4/5/2018 Elected Officials Forum Elected Officials Forum April 5, 2018 1 April 5, 2018 California WaterFix Update Larry D. Dick, Director Div. 2 Municipal Water District of Orange County Elected Officials Forum ‐ April 5, 2018 1
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4/5/2018 Project Overview • I mpro ve s lo ng -te rm • Pro te c ts wa te r supplie s with he a lth o f na tive fish a nd wildlife De lta syste m upg ra de s • Re sto re s vita l ha b ita t • Use s dua l tunne l fa c ilitie s ~ 30,000 a c re s in 5 ye a rs a nd e nviro nme ntal mitig a tio n • Suppo rte d b y b ro a de r pub lic • funding F ina nc e d b y inve stme nts fro m wa te r use rs 5 Delta Risks Se a L e ve l Rise F ishe ry De c line s Sub side nc e Se ismic 6 3
4/5/2018 Water Flowing from Delta Watershed IVE USE 4% IN- DEL T A C O NSUMPUT AN 4% MET RO PO L IT DEL T A EXPO RT S 17% UPST REAM C O NSUMPT IVE USE 31% PAC IFIC O C EAN 48% SOURCE : DE L T A VISI ON RE PORT (2007) T IME PE RI OD: 1990-2005 7 E ST IMAT E D T OT AL ANNUAL RUNOF F 32.85 MAF Ca lifo rnia Wa te rF ix F ull Pro je c t – Sta g e d Appro a c h Intake 2 Intake 2 Intake 3 Intake 3 Sacramento Sacramento Intake 5 Intake 5 Intake 5 Intake 5 Intermediate Intermediate Forebay Forebay West West West West East East Tunnel Tunnel Tunnel Tunnel Tunnel Tunnel Stockton Stockton West West West West East East Pumping Plant Pumping Plant Pumping Plant Pumping Plant Pumping Plant Pumping Plant Stage 1 Stage 1 SWP Pumps 8 Stage 2 Stage 2 CVP Pumps 4
4/5/2018 Top Five Reasons for Orange County E nsuring a Re lia b le Supply Suppo rting L o c a l Wa te r Sto ra g e Pro te c ting Ora ng e Co unty’ s I nve stme nt in Wa te r I nfra struc ture Pre se rving Jo b s Pre pa ring fo r Dro ug ht, E me rg e nc ie s 9 Comparison of Metropolitan’s Potential Investments 6,000 cfs SWP (67%) 6,000 cfs SWP (67%) 3,000 cfs CVP (33%) 3,000 cfs MWD (33%) 31.6% 64.6% Metropolitan Share $5.3 billion $10.8 billion Metropolitan Capital Cost Overall Metropolitan Budget Impact • Annual Increase 1.1 % 2.2 % • Overall Increase (at end of 15‐yrs) 1 16 % 33 % Metropolitan’s Incremental Increase 410 TAF up to 840 TAF 10 5
4/5/2018 April 10 th Metropolitan Decision Appro x. a ve ra g e ho use ho ld c o st o f Ca lifo rnia Wa te rF ix in the $2.40/ m o . MWD Se rvic e Are a fo r Sta g e 1 with 6,000 c fs MWD will c o nside r re c e nt a c tivitie s a sso c ia te d with the Ca lifo rnia Wa te rF ix fina nc ing the se c o nd tunne l in a dditio n to funding its sha re $4.80/ m o . o f the sta g e d pro je c t 1. Household impact based on 6.2 million occupied residential households in MWD Service area, 70% residential / 30% industrial split 11 Metropolitan Biennial Budget Brett R. Barbre, Board President Div. 1 Municipal Water District of Orange County Elected Officials Forum ‐ April 5, 2018 6
4/5/2018 MWD‘s Biennial Budget and Rates Process Has Several Objectives Adopt a two‐year budget, covering fiscal years 2018/19 and 2019/20 Adopt rates and charges for calendar years 2019 and 2020 Update ten‐year financial forecast, including the biennial period 13 Key Budget Assumptions Proposed Adopted Fiscal Year Ending 2018 2019 2020 Overall increase January 1 4.0% 3.0% 3.0% Total Water Transactions* 1.70 MAF 1.65 MAF 1.75 MAF State Water Project Allocation 50% 50% 50% Colorado River Aqueduct Diversions 1.04 MAF 0.84 MAF 0.92 MAF Capital Investment Plan (CIP) $200 M $200 M $200 M PAYGo (60% of CIP) $120 M $120 M $120 M * Includes water sales, exchanges, and wheeling 14 7
4/5/2018 Proposed Metropolitan Rate & Charges 2018 Rates & Charges Effective Jan. 1 2019 % Change 2020 % Change (Current) Tier 1 Supply Rate ($/AF) $209 $209 0% $208 0.5% Tier 2 Supply Rate ($/AF) $295 $295 0% $295 0.0% System Access Rate ($/AF) $299 $326 9.0% $346 6.1% Water Stewardship Rate ($/AF) $55 $69 25.5% $65 (5.8%) System Power Rate ($/AF) $132 $127 (3.8%) $136 7.1% Full Service Untreated Volumetric Costs ($/AF) Tier 1 $695 $731 5.2% $755 3.3% Tier 2 $781 $817 4.6% $842 3.1% Treatment Surcharge ($/AF) $320 $319 (0.3%) $323 1.3% Full Service Treated Volumetric Costs ($/AF) Tier 1 $1,015 $1,050 3.4% $1,078 2.7% Tier 2 $1,101 $1,136 3.2% $1,165 2.6% Readiness‐to‐Serve Charge ($M) $140 $133 (5.0%) $136 2.3% Capacity Charge ($/cfs) $8,700 $8,600 (1.1%) $8,800 2.3% 15 Overall Rate Increase 3.0% 3.0% Highlights of the Proposed Biennial Budget Debt service costs decrease by $13 million over the biennial budget period compared to the FY 2017/18 budget and trend lower over the remaining years of 10‐year forecast Planned capital spending of $500 million over the biennium to ensure facilities are well maintained and reliable 16 8
4/5/2018 Highlights of the Proposed Biennial Budget (cont.) Increased support for the Conservation Credits Program, with proposed spending to increase by $5 million (to $43 million) annually It is proposed that the remaining balance in the Water Management Fund be transferred to the Water Stewardship Fund to provide additional support for the Conservation Credits Program 17 Projected Rate Increases and Unrestricted Reserve* Target Reserve Financial Metrics Minimum Reserve 800 Million Dollars 700 600 500 400 300 200 100 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Fiscal Year Ending Overall Rate Inc. 4.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Water Transactions 1.54 1.55 1.65 1.75 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 (MAF)** Rev. Bond Cvg 1.6 1.5 1.6 1.9 2.1 2.1 2.1 2.1 2.2 2.1 2.2 2.2 Fixed Chg Cvg 1.4 1.4 1.5 1.7 1.9 1.8 1.7 1.6 1.6 1.5 1.4 1.3 PA YGO, $M 132 108 120 120 150 150 150 154 158 162 167 171 * Revenue Remainder and Water Rate Stabilization Fund ** Includes water sales, exchanges and wheeling 18 9
4/5/2018 Next Steps April 10 th Board Actions regarding Biennial Budget, Calendar Year rates and charges, and Ten‐Year Financial Forecast 19 FY 2018-19 MWDOC Draft Budget Jeffery M. Thomas, Director Div. 6 Municipal Water District of Orange County Elected Officials Forum ‐ April 5, 2018 10
4/5/2018 MWDOC FY 2018‐19 Budget Schedule • February 2018 • First Draft Budget @ A&F Committee (2‐14) • Initial Member Agency Choice Participation Confirmation (2‐15) • Member Agency Managers Meeting (2‐22) • March 2018 • Second Draft Budget @ A&F Committee (3‐14) • June 2018 • Choice Program Discussions • Member Agencies Confirm Final Choice participation • Member Agency Managers Meeting (3‐22) (6‐15) • Member Agency Formal Comments (3‐28) • August 2018 • April 2018 • Reconciliation of FY 2017‐18 WUE & Choice Programs • Elected Officials Meeting (4‐5) • September 2018 • Third Draft Budget @ A&F Committee • Revised Final Choice Budget @ A&F Committee (9‐12) Meeting (4‐11) • Board Approval of Final Budget & Rates (4‐18) • Board Approval of Revised Final Choice Budget (9‐19) 21 C7 – F7 = $28,368 Unfunded Reserve Balance NO SURPRISES A B C D E F FY 2017-18 Projected FY 2018-19 FY 2018-19 FY 2017-18 Year End Projected # Days Target Current Reclass Reserve 1 Designated Reserves Cash Reserve Balance to Reserves Balance 2 General Operations $ 3,377,754 $ 3,156,569 $ 221,185 $ 3,377,754 90-180 3 Grant & Project Cash Flow 1,500,000 1,500,000 - 1,500,000 4 Building Reserve 10-15 406,479 350,407 27,704 378,111 5 Election Reserve N/A 608,000 304,000 304,000 608,000 6 OPEB Reserve est.9/2016 N/A 209,006 209,006 - 209,006 22 7 TOTALS $ 6,101,239 $ 5,519,982 $ 552,889 $ 6,072,871 11
4/5/2018 MWDOC FY 2018‐19 Budget RATES Fixed Meter Charge @ $12.25 – Increase of 2.9% or $0.35 OCWD Contribution @ $499,204 – Increase of 6.5% or $30,639 REVENUES Core Revenues @ $8,589,018 – Increase of 6.6% or $531,619 (45% from interest) RESERVES Budgeted Draw of $5,277 Reserves Essentially Fully Funded CalPERS Unfunded Liability Payment of $207,000 EXPENSES Core Expenses @ $8,594,295 – Increase of 4.9% or $398,426 23 Core Expense by Line Item EMPLOYEE SALARY & BENEFITS 1.1% 1.6% 1.5% ∑=53.3% DIRECTOR SALARY & BENEFITS 1.6% 6.3% PROFESSIONAL FEES 2.4% BUILDING EXPENSE 2.5% ENGINEERING EXP 3.0% ELECTION RESERVE ∑=76.9% 3.0% CAPITAL ACQUISITION 47.5% LEGAL EXPENSE 3.5% WEROC ∑=85.3% 3.8% CALPERS RESERVE MEMBERSHIPS 6.2% INSURANCE MAINTENANCE 10.1% SOFTWARE SUPPORT 5.8% 24 OTHER 12
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