fy16 & fy17 strategic plan update and mid-cycle …...fy16 & fy17 strategic plan update and...
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FY16 & FY17 Strategic Plan Update
and Mid-Cycle Budget
Workshop
Board Presentation May 24, 2016
Workshop Agenda
• Introduction
• Strategic Plan
• FY17 Mid-Cycle Budget Update
• FY17 Staffing Changes
• FY17 Non-Prop 218 Rates, Charges and Fees
• Board Discussion
1
Strategic Plan
2
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer & Community Services
Workforce Planning & Development
• Created 2004
• Updated every 2 years
• New approach & design in 2016
Strategic Plan
3
• A unique opportunity
• Hosted 10 Employee Talks
• Approximately 720 employees participated
Strategic Plan Employee Talks
4
Employee Talks Examples of Questions/Comments
?
5
• Affirmed goals - they remain essentially unchanged
• Some modifications and additions to Strategies/Objectives
• Updated and added new KPI’s
• Most comments aligned with Values and Improvement areas of focus
Strategic Plan Approach and Updates
6
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer Service
Workforce Planning & Development
Strategic Plan
7
Long-Term Water Supply Goal
8
Existing Goal
Ensure a reliable high quality water supply for the future.
Strategy Description
Strategy 1 Preserve current entitlements and augment the District’s successful water supply projects by obtaining supplemental supplies to meet annual customer demands.
Strategy 2 Reduce potable water demand through water conservation and build on past water savings success to help ensure a reliable water supply.
Strategy 3 Reduce potable water demand through water recycling and build on past success to achieve a diversified and reliable water supply.
Strategy 4
Maintain an updated Climate Change Monitoring and Response Plan to inform the District’s planning efforts for future water supply, water quality and infrastructure, and support sound water and wastewater infrastructure investment decisions.
Long-Term Water Supply Strategies
9
Objectives:
• Continue implementation/updating:
– Conservation strategies and drought response plans
– Customer engagement services
– Supply-side conservation/water loss control
– Regulatory and legislative initiatives
– Research and test new efficiency technologies
Long-Term Water Supply – Water Conservation
10
WCMP Implementation Strategy & Program Priorities (2017-2018)
• Continue focus on outdoor water efficiency and savings
• Expand customer water management services (landscape water budgets, Home Water Reports, web self services)
• Adopt District AMI standards and accelerate phased installations to promote conservation and reduce non-revenue water use
• Sunset toilet and clothes washer rebates
• Lock in achieved efficiency to cost-effectively meet near-term, 2020 and 2040 savings goal
11
Strategy 1 Key Performance Indicator
FY17 Target
Supplemental Supply
Additional supply by 2040 to provide 85% reliability under design drought conditions and diversify through regional partnerships
• Work with Placer County Water Agency (PCWA) to publish a draft environmental document for a long-term water transfer
• Enter into an agreement to develop a second long-term water transfer project with Yuba County Water Agency (YCWA), Sacramento River Settlement contractors (SRSC), or other potential sellers
• Complete water rights and export permitting and initiate design for the DREAM project in San Joaquin County
• Complete Bay Area Regional Reliability (BARR) Draft Drought Contingency Plan
Key Performance Indicators – Proposed Changes
12
Strategy 3 Key Performance Indicator
FY17 Target
Water Recycling
20 MGD of recycled water capability by 2040
• Complete installation of phase 2 recycled water pipelines in Bishop Ranch/San Ramon and continue customer site conversions
• For San Ramon phase 3 pump station, begin CEQA and property acquisition
• Complete installation of recycled water pipeline in Emeryville and continue customer site conversions
• Amend North Richmond agreement with the Chevron Refinery
• Begin recycled water master plan update
Key Performance Indicators – Proposed Changes (cont.)
13
Strategy 4 Key Performance Indicator
FY17 Target
Climate Change Update the Climate Change Monitoring and Response Plan. Explore approaches for how to adapt to potential future conditions and identify "no regrets" infrastructure investment decisions
Update the Climate Change Monitoring & Response Plan to account for new information when the Intergovernmental Panel releases its Sixth Assessment Reports
Key Performance Indicators – Proposed Changes (cont.)
14
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer Service
Workforce Planning & Development
Strategic Plan
15
Water Quality & Environmental Protection Goal
16
Existing Goal
Meet or surpass environmental and public health standards and protect trust values.
Strategy Description
Strategy 1 Manage the Mokelumne and East Bay watersheds to ensure a high quality water supply and protect natural resources while providing appropriate public access.
Strategy 2 Operate and maintain District facilities to surpass federal and state drinking water regulations.
Strategy 3 Operate and maintain District facilities to anticipate and meet all water discharge, air emission, and land disposal requirements to protect and enhance the environment.
Strategy 4 Minimize impacts to the environment by reducing, recycling, reusing and reclaiming waste, and by conserving natural resources.
Strategy 5 Ensure protection and stewardship of San Francisco Bay.
Strategy 6
Operate Pardee and Camanche Reservoirs and facilities jointly as an integrated system to achieve multiple objectives including municipal water supply, stream flow regulation, environmental protection, flood control, hydropower, and releases for downstream requirements.
Water Quality & Environmental Protection Strategies
17
Manage the Watersheds
Objective:
• Collaborate with stakeholders to protect water quality and the environment on non-District owned lands
18
Manage the Watersheds Collaboration
• Participate with local agencies and organizations in efforts to promote water quality, water supply and sustainability initiatives (e.g. forest health)
• Example: Upper Mokelumne River Watershed Authority partnership with the US Forest Service approved April 22, 2016
19
• Provided staff time, materials and equipment for erosion mitigation following the Butte Fire
• Ranger-led Environmental Education Program
• Working to expand multi-agency fuel breaks in the East Bay watersheds
• Ongoing environmental, educational, and stewardships efforts
Manage the Watersheds Collaboration
20
Renewable Energy in Wastewater
Objective:
• Pursue opportunities to recover and utilize resources (e.g. nutrients and minerals), and renewable energy in wastewater
21
Resource Recovery – Nutrients Activities FY16 & FY17
• Complete an evaluation of nutrient recovery for struvite control
• Maximize the use of biosolids for land application
• Establish new biosolids contracts that favor nutrient utilization
22
Resource Recovery – Energy Activities FY16 & FY17
• Continue to pursue a diverse portfolio of high-strength wastes for anaerobic digestion, including food waste
• Expand gas utilization capabilities to minimize flaring
23
Key Performance Indicator – Proposed Change
• Percent onsite generation depends on:
- Energy demand of MWWTP
- Biogas produced
- Biogas utilized
• A KPI of 130% supports demand reduction and efficient biogas utilization
0%20%40%60%80%
100%120%140%160%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Calendar Year
Percent of Plant Power Demand Met by Onsite Generation
24
Integrated Operation of Mokelumne Reservoirs
Objective:
• Adaptively manage reservoir operations to improve salmon migration through variable flows, temperature optimization, and collaborative efforts with lower Mokelumne stakeholders
25
Mokelumne Reservoirs – Adaptive Management & Variable Flows
• Improve temperature modeling capabilities • Enhance and expand fishery science program • Continuous improvement of habitat along the
lower Mokelumne River
26
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer Service
Workforce Planning & Development
Strategic Plan
27
Long-Term Infrastructure Investment Goal Change
28
Proposed Goal
Maintain and improve the District’s infrastructure in a cost effective manner to ensure sustainable delivery of reliable, high quality service now and in the future, addressing economic, environmental, and social financial concerns.
Strategy Description
Strategy 1 Maintain coordinated master plans for all facilities and assets.
Strategy 2 Meet operational needs and reliability goals by effectively maintaining the infrastructure.
Strategy 3 Implement the master plans and set priorities in the operating and capital budget process to reflect the needs identified in those plans.
Long-Term Infrastructure Investment Strategies
29
Long-Term Infrastructure Investment Highlights
• Distribution Reservoirs (161)
• Pumping Plants (136)
• Pipeline Rebuild • Mokelumne Aqueducts
Relining • Treatment Plants (6) • Wastewater Infrastructure
Summit Reservoir Construction
30
Distribution Reservoirs
31
Estates Reservoir (Open-Cut Reservoir)
Before
Estates No. 1 and No. 2 Reservoirs (Concrete)
After
Open Cut vs. Concrete Reservoirs
32
Miranda Reservoir
Rehabilitated Steel Reservoir
33
FY16 Distribution Reservoir Activity
In Design •South
•San Pablo Clearwell
•Carisbrook
•Montclair
•San Ramon
•Muir
•Berkeley View No. 2
•Potrero
•Pearl
•Bacon
•Mendocino
Completing Construction •Sunset
•Trilane
•Pinehaven No. 1 and No. 2
•Crossroads
In Construction •Summit
•El Portal
•San Pablo Rec Area
•Round Hill
•Eden
•Stonewall
•Acorn
•University
KPI = 3 Steel Tanks per year 34
Pumping Plants
0.2 MGD 100 MGD 35
Recently Upgraded Facility – Las Aromas Pumping Plant
BEFORE
AFTER BEFORE 36
FY16 Pumping Plant Activity
In Design •Diablo •Gwin & Laguna No. 1 •Skyline
In Construction •Moyers & Road 24 No. 2 •Diablo Vista •Shasta & Woods
Completing Construction •Danville No. 1 •39th Avenue & Redwood •Bryant No. 2 •Almond •Berkeley View
KPI = 3 Pumping Plants per year
37
Identify Improvements
• Gain efficiencies
• Lower costs • Maintain
reliability
Scale Up
• Hire staff • Collaborate • Increase
replacement
Pilot
• Streamline design
• Flexibly staff crews
• Focus on trenchless (aqua-pipe and pipe bursting)
• Utilize GPS solutions
Evaluate
• Document metrics
• Strive for sustainability
• Determine long-term solution 38
• NSF 61 approved
• Class IV structural liner
• Services reinstated robotically
• Bonds to host pipe
• No specialty fittings or tapping tools for connections/repairs
• Widely tested
• 50-year design life
Aqua-Pipe
39
Relining of Mokelumne Aqueducts No. 2 and 3
Problem
Inspect approximately 75 miles each of Moke No. 2 and No. 3 Aqueducts to evaluate the extent of lining failures
Engineering Study in FY16:
• Analyzed relining alternatives, costs, and treatment
• Developed conceptual design of treatment facility to extend life of CML
Next Steps:
• Detailed condition assessments
• Inspection of 16 miles of Aqueduct No. 2 in the Delta in FY17
40
Wastewater Infrastructure Interceptor Rehabilitation
• Completed rehab of 1.6 miles of interceptor system
Wood St. Interceptor Rehab Phase 2 Alameda Interceptor Rehab Phase 1
• Completed design for rehab of additional 1.5 miles – 3rd Street Interceptor Rehab Phase 1 (start construction in FY17) – Alameda Interceptor Rehab Phase 2 (in construction)
41
Wastewater Infrastructure Concrete Rehabilitation
• Completed first year of construction for the two-year Primary Sedimentation Tanks and Channels Rehabilitation Project
42
Key Performance Indicator FY17 Target
% of Water System Corrective Work Order Hours Classified High Priority
< 10%
Miles of Pipe Surveyed 600
Infrastructure Leakage Index N/A
% of High Priority Meter Repair Orders Completed in 60 days
90%
Miles of Distribution Pipeline Replaced 15
Cumulative % of Interceptor Assets with Major Defects that have been Repaired
80%
Key Performance Indicators – Proposed Changes
43
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer Service
Workforce Planning & Development
Strategic Plan
44
Long-Term Financial Stability Goal Change
45
Proposed Goal
Manage the District’s finances to meet funding needs and maintain reasonable fair water and wastewater rates.
Strategy Description
Strategy 1 Maintain a Long-Range Financing Plan that sets forth the long-term funding needs of the District.
Strategy 2 Implement water and wastewater rates and charges that are legal, fair, and equitable.
Strategy 3 Ensure integrity, accountability and transparency in financial management.
Strategy 4
Implement technologies that improve the efficiency and effectiveness of business processes.
Long-Term Financial Stability Strategies
46
47
• Improve access to information and tools
• As the District dramatically increases rate of infrastructure in the future, opportunities exist for technology to streamline work processes
Reasons for Update
48
Updates to Strategy
• Structure and manage data to support consistent analysis and reporting and provide appropriate access to customers, employees and other stakeholders.
• Make effective use of
geospatial tools.
49
Updates: Data is Available When and Where it is Needed
• Ensure that all employees have ready access to tools and data so they can provide excellent customer service and maintain our infrastructure
• Develop and maintain long-term plan to guide evolution of IT infrastructure and capabilities
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer and Community Services
Workforce Planning & Development
Strategic Plan
50
Customer and Community Services Goal Change
51
Proposed Goal
Understand and be responsive to customer expectations for service. Maintain and enhance service excellence through continuous improvement.
Strategy Description
Strategy 1 Understand customer expectations, opinions and satisfaction levels by obtaining feedback, and use input to inform our business decisions.
Strategy 2 Enhance the customer experience and improve operational efficiencies by investing in cost effective technologies.
Strategy 3 Provide reliable, responsive, quality service to customers at fair rates and charges.
Strategy 4
Maintain an active emergency preparedness program to plan for and manage the District’s functions during an emergency and allow for an efficient and effective recovery following an emergency.
Customer and Community Services Strategies
52
Satisfaction Survey
• Assess overall service satisfaction levels
• Gain post-drought insight
• Obtain feedback on key areas
• Understand customers’ needs to improve overall experience
53
Business Process Improvements
54
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
Delayed Accounts Trend
Technology – Electronic Payments
55
Technology – Electronic Payments
56
Phase 1 - completed Reduced customer transaction
fee 50% ($1.99 vs. $3.95)
EBMUD branded site
Reduced operational costs
Phase 2 – in progress
Electronic Bill Presentment & Payment
Integrated EBMUD site
Welcome to www.ebmud.com
Average Monthly Call Statistics
Call Metric 2012 2013 2014 2015
Average Monthly Call Volume
30,409 28,357 26,886 26,664
Calls Answered within 60 seconds
41% 65% 80% 95%
Average Speed of Answer (ASA)
(minutes/seconds) 3:42 1:32 :48 :09
Call Abandonment Rate
14% 6% 3% 1%
57
Technology – Contact Center Telephony System
58
Wastewater Odor Complaints
59
36
62
27
12
28
55
26
34
14
26
47
0
25
50
75
Num
ber o
f Odo
r Com
plai
nts
Objective: Minimize customer and community impacts from water and wastewater operations.
KPI for FY16 and FY17: ≤ 30 complaints
Odor Control Activities FY16 & FY17
• Begin construction of a two stage odor scrubber at the influent pump station (expected completion December 2017)
• Initiate planning level technology assessment for addressing odor management at the primary sedimentation tanks
• Optimize both the performance of existing odor control facilities and the implementation of O&M practices
• Continue to engage with neighboring stakeholders, including the West Oakland Liaison Group, to identify opportunities to improve
60
Home Water Reports
Landscape Irrigation Budgets
AMI – web interface
Conservation management tools
Customer Engagement
61
Customer Self Service
Welcome to www.ebmud.com
62
63
Strategy Key Performance Indicator FY 17 Target
Customer Satisfaction
Timely billing of customer statements as scheduled
99%
Electronic bill presentment & payment enhancements
Implement phase 1- April 2016 Test phase 2– October 2016
Implement new telephony and IVR system
January 2017
Odor Complaints near the MWWTP
< 30 complaints
Key Performance Indicators – Proposed Changes
Strategic Plan
Goals
Long-Term Water Supply
Water Quality & Environmental Protection
Long-Term Infrastructure Investment
Long-Term Financial Stability
Customer Service
Workforce Planning & Development
64
Proposed Goal
Create an environment that attracts, retains and engages a high performing diverse workforce in support of the District’s mission and core values.
Workforce Planning & Development Goal Change
65
Workforce Planning & Development Strategies
Strategy Description
Strategy 1 – Workforce Planning
Maintain robust workforce plans to determine future needs, identify gaps and implement actions to close the gaps.
Strategy 2 - Employee Development
Continue to develop employees to meet workforce demands.
Strategy 3 - Employee Wellness Performance Culture
Integrate District values, recognize employee contributions, and establish clear performance measures to achieve a high performance culture.
Strategy 4 -Recruitment
Enhance the District’s ability to recruit a highly qualified, diverse staff.
66
Rapidly Changing Workforce
67
Year Retirements Hires Promotions*
2010 93 43 83
2011 72 67 61
2012 94 80 84
2013 96 86 82
2014 90 154 145
2015 89 166 115
2016 (to date)
52 142 129
Hires = External Hires Promotions = Internal Promotions
*Includes Civil Service and Comp Standards
Values and Organizational Improvements Project
Phase 1 – Complete
Assessment of the Districts strengths, challenges, and perceived values
Phase 2 – Complete
Engagement of employees in identification of District Values and strategies to address challenges
Phase 3 – In progress
Embedding of the values, and implementation of employee recommendations
Phase 4 – On-going
Normalizing new District culture and evaluating progress 68
Values and Organizational Improvements Key Outcomes
Employee Engagement
• Over 160 employees engaged in values and organizational improvement teams
• Over 750 employees engaged through surveys, direct interviews, and focus groups
Employee Voice
• New values from the voice of employees
• Numerous employee recommendations to address District challenges
69
Workforce Planning • Expand workforce planning efforts
Employee Development • Enhanced onboarding of new employees
• Develop employees to meet workforce demands
Approaches to Workforce Planning and Development
70
Performance Culture • Engage employees in continuous improvement
processes, problem solving, and finding new ways to do our work
Recruitment • Engage our employees as ambassadors
• Ongoing talent acquisition techniques – best industry practices with a commitment to diversity
• Continued efforts to expand list of community partners for outreach efforts
Approaches to Workforce Planning and Development
71
Key Performance Indicators – Proposed Changes
Strategy 2 & 4 Key Performance Indicator FY17 Target
Employee Development
Number of employees in development programs (academies, rotations, internships, mentorships)
Performance measure
Recruitment Number of internships % of exams resulting in hiring lists within 60 days
Performance measure
80%
72
New approach, new design Broad engagement of employee outreach
Goals
Remain essentially unchanged
Strategies/Objectives
Considered employee feedback/comments
Updated to reflect current practices and priorities
Key Performance Indicators
Updated and new KPI’s added
Communication
Continuous on-going process both internally and externally
Summary of Plan Changes
73
FY17 Mid-Cycle Budget Update
74
FY17 Mid-Cycle Budget Update
• FY16 & FY17 Budget
• Revenues & Expenditures
• Staffing
75
FY16 & FY17 Budget Priorities
•Make sustained reinvestments in aging physical infrastructure
• Invest in critical information technology infrastructure
•Manage impacts of extended drought
76
FY16 Infrastructure Investment Accomplishments
$105M Water - $28M Wastewater
• Reinvest in aging physical infrastructure
– Small-diameter pipeline infrastructure renewals
– Pipeline Rebuild underway
– Dingee Pipeline & Claremont Center aqueduct replacements
– Reservoir and pumping plant rehabilitations
– Interceptor rehabilitations
– MWWTP concrete rehabilitation
– Chemical storage and feed system improvements 77
FY16 IT Infrastructure Investment Accomplishments
• Invest in critical information technology
Established IT Governance group, developed principals and priorities, and drafted strategic IT plan
Core information system upgrades are underway
• Data storage system
• Replaced firewalls, proxy & aging servers
• Replaced customer statement printers
78
110
120
130
140
150
160
170
180
190
200
Actual Water Sales
Budgeted FY16-20
Water Sales
Projected FY16-20
Water Sales
Drought Rebound History Water Sales 1976 – 2020 (MGD)
Drought Rebound
’14-’16 ’88-’95 ’08-’10 ’77-’78
79
Mid-Cycle Trends
• FY16 – Conservation higher than anticipated – Water sales below budget – Supplemental supplies used – Drought surcharge revenue – Increased SCC revenue from new development – Increased resource recovery revenue – Use of rate stabilization funds
• FY17 – Slow rebound anticipated – Water sales below budget – Adequate water supply anticipated – No supplemental supplies/drought surcharge – State & District water restrictions & messaging – Expenditures less than budget – Increased use of rate stabilization funds
80
FY16 Water System Revenue and Expenses ($M)
Amended Budget1
Year-End Projection
Variance Favorable/
(Unfavorable)
Operating Revenues:
Water Charges $422.8 $371.8 ($51.0)
SCC Revenues 24.6 35.0 10.4
Other 57.8 57.8 -
Drought Surcharge/Excessive Use2 - 51.9 51.9
TOTAL REVENUES 505.2 516.5 11.3
Operating Expenses:
Operations 248.3 239.8 8.5
Debt Service 169.9 167.3 2.6
Drought Expenses - 25.9 (25.9)
TOTAL OPERATING EXPENSES 418.2 433.0 (14.8)
NET VARIANCE COMPARED TO BUDGET3 (3.5)
81
1 Drought contingency budget includes $64.2 million not shown above 2 Excessive Use revenues is $0.6 million 3 Projecting $12 million use of Rate Stabilization Funds at year-end to meet financial metrics
FY16 Projected Water System Budget Variance
FY17 Projected Water System Budget Variance
82
FY17 Water System Revenue and Expenses ($M)
Amended Budget1
Year-End Projection
Variance Favorable/
(Unfavorable)
Operating Revenues:
Water Charges $453.0 $398.0 ($55.0)
SCC Revenues 26.0 26.0 -
Other 86.5 87.2 0.7
Drought Surcharge/Excessive Use2 - 5.0 5.0
TOTAL REVENUES 565.5 516.2 (49.3)
Operating Expenses:
Operations 262.2 244.6 17.6
Debt Service 180.2 177.6 2.6
Drought Expenses - 0.0 -
TOTAL OPERATING EXPENSES 442.4 422.2 20.2
NET VARIANCE COMPARED TO BUDGET3 (29.1) 1 Drought contingency budget includes $62.1 million not shown above 2 Prorated FY16 drought surcharge collected in July due to billing cycle 3 Projecting $29 million use of Rate Stabilization Funds at year-end to meet financial metrics
Water System Rate Stabilization Funds ($M)
1 Considers drought surcharge suspended effective June 30, 2016
83
Fiscal Year
Deposit/ (Withdrawal)
Year-end Balance
FY13 --- $50 FY14 $35 $85 FY15 $10 $95 FY16 ($12) $83 FY171 ($29) $54
Challenging Last Decade
• Fiscal challenges from drought & recession
– Reduced sales volumes, capacity charge revenues, and interest earnings
• Multi-year effort to mitigate rate increases
– Reductions/deferrals ≈ $200 million
• Hiring freeze, no FY12 & FY13 GSI increase
• Reduced discretionary/contract expenses
• Capital project reductions/deferrals
• Refinanced outstanding debt
84
Getting Back on Track
FY14 – FY16 Budget Priorities • Invest in aging infrastructure
– Increase miles of pipeline replaced
– Rehabilitate Water & Wastewater treatment plants
– Rehabilitate raw water aqueducts
• Enhance maintenance practices – Pipelines, meters and valves
– Corrosion control
– Structural and mechanical systems
• Improve customer service – Electronic bill payment
– Respond to customer inquiries 85
Mitigating Water Rate Increases Mix of Multi-Year Strategies
• Pursue expense reduction opportunities
• Prioritize CIP to defer projects beyond year 2020
• Search for revenue generation opportunities
86
FY16 Projected Wastewater System Budget Variance
87
FY16 Wastewater System Revenue and Expenses ($M)
Amended Budget
Year-End Projection
Variance Favorable/
(Unfavorable)
Operating Revenues:
Treatment Charges & Permits $68.7 $66.6 ($2.1)
Resource Recovery 8.0 11.6 3.6
Other 42.6 44.6 2.0
TOTAL REVENUES 119.3 122.8 3.5
Operating Expenses:
Operations 65.4 62.7 2.7
Debt Service 33.7 33.6 0.1
TOTAL OPERATING EXPENSES 99.1 96.3 2.8
NET VARIANCE COMPARED TO BUDGET 6.3
FY17 Projected Wastewater System Budget Variance
88
FY17 Wastewater System Revenue and Expenses ($M)
Amended Budget
Year-End Projection
Variance Favorable/
(Unfavorable)
Operating Revenues:
Treatment Charges & Permits $72.1 $70.1 ($2.0)
Resource Recovery 8.0 10.0 2.0
Other 44.4 44.4 -
TOTAL REVENUES 124.5 124.5 -
Operating Expenses:
Operations 70.7 67.6 3.1
Debt Service 34.0 33.9 0.1
TOTAL OPERATING EXPENSES 104.7 101.5 3.2
NET VARIANCE COMPARED TO BUDGET 3.2
Summary for Board Consideration
89
Affirm FY17 Budget Appropriation ($M)
Water System
Wastewater System
Operating* $504.5 $104.7
Capital $290.4 $32.6
Total $794.9 $137.3
*Water System appropriation includes $62.1 for drought contingency.
FY17 Staffing Changes
90
FY17 Staffing Changes
91
Approved in FY16 & FY17 Budget +3.0
• Assoc Electrical Eng/Control System Eng
• Drought-related (not expected to be filled)
− Water Conservation Rep (LT)
− Water Conservation Tech (LT)
Proposed +1.0
• TC Construction Inspector
FY17 Proposed Non-Prop 218 Rates, Charges & Regulations
92
Key Dates
93
• FY17 Adopted Prop 218 Rates, June 9, 2015 Fees & Charges
• FY17 GM Report on Recommended May 10, 2016
Non-Prop 218 Rates, Fees & Charges
• Public Hearing June 14, 2016
94
Proposed Updates to Rates, Fees & Charges (Non-Prop 218) Focus on ensuring cost recovery:
•Water Account Establishment (Schedule B)
•Special Services Charges (Schedule C)
•Other District Fees − Real Property Use Application Fees
− Public Records Act Fee
•Water and Wastewater capacity fee (Schedules H, J,N and G) calculations and credit for existing service
Account Establishment Charge
Action Current Charge Proposed Charge
Account Establishment – Phone
$40 $52
Account Establishment – On-Line
$20 $36
Account Establishment – Customer Assistance Program
$14 $26
Water Service Agreement (Landlord): One-time charge
$27 $55
95
Charges for Special Services
Action Current Charge Proposed Charge
Meter Testing (by meter size)
$44 to $268 $58 to $261
Trip Charge $43 $45
Meter S-Lock (In addition to $1,000 water theft penalty)
New $57
Flow Restrictor $53 to $187 $113 to $243
Backflow Violation $199 $470
96
Charges for Special Services – Liens
Action* Current Charge Proposed Charge
Lien Filing Fee $155 $167
Lien Removal Fee (CC/AL) 1st lien removed Subsequent liens removed
$64/$71 $15/$23
$144/$152 $51/$59
Property Tax Transfer CC County AL County
$20 + $3 parcel
$20 + 1.7%
$26 + $3 parcel
$26 + 1.7%
*Partial list of changes is shown – the complete list is available in Schedule C.
97
98
Real Property Use Application Fees
Fees to cover the cost of reviewing/approving use of District property. Four categories of use applications:
• Title Transfers – Outright purchase of District’s property. Transfers ownership with all the rights to buyer.
• Easements – Conveys rights for permanent use of District property. Could include either above or below ground rights or both.
• Leases and Licenses – Transfers the right to occupy and use District property for specified time; term could range from 1 to 25 years.
• Permits (entry, encroachment, temporary construction, land use) – Provide permission for temporary access to District property; term rarely exceeds one year.
Real Property Use Application Fees
Use Type Current Charge
Proposed Charge
Fee Title – Property for Sale Fee Title – Unsolicited
$2,000 $2,000
$2,000 $12,000
Easement – Utility Type Easement – Other
$1,000 $1,000
$2,000 $5,600
Quitclaim – Pipe Abandonment Quitclaim – Other
$1,000 $1,000
$1,000 $2,300
Revocable License $500 $1,600
Telecomm Lease Other Lease
$2,000 $600
$3,400 $2,000
99
Real Property Use Application Fees (cont.)
Use Type Current Charge
Proposed Charge
Temporary Construction Easement/Encroachment Permit Open Land (no facilities) With Facilities
$100 $100
$600 $2,200
Property Entry Permits Limited Land Use Permit
$100 $25
$300 $100
Information Only Process and Review of Proposals
$60/hr $60/hr
$130/hr $130/hr
Survey Cost if needed for review $125/hr
100
Capacity Fees
101
102
Proposed Water and Wastewater Capacity Charges Increase
• Water System Capacity Charge (SCC) – Adjust charges for 2016 ENR Construction Cost Index
– Updated costs for the Future Water Supply component
– SFR SCC increase 2.3% to 3.3% for Regions 1, 2 and 3
• Wastewater Capacity Fee (WCF) – Adjust charges for 2016 ENR Construction Cost Index
– Implement 4th year of 5 year phase-in of updated calculations from FY13; FY17
– SFR WCF increase 15.6% from $1,860 to $2,150
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Current and Proposed SCC for 3/4*-inch Meters (Single Family) and 5/8-inch Meters (Non-Residential)
CURRENT FY16 PROPOSED FY17 For Single Family Residential
Region Single Family
Non-Residential
Single Family
Non-Residential Increase %
Increase
1 $16,370 $23,380 $16,740 $23,920 $370 2.3%
2 28,410 42,220 29,040 43,160 630 2.2%
3 36,230 39,040 37,050 39,930 820 2.3%
3C 83,830 See Note 1 86,590 See Note 1 2,760 3.3%
3D 93,850 93,850 96,870 96,870 3,020 3.2%
*If a combined fire service is required, a 1" or larger combined meter will be installed; SCC will be based on potable demand ¾" minimum. Note 1: Calculated based on a 1993 Agreement with HCV & Associates Ltd., Wiedemann Ranch, Inc., and Sue Christensen.
SCC Rates by Region and Sub Region
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Assessment of Capacity Fees
• For water system, SCC is based on expected average annual water use
– Expected water use for larger meters is individually analyzed
– Small meters are assigned water use by region and meter size
– Proposed change to include 2” non-residential meters in larger meter calculation
• For wastewater, WCF is based on expected wastewater flow and strength
– Residential flow and strength are assigned by number of dwelling units
– Non-residential is individually analyzed
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Capacity Fee Credit for Expanding an Existing Service
• Where an SCC/WCF was paid for existing service, credit is based on prior SCC/WCF capacity
– Water SCC began 1983; Wastewater WCF began 1987
• Where no SCC/WCF was paid on existing service:
– Water SCC credit is based on meter size or last 10 years of water use
• Small meters 1½” and under receive credit based on meter size
• Larger meters 2” and over receive credit based on average of last 10 years of water use
• Update minimum credit for larger meters equal to 1½” credit given to small meters
– Wastewater WCF service credit is based on wastewater strength and last 10 years of use
Workshop Summary
• Strategic Plan updated with broad employee input
• Drought created unfavorable fiscal impacts for the Water System in FY16 & FY17
• Wastewater System projecting a favorable net budget variance each fiscal year
• Development of FY18 & FY19 budget
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Next Steps
Milestone Date
Public hearing on rates & charges June 14
Board consider adoption & budget affirmation
June 14
Water & WW rates take effect July 1
SCC rates take effect August 15
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Board Discussion
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