HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 05/18/2016SPECIAL BOARD MEETING
May 18, 2016 at 3:00 PM
31111 Greenspot Road
Highland, CA 92346
AGENDA
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.FY 2016-17 Revenue Projections
REPORTS
2.General Manager/CEO
3.Legal Counsel Report
4.Board of Directors' Comments
ADJOURN
P ursuant to Go vernment Co d e S ectio n 54954.2(a), any reques t fo r a dis ability-related modific ation or
ac commod ation, inc luding auxiliary aids or s ervic es , that is s ought in order to participate in the abo ve
agendized pub lic meeting s hould be d irected to the Dis tric t Clerk at (909) 885-4900.
SPECIAL BOARD AGENDA STAFF REPORT
Agenda Item #1.
Meeting Date: May 18, 2016
Disc ussion Item
To: G o verning Board Memb ers
From: G eneral Manager/CEO
Subject: FY 2016-17 Revenue Projec tions
RECOMMENDATION:
This item is p res ented as informatio n o nly.
BACKGROUND / ANALYSIS:
As a result of the direc tion es tablis hed by the Board o f Directo rs with ad o p tion of a new Vision S tatement and
Organizational Ideals and End eavors in 2015, program managers and s upervis o rs develo p ed , and then
p res ented to the Board, 2016-17 p ro gram goals and objec tives at a works hop held on April 20th, 2016. Staff is
now wo rking to determine the fund ing needed in their p ro gram bud gets to ac c omplis h tho s e objec tives , and
tho s e program fund ing reques ts will ap p ear in the bud get presented to the Bo ard of Direc tors at a wo rkshop o n
June 1st, 2016.
Befo re completing an o p erational s p ending plan, however, s taff needed to p rojec t the amount o f revenue and
o ther funding sources that will be availab le to meet p ro gram c o mmitments . Therefo re, the p urp o s e o f this
works hop is to review staff revenue p ro jectio ns fo r the up c oming fis cal year, along with the related underlying
as s umptio ns.
Water Fund
The Dis tric t will provid e water services through ap p ro ximately 21,253 d o mes tic and irrigation connec tions in
fis cal year 2016-17. In addition, 1,339 fire s ervic es are c o nnected to d is tric t water mains . T his c usto mer c o unt
is b as ed o n the number o f c us tomers at the end of April 2016, and therefo re inc ludes rec ent connec tio ns for
the Glenros e Ranch development. No similar multi-unit developments are expec ted to connec t to the Dis tric t
s ystem next year, therefore the count that existed in Ap ril was used for p urposes of p ro jecting revenue for
fis cal year 2016-17.
Water sales fo r fis c al year 2016-17 are pro jec ted at $13,500,000, whic h is b as ed on antic ip ated c us tomer
d emand for 6,570,000 hundred cub ic feet o f water (HCF=748 gallons ). Thes e es timates were derived b y
reviewing monthly s ales in 2015-16, the o nly year for whic h the Dis trict has c o nsumptio n data und er the new
water bud get b as ed rate s truc ture, and applying a 1.5% reductio n. S taff feels that this mo d es t red uc tion is
p rudent after cons id ering the level of participatio n in the Dis trict’s turf remo val program, with large C ity and
East Highland s Ranch p ro jects s till in p ro gress, and the likelihood that cons ervatio n efforts b y the S tate and
District over the las t year have affected permanent b ehavio ral c hanges in water us e b y District c usto mers .
As a result, sales vo lume used fo r projec ting 2016-17 water sales, broken down b y cus tomer classific ation and
rate tier, is as follows :
Onc e thes e annual water demand projec tions fo r eac h cus to mer c las s and tier were es tablished, sales in dollars
were calc ulated by multiplying the vo lume b y the Dis tric t’s ad o p ted rates , taking into acc o unt the increases in
tiered rates that bec o me effec tive July 1, 2016. P ro jected sales revenue fo r 2016-17 is p res ented below:
Meter charge revenue fo r fisc al year 2016-17 is projec ted to be $8,960,000. P ro jectio ns for this revenue are
d etermined b as ed on the cus tomer c o unts disc ussed ab o ve, s egregated by meter s ize, and then multiplied b y
the fixed monthly rates in effec t for 2016-17. T he p ro jectio n fo r meter charge revenue inc ludes an inc reas e of
$785,000 due to p has e 2 o f increases ad o p ted in Marc h 2015 bec o ming effec tive July 1, 2016.
Other Charges & Other Revenue inc lude fees related to the collec tion of d elinquent ac c ounts , inves tment
revenue, reimb ursements from o ther agencies , and facility rental and other mis cellaneo us revenue. T he to tal
revenue p ro jec ted fo r 2016-17 is $1,187,000.
Delinq uent fees are as s es s ed p er oc currenc e, and are estimated bas ed o n prior year frequenc y. Thes e fees are
p ro jected at $755,000 for 2016-17.
Inves tment inc ome is projec ted, based o n the es timated balance o f inves tment res erves and interes t rates , at
$97,000 fo r 2016-17.
Reimburs ement p ro jections include es timates of San Bernardino Valley Municipal Water District’s p artic ipatio n
in EVWD rebate programs , and payments fro m P atto n State Ho s p ital fo r the Dis tric t’s c o ntinued wo rk o n
d igitally map p ing the Ho s p ital’s was tewater collec tion s ys tem. Reimburs ement are expec ted to be
ap p ro ximately $290,000.
Fac ility rental fees and o ther mis c ellaneous revenue are p ro jected at $15,000 and $30,000, respec tively, for
2016-17.
Sewer Fund
The dis trict provid es wastewater c ollec tion services to c usto mers thro ugh approximately 19,535 c o nnec tions .
Of these connec tions , 18,475 are s ingle family res id ential (SFR) units , with the remaining 1,060 c o ns is ting of
various commerc ial and multi-family c ustomers . The numb er o f sewer connec tions has no t inc reas ed
s ignificantly o ver the las t five years .
Sewer Sys tem Charges are p rojec ted at $4,460,000 fo r fis c al year 2016-17. Thes e revenues are the s ource of
fund s us ed by the District to maintain and rep lace wastewater c o llec tion lines , p ay a portio n o f the Dis tric t’s
general and adminis trative costs , and p ay debt s ervic e on s ewer bond s . Res id ential c us to mers , with b etween 1
and 3 d welling units, are billed a fixed monthly charge, while commerc ial c us tomers, includ ing multi-family
complexes of 4 o r more d welling units, are b illed a s mall fixed c harge, p lus a volumetric c harge b as ed on the
amo unt o f water us ed during a b illing period.
Projec ted res idential revenues fo r 2016-17 were c alculated b y multiplying the Single F amily Residential c o unt
b y the mo nthly flat c harge o f $15.36 for 12 mo nths to d erive es timated revenue of $3,405,312. T his number
was ro und ed to $3,405,000 for b udget p urpo s es .
Commerc ial c us to mer p ro jected revenues were c alculated by multiplying the number of c o mmercial ac c o unts
b y the Dis tric t’s monthly flat c harge of $3.90 for twelve mo nths, and then es timating total water us age b y
commerc ial cus tomers, in HCF, and multip lying the total usage b y a rate o f 55¢. Commerc ial billings make up
$1,056,108 of projec ted revenues - this number was ro und ed to $1,055,000 for b udget p urposes.
Sewer Treatment C harges are as s es s ed in ac cordance with rates s et b y the C ity of San Bernard ino whic h treats
all was tewater generated b y Dis tric t cus to mers . All Treatment Charges c o llec ted are remitted to the City and
therefo re have no effect on the Dis tric t’s operatio ns. Treatment Charges , and offsetting payments to the City,
are estimated at $7,610,000 fo r fisc al year 2016-17.
Total Financial Resources available for the 2016-17 fisc al year inc lude the operating revenues outlined
ab o ve, p lus developer fees of $950,000, and antic ipated SRF loan & grant proc eed s o f $65,861,000 to
complete fund ing for 2016-17 Cap ital Imp rovement P ro gram p ro jects .
The c hart below d is p lays all majo r sources of fund s available to the District fo r ac complishing s tated initiatives ,
goals and o bjec tives for the up coming fis cal year.
Staff has taken a cons ervative approac h to es timating 2016-17 revenues , antic ipating that ongoing analys is and
mo nito ring will ad d the organizatio nal flexibility to allow adjus tments to operatio nal effo rts in ac cordance with
the ac tual level o f revenues realized.
At the next bud get wo rksho p on June 1st, 2016, staff will pres ent a s p ending p lan to utilize thes e financ ial
res o urc es , entrus ted to the Dis tric t b y o ur s takeho ld ers , in an effective and fis c ally res p o nsible manner.
AGENCY IDEALS AND ENDEAVORS:
Id eals and End eavor II - Maintain An Environment Committed To Elevated P ublic S ervic e
(E) - Practice trans parent & acc o untable fis c al management
FISCAL IMPACT :
There is no fis c al imp act assoc iated with this agend a item.
Res p ectfully s ubmitted:
Rec o mmended b y:
Jo hn Mura
General Manager / C EO
Brian Tompkins
Chief F inancial Offic er
ATTACHMENTS:
Description Type
FY 2016-17 Re venue Pro jections P resentation
•Impacts of Conservation & WBR on Water Sales
•Revenue Projections
−Water Sales
−Meter Charges
−Sewer Revenue
−Other Charges
•Debt Service
•Operating Budget Summary
•Capital Budget Summary
EAST VALLEY WATER DISTRICT
OVERVIEW
2
3EAST VALLEY WATER DISTRICT
CONSUMPTION – CONSERVATION & BUDGET BASED RATES
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
HC
F
Consumption by Month for 2015-16 Fiscal Year
(with 2009-10 and 2014-15 for comparison)
2009-10
2014-15
2015-16
2009/10 - 8,627,638 HCF
2015/16 - 6,670,504 HCF
$5,224,547
$3,614,413
$4,206,808
$5,400,000
$4,850,000
$2,100,000
$5,301,146
$4,427,353
$2,509,640
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Tier 1 Tier 2 Tier 3
Rate Model Budget Actual
EAST VALLEY WATER DISTRICT
2015-16 WATER SALES – PROJECTED VERSUS ACTUAL
4
$4,874,581 $4,874,500
$8,146,580
$5,301,146
$4,427,353
$2,509,640
$13,505,159 $11,793,809
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2014-15 Flat Rate 2015-16 Flat Rate 2015-16 Tiered Rates
Meter Charge Tier 1 Tier 2 Tier 3 Flat
$18,379,740
$16,668,309
$20,384,719
EAST VALLEY WATER DISTRICT
2015-16 WATER SALES - FLAT VERSUS TIERED RATES
5
6EAST VALLEY WATER DISTRICT
2015-16 WATER SALES – TIERED RATE DISTRIBUTION
$3,223,400
$1,314,720
$763,026
$0
$2,824,438
$704,241
$85,207
$813,467
$969,644
$524,870
$193,289
$773,930
$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000
Residential
Multi-Family
Commercial
Irrigation
Sales By Tier / Customer Class
Tier 3
Tier 2
Tier 1
$0
$100
$200
$300
$400
$500
$600
Residential Multi-Family Commercial Irrigation
$51
$479
$212
$432
$57
$533
$207
$504
Average Monthly Bill
2014-15 2015-16
2015-16 RATE IMPACTS BY CUSTOMER CLASS
EAST VALLEY WATER DISTRICT 7
EAST VALLEY WATER DISTRICT
WATER SALES & METER CHARGE PROJECTIONS
•Rates established in March 2015
•Phase 2 of rate adjustments effective July 2016
•Factors in developing projections
−Water consumption
−Number and size of water services (Meters)
•Other factors to consider
−Permanent behavioral changes
−Relaxation of conservation mandates
−Drier weather following El Nino in 2015-16
8
9EAST VALLEY WATER DISTRICT
2016-17 WATER DEMAND PROJECTION
2,219,000
900,000
517,000
0
1,340,000
335,000
40,000
387,000
330,000
175,000
65,000
262,000
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000
Residential
Multi-Family
Commercial
Irrigation
Consumption (HCF) By Tier / Customer Class
Tier 3
Tier 2
Tier 1
1010
•Residential
−Tier 1 $ 3,605,000
−Tier 2 $ 3,109,000
−Tier 3 $ 1,070,000
•Multi-Family
−Tier 1 $ 1,467,000
−Tier 2 $ 778,000
−Tier 3 $ 567,000
•Commercial
−Tier 1 $ 843,000
−Tier 2 $ 93,000
−Tier 3 $ 210,000
•Irrigation
−Tier 2 $ 898,000
−Tier 3 $ 860,000
EAST VALLEY WATER DISTRICT
2016-17 WATER SALES
$7,784,000
$2,812,000
$1,146,000
$1,758,000
Total Sales- $13,500,000
Residential Multi-Family Commercial Irrigation
1111
Meter Size Count Rate
5/8” 4,321 $ 23.06
3/4” 12,150 $ 29.27
1” 4,146 $ 41.71
1 1/2” 254 $ 72.81
2” 283 $ 110.13
3” 64 $ 228.30
4” 22 $ 402.44
6” 2 $ 819.44
8” 10 $ 1,503.28
Residential Fire
Service
1,091 $ 8.78
Commercial Fire
Service
248 $11.98 to $87.84
EAST VALLEY WATER DISTRICT
2016-17 METER CHARGES
$7,215,000
$575,000
$525,000
$310,000
$60,000 $275,000
Total Charges - $8,960,000
Residential Commercial Multi-Family
Irrigation Construction Fire Services
12EAST VALLEY WATER DISTRICT
2016-17 TOTAL WATER REVENUE
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2012-13 2013-14 2014-15 2015-16 2016-17
$4,555,414 $4,704,036 $4,874,581
$8,146,580 $8,960,000
$14,780,448 $15,351,609 $13,505,159
$12,238,139
$13,500,000
Water Sales
Meter Charges
EAST VALLEY WATER DISTRICT
SEWER COLLECTION (SYSTEM) CHARGES
•Last rate hearing held July 15, 2010
•Current fees in effect since October 2012
•2016-17 Objective: Conduct Cost of Service Analysis (COSA) and Prop 218 hearing
−Include Collections and Treatment fees
−Consider charges based on occupancy
•Preliminary schedule
−Hire analyst by September 2016
−Complete COSA by March 2017
−Schedule hearing May 2017
−New rates effective July 2017
13
Rate Type Count
Estimated
Consumption
Monthly Fixed
or Unit Charge Total Charge
Residential (SFR) 18,475 $ 15.36 $ 3,405,000
Comm. / Multi-Family
Fixed 1,060 $ 3.90 $ 49,000
Volumetric 1,800,000 $ 0.55 $ 1,006,000
Total $ 4,460,000
EAST VALLEY WATER DISTRICT
2016-17 SEWER SYSTEM CHARGES
14
15EAST VALLEY WATER DISTRICT
2016-17 SEWER TREATMENT CHARGES
•City of San Bernardino established rates
•Rate Increases 10/1/15 and 07/01/16
−Residential - $20.85 monthly
−Non-Residential: $3.42, plus $1.29 to $3.18 per HCF
•No Net Effect On District Operating Results
•Remittance Process
2015-16 2016-17
Sewer Treatment Charges $ 7,250,000 $ 7,610,000
Contract Services – Sewer Treatment $ (7,250,000) $ (7,610,000)
Net Effect on District Operations $ 0 $ 0
16EAST VALLEY WATER DISTRICT
2016-17 PROJECTED RATE REVENUE
Sewer Revenue
Water Revenue
$0
$3,000,000
$6,000,000
$9,000,000
$12,000,000
$15,000,000
$18,000,000
2012-13 2013-14 2014-15 2015-16 2016-17
$4,473,032 $4,649,212 $4,531,355 $4,400,000 $4,460,000
$19,335,862 $20,055,645
$18,379,740
$20,375,000 $22,460,000
Sewer Revenue Water Revenue
EAST VALLEY WATER DISTRICT
OTHER CHARGES/REVENUE PROJECTIONS
•Fee schedule updated February 2016
•Factors in developing Other Charges projection
−Number of occurrences
•Factors affecting Other Revenue projection
−Investible funds
−Interest rates
−Reimbursement agreements
17
18EAST VALLEY WATER DISTRICT
2016-17 OTHER CHARGES & REVENUE
Charge / Revenue
Number of
Occurrences Fee
Projected
Revenue
Initiation of Service Fee 2,300 $ 30.00 $ 70,000
Delinquent Fees 80,000 $ 1.50 $ 125,000
Disconnect Notice Charge 18,000 $ 23.00 $ 415,000
Disconnect / Reconnect Fee 2,000 $ 70.00 $ 140,000
Returned Payment Fee 250 $ 20.00 $ 5,000
Facility Rental Fee 25 $ 600.00 $ 15,000
Reimbursements N/A N/A $ 290,000
Miscellaneous Revenue N/A N/A $ 30,000
Interest Revenue N/A N/A $ 97,000
Total Other Charges / Revenue $1,187,000
$13,500,000
$8,960,000
$4,460,000
$1,187,000
Total Operating Revenue - $28,107,000
Water Sales
Meter Charges
Sewer System Charges
Other Charges & Revenue
EAST VALLEY WATER DISTRICT
TOTAL SOURCES-OPERATIONS
19
2020
•Outstanding Debt
−2010 Revenue Bonds
−2013 Revenue Bonds
−SRF Loan – Plant 134
−SRF Loan – Plant 150
−US Bank Loan (Honeywell)
−SBVMWD Loan – Plant 134
•2016-17 Debt Service
−Total Water: $ 4,007,000
−Total Sewer: $ 317,000
EAST VALLEY WATER DISTRICT
DEBT SERVICE
$27,025,000
$7,875,000
$505,000
$4,210,000
$3,299,107
$6,768,562
$50,000
$3,900,000
Outstanding Debt - $53,632,669
2010 Rev Bonds - Water 2013 Rev Bonds - Water
2010 Rev Bonds - Sewer 2013 Rev Bonds - Sewer
US Bank Loan SRF Loan - Plant 134
SRF Loan - Plant 150 SBVMWD Loan - Plant 134
21EAST VALLEY WATER DISTRICT
OPERATING BUDGET SUMMARY
Water Sewer
Sales & Services $ 22,460,000 $ 4,460,000
Other Charges $ 820,000 $ 240,000
Investment & Miscellaneous Revenue $ 105,000 $ 22,000
Total Revenue $ 23,385,000 $ 4,722,000
Operations $ 15,647,900 $ 3,432,100
Debt Service $ 4,007,000 $ 317,000
Capital Expenditures $ 1,309,500 $ 280,000
Replacement Reserve Contribution $ 2,420,600 $ 692,900
Total Expenditures $ 23,385,000 $ 4,722,000
22EAST VALLEY WATER DISTRICT
CAPITAL EXPENDITURES
Water Sewer
Pipeline Projects $ 1,710,000 $ 4,085,000
AMI Meter Project $ 2,011,000 $ 0
Sterling Natural Resource Center $ 0 $ 61,000,000
Reservoir & Boosters $ 660,000 $ 0
HCP / Studies $ 310,000 $ 110,000
Facility Rehabilitations $ 350,000 $ 0
Equipment Purchases & Replacements $ 515,000 $ 228,000
Total Expenditures $ 5,556,000 $ 65,423,000
$1,589,500 $2,578,500
$65,861,000
$950,000
Total Funding Sources - $70,979,000
Operating Revenue
Replacement Reserve
SRF Grants & Loans
Capacity Fees
EAST VALLEY WATER DISTRICT
TOTAL SOURCES-CAPITAL
23
24EAST VALLEY WATER DISTRICT
CAPITAL BUDGET SUMMARY
Water Sewer
Operating Revenue $ 1,309,500 $ 280,000
SRF Grants & Loans $ 2,011,000 $ 63,850,000
Replacement Reserve $ 1,985,500 $ 593,000
Developer Capacity Fees - Current $ 250,000 $ 0
Developer Capacity Fees - Future $ 0 $ 700,000
Total Sources $ 5,556,000 $ 65,423,000
Capital Improvement Projects $ 5,041,000 $ 65,195,000
Capital Outlay $ 515,000 $ 228,000
Total Expenditures $ 5,556,000 $ 65,423,000
EAST VALLEY WATER DISTRICT