HomeMy WebLinkAbout03-07-18 Board Packet 1
OTAY WATER DISTRICT
BOARD OF DIRECTORS MEETING
DISTRICT BOARDROOM
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
WEDNESDAY
March 7, 2018
3:30 P.M.
AGENDA
1. ROLL CALL
2. PLEDGE OF ALLEGIANCE
3. APPROVAL OF AGENDA
4. APPROVE THE MINUTES OF THE SPECIAL BOARD MEETING ON DECEMBER 11,
2017
5. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO
SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURIS-
DICTION BUT NOT AN ITEM ON TODAY'S AGENDA
CONSENT CALENDAR
6. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS
MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PARTICU-
LAR ITEM:
a) APPROVE AN AGREEMENT WITH ADP, LLC, FOR SOFTWARE SERVICES
RELATED TO PAYROLL AND PERSONNEL MANAGEMENT IN THE AMOUNT
OF $18,675 FOR IMPLEMENTATION COSTS AND AN ANNUAL SERVICE FEE
OF $58,009
b) APPROVE A PAYMENT IN THE AMOUNT OF $129,248 TO SAN DIEGO GAS &
ELECTRIC FOR NEW ELECTRIC SERVICE FOR THE 870-2 PUMP STATION
REPLACEMENT PROJECT
c) APPROVE AN INCREASE TO THE CIP S2045 BUDGET IN THE AMOUNT OF
$60,000 AND AWARD A CONSTRUCTION CONTRACT TO BURTECH PIPE-
LINE INCORPORATED FOR THE FUERTE DRIVE SEWER RELOCATION PRO-
JECT IN AN AMOUNT NOT-TO-EXCEED $193,690
2
d) REJECT ALL BIDS FOR THE CONSTRUCTION OF THE STEELE BRIDGE
SEWAGE PUMP STATION WET WELL IMPROVEMENTS PROJECT (R2118)
e) REJECT ALL BIDS FOR CONSTRUCTION OF THE 520 RESERVOIRS CHEMI-
CAL FEED IMPROVEMENTS PROJECT (P2557)
ACTION ITEMS
7. GENERAL MANAGER
a) APPROVE DONATION TO ASSOCIATION OF CALIFORNIA WATER AGEN-
CIES (ACWA) FOR WATER EDUCATION (OTERO)
8. BOARD
a) DISCUSSION OF THE 2018 BOARD MEETING CALENDAR
INFORMATIONAL ITEM
9. THE FOLLOWING ITEMS ARE PROVIDED TO THE BOARD FOR INFORMATIONAL
PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA
ITEMS:
a) PRESENT RESULTS OF THE CURRENT SEWER COST OF SERVICE STUDY
PREPARED BY HDR ENGINEERING, INC. (KOEPPEN)
b) SECOND QUARTER OF FISCAL YEAR 2018 CAPITAL IMPROVEMENT PRO-
GRAM REPORT (MARTIN)
c) FISCAL YEAR 2018 MID-YEAR STRATEGIC PLAN UPDATE (SEGURA)
REPORTS
10. GENERAL MANAGER’S REPORT
11. SAN DIEGO COUNTY WATER AUTHORITY UPDATE
12. DIRECTORS' REPORTS/REQUESTS
13. PRESIDENT’S REPORT/REQUESTS
RECESS TO CLOSED SESSION
14. CLOSED SESSION
a) CONFERENCE WITH LABOR NEGOTIATORS [GOVERNMENT CODE
§54957.6]
AGENCY DESIGNATED REPRESENTATIVES: MARK ROBAK AND TIM SMITH
3
EMPLOYEE ORGANIZATION: OTAY WATER DISTRICT EMPLOYEES’ ASSOCI-
ATION
AND
ALL REPRESENTED AND UNREPRESENTED PERSONNEL INCLUDING MAN-
AGEMENT AND CONFIDENTIAL EMPLOYEES
b) CONFERENCE WITH REAL PROPERTY NEGOTIATORS [GOVERNMENT
CODE §54956.8]
PROPERTY: SALT CREEK GOLF COURSE
525 HUNTE PARKWAY
CHULA VISTA, CA 91914
AGENCY NEGOTIATOR: MARK WATTON, GENERAL MANAGER
NEGOTIATING PARTIES: BILL McWETHY, PACIFIC HOSPITALITY
GROUP
UNDER NEGOTIATIONS: INSTRUCT NEGOTIATOR CONCERNING
PRICE, TERMS OF PAYMENT, OR BOTH, FOR THE
PURCHASE, SALE AND/OR LEASE OF THE PROP-
ERTY.
c) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERN-
MENT CODE §54956.9]
OTAY WATER DISTRICT v. CITY OF SAN DIEGO; CASE NO. 37-2017-
00019348-CU-WM-CTL
RETURN TO OPEN SESSION
15. ADOPT RESOLUTION NO. 4343 TO APPROVE A ONE (1) YEAR EXTENSION (JULY
1, 2018 THORUGH JUNE 30, 2019) TO THE CURRENT MEMORANDUM OF UNDER-
STANDING (MOU) BETWEEN THE OTAY WATER DISTRICT AND THE OTAY WATER
DISTRICT EMPLOYEE’S ASSOCIATION, TO INCLUDE A COST-OF-LIVING ADJUST-
MENT UNDER THE SAME TERMS AS REFERENCED IN THE MOU FOR YEARS 2015
THROUGH 2017 FOR REPRESENTED EMPLOYEES, AND APPROVE THE SAME
PROVISIONS FOR MANGEMENT, CONFIDENTIAL AND EXECUTIVE EMPLOYEES
(WILLIAMSON)
16. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO
TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION
17. ADJOURNMENT
4
All items appearing on this agenda, whether or not expressly listed for action, may be
deliberated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the District’s
website at www.otaywater.gov. Written changes to any items to be considered at the open
meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda
and all attachments are also available through the District Secretary by contacting her at (619)
670-2280.
If you have any disability which would require accommodation in order to enable you to partici-
pate in this meeting, please call the District Secretary at (619) 670-2280 at least 24 hours prior
to the meeting.
Certification of Posting
I certify that on March 2, 2018, I posted a copy of the foregoing agenda near the regular
meeting place of the Board of Directors of Otay Water District, said time being at least 72 hours
in advance of the regular meeting of the Board of Directors (Government Code Section
§54954.2).
Executed at Spring Valley, California on March 2, 2018.
/s/ Susan Cruz, District Secretary
1
MINUTES OF THE
SPECIAL MEETING OF THE
BOARD OF DIRECTORS
OTAY WATER DISTRICT
December 11, 2017
1. The meeting was called to order by President Robak at 12:12 p.m.
2. ROLL CALL
Directors Present: Gastelum, Robak, Smith and Thompson
Directors Absent: Croucher (assigned to fight fires)
Staff Present: General Manager Mark Watton, General Counsel Dan
Shinoff, Consultant Harry Erhlich, Chief Financial Officer Joe
Beachem, Chief of Engineering Rod Posada, Chief of
Operations Pedro Porras, Chief of Administration and
Information Technology Adolfo Segura, District Secretary
Susan Cruz and others per attached list.
3. PLEDGE OF ALLEGIANCE
4. APPROVAL OF AGENDA
A motion was made by Director Smith, seconded by President Robak and carried
with the following vote:
Ayes: Directors GasteIum, Robak, Smith and Thompson
Noes: None
Abstain: None
Absent: Directors Croucher
to approve the agenda.
5. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO
SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S
JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
Mr. Bob (Basman) Bakayou of El Cajon indicated that he was constructing an
accessory dwelling unit (ADU) on his property. He stated that based on the new
fixture count on his property, it would require that he upgrade his property meter
from ¾” to 1” at an approximate cost of $20,000. He stated there were bills passed
by the legislature addressing such fees.(SB 1069 and 229) and Senate Bill 2299
indicated that the fees should be “proportionate to the burden of the proposed ADU
2
based on either size or number of plumbing fixtures. This fee or charge shall not
exceed the reasonable cost of providing this service.” Mr. Bakayou indicated that
the fee for a ¾” meter is $14,000 and the cost to upgrade to a 1” meter is
approximately $20,000. He stated, in his opinion, the cost is not proportionate or
reasonable. He felt that the burden that his ADU will be placing on the system is
not nearly as much as a brand new house. In his discussion with Otay WD staff,
the District indicated that the bill does not apply to special districts. Mr. Bakayou
indicated the accessory bill, AB 229, passed a few months ago, states that Special
Districts are now included in the law (SB 0169). He requested that the District
review the new law and address his concerns.
It was discussed that the required meter size for a property is determined by fixture
count and not by Equivalent Dwelling Unit (EDU). Director Smith explained that
with flowing water there is not a straight line function for its demand on the system.
When a meter increases in size from a ¾” to 1”, the flow rate jumps at a ratio of 1 to
2.5 and this is the reason for the cost jump. General Manager Watton indicated that
staff will bring back a report on this issue to the board at a future meeting. It was
requested that Mr. Bakayou be made aware when this item is brought back to the
board.
WORKSHOP
6. DISCUSSION OF THE GENERAL MANAGER’S REVIEW PROCESS
President Robak introduced Mr. Harry Ehrlich of Project Resource Specialist who
will be facilitating the board workshop. Mr. Ehrlich has been involved in the water
industry for many years and has worked at Ramona WD, Olivenhain MWD and
most recently for the Local Agency Formation Commission (LAFCO). He
additionally worked as a consultant for the Special Districts Leadership Foundation
and served on the California Special Districts Association (CSDA) Board as
President where they developed the Leadership Academy training program. He is a
current member of the Borrego Springs WD’s board.
Mr. Ehrlich indicated that the evaluation of the General Manager serves as a tool for
the Board to communicate their expectations and for the General Manager to
communicate his/her expectations. The evaluation also provides for the board to
assess the District’s progress on goals/objectives, communicate what is going
well/not well, determine goals for the next year, and decide on the General
Manager’s contract extension/renewal. He stated that the evaluation document
should focus on the following criteria:
Relationship with the Board
Management skills and abilities
Knowledge of the community served
Fiscal management
Professional and personal attributes
3
Effective leadership of staff
The Board and GM should agree on the criteria of the evaluation
Establish a policy and timeline for the process with start to finish dates
He stated that there is no perfect form, but the Board should agree in advance on
the form and there should be a “no surprise” approach and the review should be
objective (outcome based).
The board discussed the evaluation form and the process at length and agreed that
the present form was acceptable. It was agreed that the General Manager’s review
process would begin in June and the General Manager will provide a report specific
to how he has met his objectives along with a self-appraisal utilizing the
performance evaluation form. The President of the Board will determine the
timeline for the evaluation process.
7. DISCUSSION OF BOARD OF DIRECTORS POLICY 8, DIRECTORS
COMPENSATION, REIMBURSEMENT OF EXPENSES AND GROUP
INSURANCE BENEFITS
It was discussed that in September 2004, the sitting board voted to reduce the
Board of Directors per diem from $145 to $100 per meeting. Not long after the per
diem was reduced to $100, the board held a workshop to discuss per diems. No
changes were made to the per diem rate at that meeting and no changes have been
to date. The board discussed that they felt that the per diem rate was low in
comparison to other water agencies and that they should consider increasing the
rate. The board discussed possible alternatives to adjust the rate, but had legal
concerns as the law states that per diems cannot be raised more than 5% annually.
The board discussed a per diem survey completed in August 2017 of water
agencies in the Counties of San Diego, Orange and Riverside where agencies with
similar budgets to Otay WD have a per diem rate of $200 or above.
President Robak made a motion to raise the District’s board member per diem rate
to $200 per meeting with an annual cost-of-living escalator. Director Thompson
seconded the motion.
There was discussion that it is felt that a higher per diem would encourage more
participation and that the rate should be reflective of the size of the agency.
Director Thompson suggested an amendment to the motion. He stated that he did
not wish to set a specific per diem amount and suggested taking the agencies in the
presented survey and sorting them in order of the lowest to the highest per diem
rate and calculating the 40th percentile based on the number of employees
(example: 3000 employees at 40th percentile is 1200) and the District’s per diem
rate would be set at whichever agency has the “1200 employee”. This rate would
then be adjusted annually from this point forward.
4
Director Gastelum suggested taking the average and the median of the per diems in
the survey and taking the amount in the middle of the two figures. He inquired of
general counsel if the law would allow the board to vote on this per diem increase.
General Counsel Shinoff indicated that he is concerned about the 5% limit that the
law refers to and would like to review the law and the fact that the District has not
instituted any per diem rate increases since 2004. He indicated he did not wish to
put the District in a compromised position.
Director Thompson indicated that he suggested the 40th percentile based on the
number of employees as it takes into account the size of the agency. He stated he
wished the public to know that the District’s per diem rate is below average (there
are move agencies with higher per diem rates than the District) and would like to
send the message that the District board members do not want to be over
compensated, just wanted to be reasonably compensated.
President Robak amended his motion to increase Director’s per diem rate to $180
($100 compounded 5% annually for 12 years) with an annual Cost-of-Living
Adjustment (COLA) similar to the employee COLA increases (capped at 3%)
subject to General Counsel’s findings. Director Gastelum seconded the motion.
Director Smith suggested that the board wait until General Counsel reviews State
law to determine what is legal and suggested an amendment to the motion to direct
General Counsel to prepare a memo on allowable per diem increases.
Director Thompson indicated that he would like the Board to consider phasing in
any increases.
President Robak rescinded his motion. The per diem discussion was referred back
to staff and counsel to provide a memo regarding allowable per diem increases by
law.
The board recessed at 2:13 p.m. and reconvened at 2:23 p.m.
8. DISCUSSION OF COLLABORATING WITH STAFF MORE CLOSELY ON THE
UPDATE OF THE DISTRICT’S STRATEGIC PLAN
The board discussed the Strategic Plan and the importance and process of setting
direction. It was indicated that developing a new Strategic Plan periodically allows
the board and staff the opportunity to re-vitalize and renew its vision and goals. The
board reviewed the District’s mission, vision, values, and discussed the
development of goals and performance measures to set direction and measure the
success of the District in meeting its goals.
Director Thompson stepped out at 2:59 p.m. and returned at 3:01 p.m.
5
Each director shared items they wished added to the list of District goals:
North/South Interconnect Pipeline as it will provide for a 10-day emergency
supply for the District.
Develop Employee mentor program to grow capabilities and skills; formalize
this goal by including it in the District’s policies.
Continue to look at diversifying water supplies.
Continue to keep water rates low and reliability high. Currently, the District’s
water rates is the third lowest among the water agencies in the County.
Proactively monitor regulatory environment and possible impact to the
District’s operations.
Successfully complete labor negotiations.
Continue to work with Sweetwater Authority to explore the possibility of
placing the output from the District’s Ralph W. Chapman Water Recycling
Facility (RWCWRF) into the Sweetwater Reservoir.
Explore a possible “formalized” grant program where the District employs in-
house personnel or consultants whose job is to find available grants and
draft grant applications to take maximum advantage of grants.
The District’s Chiefs shared their divisions’ goals for the new three (3) to five (5)
year strategic plan. Please reference the Strategic Plan draft provided for agenda
item 7 in the board documents.
Director Thompson left at 4:29 p.m.
The board was appreciative of the openness of the discussion and felt that the
District was headed in the right direction. They thanked Mr. Erhlich for his work in
facilitating today’s workshop.
9. ADJOURNMENT
With no further business to come before the Board, President Robak adjourned the
meeting at 4:31 p.m.
___________________________________
President
ATTEST:
District Secretary
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Kevin Koeppen,
Assistant Chief of Finance
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
Mark Watton, General Manager
SUBJECT: Replacement of the District’s Payroll and Timesheet Modules
with a Third-party Payroll Solution
GENERAL MANAGER’S RECOMMENDATION:
That the Board authorize the General Manager to enter into an
agreement with ADP, LLC. (ADP), for software services related to
payroll and personnel management in the amount of $18,675 for
implementation costs and an annual service fee of $58,009.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To authorize the General Manager to enter into service agreement with
ADP for software services to support the District’s payroll
processing and personnel database.
ANALYSIS:
Staff routinely examines processes and procedures to determine if
there are opportunities to increase their efficiency and
effectiveness. Due to the retirement of the District’s payroll
technician and to the increasingly complex payroll regulatory
2
environment, staff evaluated the potential benefits and risks of
utilizing a third-party payroll provider for its payroll processing.
The District currently processes payroll using its ERP system, Eden,
and a timesheet system developed and maintained by the District’s IT
staff. Finance staff is responsible for ensuring the Eden system
tables and calculations comply with all changes in regulatory
requirements. Due to the financial risks and cost to administer and
stay abreast of payroll regulations, firms have increasingly turned
to third-party providers for assistance with their payroll process.
The benefits of utilizing a third-party payroll provider include:
leveraging those systems and resources for payroll compliance;
utilizing their timesheet system; incorporating best management
practices and internal controls; and gaining technological
capabilities that would not be financially feasible for the District
to undertake. Some of the technological capabilities staff observed
during the evaluation include: mobile applications, an advanced
timekeeping system, integrated open enrollment processing, and a
streamlined employee onboarding process.
Through efficiencies gained from the utilization of a third-party
payroll provider, staff will be able to reduce one full-time
equivalent (FTE). When considering the FTE reduction and other
miscellaneous cost reductions, staff estimates the District will
generate a net annual savings of $50,000.
Staff met with multiple national and local payroll providers to
evaluate their ability to meet the District’s needs. The vendors
staff met with included: ADP, Paychex, Ultipro, Paylocity, and
Coastal Payroll Services. During the discovery process Ultipro,
Paylocity, and Coastal Payroll Services removed themselves from
consideration due to their system’s limitations. Limitations for
these providers included the inability to: import hours from an
external source into the provider’s timesheet system, meet the
District’s general ledger requirements, and/or manage the District’s
multiple schedules.
The remaining vendors, Paychex and ADP, submitted proposals and
presented demonstrations of their solutions to staff. Based on the
demonstrations and follow-up investigation, Paychex was not able to
meet the District’s needs due to limitations in its timesheet system,
concerns about their ability to manage the District’s flex schedules,
and lack of workflow.
ADP’s technology infrastructure methodology and their practice for
internal information security is excellent. ADP’s cloud solution
3
promotes a dedicated, secure, and exclusive framework to support the
District’s payroll and other financial management services. The
model presented includes employee encryption accessibility, redundant
electrical power and cooling throughout their various datacenter
locations, redundant firewalls, network protocol security,
infrastructure security, business continuity measures, and incident
recovery.
The implementation process is scheduled to be completed in the first
quarter of fiscal year 2019.
FISCAL IMPACT:
The implementation fee of $18,675 and the annual service fee of
$58,009 will be funded by the reduction of one FTE. Staff expects
the project will be cost neutral in the year of implementation and
generate a net annual savings of approximately $50,000 in subsequent
years.
The fees are fixed for a period of four (4) years.
STRATEGIC GOAL:
This item supports the District’s strategic plan objective, Advance
Business Processes and Operational Efficiencies through the
Implementation of Information Technology.
LEGAL IMPACT:
None.
Attachments: A) Committee Action
B) ADP Contract
ATTACHMENT A
SUBJECT/PROJECT:
Replacement of the District’s Payroll and Timesheet Modules
with a Third-party Payroll Solution
COMMITTEE ACTION:
The Finance and Administration Committee reviewed this item at a
meeting held on February 21, 2018 and the following comments were
made:
Staff is requesting that the board approve an agreement with ADP,
LLC (ADP) for software services related to payroll and personnel
management in the amount of $18,675 for implementation costs and an
annual service fee of $58,009.
Staff reviewed information in the staff report.
In response to an inquiry from the Committee, staff indicated that
ADP’s fee is fixed for four (4) years and would then be increased by
a CPI adjustment following the fourth year. As part of the
negotiations process, staff had negotiated a free month each year
for the first four (4) years to offset any implementation fees as it
was wished that the implementation costs for ADP’s services be cost
neutral.
The District will have the benefit of ADP’s resources to keep the
District in compliance with payroll regulations.
Director Robak noted that his company utilizes ADP for payroll
processing and inquired if this would present a conflict and require
that he recuse himself from voting on this item. Attorney Jeanne
Blumenfeld indicated that it did not as ADP’s services are generally
available to the public and the District had considered many payroll
firms in its search for a provider.
Staff indicated that the implementation process would begin in the
first quarter of FY 2019. During the implementation process, the
District will continue to employ a temporary payroll staff member.
Thus, when the FY 2019 budget is developed it will include the
payroll position. Once ADP’s services has been fully implemented,
the FY 2019 budget will have savings as the payroll position will no
longer be needed. The position will be fully eliminated in the FY
2020 budget.
Upon completion of the discussion, the committee supported staffs’
recommendation and presentation to the full board on the consent
calendar.
Investment Summary
Quote Number
02-2018-18765.2
Company Information
Otay Water District
2545 Sweetwater Springs Blvd
Spring Valley, CA 91978
United States
135
Total
Employees
ADP Sales Associate
Brittany Caselli
MAS UM OM
brittany.caselli@adp.com
(619) 688-4736
$18,675.00
Implementation
Costs
Expiration
2/26/2018
Executive Contact
Kevin Koeppen
Finance Manager
kevin. koeppen@otavwater .aov
(619) 670-2250
$58,009.35
Total Annual
Investment
Sales Order
Quote Number
02-2018-18765.2
Company Information
Otay Water District
2545 Sweetwater Springs Blvd
Spring Valley, CA 91978
United States
Processing Fees and Considerations
Number of Employees: 135 on Otay Water District
@ Per Processing
Workforce Now Payroll Solutions
• Essential Plus Payroll
Employment and Income Verification
• Employment Verification
~ Monthly Processing
Workforce Now HCM Solutions
• Enhanced HR
• Benefits Administration
• HR Assist
Workforce Now Time and Attendance
• Enhanced Time
• Hosting Services
• Enhanced Scheduler
• Enhanced Leave
Workforce Now Time and Attendance
Additional Jurisdiction (if applicable)
International Employees Rate (if
applicable)
~ Annual Processing
Year End Forms, W2s or 1 099s
@ Total Annual Investment
Workforce Now Services
Other Considerations
Hardware and Other Fees
• Additional Manager Licenses
Implementation
• Implementation for Workforce Now HCM Solutions
Count Min
135
Count Min
135
135 $2,650.00
2+
Count Min
135
Count
2
Base
$90.00
Base
Base
Executive Contact
Kevin Koeppen
Finance Manager
kevin.koeppen(ci)otaywater.ggy
(619) 670-2250
Rate
$2.25
Rate
$9.28
Bi-Weekly
$393.75
Monthly
$1,252.80
See Below $2,650.00
$13.25
$8.95/month
$3.00/month
Rate
$6.95
Annual
$10,237.50
Annual
$15,033.60
$31,800.00
Annual
$938.25
Total Annual
$58,009.35
Rate Setup
$1,000.00 $2,000.00
$3,300.00
Sales Order
Quote Number
02-2018-18765.2
Company Information
Otay Water District
2545 Sweetwater Springs Blvd
Spring Valley, CA 91978
United States
Implementation
• Implementation for Workforce Now Time and Attendance
• Implementation for WFN extension to calculate FLSA overtime rates
• Client will load hours history themselves
®Total Other Considerations
Implementation and Setup
Implementation Discount Value
Estimated Total Net Implementation
Executive Contact
Kevin Koeppen
Finance Manager
kevin. koeppen@otawtater .gov
(619) 670-2250
$11,875.00
$1,500.00
N/A
Total Setup
$51,500.00
( $32,825.00 )
$18,675.00
Sales Order
Quote Number
02-2018-18765.2
Company Information
Otay Water District
2545 Sweetwater Springs Blvd
Spring Valley, CA 91978
United States
Important Project and Billing Information
Product
Executive Contact
Kevin Koeppen
Finance Manager
kevln.koeppen®otaywater.gov
(619) 670-2250
Billing for Payroll Processing Services, HCM and any module bundled into the single per employee per processing fee for payroll,
is billed immediately following the client's first payroll processing. The billing count is based on the number of pays submitted
during each processing period, therefore total billing may fluctuate.
Billing for Enhanced Time will be begin on the date Enhanced Time is available for use by the client in a production environment.
The billing counts is based on all non-terminated employees in the Time Module. This count includes practitioners and supervisors.
Billing for all modules bundled under HCM Solutions will begin on the date the ADP Product or Service is available for use by the
client in a production environment. The billing count is based on all unique lives in the database paid in the previous calendar month.
Any non-terminated employees based outside the United States will be billed separately as International Employees.
The Enhanced Time pricing is based solely on tracking US employees Only. Extra fees will apply for tracking any lives outside the
us.
Other
Start Date: Payroll:6/22/2018l Time:8/3/2018l HCM:8/17/2018
ADP's Fees for Service will be debited directly out of client's bank account of their choosing seven (7) days
from invoice date.
Expiration Date: 2/26/2018
Summary
Estimated Annual Net Investment: $58,009.35 Total Net
Implementation:
$18,675.00
The ADP Services listed on this Sales Order and the fees for such services set forth above are not final and remain subject to approval
by ADP Finance in all respects. Once final, Client will receive a revised final, executable sales order to be signed by both ADP and
Client.
Sales Order
Quote Number
02-2018-18765.2
Company Information
Otay Water District
2545 Sweetwater Springs Blvd
Spring Valley, CA 91978
United States
Workforce Now Included SeNices
Essential Plus Payroll
• Tax Filing Service
• Payment Services
• Reports Library and Custom Report Writer
• Wage Garnishment Processing
• Group Term Life Auto Calculation
• One Delivery Location
Enhanced HR
• ADP Portal with Customized Content
• Paid Time Off (PTO) Accruals Engine
• Multiple Language & Currencies
• Country Specific Workflows & Processes
• Country Specific Custom Fields & Formatting
• Employee and Manager Self Service
Benefits Administration
• Multiple Benefit Plan Types
• Flexible Rate Structures (Age Banded & Salary
Tiers)
• Notifications & Approvals
• Invoice Auditing
• Annuai1095-C Forms
HR Assist
• HR Forms Compliance Library and Webinars
• Employee Handbook
• Labor Law Posters
Enhanced Time
• Multiple Time Collection Methods
• PTO Management & Reporting
• Request & Approval Workflows
• Scheduling
Hosting Services
Enhanced Scheduler
Enhanced Leave
Employment Verification
• Commercial Employment and Income
Verifications
Executive Contact
Kevin Koeppen
Finance Manager
kevin.koeppen@otavwater .gov
(619) 670-2250
• Employee and Manager Self Service
• Access to Mobile Apps
• Employee Discount Program
• New Hire Reporting
• General Ledger Solution
• Online Reports and Pay Statements
• Employee Development Tracking
• Onboarding
• Compliance Reporting
• Organization Charting
• Policy Acknowledgement
• Dependent & Beneficiary Tracking
• Employee Open Enrollment
• ACA Measurement Dashboard
• Evidence of Benefit Offering Screens
• Annuai1094-C Filing
• Sample Job Description
• Employer Helpdesk (proactive outreach)
• ACA Support
• Rule Based Calculations
• Enhanced Accruals 'Engine'
• Time Off Request Template
• Access to Mobile Apps
• Client access to Electronic Reports and Tools
Sales Order
Quote Number
02-2018-18765.2
Company Information
Otay Water District
2545 Sweetwater Springs Blvd
Spring Valley, CA 91978
United States
Workforce Now Included Services
• Social Services Verifications
• Workers Compensation Verifications
Executive Contact
Kevin Koeppen
Finance Manager
kevin.koenpen®otaywater .qov
(619) 670-2250
• Immigration Verifications
Thank you for your consideration
~ Major Accounts Services Amor~ hufl'.lJ'ore>ource.
Master Services Agreement
ADP, LLC: (referred to herein as "ADP") Client: (referred to herein as "Client")
One ADP Boulevard
Roseland, New Jersey 07068
United States
Otay Water District 01-12-2018
2545 Sweetwater Springs Blvd (Effective Date)
Spring Valley, CA 91978, United States
Attention
Kevin Koeppen
ADP and Client agree that ADP shall provide Client with the following services in accordance with the terms and subject to the conditions
set forth in this Major Accounts Services Master Services Agreement (the "Agreement")
ANNEXA: GENERAL TERMS AND CONDITIONS
ANNEX B: PAYROLL PROCESSING & TAX FILING; EMPLOYMENT VERIFICATION SERVICES
ANNEX C: [TIME AND ATTENDANCE SERVICES
ft\NNEX D: HR, BENEFITS AND TALENT MANAGEMENT SERVICES
~NNEX L: HR ASSIST SERVICES
BY SIGNING BELOW, CLIENT ACKNOWLEDGES THAT THEY HAVE REVIEWED THE ENTIRE AGREEMENT INCLUDING THETERMS AND
CONDITIONS IN EACH ANNEX CORRESPONDING TO SERVICES PURCHASED PURSUANT TO THE SALES ORDER.
This Agreement includes the Annexes related to the services selected by Client. Each Annex listed above is attached
hereto and is incorporated into this Agreement in full by this reference as if set forth in this Agreement in full.
ADP, LLC CLIENT
(Signature of Authorized Representative) (Signature of Authorized Representative)
(Name -Please Print) (Name -Please Print)
(Title) (Date) (Title) (Date)
ADP Proprietary and Confidential 02-2018-18765.2 ADP Major Account Services
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Major Accounts Services I Annex A
General Terms and Conditions
1 Definitions.
1.1 "ADP" has the meaning set forth on the cover page.
A more human resource:
1.2 "ADP Application Programs" means the computer software programs and related Documentation, including any updates,
modifications or enhancements thereto, that are either delivered or made accessible to Client through a hosted environment
by ADP in connection with the Services.
1.3 "ADP Workforce Now" means ADP's web-based portal which provides a single point of access to ADP online solutions and
employee-facing websites and resources related to payroll, HR, benefits, talent, and time and attendance. A general
description of the Services can be found at www.productdescription.majoraccounts.adp.com (which may be modified from
time to time provided, however, that any such modifications will not have a material adverse impact on any of the Services
Client is receiving).
1.4 "Agreement" means this Major Accounts Services-Master Services Agreement, consisting of the signature pages, the
General Terms and Conditions, all exhibits, annexes, addendum, appendices and schedules, and each Amendment, if any.
1.5 "Affiliate" means any individual, corporation or partnership or any other entity or organization (a "person") that controls, is
controlled by or is under common control with Client. For purposes of the preceding definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such
person, whether through ownership of voting securities or by contract or otherwise.
1.6 "API" means ADP approved application programming interface(s) that support point to point interaction of different systems.
1.7 "Approved Country" means each country in which, subject to the terms of this Agreement, Client is authorized to use or
receive the Services. The Approved Country for the Services is the United States.
1.8 "Access Country" means each country in which, subject to the terms of this Agreement, Client is authorized to use or
access the HR and/or Talent modules of ADP Workforce Now (but specifically excluding document cloud services and any
other modules/tools that ADP, in its sole discretion, determines shall not be accessible to Client employees located outside
the United States) and as approved by ADP. A list of Access Countries for the applicable Services is found at found at
www.oroductdescription.maloraccounts.adp.com.
1.9 "Business Day" means any day, except a Saturday, Sunday or a day on which ADP's bank is not open for business in the
applicable jurisdiction where services are provided by ADP.
1.10 "Client" has the meaning set forth on the cover page.
1.11 "Client Content" means all information and materials provided by Client, its agents or employees, regardless of form, to
ADP under this Agreement.
1.12 "Client Group" means Client and Client's Affiliates means Client and Client's Affiliates who are receiving Services under
this Agreement pursuant to a Sales Order.
1.13 "Client Infringement Event" means (i) any change, or enhancement in the Services made by Client or any third party on
behalf of Client other than at the direction of, or as approved by, ADP, (ii) Client's use of the Services except as
contemplated by this Agreement, or (ii i) to the extent ADP Application Programs include computer software programs,
Client's use of other than the most current release or version of such computer software programs included in the ADP
Application Programs, or Client's failure to use corrections or enhancements to such computer software programs included
in the ADP Application Programs, in each case provided by ADP to Client at no charge, that results in a claim or action for
infringement that could have been avoided by use of such current release or version, or by such corrections or
enhancements.
1.14 "Confidential Information" means all information of a confidential or proprietary nature, including pricing and pricing related
information and all Personal Information, provided by the disclosing party to the receiving party under this Agreement but
does not include (i) information that is already known by the receiving party, (ii) information that becomes generally available
to the public other than as a result of disclosure by the receiving party in violation of this Agreement, and (iii) information that
becomes known to the receiving party from a source other than the disclosing party on a non-confidential basis.
1.15 "Documentation" means all manuals, tutorials and related materials that may be provided or made available to Client by
ADP in connection with the Services.
1.16 "General Terms and Conditions" means the terms and conditions contained in this Annex A.
1.17 "Gross Negligence" has the meaning set forth in Section 7.3.1.
1.18 "Improvements" has the meaning set forth in Section 5.4
1.19 "Incident" means a security breach (as defined in any applicable law) or any other event that compromises the security,
confidentiality or integrity of Client's Personal Information.
1.20 "lndemnitees" has the meaning set forth in Section 6.3
1.21 "Indemnitor" has the meaning set forth in Section 6.3.
1.22 "Intellectual Property Rights" means all rights, title and interest to or in patent, copyright, trademark, service mark, trade
secret, business or trade name, know-how and rights of a similar or corresponding character.
1.23 "Internal Business Purposes" means the usage of the Services solely by the Client Group for its own internal business
purposes, without the right to provide service bureau or other data processing services, or otherwise share or distribute the
Services, to any party outside the Client Group, unless expressly contemplated by this Agreement.
1.24 "NACHA" means the National Automated Clearing House Association.
1.25 ''OFAC" means the Office of Foreign Assets Control.
1.26 "Payee" means any intended recipient of payments under the Payment Services and may include Client's employees, taxing
authorities, governmental agencies, suppliers. benefit carriers and/or other third parties; provided that in the case of ADP
Wage Payment Services, Payee shall be limited to Client's employees and independent contractors.
1.27 "Payment Services" means any Services that involve electronic or check payments being made by ADP to third parties on
Client's behalf and at its direction.
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1.28 "Personal Information" means information relating to an identified or identifiable natural person. An identifiable natural
person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or
more factors specific to such person's physical, physiological, mental, economic, cultural or social identity.
1.29 "Price Agreement" means a supplemental agreement between the parties that addresses future price increase rates on
certain Services over a specific period of time.
1.30 "Sales Order(s)" means the document(s) between the parties that lists the specific Services purchased by Client Group
from ADP.
1.31 "Services" means the services (including implementation services related thereto) listed in any Sales Order, and such other
services as the parties may agree to be performed from time to time.
1.32 "SOC 1" means any routine Service Organization Control 1 reports.
1.33 "Termination Event" means with respect to any party, the occurrence of any of the following: (i) under the applicable
bankruptcy laws or similar law regarding insolvency or relief for debtors, (A) a trustee, receiver, custodian or similar officer is
appointed over a party's business or property, (B) a party seeks to liquidate, wind-up, dissolve, reorganize or otherwise
obtain relief from its creditors, or (C) an involuntary proceeding is commenced against a party and the proceeding is not
stayed, discharged or dismissed within thirty (30) days of its commencement, or (ii) a party's Standard and Poor's issuer
credit rating falls to or below BB.
1.34 "User" means any single natural person who, subject to the terms of this Agreement, is authorized by Client to use, access
or receive the Services.
2 Provision and Use of Services
2.1 Provision of Services. ADP, or one of its Affiliates, will provide the Services to Client in accordance with the terms of this
Agreement and any applicable Sales Order(s) ADP will provide the Services in a good, diligent and professional manner in
accordance with industry standards, utilizing personnel with a level of skill commensurate with the Services to be performed.
ADP's performance of the Services (including any applicable implementation activities) is dependent upon the timely
completion of Client's responsibilities and obligations under this Agreement. Without limitation of the foregoing, Client will
timely provide the Client Content necessary for ADP to provide the Services.
2.2 Cooperation. ADP and Client will work together to implement the Services. Client will cooperate with ADP and execute
and deliver all documents, forms, or instruments necessary for ADP to implement and render the Services. Client will
provide ADP with all reasonable and necessary Client Content in the format requested by ADP, and will otherwise provide
all reasonable assistance required of Client in order for ADP to implement the Services.
2.3 Use of Services. Client will use the Services in accordance with the terms of this Agreement and solely for its own Internal
Business Purposes in the Approved Country and the Access Countries. Client will be responsible for the use of the
Services by the Client Group and the Users in accordance with the terms of this Agreement. Client is responsible for the
accuracy and completeness of the Client Content provided to ADP.
2.4 Errors. Client will promptly review all documents and reports produced by ADP and provided or made available to Client
in connection with the Services and promptly notify ADP of any error, omission, or discrepancy with Client's records. ADP
will promptly correct such error, omission or discrepancy and, if such error, omission or discrepancy was caused by ADP,
then such correction will be done at no additional charge to Client.
2.5 Records. Without prejudice to ADP's obligation to retain the data necessary for the provision of the Services, ADP does not
serve as Client's record keeper and Client will be responsible for retaining copies of all documentation received from and
Client Content provided to ADP in connection with the Services to the extent required by Client
3 Compliance.
3.1. Applicable Laws. Each party will comply with applicable laws and regulations that affect its business generally, including
any applicable anti-bribery, export control and data protection laws
3.2. Design of the Services. ADP will design the Services, including the functions and processes applicable to the performance
of the Services, to assist the Client in complying with its legal and regulatory requirements applicable to the Services, and
ADP will be responsible for the accuracy of such design. Client and not ADP will be responsible for (i) how it uses the
Services to comply with its legal and regulatory requirements and (ii) the consequences of any instructions that it gives or
fails to give to ADP, including as part of the implementation of the Services, provided ADP follows such instructions.
Services do not include any legal, financial, regulatory, benefits, accounting or tax advice.
3.3. Online Statements. If Client instructs ADP to provide online pay statements, Forms W2, Forms 1099 or Forms 1095-C, as
applicable, without physical copies thereof, Client will be exclusively responsible for determining if and to what extent
Client's use of online pay statements, Forms W2, Forms 1099 or Forms 1095-C, as applicable, satisfies Client's obligations
under applicable laws and the consequences resulting from such determinations.
3.4. Data Protection Laws. Client represents that Personal Information transferred by Client or at Client's direction to ADP has
been collected in accordance with applicable privacy laws, and ADP agrees that it shall only process the Personal
Information as needed to perform the Services, or as required or permitted by law.
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4.1 General. All Confidential Information disclosed under this Agreement will remain the exclusive and confidential property of
the disclosing party. The receiving party will not disclose to any third party the Confidential Information of the disclosing
party and will use at least the same degree of care, discretion and diligence in protecting the Confidential Information of the
disclosing party as it uses with respect to its own confidential information. The receiving party will limit access to
Confidential Information to its employees with a need to know the Confidentiallnfon11ation and will instruct those employees
to keep such information confidential. ADP may disclose Client's Confidential Information on a need to know basis to (i)
ADP's subcontractors who are performing the Services, provided that ADP shall remain liable for any unauthorized
disclosure of Client's Confidential Information by those subcontractors, (ii) employees of ADP 's Affiliates, provided such
employees are instructed to keep the information confidential as set forth in this Agreement and (iii) social security agencies,
tax authorities and similar third parties, to the extent strictly necessary to perform the Services. ADP may use Client's and
its employees' and other Services recipients' information in an aggregated, anonymized form, such that neither Client nor
such person may be identified, and Client will have no ownership interest in such aggregated, anonymized data. Client
authorizes ADP to release employee-related data, and such other data as required to perform the Services, to third party
vendors of Client as designated by Client from time to time. Notwithstanding the foregoing, the receiving party may disclose
Confidential information (X) to the extent necessary to comply with any law, rule, regulation or ruling applicable to it, (y) as
appropriate to respond to any summons or subpoena or in connection with any litigation and (z) to the extent necessary to
enforce its rights under this Agreement.
4.2 Return or Destruction. Upon the request of the disclosing party or upon the expiration or earlier termination of this
Agreement, and to the extent feasible, the receiving party will return or destroy all Confidential information of the disclosing
party in the possession of the receiving party, provided that each party may maintain a copy if required to meet its legal or
regulatory obligations and may maintain archival copies stored in accordance with regular computer back-up operations. To
the extent that any portion of Confidential information of a disclosing party remains in the possession of the receiving party,
such Confidential information shall remain subject to the generally applicable statutory requirements and the confidentiality
protections contained in Section 4.1.
4.3 Transfer. The Services may be performed by ADP Affiliates or subcontractors located in other countries, and ADP may
transfer or permit access to Client's Confidential information, including employees' Personal Information, for the purposes of
performing the Services outside of Canada and the United States of America. As a result, Client's employees' Personal
Information may be subject to the laws of such jurisdictions and may be accessible to the courts and law enforcement
authorities of those jurisdictions. Notwithstanding the foregoing, ADP will remain responsible for any unauthorized
disclosure or access of Client's employees' Persona/Information by any ADP Affiliate or subcontractor in the performance of
any such Services.
5 INTELLECTUAL PROPERTY
5.1 Client IP Rights. Except for the rights expressly granted to ADP in this Agreement, all rights, title and interests in and to
Client Content, including all intellectual Property Rights inherent therein and pertaining thereto, are owned exclusively by
Client or its licensors. Client hereby grants to ADP for the term of this Agreement a non-exclusive, worldwide, non-
transferable, royalty-free license to use, edit, modify, adapt, translate, exhibit, publish, reproduce, copy and display the
Client Content for the sole purpose of performing the Services; provided Client has the right to pre-approve the use by ADP
of any Client trademarks or service marks.
5.2 ADP IP Rights. Except for the rights expressly granted to Client in this Agreement, all rights, title and interest in and to the
Services, including all Intellectual Property Rights inherent therein and pertaining thereto, are owned exclusively by ADP or
its licensors. ADP grants to Client for the term of this Agreement ·a personal, non-exclusive, non-transferable, royalty-free
license to use and access the ADP Application Programs solely for the Internal Business Purposes in the Approved
Countries and the Access Countries. The ADP Application Programs do not include any Client-specific customizations
unless otherwise agreed in writing by the parties. Client will not obscure, alter or remove any copyright, trademark, service
mark or proprietary rights notices on any materials provided by ADP in connection with the Services, and will not copy,
decompile, recompile, disassemble, reverse engineer, or make or distribute any other form of, or any derivative work from,
such ADP materials.
5.3 Ownership of Reports. Client will retain ownership of the content of reports and other materials that include Client Content
produced and delivered by ADP as a part of the Services, provided that ADP will be the owner of the format of such reports
To the extent any such reports or other materials incorporate any ADP proprietary information, ADP (i) retains sole
ownership of such proprietary information and (ii) provides the Client a fully paid up, irrevocable, perpetual, royalty-free
license to access and use same for its Internal Business Purposes without the right to create derivative works (other than
derivative works to be used solely for its Internal Business Purposes) or to further distribute any of the foregoing rights
outside the Client Group.
5.4 Improvements. ADP will make available to Client, at no additional cost, software improvements, enhancements, or
updates to any ADP Application Programs that are included in the Services (collectively "Improvements") if and as they are
made generally available by ADP at no additional cost to ADP's other clients using the same ADP Application Programs as
Client and receiving the same Services as Client. All Improvements provided under this Section 5.4 shall be considered part
of the ADP Application Programs
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6 Indemnities
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6.1 ADP Indemnity. Subject to the remainder of this Section 6.1, and Section 6.3 and 7, ADP shall defend Client in any suit or
cause of action, and indemnify and hold Client harmless against any damages payable to any third party in any such suit or
cause of action, alleging that the Services or ADP Application Programs, as provided by ADP and used in accordance with
the terms of this Agreement, infringe upon any Intellectual Property Rights of a third party in an Approved Country. The
foregoing infringement indemnity will not apply and ADP will not be liable for any damages assessed in any cause of action
to the extent resulting from a Client Infringement Event or ADP's use of Client Content as contemplated by this Agreement.
If any Service is held or believed to infringe on any third-party's Intellectual Property Rights, ADP may, in its sole discretion,
(i) modify the Service to be non-infringing, (ii) obtain a license to continue using such Service, or (iii) if neither (i) nor (ii) are
practical, terminate this Agreement as to the infringing Service.
6.2 Client Indemnity. Subject to Sections 6.3 and 7, Client will defend ADP against any third party claims and will indemnify and
hold ADP harmless from any resulting damage awards or settlement amounts in any cause of action to the extent such
cause of action is based on the occurrence of a Client Infringement Event or ADP's use of Client Content as contemplated
by this Agreement.
6.3 Indemnity Conditions. The indemnities set forth in this Agreement are conditioned on the following: (i) the party claiming
indemnification (the "Indemnitee") shall promptly notify the indemnifying party (the "Indemnitor") of any matters in respect of
which it seeks to be indemnified, and shall give the Indemnitor full cooperation and opportunity to control the response
thereto and the defense thereof, including without limitation any settlement thereof, (ii) the Indemnitor shall have no
obligation for any claim under this Agreement if the Indemnitee makes any admission, settlement or other communication
regarding such claim without the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld,
and (iii) the Indemnitee's failure to promptly give notice to the Indemnitor shall affect the Indemnitor's obligation to indemnify
the Indemnitee only to the extent the Indemnitor's rights are materially prejudiced by such failure. The Indemnitee may
participate, at its own expense, in such defense and in any settlement discussions directly or through counsel of its choice.
7 Limit on Liability
7.1 Ordinary Cap. Notwithstanding anything to the contrary in this Agreement and subject to the remainder of this Section 7,
neither party's aggregate limit on monetary damages in any calendar year shall exceed an amount equal to six (6) times the
average ongoing monthly Services fees paid or payable to ADP by Client during such calendar year (the "Ordinary Cap").
ADP will issue Client a credit(s) equal to the applicable amount and any such credit(s) will be applied against subsequent
fees owed by Client.
7.2 Extraordinary Cap. As an exception to Section 7.1 , if damages (monetary or otherwise) arise from a breach of Section 4.1
(Confidentiality) or Section 9.3 (Data Security), the Ordinary Cap will be increased by an additional six (6) times the average
ongoing monthly Service fees paid or payable to ADP by Client during such calendar year (the "Extraordinary Cap"). For the
avoidance of doubt, in no case shall either party's aggregate limit on monetary damages in any calendar year under this
Agreement exceed twelve (12) times the average monthly ongoing Service fees paid or payable to ADP by Client during
such calendar year.
7.3 Matters not Subject to Either Cap. The limitations of liability set forth in Sections 7.1 and 7.2 shall not apply to:
7.3.1 Either party's Gross Negligence, or willful, criminal or fraudulent misconduct; for the purposes of this Agreement,
"Gross Negligence" shall be defined as: (1) willful, wanton, careless or reckless conduct, misconduct, failures,
omissions, or disregard of the duty of care towards others of a risk known or so obvious that the actor must be
taken to have been aware of it, and with an intent to injure or so great as to make it highly probable that harm
would follow and/or (2) failure to use even the slightest amount of care, or conduct so reckless, as to demonstrate a
substantial lack of concern fot the safety of others. For the avoidance of doubt, Gross Negligence must be more
than any mere mistake resulting from inexperience, excitement, or confusion, and more than mere thoughtlessness
or inadvertence or simple inattention;
7.3.2 The infringement indemnity set forth in Sections 6.1 and 6.2;
7.3.3 Client's obligations to pay the fees for Services;
7.3.4 ADP's obligations to provide credit monitoring and notifications as set forth in Section 10.2;
7.3.5 Client's funding obligations in connection with the Payment Services;
7.3.6 ADP's Joss or misdirection of Client funds in possession or control of ADP due to ADP's error or omission;
7.3.7 In connection with the Employment Tax Services as provided in Annex B, (a) interest charges imposed by an
applicable tax authority on Client for the failure by ADP to pay funds to the extent and for the period that such funds
were held by ADP and (b) all tax penalties resulting from ADP's error or omission in the performance of such
Service. The provisions of this (iv) shall only apply if (x) Client permits ADP to act on Client's behalf in any
communications and negotiations with the applicable taxing authority that is seeking to impose any such penalties
or interest and (y) Client assists ADP as reasonably required by ADP.
7.3.8 Client's use or access of the Services and/or ADP Application Programs outside of the Approved Countries and/or
Access Countries.
7.4 Mitigation of Damages. ADP and Client will each use reasonable efforts to mitigate any potential damages or other
adverse consequences arising from or relating to the Services.
7.5 No Consequential Damages. N01WITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND
ONLY TO THE EXTENT PERMITTED BY APPLICABLE LAW, NONE OF ADP, CLIENT OR ANY BANK WILL BE
RESPONSIBLE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR OTHER SIMILAR DAMAGES
(INCLUDING DAMAGES FOR LOSS OF BUSINESS OR PROFITS, BUSINESS INTERRUPTIONS OR HARM TO
REPUTATION) THAT ANY OTHER PARTY OR ITS RESPECTIVE AFFILIATES MAY INCUR OR EXPERIENCE IN
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CONNECTION WITH THIS AGREEMENT OR THE SERVICES, HOWEVER CAUSED AND UNDER WHATEVER THEORY
OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. The foregoing
exclusion shall not apply to claims for consequential damages arising from ADP's or Client's (i) willful, criminal or fraudulent
misconduct, or (ii) breach or breaches of Section 4.1 or Section 9.3 under this Agreement; provided however, that any
consequential damages recovered by Client or ADP in a calendar year for claims pursuant to Section 7.5(ii) will be subject
to the Extraordinary Cap set forth in Section 7.2 above.
8 WARRANTIES AND DISCLAIMER
8.1 Warranties. Each party warrants that (i) it has full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby and (ii) this Agreement has been duly and validly executed and
delivered and constitutes the valid and binding agreement of the parties, enforceable in accordance with its terms.
8.2 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL SERVICES, ADP APPLICATION
PROGRAMS AND EQUIPMENT PROVIDED BY ADP OR ITS SUPPLIERS ARE PROVIDED "AS IS" AND ADP AND ITS
LICENSORS AND SUPPLIERS EXPRESSLY DISCLAIM ANY WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, COMPLETENESS, CURRENTNESS, NON-INFRINGEMENT, NON-INTERRUPTION OF USE, AND
FREEDOM FROM PROGRAM ERRORS, VIRUSES OR ANY OTHER MALICIOUS CODE, WITH RESPECT TO THE
SERVICES, THE ADP APPLICATION PROGRAMS, ANY CUSTOM PROGRAMS CREATED BY ADP OR ANY THIRD-
PARTY SOFTWARE DELIVERED BY ADP AND RESULTS OBTAINED THROUGH THE USE THEREOF.
9 SECURITY AND CONTROLS
9.1 Service Organization Control Reports. Following completion of implementation of any applicable Services, ADP will, at
Client's request and at no charge, provide Client with copies of any routine Service Organization Control 1 reports ("SOC 1
Reports") (or any successor reports thereto) directly related to the core ADP Products utilized to provide the Services
provided hereunder for Client and already released to ADP by the public accounting firm producing the report. SOC 1
Reports are ADP Confidential Information and Client will not distribute or allow any third party (other than its independent
auditors) to use any such report without the prior written consent of ADP. Client will instruct its independent auditors or
other approved third parties to keep such report confidential and Client will remain liable for any unauthorized disclosure of
such report by its independent auditors or other approved third parties.
9.2 Business Continuity; Disaster Recovery. ADP has established and will maintain a commercially reasonable business
continuity and disaster recovery plan and will follow such plan.
9.3 Data Security. ADP has established and will maintain an information security program containing appropriate
administrative, technical and physical measures to protect Client data (including any Personal Information therein) against
accidental or unlawful destruction, alteration, unauthorized disclosure or access consistent with applicable laws . In the
event ADP suspects any unauthorized access to, or use of, the Services, ADP may suspend access to the Services to the
extent ADP deems necessary to preserve the security of the Client's data.
10 DATA SECURITY INCIDENT
10.1 Notification. If ADP becomes aware of a security breach (as defined in any applicable law) or any other event that
compromises the security, confidentiality or integrity of Client's Personal Information (an "Incident"), ADP will take
appropriate actions to contain, investigate and mitigate the Incident. ADP shall notify Client of an Incident as soon as
reasonably possible.
10.2 Other ADP Obligations. In the event that an Incident is the result of the failure of ADP to comply with the terms of this
Agreement, ADP shall, to the extent legally required or otherwise necessary to notify the individuals of potential harm, bear
the actual, reasonable costs of notifying affected individuals. ADP and Client shall mutually agree on the content and timing
of any such notifications, in good faith and as needed to meet applicable legal requirements. In addition, where notifications
are required and where such monitoring is practicable and customary, ADP shall also bear the cost of one year of credit
monitoring to affected individuals in applicable jurisdictions.
11 PAYMENT TERMS
11.1 Fees and Fee Adjustments. Client will pay to ADP the fees and other charges for the Services as set forth in the Sales
Order. Unless there is a Price Agreement in effect, the fees set forth in the Sales Order will remain fixed during the first six
(6) months following the Effective Date and thereafter, ADP may modify the fees on an annual basis upon thirty (30) days'
prior written notice to Client. The fees presented in the Sales Order were calculated based upon particular assumptions
relative to Client requirements (including funding requirements), specifications, volumes and quantities as reflected in the
applicable Sales Order and related documentation, and if Client's actual requirements vary from what is stated, ADP may
adjust the fees based on such changes. The fees do not include any customizations to any Service.
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11.2 Additional Services and Charges. If Client requests additional services offered by ADP not included in this Agreement,
and ADP agrees to provide such services: (i) those services and related fees will be included in a separate Sales Order; (ii)
any Services provided to Client but not included in a Sales Order will be provided subject to the terms of this Agreement and
charged at the applicable rates as they occur; and (iii) those services will be considered to be "Services" for purposes of this
Agreement. Additional charges may be assessed Client in relation to the performance of the Services in certain
circumstances, including without limitation, late funding, an insufficient funds notification and emergency payment requests
from Client
11.3 Fees for Implementation Services. Implementation fees are due and payable by Client upon the go-live date for such
Services. However, if this Agreement or any Service are terminated after implementation services have started but before
the go-live date, the greater of the following amounts shall be immediately due and payable by Client (i) implementation
fees for implementation services performed up to the date of termination; or (ii) 30% of the total Implementation Fees set out
in the Sales Order.
11.4 Invoicing. ADP will notify Client of all applicable Services fees payable by Client by way of invoice or other method (i.e.
ADP's on-line reporting tool). Client will pay the amount on each invoice or such other similar document in full within seven
(7) days of notification via the agreed to method of payment. All amounts not paid when due are subject to a late payment
charge of one and one-half percent (1'Y>%) per month (not to exceed the maximum allowed by applicable law) of the past
due amount from the due date until the date paid.
11.5 Currency. Client shall pay the fees in US dollars.
11.6 Taxes. Unless Client provides ADP a valid tax exemption or direct pay certificate, Client will pay directly, or will pay to ADP,
an amount equal to all applicable taxes or similar fees levied or based on the Agreement or the Services, exclusive of taxes
based on ADP's net income.
11.7 Postage, Shipping Travel and out-of-pocket expenses. ADP will invoice Client for postage charges, delivery charges,
other third party charges, and reasonable travel and out-of-pocket expenses as necessary to provide the Services.
11.8 Funding Requirements and Disbursement Disclosures. With respect to Payment Services to be deducted by ACHor
Pre-Authorized Debit, Client must have sufficient good funds for payment of the payroll obligations, tax filing obligations,
wage garnishment deduction obligations, service fees (as applicable), expenses, and any other applicable charges, to be
direct debited from Client's designated account no later than one (1) banking days prior to the pay date for the applicable
payroll (in the case of payroll processing services), or as otherwise agreed by the parties. For reverse wire clients, funds
must be available (a) one (1) banking day prior to the pay date for the applicable payroll (in the case of the ADP
Employment Tax Services) and (b) two (2) banking days prior to the pay date for all other Payment Services, or as
otherwise agreed by the parties. In consideration for the additional costs incurred by ADP in providing wire transfer service,
Client agrees to pay a reasonable fee (currently $10.00) for each wire transfer. Notwithstanding the foregoing, ADP
reserves the right to modify the aforementioned deadlines at any time and will communicate any such modifications to
Client.
11.9 Change Control. In the event either party requests a change in the scope of Services (including implementation services)
(each a "Change Control Item"), the parties shall address such change request via ADP's change control process. Change
Control Items and the cost associated with such changes (if any) to the Services shall be mutually agreed to by the parties,
with the exceptions of Change Control Items that are required to be made by law or regulation applicable to the Services or
to the duration of implementation services, which ADP will notify Client of prior to making the change. The current standard
hourly rate for a Change Control Item $150.00 per hour; provided, however, that such rate may be increased by ADP if such
Change Control Item (i) entails significant modification of available resources, (ii) impacts existing change control efforts for
other ADP clients, or (iii) occurs during high-volume periods. ADP may modify the standard hourly rate for a Change
Control Item from time to time.
12 Term; Termination; Suspension
12.1 Term; Termination for Convenience This Agreement will commence on the Effective Date and remain in effect until
terminated by either party in accordance with the terms hereof. Subject to the terms of any Price Agreement, either party
may terminate this Agreement or any Service upon ninety (90) days' prior written notice to the other party. In the event
Client does not provide ADP with the proper notice as set forth in the previous sentence (or as set forth in any Annex
herein), Client shall pay ADP for any fees for Services that would have been incurred by Client during such notice period
(calculated based on an average of the prior six months of invoices for such terminated Services, or shorter period of time if
there has been less than six months of invoices).
12.2 Termination for Cause. Either party may terminate this Agreement for the other's material breach of this Agreement if
such breach is not cured within sixty (60) days following notice thereof or in the event either party is the subject of a
Termination Event. In addition. ADP may terminate this Agreement in the event Client fails to timely pay fees for Services
performed within 10 days following notice that such fees are past due. ADP may also terminate this Agreement or the
Services immediately on written notice to Client if the provision of Service to Client causes or will cause any affiliate or
subsidiary of ADP to be in violation of any laws, rules or regulations applicable to such affiliate or subsidiary.
Notwithstanding anything to the contrary in this Agreement, email will be considered adequate notification for the purposes
of this Section 12.
12.3 Suspension. Without limiting the foregoing, the parties agree that Payment Services involve credit risk to ADP. Payment
Services may be suspended by ADP (A) immediately if: (i) Client has failed to remit sufficient, good and available funds
within the deadline and via the method of delivery agreed upon as it relates to the applicable Payment Services; or (ii) Client
breaches any rules promulgated by NACHA as it relates to ADP conducting electronic payment transactions on behalf of
Client, and (B) with 24 hour notice if: (i) a bank notifies ADP that it is no longer willing to originate debits from Client's
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account(s) or credits for Client's behalf for any reason or (ii) the authorization to debit Client's account is terminated or ADP
reasonably believes that there is or has been fraudulent activity on the account. If the Payment Services are terminated or
suspended pursuant to Sections 12.2 or 12.3, Client acknowledges that ADP shall be entitled to allocate any funds in ADP's
possession that have been previously remitted or otherwise made available by Client to ADP relative to the Payment
Services in such priorities as ADP may determine appropriate, including reimbursing ADP for payments made by ADP on
Client's behalf to a third party. If the Payment Services are terminated by ADP, Client understands that it will (x)
immediately become solely responsible for all of Client's third party payment obligations covered by the Payment Services
then or thereafter due (including, without limitation, for ADP Employment Tax Services any and all penalties and interest
accruing after the date of such termination, other than penalties and interest for which ADP is responsible under Section
7.3.7), and (y) reimburse ADP for all payments properly made by ADP on behalf of Client to any payee, which have not
been paid or reimbursed by Client. If the Payment Services remain suspended for thirty (30) days, the Payment Services
will be terminated on the 31st day following suspension.
12.4 Post Termination. At any time prior to the actual termination date, Client may download Client's information or reports
available to it in conjunction with all of the Services provided to Client by ADP. Upon termination of this Agreement, Client
may order from ADP any data extraction offered by ADP, at the then prevailing hourly time and materials rate.
13 Reserved.
14 Additional Terms. In addition to the terms set forth in any subsequent Annexes attached hereto, the following terms shall apply.
14.1 ESS & MSS Technology. Employee self-service (ESS) and Manager self-service (MSS) functionality provides all Client
Users (practitioners, managers and employees) 24x7 online access to ADP Application Programs. The following additional
terms apply to the ESS & MSS Technology:
14.1.1 Client acknowledges that Client's employees or participants may input information into the self-service portions of
the ADP Application Programs. ADP shall have no responsibility to verify, nor does ADP review the accuracy or
completeness of the information provided by Client's employees or participants to ADP using any self-service
features. ADP shall be entitled to rely upon such information in the performance of the Services under this
Agreement as if such information was provided to ADP by Client directly.
14.2 ADP Marketplace. Enable Client to build applications and/or purchase available applications via online store. Provide
access to certain Client data stored in ADP systems via industry-standard Application Programming Interfaces (APis). The
following additional terms apply to the ADP Marketplace (applies only if Client accesses ADP Marketplace Services):
14.2.1 Transmitting Information to Third Parties. In the event that Client elects to use an API to provide any Client
Content or employee or plan participant information to any third party, Client represents that it has acquired any
consents or provided any notices required to transfer such content or information and that such transfer does not
violate any applicable international, federal, state, or local laws and/or regulations. ADP shall not be responsible
for any services or data provided by any such third party.
14.2.2 Use of the ADP APis. Client will use the ADP APis to access Client's information only. Client may not use any
robot, spider, or other automated process to scrape, crawl, or index the ADP Marketplace and will integrate Client's
application with the ADP Marketplace only through documented APis expressly made available by ADP. Client
also agrees that Client will not (a) use the ADP Marketplace or any ADP API to transmit spam or other unsolicited
email; (b) take any action that may impose an unreasonable or disproportionately large load on the ADP
infrastructure, as determined by ADP; or (c) use the ADP APis or the ADP Marketplace in any way that threatens
the integrity, performance or reliability of the ADP Marketplace, Services or ADP infrastructure. ADP may limit the
number of requests that Client can make to the ADP API gateway to protect ADP's system or to enforce
reasonable limits on Client's use of the ADP APis. Specific throttling limits may be imposed and modified from
time to time by ADP.
15 Miscellaneous
15.1 Amendment. This Agreement may not be modified, supplemented or amended, except by a writing signed by the
authorized representatives of ADP and Client.
15.2 Assignment. Neither this Agreement, nor any of the rights or obligations under this Agreement. may be assigned by any
party without the prior written consent of the other party, such consent not to be unreasonably withheld. However, Client
may assign any or all of its rights and obligations to any other Client Group member and ADP may assign any or all of its
rights and obligations to any Affiliate of ADP, provided that any such assignment shall not release the assigning party from
its obligations under this Agreement This Agreement is binding upon and inures to the benefit of the parties hereto and
their respective successors and permitted assigns.
15.3 Additional Documentation. In order for ADP to perform the Services, it may be necessary for Client to execute and deliver
additional documents (including reporting agent authorization, client account agreement, limited powers of attorney, etc.)
and Client agrees to execute and deliver such additional documents.
15.4 Subcontracting. Notwithstanding Section 15.2, ADP reserves the right to subcontract any or all of the Services, provided
that ADP remains fully responsible under this Agreement for the performance of any such subcontractor. For the avoidance
of doubt, third parties used by ADP to provide delivery or courier services, including the postal service in any country or any
third party courier service, and banking institutions, are not considered subcontractors of ADP.
15.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding between ADP and Client with
respect to its subject matter and merges and supersedes all prior discussions, agreements and understandings of every
kind and nature between the parties. No party will be bound by any representation, warranty, covenant, term or condition
other than as expressly stated in this Agreement. Except where the parties expressly state otherwise in a relevant exhibit,
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annex, appendix or schedule, in case of conflict or inconsistency between this Annex A and any such exhibit. annex,
appendix or schedule, this Annex A will prevail and control. Purchase orders or statements of work submitted to ADP by
Client will be for Client's internal administrative purposes only and the terms and conditions contained in any purchase order
or statements of work will have no force and effect and will not amend or modify this Agreement.
15.6 No Third Party Beneficiaries. Except as expressly provided herein or in an applicable exhibit, annex, appendix or
schedule, nothing in this Agreement creates, or will be deemed to create, third party beneficiaries of or under this
Agreement. Client agrees that ADP's obligations in this Agreement are to Client only, and ADP has no obligation to any
third party (including, without limitation, Client's personnel, directors, officers, employees, Users and any administrative
authorities).
15.7 Force Majeure. Any party to this Agreement will be excused from performance of its obligations under this Agreement,
except for Client's obligation to pay the fees to ADP pursuant to Section 11 , for any period of time that the party is prevented
from performing its obligations under this Agreement due to an act of God, war, earthquake, civil disobedience, court order,
labor disputes or disturbances, governmental regulations, communication or utility failures or other cause beyond the party's
reasonable control. Such non-performance will not constitute grounds for breach.
15.8 Waiver. The failure by any party to this Agreement to insist upon strict performance of any provision of this Agreement will
not constitute a waiver of that provision. The waiver of any provision of this Agreement shall only be effective if made in
writing signed by the authorized representatives of ADP and Client and shall not operate or be construed to waive any future
omission or breach of, or compliance with, any other provision of this Agreement.
15.9 Headings. The headings used in this Agreement are for reference only and do not define, limit, or otherwise affect the
meaning of any provisions hereof.
15.10 Severability. If any provision of this Agreement is finally determined to be invalid, illegal or unenforceable by a court of
competent jurisdiction, the validity, legality or enforceability of the remainder of th is Agreement will not in any way be
affected or impaired and such court shall have the authority to modify such invalid, illegal or unenforceable provision to the
extent necessary to render such provision valid, legal or enforceable, preserving the intent of the parties to the furthest
extent permissible.
15.11 Relationship of the Parties. The performance by ADP of its duties and obligations under this Agreement will be that of an
independent contractor and nothing contained in this Agreement will create, construe or imply an agency, joint venture,
partnership or fiduciary relationship of any kind between ADP and Client None of ADP's employees, agents or
subcontractors will be considered employees, agents or subcontractors of Client. Unless expressly stated in this
Agreement, none of ADP, its employees, agents or its subcontractors may enter into contracts on behalf of, bind, or
otherwise obligate Client in any manner whatsoever.
15.12 Governing Law. This Agreement is governed by the laws of the State of New York without giving effect to its conflict of law
provisions.
15.13 Jurisdiction. Any disputes that may arise between ADP and Client regarding the performance or interpretation of this
Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of New York, New York. The parties
hereby irrevocably consent to the exclusive jurisdiction of the state and federal courts of New York, New York and waive any
claim that any proceedings brought in such courts have been brought in an inconvenient forum. THE PARTIES HEREBY
IRREVOCABLY WAIVE THEIR RIGHT TO TRIAL BY JURY.
15.14 Counterparts. This Agreement may be signed in two or more counterparts by original, .pdf (or similar format for scanned
copies of documents) or facsimile signature, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15.15 Notices. All notices required to be sent or given under this Agreement will be sent in writing and will be deemed duly given
and effective (i) immediately if delivered in person, or (ii) upon confirmation of signature recording delivery, if sent via an
internationally recognized overnight courier service with signature notification requested to Client at the address indicated on
the signature page hereof and to ADP at 15 Waterview Boulevard, Parsippany, New Jersey 07054, Attention: Legal
Department or to any other address a party may identify in writing from time to time. A copy (which shall not constitute
notice) of all such notices shall be sent to ADP at One ADP Boulevard, MS 425, Roseland, New Jersey 07068, Attention:
General Counsel and to Client at the address indicated on the cover page hereof.
15.16 Survival. Those provisions which by their content are intended to, or by their nature would, survive the perfonnance,
termination, or expiration of this Agreement. shall survive termination or expiration of this Agreement
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1 Payroll, Employment Tax & Wage Payment Services. ADP will provide the following services:
1.1 ADP Payroll Services. Administration and processing of payroll including performing gross-to-net calculations and
generating and/or transmitting of payment instructions.
1.2 ADP Employment Tax Services. Coordination of payroll-related tax and/or regulatory agency deposits, filings, and
reconciliations on behalf of employers.
1.3 ADP Wage Payment Services. Payment of wages, commissions, consulting fees, or similar compensation or work-related
expenses in the employment context to employees and independent contractors via direct deposit, check, or payroll debit
cards, in each case to the extent the method of payment delivery is in scope, and online posting of pay statements to the
extent applicable. Such services may be provided via ADPCheck Services, ADP Direct Deposit Services, and ALINE Card
Services (if elected additional terms set forth in Annex J shall apply).
1.4 Print and Online Statement Services. Print and distribution of payroll checks, pay statements, and/or year-end statements,
as well as online posting of pay statements and/or year-end statements.
1.5 Wage Garnishment Payment Services. Garnishment payment processing and disbursement of payments to appropriate
payees as directed by client.
2 Billing. Payroll, Employment Tax & Wage Payment Services and any other Services bundled into the pricing for such services are
billed immediately following Client's first payroll processing. The billing count is based on the number of pays submitted during each
payroll processing period, therefore total billing may fluctuate.
3 ADP Wage Payment Services. The following additional terms and conditions apply to the ADP Wage Payment Services:
3.1 Client Credentialing. Client understands and acknowledges that the implementation and ongoing provision of Payment
Services are conditioned upon Client passing (and continuing to pass) a credentialing process that ADP may deem
necessary in connection with the provision of Payment Services.
3.2 Additional Requirements. Payment Services may be subject to the rules and standards of any applicable clearing house,
payment and/or card networks or associations. Client and ADP each agree to comply with all such rules and standards
applicable to it with respect to the Payment Services.
3.3 Funding Obligations. Client acknowledges that ADP is not a lender. As such, as a condition to receiving services, Client
will remit or otherwise make available to ADP sufficient, good and available funds within the agreed-to deadline and via the
agreed-to method of delivery to satisfy all of Client's third-party payment obligations covered by the Agreement. ADP will
apply such funds to satisfy such third-party payment obligations. ADP will not be required to provide Payment Services if
ADP has not received all funds required to satisfy Client's third-party payment obligations. Client will immediately notify ADP
if it knows or should know that it will not have sufficient funds to satisfy the amounts required in connection with the Payment
Services. If Client has a material adverse change in its condition, ADP may modify the funding method or deadline by which
funds must be made available to ADP for payment to Payees. Client agrees to pay to ADP upon demand any amounts that
have been paid by ADP to satisfy Client's third party payment obligations prior to receiving such amounts from Client.
3.4 Investment Proceeds; Commingling of Client Funds. IF ADP RECEIVES CLIENT'S FUNDS IN ADVANCE OF THE TIME
ADP IS REQUIRED TO PAY SUCH FUNDS TO THIRD PARTIES, ALL AMOUNTS EARNED ON SUCH FUNDS, IF ANY,
WHILE HELD BY ADP WILL BE FOR THE SOLE ACCOUNT OF ADP. ADP may commingle Client's funds with similar funds
from other clients and with similar ADP and ADP-administered funds. ADP utilizes a funds control system that maintains
general ledger entries by cli ent and/or by jurisdiction.
3.5 Recovery of Funds; Stop Payment Requests. Client agrees to cooperate with ADP and any other third parties to recover
funds erroneously issued or transferred to any Payee or credited to any Payee's account. If Client desires to stop payment on
any check or to recall or reverse any electronic payment, Client will provide ADP with a stop payment request in the form
required by ADP. Client acknowledges that ADP's placement of a stop order request is not a guarantee that such stop
payment will occur.
3.6 ADPCheck Services. Client agrees not to distribute any ADPChecks to Payees in a manner that would allow Payees to
access the associated funds before pay date. With respect to ADPChecks drawn on an ADP bank account, to request a stop
payment, Client shall provide ADP with a written stop payment order request in the form provided by ADP and ADP shall
place a stop payment order in accordance with its standard operating procedures.
3.7 Full Service Direct Deposit (FSDD). Prior to the first credit to the account of any employee or other individual under FSDD
services, Client shall obtain and retain a signed authorization from such employee or individual authorizing the initiation of
credits to such party's account and debits of such account to recover funds credited to such account in error.
4 ADP Employment Tax Services. The following additional terms and conditions apply to the ADP Employment Tax Services:
4.1 Important Tax Information (IRS Disclosure). Notwithstanding Client's engagement of ADP to provide the ADP Employment
Tax Services in the United States, please be aware that Client remains responsible for the timely filing of payroll tax returns
and the timely payment of payroll taxes for its employees. The Internal Revenue Service recommends that employers enroll
in the U.S. Treasury Department's Electronic Federal Tax Payment System (EFTPS) to monitor their accounts and ensure
that timely tax payments are being made for them, and that online enrollment in EFTPS is available at www.eftps.gov; an
enrollment form may also be obtained by calling (800) 555-4477; that state tax authorities generally offer simil ar means to
verify tax payments; and that Client may contact appropriate state offices directly for details
4.2 State Unemployment Insurance Management. Subject to Section 15.7 of Annex A, Client's compliance with its obligations
in Sections 4.2.1 and 4 .. 2.2 herein, and any delays caused by third parties (e.g., postal service, agency system and broker
delays) and events beyond ADP's reasonable control, ADP will deliver the State Unemployment Insurance Management
Services ("SUI Management Services") within the time periods established by the relevant unemployment compensation
agencies.
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4.2.1 Provision of Information; Contesting Claims. Client will on an ongoing basis provide ADP and not prevent ADP
from furnishing all information necessary for ADP to perform the SUI Management Services within the timeframes
established or specified by ADP. The foregoing information includes without limitation the claimants' names,
relevant dates, wage and separation information, state-specific required information, and other documentation to
support responses to unemployment compensation agencies.
4.2.2 Transfer of Data. Client may transfer the information described in Section A to ADP via: (i) on-line connection
between ADP and Client's computer system, or (ii) inbound data transmissions from Client to ADP. Client will
provide the data using mutually acceptable communications protocols and delivery methods. Client will promptly
notify ADP in writing if Client wishes to modify the communication protocol or delivery method.
4.2.3 Client acknowledges that ADP is not providing storage or record keeping of Client records as part of the SUI
Management Services, and that if the SUI Management Services are terminated, ADP may, in conformity with
Section 4 of Annex A, dispose of all such records. If the SUI Management Services are terminated, any access
Client has to ADP websites containing Client's data will expire and Client will be responsible for downloading and
gathering all relevant data prior to expiration of any such access that may have been granted.
5 Employment Verification Services. Client desires to receive and ADP agrees to provide the following Services to Client in addition
to those already provided under the Agreement.
5.1 Definitions. Unless a capitalized term used herein is defined herein, it shall have the same meaning ascribed that term in the
Agreement.
5.1.1 "FCRA" Fair Credit Reporting Act, 15 U.S.C. §1681 et seq.
5.1.2 "Verification Agent" has the meaning set forth in Section 5.2.1. 1
5.1.3 "Verification Data" has the meaning set forth in Section 5.2.1. 1.
5.1.4 "Verifiers" has the meaning set forth in Section 5.2. 1.1.
5.2 Additional Terms. To the extent Client has not opted out of receipt of Employment Verification Services, the following
additional terms and conditions shall apply:
5.2.1 Verification Services and Authorization as Agent.
5.2.1.1 ADP currently provides the Employment Verification Services through The Work Number®, an Equifax Workforce
Solutions service though ADP reserves the right to provide them through another entity (each, a "Verification
Agent"). Notwithstanding anything to the contrary in Section 4.1 of Annex A, Client authorizes ADP and its
Verification Agents to disclose, on Client's behalf, employment information (including employees' place of
employment and employment status) and income information (including total wages per year to date and previous
year income) of Client and Client's employees (or former employees) (collectively, "Verification Data"), to
commercial, private, non-profit and governmental entities and their agents (collectively, "Verifiers"), who wish to
obtain or verify any of Client's employees' (or former employees') Verification Data. Verification Data will be
disclosed to Verifiers who certify they are entitled to receive such data (as described below) pursuant to the FCRA,
and, in the case of income information requests, who additionally certify they have a record of the employee's
consent to such disclosure or who utilize a salary key. In accordance with FCRA, Verification Data may be provided
to Verifiers where (i) the employee has applied for a benefit (such as credit, other employment or social services
assistance); (ii) the employee has obtained a benefit and the Verifier is seeking to (a) determine whether the
employee is qualified to continue to receive the benefit; and/or (b) collect a debt or enforce other obligations
undertaken by the employee in connection with the benefit; or (iii) the Verifier is otherwise entitled under FCRA to
obtain the Verification Data. In certifying they have a record of the employee's consent, Verifiers generally rely on
the employee's signature on the original application as authorization for the Verifier to access the employee's
income data at the time of the application and throughout the life of the obligation. Client understands that Verifiers
are charged for commercial verifications processed through ADP or its Verification Agents.
5.2.1.2 Data Quality. If requested by ADP, Client agrees to work with ADP during implementation to produce a test file and
validate the Verification Data included in the Verification Services database using validation reports made available
by ADP or its Verification Agents. If Client uses ADP's hosted payroll processing services, ADP will update the
Verification Services database with the applicable Verification Data available on ADP's payroll processing system.
5.2.1.3 Notice to Furnishers of Information: Obligations of Furnishers of Information ("Notice to Furnishers").
Client certifies that it has read the Notice to Furnishers provided to Client at the following URL:
https:l/www.consumer.ftc.gov/articles/pdf-0092-notice-to-furnishers.pdf. Client understands its obligations as a data
furnisher set forth in such notice and under FCRA which include duties regarding data accuracy and investigation of
disputes, and certifies it will comply with all such obligations. Client further understands that if it does not comply
with such obligations, ADP may correct incorrect Verification Data on behalf of Client or terminate the Employment
Verification Services upon 90 days prior written notice to Client.
5.2.1.4 Archival Copies. Notwithstanding anything to the contrary in Annex A, Client agrees that, after the termination of
this Agreement, ADP and its Verification Agents may maintain archival copies of the Verification Data as needed to
show the discharge and fulfillment of obligations to Client's employees and former employees and the provisions of
Section 4.1 of Annex A will continue to apply during the time that ADP and its Verification Agents maintain any such
archival copies.
5.2.1.5 Additional Termination Provisions for Employment Verification Services. ADP may, in its sole discretion,
terminate the Employment Verification Services at any time upon 90 days prior written notice to Client should a
Verification Agent notify ADP that it is no longer willing to provide the Employment Verification Services and ADP,
after taking commercially reasonable steps, cannot engage a successor Verification Agent
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Time and Attendance Services A more hurnan reso~~rce.
ADP Time & Attendance Services. ADP will provide Client with those time & attendance services delivered via ADP Workforce
Now including ADP Workforce Now Essential Time or ADP Workforce Now Enhanced Time ("ADP Time & Attendance
Services''). For the hosted the ADP Workforce Now Enhanced Time product only, additional license terms are available at
www.adp.com/llmlicenseterms. ADP Workforce Now Enhanced Time and ADP Workforce Now Essential Time products are
available for use in a limited number of countries outside the United States, although certain restrictions and requirements may
apply.
2 Billing for ADP Time & Attendance Services. Billing for ADP Time & Attendance Services will begin on the date such Services
are available for use by Client in a production environment.
3 Time & Attendance Hardware. If ADP agrees to provide Client with the data collection devices (e.g. Timeclock, HandPunch, etc.)
(the "Time & Attendance Hardware") as described in the Sales Order, the following terms will apply:
3.1 If Client procures Time & Attendance Hardware, Client shall provide and maintain an installation environment (including all
power, wiring and cabling required for installation) as specified in the manufacturer's product documentation and other written
instructions provided to Client by ADP.
3.2 Regarding Time & Attendance Hardware provided on a subscription basis only, Client shall not make any alterations or attach
any devices thereto that are not provided by ADP, nor shall Client remove same from the place of original installation without
ADP's prior consent. All right and title in the Time & Attendance Hardware procured on a subscription basis is, and at all
times shall remain, that of ADP and a separate item of personal property of ADP, notwithstanding its attachment to other
items or real property, and promptly upon termination of the ADP Time & Attendance Services, for any reason whatsoever,
Client shall, at its expense, return such Time & Attendance Hardware in good condition, in accordance with ADP's
instructions, normal wear and tear excepted. If such Time & Attendance Hardware is not promptly returned, Client agrees to
purchase same at fair market value. Repairs and replacements required as a result of any of the following shall not be
included in any maintenance services and shall be charged at ADP's then current rates: (i) damage, defects, or malfunctions
resulting from misuse, accident, neglect, tampering, unusual physical, or electrical stress, or causes other than normal or
intended use; (ii) failure of Client to provide and maintain a suitable installation environment; (iii) any alterations made to or
any devices not provided by ADP attached to the Time & Attendance Hardware; and (iv) malfunctions resulting from use of
badges or supplies not approved by ADP.
3.3 Maintenance Fees. Maintenance services for the Time & Attendance Hardware apply automatically to Time & Attendance
Hardware obtained under the subscription option (and any charges therefore are already included in the monthly time and
attendance subscription fees). The costs for maintenance services for Time & Attendance Hardware under the purchase
option are not included in the purchase price for such equipment; a separate annual maintenance fee applies. Client, under
the purchase option, may terminate its receipt of maintenance services by providing written notice to ADP no less than thirty
(30) days prior to the end of the then current annual coverage period. ADP is not required to rebate to Client any
maintenance fees relating to a current or prior coverage period. (NOTE: If Client selects the purchase option but opts not to
receive (or terminates) maintenance services hereunder by executing a waiver of maintenance services, any such services
provided by ADP at Client's request will be subject to ADP's then current charges for such services.) No Time & Attendance
Hardware maintenance is done at the Client site. Client shall bear all delivery/shipping costs and all risk of loss during
shipment/delivery of Time & Attendance Hardware relating to maintenance services.
3.4 Maintenance Services. ADP will maintain the Timeclock Equipment to be free from defects in material and workmanship as
follows: Any parts found to be defective (except as specifically excluded below) shall be replaced or repaired, at ADP's or its
designee's option, without charge for parts or labor, provided that the Time & Attendance Hardware has been properly
installed and maintained by Client and provided that such equipment has been used in accordance with this Agreement or
other accompanying documentation including, but not limited to, Client's Sales Order provided by ADP or its designee and
has not been subject to abuse or tampering.
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HR, Benefits and Talent Services A more human re>ourN,
ADP HCM Services. Only those Services that have been purchased by Client (as listed on a Sales Order) will be applicable.
1.1 ADP Document Cloud. Integrated solution to support maintenance and retrieval of employee-specific documents via cloud-
based technology,
1.2 Benefit Services. Benefit-related services made up of the following:
1.2.1. Health and Benefits Services. Technology to facilitate the administration of employee benefits, including applying
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record.
1.5 Human Resources Administration Services. Administration of human resource functions using a unified system to process
and audit employee lifecycle events, provide compliance tracking and reporting, including new hire reporting, and automate
notification and approval processes via self-service/direct access, and also including:
1.6 Talent Acquisition Solutions. Talent acquisition solutions made up of the following:
1.6.1. ADP Recruitment Management Services. Talent recruitment management technology, including talent acquisition
and on-boarding for exempt and non-exempt workforce.
1.7 Talent Management Solutions. Technology to facilitate the administration of talent management services, including:
1.7.1 Performance Management. Solutions and tools to facilitate the performance management process, including goal
alignment, and employee engagement
1.7.2 Compensation Management. Solutions and tools to administer the compensation planning process.
2 Billing for HR, Benefits & Talent Services. Billing for any HR, Benefits & Talent Services will begin on the date such Services are
available for use by the client in a production environment
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STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Jeff Marchioro
Senior Civil Engineer
Bob Kennedy
Engineering Manager
PROJECT: P2083-001103 DIV. NO. 2
APPROVED BY:
Rod Posada, Chief, Engineering
Mark Watton, General Manager
SUBJECT: Payment to SDG&E for New Electric Service for the 870-2 Pump
Station Replacement Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
authorize the General Manager to approve payment in the amount of
$129,248 to San Diego Gas & Electric (SDG&E) for new electric service
for the 870-2 Pump Station Replacement Project (see Exhibits A and B
for Project location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board authorization for the General Manager to approve
payment in an amount of $129,248 to SDG&E for new electric service
for the 870-2 Pump Station Replacement Project (see Exhibit C).
2
ANALYSIS:
The District entered into a $17 million contract with a contractor
(Pacific Hydrotech) on August 1, 2017 for the construction of the
870-2 Pump Station Replacement Project. The construction contract
also includes the replacement of the 571-1 (Roll) Reservoir floating
cover and liner. Notice to Proceed was issued on July 27, 2017 and
the contractor broke ground in November 2017.
Early coordination of the utilities needed to support the new 870-2
Pump Station are in progress. In an effort to advance this work, a
payment to SDG&E in the amount of $129,248 is required for SDG&E to
engage Pacific Hydrotech, Pacific Hydrotech’s electrical and
instrumentation subcontractor (Southern Contracting), the District’s
Construction Management and Inspection Services consultant (Michael
Baker International), and District staff to provide input on
construction submittals, shop drawings, and requests for information.
Once SDG&E receives the full payment, SDG&E will open a construction
work order and assign an inspector(s) to coordinate with the
construction project team.
In addition to SDG&E construction inspection and coordination, the
$129,248 payment also covers SDG&E material and installation costs to
set a new power pole, a new 3,000 ampere transformer, and a new meter
at the site. SDG&E will also pull conductors and make end
connections to SDG&E’s equipment.
A separate payment to SDG&E in the amount of $35,526 was made for the
new gas service under the General Manager’s authority in February
2018.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The total budget for CIP P2083, as approved in the FY 2018 budget, is
$18,750,000.00. Total expenditures, plus outstanding commitments and
forecast, including this contract, are $18,750,000. See Attachment B
for the budget detail.
Based on a review of the financial budget, the Project Manager
anticipates that the budgets are sufficient to support the Project.
The Finance Department has determined that, under the current rate
model, 100% of the funding will be available from the Replacement
Fund for CIP P2083.
3
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay
Water District, in a professional, effective and efficient manner”
and the General Manager’s Vision, "A District that is at the
forefront in innovations to provide water services at affordable
rates, with a reputation for outstanding customer service."
LEGAL IMPACT:
None.
JM/BK/RP:mlc
P:\WORKING\CIP P2083 870-2 Pump Station Replacement\Staff Reports\2018-03-07 SDGE Electric Service\BD 03-07-18 Staff
Report SDGE Elec Service for 870-2 PS.docx
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – 870-2 Pump Station Project Location Map
Exhibit B – 870-2 Pump Station Project Detail Map
Exhibit C – SDG&E Electric Service Cost
ATTACHMENT A
SUBJECT/PROJECT:
P2083-001103
Payment to SDG&E for New Electric Service for the 870-2
Pump Station Replacement Project
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee (Committee)
reviewed this item at a meeting held on February 20, 2018, and the
following comments were made:
Staff reviewed the staff report with the Committee and
recommended that the Board authorize the General Manager to
approve payment in the amount of $129,248 to San Diego Gas &
Electric (SDG&E) for new electric service for the 870-2 Pump
Station Replacement Project.
In response to a question from the Committee, staff stated that
SDG&E’s fees are based on several project specific factors such
as the amperage draw, topography, and distance from SDG&E’s
existing facilities to the site.
The Committee inquired about the $24,770.00 tax listed on the
Costs Summary Sheet. In response to the Committee’s inquiry,
staff called SDG&E after the meeting and obtained the attached
fact sheets from the company’s planner assigned to the project.
Upon completion of the discussion, the Committee accepted staffs’
report and supported presentation to the full board as a consent item.
Southern Region
(Metro)
Metro Service
Order Team Northeast District
North Coast
Service Order
Team
Orange County Eastern Service
Order Team
8315 Century Park Ct 210
San Diego, CA 92123 858-636-6805
701A 33rd Street
San Diego, CA 92102 619-230-7800
571 Enterprise Street
Escondido, CA 92029 760-480-7745
4940 Carlsbad Blvd
Carlsbad, CA 92008 760-476-5621
662 Camino De Los Mares
San Clemente, CA 92673 949-361-8066
904 W. Main St.
El Cajon, CA 92020 619-441-3969
Project Management Fact Sheet - Customer Use
EXPLANATION OF THE TAX GROSS-UP PERCENTAGE (ITCC)
The California Public Utilities Commission (CPUC) has directed utilities to
recover from customers or contributors who make construction advances a
specified amount to compensate the utility for additional tax expenses it incurs as
a result of these advances. (The additional tax expense is mandated by the
Internal Revenue Service). These amounts are collected through the use of a tax
gross-up procedure. The CPUC authorizes the tax gross-up rate for each utility.
(The tax gross-up percentage is sometimes referred to as the income tax
component of contribution, or ITCC).
The tax gross-up rate is less than the actual tax rate the utilities pay, but also takes
into consideration certain benefits that the utilities receive in the form of future
tax depreciation allowances and the use of the funds. Through the gross-up
procedure, the utility neither benefits nor loses as a result of the transaction.
Posted1/06/10
Southern Region
(Metro)
Metro Service
Order Team Northeast District
North Coast
Service Order
Team Orange County Eastern Service
Order Team
8315 Century Park Ct 210
San Diego, CA 92123 858-636-6805
735 33rd Street
San Diego, CA 92102 619-230-7800
571 Enterprise Street
Escondido, CA 92029 760-480-7745
4940 Carlsbad Blvd
Carlsbad, CA 92008 760-476-5621
662 Camino De Los Mares
San Clemente, CA 92673 949-361-8066
904 W. Main St.
El Cajon, CA 92020 619-441-3969
1
Project Management Fact Sheet - Customer Use
2018 INCOME TAX COMPONENT OF CONTRIBUTIONS AND
ADVANCES PROVISION
SDG&E filed Advice Letter 2844-E/2450-G on January 8, 2016 with the Public Utilities Commission of
the State of California to extend the 50% bonus depreciation tax factor from January 1, 2015 through
December 31, 2017. In December 18, 2015 the President signed H.R. 2029 - Consolidated
Appropriations Act, 2016, Division Q, Section 143 which allows for the extension of 50% bonus
depreciation to tax years 2015 thru 2017.
Pursuant to the Protecting Americans from Tax Hikes Act of 2015, which retroactively extended the
Federal Depreciation Provisions of the Internal Revenue Code through December 31, 2019 with
reduced tax incentives in 2018 and 2019, a Tax Factor of: 1) 22% is applicable to contributions
received by the utility between January 1, 2015 and December 31, 2017; 2) 24% is applicable to
contributions received between January 1, 2018 and December 31, 2018
• 2018 Electric jobs will be taxed at 24%
• 2018 Gas jobs will be taxed at 24%
Tax rate increases will occur in 2019. Announcements will be made in the year previous to the change
so you may plan accordingly.
Issued: 02-22-2018
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
P2083-001103
Payment to SDG&E for New Electric Service for the 870-2
Pump Station Replacement Project
Date Updated: 2/2/2018
Budget
18,750,000
Planning
Consultant Contracts 105,296 105,296 - 105,296 ICF JONES & STOKES INC
17,094 17,094 33,833 50,927 JONES & STOKES ASSOCIATES INC74,077 78,000 78,000 HELIX ENVIRONMENTAL
Regulatory Agency Fees 2,109 2,109 - 2,109 CA DEPT OF FISH & WILDLIFE
720 720 - 720 CALIFORNIA REGIONAL WATER
1,570 1,570 - 1,570 SAN DIEGO COUNTY WATER AUTH
622 622 - 622 STATE WATER RESOURCES
Service Contracts 2,260 2,260 - 2,260 COUNTY OF SAN DIEGO
164 164 - 164 SAN DIEGO DAILY TRANSCRIPT505 505 - 505 THE SAN DIEGO UNION-TRIBUNE
Standard Salaries 153,480 153,480 - 153,480
Fixed Asset 580,444 580,444 - 580,444
Total Planning 938,342 864,265 111,833 976,098
Design 001102
Consultant Contracts 4,850 4,850 - 4,850 BURKETT & WONG ENGINEERS INC5,000 136 4,864 5,000 THE WATCHLIGHT CORPORATION
14,068 14,068 - 14,068 SOUTHERN CALIFORNIA SOIL
3,034 3,034 - 3,034 RICK ENGINEERING COMPANY
4,810 4,625 185 4,810 ROGER B WOODHULL
22,463 22,149 314 22,463 NINYO & MOORE GEOTECHNICAL AND
6,086 6,086 - 6,086 HDR ENGINEERING INC10,484 10,484 - 10,484 HUNSAKER & ASSOCIATES
682,870 682,870 - 682,870 CAROLLO ENGINEERS INC
7,974 7,974 - 7,974 AEGIS ENGINEERING MGMT INC
Regulatory Agency Fees 3,694 3,694 - 3,694 SAN DIEGO GAS & ELECTRIC
14,264 14,264 - 14,264 COUNTY OF SAN DIEGO
Service Contracts 98 98 - 98 DAILY JOURNAL CORPORATION
Standard Salaries 676,838 676,838 - 676,838 Supplier Contracts 5,350 5,350 - 5,350 INLAND AERIAL SURVEYS INC
Total Design 1,461,884 1,456,520 5,363 1,461,884
Construction
Construction Contracts 13,688,835 384,703 13,304,132 13,688,835 PACIFIC HYDROTECH CORPORATION
720,465 20,248 700,218 720,465 PACIFIC WESTERN BANK
Consultant Contracts 329,658 84,419 245,240 329,658 CAROLLO ENGINEERS INC789,762 66,927 722,835 789,762 MICHAEL BAKER INT'L INC
OTHER AGENCY FEES 708 708 - 708 COUNTY OF SAN DIEGO
Professional Legal Fees 276 276 - 276 ARTIANO SHINOFF
280 280 - 280 STUTZ ARTIANO SHINOFF
Service Contracts 3,628 3,628 - 3,628 MAYER REPROGRAPHICS INC
119 119 - 119 SAN DIEGO DAILY TRANSCRIPTStandard Salaries 72,207 72,207 200,129 272,336
129,248 129,248 129,248 SDG&E Electric Service
35,526 35,526 35,526 SDG&E Gas Service
20,000 20,000 Security System
20,000 20,000 County Hazardous Materials Business Plan
30,000 30,000 County Access Road Inspection
80,000 80,000 Environmental Offsite Mitigation10,000 10,000 ATT Connection
181,177 181,177 Contingency @ 1.3% of Construction Contract
Total Construction 15,770,712 633,514 15,678,505 16,312,018
Grand Total 18,170,938 2,954,299 15,795,701 18,750,000
Vendor/Comments
Otay Water District
P2083-PS - 870-2 Pump Station
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost
OTAY WATER DISTRICT870-2 PUMP STATIONPROJECT DETAIL MAP
EXHIBIT B
CIP P2083F
P:\WORKING\CIP P2083 870-2 Pump Station Replacement\Graphics\Exhibits-Figures\Exhibit B, Project Detail Map, May 2016.mxd
0 10050
Feet
Legend
ExistingEasementOWD
ExistingParcelOWD
ExistingEasementSDGE
ProposedStructure
ProposedWater
ProposedStormDrain
ProposedSewer
ProposedGas
ProposedSiteCivil
ExistingWaterOWD
soqf
A ~ Sempra Energy ulilily"
February 7, 2018
Jeff Marchioro
Otay Water District
2554 Sweetwater Springs Blvd
Spring Valley, CA 91978
Dear Mr. Marchioro,
PROJECT: OTAYWATER DISTRICT
FILE NO. PLA 580
Project No. 457584-020
Thank you for requesting that SDG&E provide gas and electric service to your project.
Construction responsibilities are outlined following. And, the related costs are attached as the "Cost
Summary Sheet".
RATES
Based on the information provided to your Planner, your project has been assigned a rate of
"AL TOUCP2" for electric. Other optional rates may be available. If you are interested in talking with
someone regarding your options, please contact the SDG&E Call Center at 1-800-411-7343.
ELECTRIC SERVICE
SDG&E must set a new pole to serve the project. The extension will require a construction advance
as outlined in the Costs section of this letter. The advance was computed based on your selection
of the option to pay a non-refundable advance (50% discount option).
Underground service will be supplied under the provisions of Electric Rule 16. Accordingly, you are
responsible for providing a clear path, the trench, backfill, conduit and concrete substructure(s) from
pole to transformer and meter. (Also, you will be responsible for the on-going maintenance of these
facilities.) To complete the underground service, we will install and connect the electric service
conductors. Your cost for cable and/or cable pole material and/or service connectors is outlined
in the Cost Summary Sheet.
The manufacturer of your electrical equipment --if rated 1000 amperes or above--must submit four
(4) copies of the drawings to: SDG&E ENERGY MEASUREMENT and SERVICE STANDARDS at
8316 Century Park Ct., Suite CP52F, San Diego, CA 92123-1582. The submittal must be made
prior to fabrication and must include the project address. One copy will be returned with approvals
or corrections, as needed.
Please note that when five-inch service conduits are to be installed, a minimum of six-feet clear
and level working space must be provided in front of the underground pull section to permit
setup and operation of cable pulling equipment.
PROJ# 457584-020 2 February 7, 2018
SITE ACCESS -LINE TRUCK, METER, SERVICE, AND TRANSFORMER
SDG&E must have line truck access to gas and electric facilities for the purpose of installation,
reading, testing, inspection, maintenance, and emergencies (refer to SDG&E Service Standards
and guide sections 016, 005, 604, and 1006-1 008).
If you are installing an electrically operated gate for your project, there are several things you need
to know. First, 24-hour access to the gas and electric meters is required by the Fire Department and
SDG&E. Because of the serious safety issues involved, we cannot set meters until access is
guaranteed. You should contact the Fire Department to obtain their specific requirements, but our
minimum requirements are:
1. A Schlage VTQP Quad Section cylinder in a key switch wired to the gate controller. A list of
locksmiths authorized to sell SDG&E approved locks is available on request.
2. A means of opening the gate from the inside without the use of a vehicle to activate the
controller. This will require the installation of an additional key switch inside the gate if there is
no unsecured switch available.
TRENCHING, CONSTRUCTION, INSPECTION
After you have been notified by us that your construction order has been issued, you or your
contractor must notify our Construction Department by phone, 48 hours prior to having the
trench ready. Please call 619-699-1039 to arrange a pre-construction meeting or to discuss any
construction-related questions.
So that you may effectively schedule your work, you should know that our Inspector is required
to inspect your work at the following stages and you will need to call 619-699-1039 as each
stage is ready.
[J Trenching
[J Conduit installation and mandrelling
[J Backfill and compaction
[J Substructure installation
[J Completion stage (final inspection)
When calling our Construction Department, the following will identify your project:
Project Name: OTAY WATER DISTRICT
Work Order#: Electric: 2411580
TRENCHING ADVISORIES
Prior to trenching /excavating, please contact DigAiert (USA Markout) at least 48 hours in advance
at 811. We will locate and mark-out our facilities. Failure to call may result in serious injuries and/or
substantial damage for which you will be responsible.
PROJ# 457584-020 3 February 7, 2018
You, probably, will need an excavation permit from the City of San Diego prior to your excavation
work. Additionally, you are responsible for obtaining any other necessary permits and for adhering
to all applicable governmental and regulatory statutes, codes, and rules.
Finally, before you begin trenching, I strongly suggest you contact the local telephone and cable
television companies for their requirements and any charges they may have.
CHECKLIST
There are, of course, a few other things to be done before the meter can be set. I have prepared a
checklist for your use.
[J Your work must be completed and accepted, and SDG&E's portion of the work must be
completed.
[J Ensure that the address we have on record and your permit address match.
[J Whoever is going to be responsible for the billing needs to call our Customer Contact Center
and make application at 1-800-411 -SDGE (7343) or contact your assigned account
representative.
[J We must receive either permanent or temporary inspection clearances from the City of San
Diego.
COSTS
All costs and offers quoted in this letter shall expire at the end of the business day on April 201h,
2018. If business negotiations are not completed, or if you request revised costs after that date, an
engineering fee may be required. Also, please understand that SDG&E is subject to California
Public Utilities Commission decisions -any changes directed by the Commission can affect the
quotes.
The costs quoted in this letter include a cost component to cover SDG&E's estimated liability for
State and Federal Income Tax.
Since a portion of the work required to complete your project is to be performed by you, it is
imperative that you complete that work in a timely manner. Within one year of the date SDG&E
first releases your job for construction, all trench, conduit, and substructure work required of you
must be completed. Should you not complete that work within one year, subsequently not
allowing SDG&E to complete its required work, your job will be placed on hold pending review.
If, at that time, you wish to continue, SDG&E will re-estimate the cost of the job. You may be
asked to pay a cost update fee and to submit additional funds, if applicable, to cover SDG&E's
current cost of construction. If you elect not to proceed with your project it will be cancelled.
Note: if you cancel your request, we will retain a portion of your payment to cover SDG&E's expense
for processing. The remaining amount, if any, will be refunded to you.
Project Management offices are unable to accept payments. If you wish to proceed, please
mail all of the required paper work associated with the project, the enclosed Customer Payment
Remittance, and your check for $129,248.00 to:
Customer Payment Services -CP61 C
San Diego Gas & Electric
P.O. Box 129831
San Diego, CA 92112-9831
Once your check is received, your work order will be issued.
PROJ# 457584-020 4 February 7, 2018
THANK YOU
We appreciate your business and hope you are very satisfied with our service. For additional
general information, you can visit our website at http://sdge.com. If I may be of further assistance
or should you have any non-construction-related questions (easements, charges, etc.), please caH
me or my assistant at the number below. Our normal office hours are 7:00 a.m. to 4:00 p.m.,
Monday through Friday.
Sincerely,
James Todd
Sr. Customer Project Planner
Telephone: (858) 636-3920
PROJ# 457584-020
COSTS SUMMARY SHEET
Rule 16 Service-Electric
a. Rule 16 OH/UG service costs (Combo)
b. Tax
c. Amount due
d. Engineering fee
e. Total electric service lateral cost
Total Amount Due:
5
$ 106,493.00
$24.770.00
<$ 2,015.00>
February 7, 2018
$131,263.00
$ 129,248.00
$ 129.248.00
PCRRemittance Ver 1.0 Page 1 of 1
Sf
A~ Sempra Energy tstiliti''
CUSTOMER PAYMENT REMIITANCE
Invoice/CR # 1 298369 I
Project# 1 457584 I
Date I February 07, 2018 I
Preparer I Dors, Debra I
Customer/Project Name: I OTAY WATER DISTRICT I
Project Location: I 1240 ALTA RD SD I
SDG&E Contact: I Todd,lim I Telephone: I 858-636-3920~ I
PAYMENT DUE: I $129,248.00 I
-Make checks payable to SDG&E -
MAIL TO:
Customer Payment Services -CP61C
San Diego Gas & Electric
PO Box 129831
San Diego, CA 92112-9831
THIS REMITTANCE MUST BE RETURNED WITH PAYMENT
http:/ /infoweb.sdge.com/ departments/cac/cac _remittance.cfm 2/7/2018
1
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Dan Martin
Engineering Manager
PROJECT: S2045-
001103
DIV. NO. 5
APPROVED BY:
Rod Posada, Chief, Engineering
Mark Watton, General Manager
SUBJECT: Approval to Increase the CIP S2045 Budget in an Amount of
$60,000 and Award of a Construction Contract to Burtech
Pipeline, Incorporated for the Fuerte Drive Sewer Relocation
Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
increase the CIP S2045 budget in the amount of $60,000.
Additionally, that the Board award a construction contract to Burtech
Pipeline, Incorporated (Burtech) and to authorize the General Manager
to execute an agreement with Burtech for the Fuerte Drive Sewer
Relocation Project in an amount not-to-exceed $193,690.00 (see
Exhibit A for Project location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board authorization to increase the CIP S2045 budget in the
amount of $60,000 from $250,000 to $310,000 and to obtain Board
authorization for the General Manager to enter into a construction
contract with Burtech for the Fuerte Drive Sewer Relocation Project
in an amount not-to-exceed $193,690.00.
2
ANALYSIS:
The Fuerte Drive Sewer Relocation Project (Project) is for the
relocation of approximately 255 linear feet of 8-inch sanitary
gravity sewer related to the County of San Diego (County) realigning
Fuerte Drive at the intersection of Alzeda Drive for safety issues.
The District’s construction contract for the Project was advertised
for bid on June 29, 2017 using BidSync, an online bid solicitation
website. The Project was also advertised in the Daily Transcript.
BidSync provided electronic distribution of the Bid Documents,
including specifications, plans, and addenda. One (1) addendum was
sent out to all bidders and plan houses to distribute the County of
San Diego Permits and address questions and clarifications to the
contract documents during the bidding period. Bids were publicly
opened on July 26, 2017, with the following results:
CONTRACTOR TOTAL BID
AMOUNT
1 Ortiz Corporation (National City, CA) $147,650.00
2 Burtech Pipeline, Incorporated (Encinitas, CA) $193,690.00
3 El Cajon Grading and Engineering Co., Inc.
(Lakeside, CA) $229,991.00
4 Bali Construction, Inc. (South El Monte, CA) $332,005.00
The construction contract for this work was awarded to Ortiz
Corporation (Ortiz) at the September 6, 2017 Board Meeting. The
original schedule provided to the District by the County for
performing the Project was from November 21, 2017 to December 15,
2017. This schedule was incorporated into the construction
contract’s bid documents.
Since the award of the construction contract, the County initially
notified the District that the District’s utility relocation schedule
would be moved into January 2018. The County has since notified the
District that the District’s relocation schedule has been moved to
April 2018. In response, District staff followed up with Ortiz to
verify their ability to meet the revised Project schedule. Ortiz
indicated that they could not accommodate the new dates due to other
obligations and requested to terminate the contract. At the
February 7, 2018 Board Meeting, the Board approved a staff
recommendation to terminate the contract with Ortiz.
District staff has reached out to Burtech, who was the second lowest
bidder when the Project was originally bid. District has
communicated the new schedule to Burtech and has noted that the
schedule could move to May 2018.
3
Burtech has stated that they would accept the Project and honor their
original bid pricing.
A review of the bids that were publicly opened on July 26, 2017 was
performed by District staff for conformance with the contract
requirements and validated that Burtech was the second lowest
responsive and responsible bidder. Burtech holds a Class A, General
Engineering, Contractor’s License in the State of California, which
meets the contract document’s requirements, and is valid through
January 31, 2020. The reference checks indicated a very good to
excellent performance record on similar projects. Burtech has
recently performed similar work for the City of San Diego and the
City of Oceanside. An internet background search of the company was
performed and revealed no outstanding issues with this company.
Staff will verify that Burtech’s Performance Bond and Labor and
Materials Bond are valid prior to execution of the contract.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The Fiscal Year 2018 budget for CIP S2045 is $250,000. Total
expenditures, plus outstanding commitments and forecast, including
this contract, are estimated to be $307,400. See Attachment B for
budget detail.
Based on a review of the financial budget, the Project Manager
anticipates that with a budget increase of $60,000, the Project will
be completed within the new budget amount of $310,000.
The Finance Department has determined that under the current rate
model, 100% of the funding is available from the Replacement Fund.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay
Water District in a professional, effective, and efficient manner”
and the District’s Vision, “A District that is at the forefront in
innovations to provide water services at affordable rates, with a
reputation for outstanding customer service.”
LEGAL IMPACT:
None.
DM/RP:mlc
P:\WORKING\CIP S2045 Fuerte Drive Sewer Relocation\Staff Reports\BD 03-07-18\BD-03-07-18, Staff Report, Fuerte Drive
Sewer Award Construction Contract, (DM-RP).docx
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – Location Map
ATTACHMENT A
SUBJECT/PROJECT:
S2045-001103
Approval to Increase the CIP S2045 Budget in an Amount of
$60,000 and Award of a Construction Contract to Burtech
Pipeline, Incorporated for the Fuerte Drive Sewer
Relocation Project
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee
(Committee) reviewed this item at a meeting held on February 20,
2018, and the following comments were made:
Staff reviewed the staff report with the Committee and
recommended that the Board increase the CIP S2045 budget in the
amount of $60,000. Additionally, that the Board award a
construction contract to Burtech Pipeline, Incorporated
(Burtech) and to authorize the General Manager to execute an
agreement with Burtech for the Fuerte Drive Sewer Relocation
Project in an amount not-to-exceed $193,690.00.
In response to a question from the Committee, staff stated that
because of two (2) changes to the relocation schedule by the
County of San Diego which pushed out the project’s date to April
2018, Ortiz Corporation requested to terminate their contract as
they could not accommodate the new dates due to other
obligations.
In response to another question from the Committee, staff
indicated that the $60,000 increase to the CIP S2045 budget will
come from the Sewer Replacement funding source. It was noted
that the District has sufficient funds to cover the $60,000
increase and is still within the District’s annual budget.
Upon completion of the discussion, the Committee accepted staffs’
report and supported presentation to the full board as a consent
item.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
S2045-001103
Approval to Increase the CIP S2045 Budget in an Amount of
$60,000 and Award of a Construction Contract to Burtech
Pipeline, Incorporated for the Fuerte Drive Sewer
Relocation Project
2/2/2018
Budget
310,000
Planning
50 50 - 50 Petty Cash Custodian
Standard Salaries 21,949 21,949 - 21,949
Total Planning 21,999 21,999 - 21,999
Design 001102
Consultant Contracts 1,206 1,206 - 1,206 HUNSAKER & ASSOCIATES
7,797 7,797 - 7,797 RICK ENGINEERING COMPANY
12,780 12,780 - 12,780 AIRX UTILITY SURVEYORS INC
47 47 - 47 Daily Journal Corporation
Standard Salaries 22,928 22,928 - 22,928
Total Design 44,758 44,758 - 44,758
Construction
Consultant Contracts 7,000 - 7,000 7,000 Construction Management
Construction Contract 193,690 - 193,690 193,690 BURTECH PIPELINE INCORPORATED
25,000 6,014 18,986 25,000 Standard Salaries
15,003 - 15,003 15,003 Contingency @ 7.7% of Construction Contract
Total Construction 240,693 6,014 234,679 240,693
Grand Total 307,400 72,721 234,679 307,400
Vendor/Comments
Otay Water District
S2045 - Fuerte Drive Sewer Relocation
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost
OTAY WATER DISTRICTFUERTE DR SEWER RELOCATIONLOCATION MAPEXHIBIT A CIP S2045F
P:\WORKING\CIP S2045 Fuerte Drive Sewer Relocation\Graphics\Exhibits-Figures\Exhibit A, Fuerte Dr Sewer Relocation, Aug 2017.mxd
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STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Dan Martin
Engineering Manager
PROJECT: R2118-001103
DIV. NO.: 3
APPROVED BY:
Rod Posada, Chief, Engineering
Mark Watton, General Manager
SUBJECT: Reject all Construction Bids for the Steele Bridge Sewage Pump
Station Wet Well Improvements Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
reject all bids for the construction of the Steele Bridge Sewage Pump
Station Wet Well Improvements Project (CIP R2118) (see Exhibit A for
Project location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board authorization for the General Manager to reject all
bids for the construction of the Steele Bridge Sewage Pump Station
Wet Well Improvements Project (CIP R2118).
2
ANALYSIS:
The District provides sanitary sewer collection service in the
Jamacha drainage basin located in the northern area of the District.
Clogging of the sewage suction lift wastewater pumps is a frequent
occurrence at the station and requires significant maintenance staff
time to clear debris. The addition of a bar screen within the wet
well is expected to reduce the number of pump service calls by staff.
To adequately access the wet well after the screen addition, a new
top slab with access hatches on either side of the screen is
required. Additional top slab openings for instrumentation and pump
piping are also needed.
The construction contract’s scope of work generally consists of
removal and disposal of the existing wet well top slab, a replacement
concrete top slab with access hatches and hand holes, furnishing and
installing of a new stainless steel wastewater bar screen with
grouting, wet well interior coating and all other appurtenant as
required by the Contract Documents.
The Project was advertised for bid on December 12, 2017 using
BidSync, an online bid solicitation website. The Project was also
advertised in the Daily Transcript. BidSync provided electronic
distribution of the Bid Documents, including specifications, plans,
and addenda. One (1) addendum was sent out to all bidders and plan
houses to address questions and clarifications to the contract
documents during the bidding period. Bids were publicly opened on
January 23, 2018, with the following results:
CONTRACTOR TOTAL BID
AMOUNT
1 Tharsos, Inc., La Mesa, CA $98,000.00
2 Telliard Construction, San Diego, CA $147,100.00
3 Bali Construction, Inc., South El Monte, CA $158,000.00
The Engineer’s Estimate is $50,000.
During the Project advertisement period, a copy of the Project
advertisement was e-mailed directly to 22 contractors that had either
performed work for the District or submitted a bid on a previous
project. This is in addition to the notifications provided by
BidSync to contractors in the Southern California area, with over
several hundred identified for the project classifications checked
for this Project. Subsequent contact with several of the contractors
found that they were too busy to consider the Project. As the
Project budget would need to be increased to award the higher than
anticipated contract amount, staff recommends rejecting all bids and
to consider repackaging the Project for rebid at a future date when a
more favorable bid may be obtained.
3
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay
Water District in a professional, effective, and efficient manner”
and the District’s Vision, “A District that is at the forefront in
innovations to provide water services at affordable rates, with a
reputation for outstanding customer service.”
LEGAL IMPACT:
None.
DM/RP:jf
P:\WORKING\CIP R2118 - Steele Bridge SPS\Staff Report\BD 03-07-18 Staff Report Steele Bridge SPS
Improvements Award Construction Project_rev1.docx
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – Location Map
ATTACHMENT A
SUBJECT/PROJECT:
R2118-001103 Reject all Construction Bids for the Steele Bridge Sewage
Pump Station Wet Well Improvements Project
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee (Committee)
reviewed this item at a meeting held on February 20, 2018, and the
following comments were made:
Staff reviewed the staff report with the Committee and
recommended that the Board reject all bids for the construction
of the Steele Bridge Sewage Pump Station Wet Well Improvements
Project (CIP R2118).
It was noted that the District received three (3) bids and the
low bidder for the project was $98,000; which is 96% over the
District engineer’s estimate of $50,000.
In response to a question from the Committee, staff stated that
the District can postpone this project and advertise the work at
a later date as part of a larger scope that would increase the
contract amount and attract more vendors.
The Committee inquired if Operations’ staff could perform the
project’s scope of work. Staff stated that this alternative was
discussed, but committing Operations’ staff resources to a
certain amount of time is difficult as they are required to
respond to main breaks and other unforeseen emergencies.
It was noted that staff will send a rejection letter to all
bidders.
Upon completion of the discussion, the Committee accepted staffs’
report and supported presentation to the full board as a consent item.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
R2118-001103
Reject all Construction Bids for the Steele Bridge Sewage
Pump Station Wet Well Improvements Project
14-Feb-18
Budget
75,000
Planning
Regulatory Agency Fees 50 50 - 50 PETTY CASH CUSTODIAN
Standard Salaries 3,854 3,854 - 3,854
Total Planning 3,904 3,904 - 3,904
Design 001102
Consultant Contracts 8,035 8,035 - 8,035 RICK ENGINEERING COMPANY
Standard Salaries 20,476 20,476 - 20,476
Total Design 28,511 28,511 - 28,511
Construction
Standard Salaries 399 399 - 399
Total Construction 399 399 - 399
Grand Total 32,814 32,814 - 32,814
Vendor/Comments
Otay Water District
R2118-Steele Canyon Sewer PS Chopper Pump
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost
Bud
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Dan Martin
Engineering Manager
PROJECT: P2557-001103
DIV. NO.: 3
APPROVED BY:
Rod Posada, Chief, Engineering
Mark Watton, General Manager
SUBJECT: Reject all Construction Bids for the 520 Reservoirs Chemical
Feed Improvements Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
reject all bids for the construction of the 520 Reservoirs Chemical
Feed Improvements Project (CIP P2557) (see Exhibit A for Project
location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board authorization for the General Manager to reject all
bids for the construction of the 520 Reservoirs Chemical Feed
Improvements Project (CIP P2557).
2
ANALYSIS:
The District provides potable water distribution service in the
northern area of the District with water imported from the Helix
Water District’s R.M. Levy Water Treatment Plant. This water is
already chlorinated, but the detention time in the two 520 Pressure
Zone storage tanks requires additional disinfectants to be fed to
maintain an adequate residual. The District uses chloramination,
which consists of chlorine solution and ammonia, for disinfection
purposes. The existing ammonia feed piping is constructed of iron
pipe, which is deteriorating from use.
The construction contract’s scope of work generally consists of
removal and replacement of ammonia chemical piping (exposed and
buried), injection vault modifications with addition of concrete
floor, injector replacement, and valve additions and all other
appurtenant as required by the Contract Documents.
The Project was advertised for bid on December 12, 2017 using
BidSync, an online bid solicitation website. The Project was also
advertised in the Daily Transcript. BidSync provided electronic
distribution of the Bid Documents, including specifications, plans,
and addenda. One (1) addendum was sent out to all bidders and plan
houses to make available the presentation prepared for the pre-bid
meeting. Bids were publicly opened on January 25, 2018, with the
following results:
CONTRACTOR TOTAL BID
AMOUNT
1 Tharsos, Inc. – La Mesa, Ca $93,000.00
2 Telliard Construction – San Diego, CA $121,900.00
The Engineer’s Estimate is $45,000.
During the Project advertisement period, a copy of the Project
advertisement was e-mailed directly to 22 contractors that had either
performed work for the District or submitted a bid on a previous
project. This is in addition to the notifications provided by
BidSync to contractors in the Southern California area, with over
several hundred identified for the project classifications checked
for this Project. Subsequent contact with several of the contractors
found that they were too busy to consider the Project. As the
Project budget would need to be increased to award the higher than
anticipated contract amount, staff recommends rejecting all bids and
to consider either repackaging the Project for rebid at a future date
when a more favorable bid may be obtained or use District forces to
construct the Project at a cost below the low bid amount.
3
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay
Water District in a professional, effective, and efficient manner”
and the District’s Vision, “A District that is at the forefront in
innovations to provide water services at affordable rates, with a
reputation for outstanding customer service.”
LEGAL IMPACT:
None.
DM/RP:jf
P:\WORKING\CIP P2557 520 Res Recirculation Pipeline Chemical Supply and Analyzer Feed Replacement\Staff Reports\BD 03-
07-18 Staff Report 520 Res Chemical Feed Improvements Award Construction Project_rev1.docx
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – Location Map
ATTACHMENT A
SUBJECT/PROJECT:
P2557-001103
Reject all Construction Bids for the 520 Reservoirs
Chemical Feed Improvements Project
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee (Committee)
reviewed this item at a meeting held on February 20, 2018, and the
following comments were made:
Staff reviewed the staff report with the Committee and
recommended that the Board reject all bids for the construction
of the 520 Reservoirs Chemical Feed Improvements Project (CIP
P2557).
In response to a question from the Committee, staff stated that
the District advertises its Request for Bids through BidSync (an
online bid solicitation website), the Daily Transcript, and the
Associated General Contractors Plan Room. Staff indicated that
the greatest volume of vendors throughout the state are members
of BidSync.
The Committee suggested that staff conduct a survey to
contractors to find out the source that they use to look for
work. It was noted that this survey can be included in the bid
proposal package that the District requires all contractors to
fill out.
The Committee inquired if staff from the Operations Department
can perform this project’s scope of work. Staff stated yes.
Upon completion of the discussion, the Committee accepted staffs’
report and supported presentation to the full board as a consent item.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
P2557-001103
Reject all Construction Bids for the 520 Reservoirs
Chemical Feed Improvements Project
14-Feb-18
Budget
100,000
Planning
Standard Salaries 8,825 8,825 - 8,825
Total Planning 8,825 8,825 - 8,825
Design 001102
Standard Salaries 32,077 32,077 - 32,077
Total Design 32,077 32,077 - 32,077
Construction
Standard Salaries 570 570 - 570
Total Construction 570 570 - 570
Grand Total 41,472 41,472 - 41,472
Vendor/Comments
Otay Water District
P2557 - 520 Reservoir Recirculation Pipeline Chemical
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost
Bud
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Tenille M. Otero,
Communications Officer
PROJECT: Various DIV. NO. ALL
APPROVED BY:
Mark Watton, General Manager
SUBJECT: Approve Contribution to Association of California Water Agencies for Water Education
GENERAL MANAGER’S RECOMMENDATION:
That the Board of Directors approve a contribution of $10,000 to the Association of California Water Agencies (ACWA) for water education. COMMITTEE ACTION:
See Attachment A. PURPOSE: To provide direction to staff to make a contribution in the amount of
$10,000 to ACWA for an educational campaign related to the tax on drinking water.
ANALYSIS:
ACWA and member agencies’ efforts to educate stakeholders and the
public about SB 623 (Monning) and the budget trailer bill related to a tax on drinking water is one of the most important issues
undertaken in recent years. Considering the potential negative consequences of this proposed tax and the dangerous precedent that it could set, ACWA is launching a fund-raising effort to secure an
outside public affairs firm to help develop a more strategic external affairs education campaign and assist with coalition building outside
of the water industry. ACWA’s funding goal is $300,000, enough to potentially sustain this effort through the summer.
2
ACWA is asking water agencies and other organizations to submit voluntary contributions to fund this effort. Based on the size of the
Otay Water District, they are asking for a contribution of $10,000. Although, there are strict guidelines to avoid advocacy and focus only on education and awareness if an item is on the ballot, those guidelines may not apply to SB 623 because it is not on the ballot and is pending legislation. Therefore, ACWA and member agencies may
be able to focus the efforts of the campaign on education and advocacy. These strategies will include outreach, communications, coalition building, advertising, social media, and other educational
outreach activities. Once ACWA has awarded a public affairs firm with the contract, ACWA and the firm will work on a comprehensive
strategic plan. The goal of the campaign is to help ACWA and member agencies educate stakeholders and ratepayers about the tax on drinking water.
ACWA staff is currently discussing proposals from four Sacramento firms and is also working with ACWA’s attorneys to ensure that the funds are used appropriately.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Because of the aggressive movement on the tax on drinking water issue in the legislature and ACWA’s urgent request in late February 2018 to develop this outreach effort, the contribution amount of $10,000 is not in the District’s FY 2018 budget. If the Board approves the
contribution, staff will evaluate line items from the FY 2018 budget projected to not be fully expended that can then be used for the ACWA
contribution. LEGAL IMPACT:
None
Attachments: Attachment A – Committee Action Attachment B – No Drinking Water Tax Education and Outreach Campaign Contribution Form
ATTACHMENT A
SUBJECT/PROJECT:
Approve Contribution to Association of California Water Agencies for Water Education
COMMITTEE ACTION: The Public Relations, Legal and Legislative Committee is scheduled to review this item at the monthly Board meeting to be held on March 7, 2018. The attachment will be updated with notes from the
committee’s discussion.
Attachment B
WE CAN SOLVE IT WITHOUT A DRINKING WATER TAX
No Drinking Water Tax Education and Outreach CampaignCONTRIBUTION FORM
Please Print or Type
MEMBER AGENCY INFORMATION
Organization
Contact Person
Phone Email
Billing Address City, State, Zip
CONTRIBUTION INFORMATION
We contribute a total of
$
Payment Option
Please send an invoice for processing
A check will be mailed to ACWA within 30 days. Please make check payable to ACWA and mail it to 910 K Street, Ste. 100, Sacramento, CA 95814.
Please send this completed form to Michaela Martinez at michaelam@acwa.com
Printed Name Title
Signature Date
STAFF REPORT
TYPE MEETING: Regular Board Meeting MEETING DATE: March 7, 2018
SUBMITTED BY: Mark Watton,
General Manager
W.O./G.F. NO: DIV. NO.
APPROVED BY:
Susan Cruz, District Secretary
Mark Watton, General Manager
SUBJECT: Board of Directors 2018 Calendar of Meetings
GENERAL MANAGER’S RECOMMENDATION:
At the request of the Board, the attached Board of Director’s meeting
calendar for 2018 is being presented for discussion.
PURPOSE:
This staff report is being presented to provide the Board the
opportunity to review the 2018 Board of Director’s meeting calendar
and amend the schedule as needed.
COMMITTEE ACTION:
N/A
ANALYSIS:
The Board requested that this item be presented at each meeting so
they may have an opportunity to review the Board meeting calendar
schedule and amend it as needed.
STRATEGIC GOAL:
N/A
FISCAL IMPACT:
None.
LEGAL IMPACT:
None.
Attachment: Calendar of Meetings for 2018
G:\UserData\DistSec\WINWORD\STAFRPTS\Board Meeting Calendar 3-7-18.doc
Board of Directors, Workshops
and Committee Meetings
2018
Regular Board Meetings:
Special Board or Committee Meetings (3rd
Wednesday of Each Month or as Noted)
January 3, 2018
February 7, 2018
March 7, 2018
April 4, 2018
May 2, 2018
June 6, 2018
July 11, 2018
August 1, 2018
September 5, 2018
October 3, 2018
November 7, 2018
December 5, 2018
January 17, 2018
March 21, 2018
March 21, 2018
April 18, 2018
May 16, 2018
June 20, 2018
July 18, 2018
August 15, 2018
September 19, 2018
October 17, 2018
November 21, 2018
December 19, 2018
SPECIAL BOARD MEETINGS:
BOARD WORKSHOPS:
Monday, May 21, at 3:00pm, Budget Workshop
STAFF REPORT
TYPE MEETING: Regular Board Meeting MEETING DATE: March 7, 2018
SUBMITTED BY: Kevin Koeppen, Assistant
Chief of Finance
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
Mark Watton, General Manager
SUBJECT: Communicate to the Board the Results of the Current Sewer Cost
of Service Study Prepared by HDR Engineering, Inc.
GENERAL MANAGER’S RECOMMENDATION:
This is an informational item only.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
Communicate to the Board the results of the current sewer cost of
service study prepared by HDR Engineering, Inc.
BACKGROUND:
The District performs rate studies every three to five years
depending on changes in economic factors, price increases, usage
patterns, regulations, infrastructure, and other cost drivers. The
cost of service study is an important guide when setting rates. As
usage and cost drivers change over time, imbalances may occur in the
equity of how various customer classes pay for sewer. It has been
five years since the District’s last sewer rate study was performed,
and an updated study is needed to establish rates that reflect
changes in usage patterns and the legal environment. The cost of
service study was prepared using the FY 2018 budget and rate model.
Similar to water rate setting, sewer rates must comply with the legal
constraints regarding utility ratemaking and the California
Constitution Article XIII D, Section 6 (referred to as “Proposition
218”) is at the forefront of the rate setting process. Proposition
218 requires sewer (and water) utilities establish cost-based rates
for the services provided. At the time of the last comprehensive
sewer rate study conducted for the District in 2013, the technical
analysis was structured and developed to comply with the requirements
of Proposition 218, as were known at that time. The results of this
study recommend that the District maintain the current sewer rate
structure; however, the charges to various customers and customer
classes will change. The impact of these changes on customers and
customer classes is discussed further in the Rate Analysis section of
this staff report.
Process and Timeline
Proposition 218 requires certain public hearing and protest
procedures be followed. The last 218 Notice and public hearing for
sewer rates was held in 2013 and covered a five-year period ending in
2018. A new 218 Notice and hearing is required to make future rate
changes effective.
Today we are bringing rate modifications to the Board’s attention.
The next step will be to incorporate these changes into the FY 2019
rate model and budget. In May of 2018, staff will request the Board
approve the FY 2019 budget and direct staff to move forward with the
Proposition 218 process using updated rates based on the cost of
service study. Only after the Proposition 218 hearing can the Board
approve the rates.
In 2013, the District executed a five-year Proposition 218 notice.
The District, as well as many other agencies, use a five-year process
with very positive results. In the past, to make these notices
effective for five-years, the Board has approved a pass-through
component of future rate increases from sewer service providers, and
also approves a separate maximum rate increase for the portion of
rates due to increases in internal costs. The pass-through costs
apply to rates, fees, and charges from sewer service providers and
are defined as costs charged by the County of San Diego and City of
San Diego. Staff will again be proposing a five-year process.
Rate Analysis
Sewer fees are comprised of both a fixed monthly system fee and a
usage fee. A key aspect of the cost of service study is the
allocation of operating and capital costs between the fixed system
and usage fees based on generally accepted cost of service
principles. Fixed monthly system fees are set by the customer’s meter
size. For this study, changes in the fixed monthly system fees
reflect a true-up in equivalent meter ratios. An equivalent meter
ratio is the relationship of the maximum flow of each meter size to a
typical residential base meter size. The District uses a three-
quarter inch meter as the residential base meter size. The rates
presented in this rate study align with the appropriate meter
equivalencies.
Usage fees are set by the customer class (i.e. residential, multi-
residential and commercial) and reflect the allocation of costs
related to sewer flow levels and strength. Due to varying levels of
strength, commercial customer usage fees are classified by the State
Water Resources Control Board subclasses (i.e. schools, churches,
low-strength, medium-strength, and high-strength). The changes in
these charges are a result of changes in each customer’s class,
average winter flow or annual flow.
The results of the revisions in the fixed and consumption charges, to
meet the intent of Proposition 218 through the cost of service
analysis, will impact customers differently depending on the
customers meter size and strength level. As a result of the update
to the meter ratios, customers with large meters and high water use
are likely to see a slightly larger increase in their monthly bill
than customers with smaller meters and low water use, who will likely
see a smaller increase or reduction in their monthly bill.
Following is a more detailed analysis of the impact by customer class
based on billable water usage or meter size.
Residential Customers
The below table summarizes the impact on individual residential bills
based on the current customer winter averages.
Multi-Residential Customers
The below table summarizes the impact per dwelling unit for multi-
residential bills based on each multi-residential complex.
Winter
Average
Range (HCF)
# of
Customers
Winter
Average
Monthly
Consumption
(HCF)
Current
Monthly
Charge
Proposed
Monthly
Charge
$
Inc/( Dec)
%
Inc/(Dec)
0 - 10 2,956 6.1 $31.33 $30.78 ($0.55)-1.8%
10.1 - 20 1,315 13.8 $49.55 $49.63 $0.08 0.2%
20.1 - 29 169 23.7 $73.01 $73.91 $0.90 1.2%
29.1 - 35 76 36.2 $95.92 $97.61 $1.69 1.8%
# of
Customers
# of
Dwelling
Units # of Meters
Winter
Average per
Dwelling Unit
(HCF)
Current
Monthly
Charge per
Dwelling Unit
Proposed
Monthly
Charge per
Dwelling Unit
$
Inc/( Dec)
%
Inc/(Dec)
1 676 37 5.5 $19.71 $20.38 $0.67 3.4%
1 282 9 5.5 $22.77 $24.02 $1.25 5.5%
1 96 1 4.3 $12.53 $13.05 $0.52 4.2%
1 192 2 4.4 $12.67 $13.19 $0.52 4.1%
Schools
The below table summarizes the impact on the individual school’s
monthly charges based on the customer’s meter size. The impact seen
by some of the schools is a combination of the change in the fixed
charge and the consumption charge. In the case of the larger meter
size, both the fixed charge and consumption charge increased, while
only the consumption charge increased in the smaller meter size.
Churches
The below table summarizes the impact on individual church monthly
charges based on the customer’s meter size. Similar to the impacts
in the school rate, the church rate also depends on the change in the
meter size and increase in the consumption charge.
Commercial – Low-Strength
The below table summarizes the impact on individual commercial low-
strength monthly charges based on the actual customer’s meter size.
The change in the bill for low-strength commercial is a result of the
increase in the consumption charge, and change in the system fee
based on the meter size, with a decrease for smaller meters and an
increase for larger meters.
Meter Size
Number of
Customers
Monthly
Average
Consumption
(HCF)
Current
Monthly
Charge
Proposed
Monthly
Charge
$
Inc/( Dec)
%
Inc/(Dec)
1.5 1 5.4 $80.92 $80.16 ($0.76)-0.9%
2.0 4 88.0 $331.58 $342.93 $11.35 3.4%
3.0 1 448.0 $1,281.08 $1,333.37 $52.29 4.1%
10.0 1 2,478.0 $7,508.65 $7,890.31 $381.66 5.1%
Meter Size
Number of
Customers
Monthly
Average
Consumption
(HCF)
Current
Monthly
Charge
Proposed
Monthly
Charge
$
Inc/( Dec)
%
Inc/(Dec)
0.75 1 25.6 $90.81 $78.43 ($12.38)-13.6%
1.00 1 189.5 $491.68 $502.37 $10.69 2.2%
2.00 2 182.5 $539.04 $557.60 $18.56 3.4%
Meter Size
Number of
Customers
Monthly
Average
Consumption
(HCF)
Current
Monthly
Charge
Proposed
Monthly
Charge
$
Inc/( Dec)
%
Inc/(Dec)
0.75 16 9.2 $52.23 $38.52 ($13.71)-26.3%
1.00 4 18.9 $89.44 $86.14 ($3.31)-3.7%
1.50 11 35.1 $163.66 $165.79 $2.12 1.3%
2.00 11 60.4 $266.53 $275.62 $9.09 3.4%
6.00 1 472.0 $1,841.77 $1,953.00 $111.23 6.0%
Commercial – Medium-Strength
The below table summarizes the impact on individual commercial
medium-strength monthly charges based on the actual customer’s
average water usage. While the meter charge has also changed for
medium-strength commercial customers, the primary bill impact is a
result of the decrease in the consumption charge.
Commercial – High-Strength
The below table summarizes the impact on individual commercial high-
strength bills based on the actual customer’s average water usage.
The decrease in the bill impact for high-strength commercial
customers is driven by the reduction in the consumption charge.
Conclusion
The sewer rates presented in the attached report have been calculated
using the current rate structure, and meet the requirements of
Proposition 218 as they are known today. Staff will be incorporating
these rates into its FY 2019 budget, which will be presented to the
Board in May.
As part of the FY 2019 budget process, staff will again recommend a
five-year Proposition 218 notice. In mid-2018, staff will prepare
the Proposition 218 notices and in mid to late 2018 a Proposition 218
hearing will be held to adopt the rates. After the Proposition 218
hearing, the proposed rate structures and rate increase provisions
would be effective in January 2019.
Meter Size
Number of
Customers
Monthly
Average
Consumption
(HCF)
Current
Monthly
Charge
Proposed
Monthly
Charge
$
Inc/( Dec)
%
Inc/(Dec)
0.75 3 3.1 $41.08 $25.50 ($15.58)-37.9%
1.50 4 36.4 $204.05 $190.37 ($13.68)-6.7%
2.00 5 64.5 $342.19 $323.43 ($18.76)-5.5%
Meter Size
Number of
Customers
Annual
Average
Consumption
(HCF)
Current
Monthly
Charge
Proposed
Monthly
Charge
$
Inc/( Dec)
%
Inc/(Dec)
0.75 1 7.6 $71.36 $47.60 ($23.76)-33.3%
1.50 4 71.6 $467.08 $378.50 ($88.58)-19.0%
2.00 2 115.0 $744.10 $607.23 ($136.87)-18.4%
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The recommendations in this study may change the sewer charges for
individual customer types, but the overall change is financially
neutral as it is based on the FY 2018 budgeted cost.
STRATEGIC GOAL:
The District ensures its continued financial health through sound
policies and procedures.
LEGAL IMPACT:
None.
Attachments:
A) Committee Action Form
B) HDR Presentation
C) HDR Rate Study
ATTACHMENT A
SUBJECT/PROJECT:
Communicate to the Board the Results of the Current Sewer
Cost of Service Study Prepared by HDR Engineering, Inc.
COMMITTEE ACTION:
The Finance and Administration Committee reviewed this item at a
meeting held on February 21, 2018 and the following comments
were made:
Staff indicated that the purpose of this report is to
communicate the results of the current sewer cost of service
study (COSS) prepared by Mr. Tom Gould, HDR Engineering, Inc.
Staff reviewed information in the staff report.
Mr. Gould reviewed the following in his presentation
(Attachment B to the staff report):
Purpose of the study
Requirements of Proposition 218
Overview of the rate setting process
Key assumptions of the study; and
Study results and recommendations
The Committee inquired what the percentage increase is for
revenue requirements from FY 2019 to 2020. It was indicated
that it is approximately 7.5%, but this figure will not be
finalized until the FY 2019 budget is completed in May. The
Committee inquired if the District will be smoothing the rate
increase to meet the increased revenue requirements. Staff
indicated that today’s presentation is to provide the results
of the COSS; how to equitiably allocate the costs among the
customer classes. This information will be utilized during
the development of the FY 2019 budget. In developing the
budget, it is staff’s goal to smooth any proposed rate
increases.
It was indicated that Metro Commission O&M costs is
approximately 30% of the total FY 2018 sewer services costs.
Historically, Metro Commission costs have been 20 to 25% of
the District’s sewer service cost and it is expected to
increase further.
In response to an inquiry from the Committee, staff indicated
that the District’s sewer service needs are updated through
the permitting process when new tenants or new
construction/building service requests are processed.
It was indicated that when reviewing the cost to serve the
District’s customer classes, residential (-0.5%) and
commercial (-0.4%) costs have gone down slightly and multi-
residential (+4.1%) costs have gone up. The reason for this
is multi-residential customers, on a per unit basis, have
increased slightly in volume, thus, they were allocated a
slightly larger proportion of the cost related to volume than
they have been in the past.
It was indicated that the current rate structure for
residential and multi-family is based on 85% of their winter
water consumption. The Committee inquired if staff has
reviewed if utilizing 85% of winter consumption is
justifiable. Staff confirmed it was and stated to test this,
they looked at the annual billed volume and compared it to the
amount of wastewater that was processed at the treatment
plant. When the two figures were compared, it was found that
the difference was about 10%. Therefore, the billing method
that the District is using is reasonable in relation to the
volume that is going to the treatment plant.
The Committee inquired if they also looked at the commercial
winter water consumption versus summer. It was indicated that
they reviewed the current methodology and there was a
reasonable relationship between the billing method and the
volume billed, as well as, the volume that is treated at the
treatment plant. It was found that the billing method is
appropriate as the two amounts are very close. The Committee
felt that staff should verify this everytime a COSS is
performed. HDR Engineering, Inc. reviewed the commercial
winter water usage and annual water usage for the District’s
non-residential customers, and determined that the annual
average usage methodology was reasonable for non-residential
users.
It was noted with regard to the proposed monthly fixed charge
by meter size that the fee is based on the meter’s capacity
which is tied to the American Water Works Association’s (AWWA)
weighting for meter size. AWWA designates the capacity
difference between a ¾” and 1” meter as 2½ times. Thus, the
determined fixed charge for a 1” meter is 2½ times that of a
¾” meter ($16.03 X 2.5 = $40.08). Staff explained that
residential and commercial are the only customers that utilize
the ¾”, 1” and 1.5” meters. Multi-residential customers
utilize meters that are 2” to 4” meters.
Staff indicated the next steps following the completion of the
COSS is:
Staff will prepare the FY 2019 rate model and budget using
the recommended rate structure and rates.
At a Special Board Meeting/Board Budget Workshop scheduled
on May 21, 2018, staff will request the Board to approve
the FY 2019 budget and will also ask the Board to direct
staff to move forward with the Proposition 218 process.
Only after the Proposition 218 hearing can the Board
approve the proposed rates and rate structure changes.
o In 2013 the District did a five-year Proposition 218
notice for sewer. The District as well as many other
agencies have used this five-year process with very
positive results.
o In the past, so that the notices are effective for
five-years, the board had approved a pass-through
component of future rate increases for supplier costs,
and approved a separate maximum rate increase for the
portion of rates that is due to increases in internal
costs. Supplier costs have historically been defined
as costs charged by the City of San Diego and the
County of San Diego.
It was clarified that the COSS utilized the FY 2018 data to
develop the methodology for the sewer rate structure and
rates. Staff will utilize this methodology to develop the FY
2019 budget and the proposed rates for sewer.
Upon completion of the discussion, the committee supported
staffs’ recommendation and presentation to the full board as an
informational item.
February 21, 2018
Summary of the Sewer
Cost of Service Study
Presented by:
Tom Gould
Vice President
HDR Engineering, Inc.
Otay Water District
Attachment B
2
Overview of the Presentation
•Purpose of the study
•Requirements of Proposition 218
•Overview of the rate setting process
•Key assumptions of the study
•Review study results and recommendations
•Questions and discussion
•Next steps
3
Purpose of the Study
•Develop equitable, cost‐based, and legally
defendable rates
–Meet the intent of Proposition 218
•Provide sufficient revenue to prudently
operate and maintain District’s sewer services
•Review the current sewer rate structures
based on industry standard approaches
3
4
Proposition 218 Requirements
•Proposition 218 is a constitutional amendment
designed to protect taxpayers by limiting the
methods by which local governments can create or
increase taxes, fees and charges without taxpayer
consent
•Proposition 218 is not prescriptive in defining a
“cost‐based” rate
•In part, Proposition 218 requires
–Fees shall not exceed the reasonable cost of
providing the service
–Fees shall not exceed the proportional cost of
providing the service
5
Overview of the Rate Setting Process
Rate Design
Design cost‐based rates for each class of service to meet the revenue needs of the
utility, along with any other rate design goals and objectives
Cost of Service
Equitably (proportionally) allocates the revenue requirement between the various
customer classes of service
Revenue Requirement
Compares the revenue of the utility to the expenses to evaluate the level of
overall rates
6
Key Assumptions of the Study
•Revenue Requirement
–Revenue neutral
–Future (proposed) rate adjustments to the level of
revenues are determined in the District’s budgeting
process
•Cost of Service
–Used generally accepted cost allocation techniques
–Considered the District’s sewer facilities, customers,
and costs
–Provided unit costs for the rate design
•Rate design
–Reviewed the structures and developed revenue
neutral rates
Summary Results of the
Sewer Rate Study
8
FY 2018 Revenue Requirement ($000s)
FY 2018
Revenues
Rate Revenues $2,810
Miscellaneous Revenues 117
Total Revenues $2,927
Expenses
Total Operations & Maintenance $2,830
Total Taxes / Transfer 36
Net Debt Service 0
Total To / (From) Reserves 61
Total Expenses $2,927
Bal. / (Def.) of Funds $0
9
Revenue Requirement ($000s)
9
10
Revenue Requirement Summary
•Total FY 2018 revenues balance to expenses
–Revenues are a blend of the Jan 1, 2017 and
January 1, 2018 rate adjustments
•Study is a “revenue neutral” analysis of the rates
•Major expense for the utility is Metro O&M Costs
(≈ 30% of total costs)
•Total revenue requirement includes the total costs
associated with providing sewer service
–Future rate adjustments will be determined in the
District’s budgeting process
11
Overview of Cost of Service
What is cost of service?
• Analysis to equitably allocate the revenue requirement to the
various customer classes of service
Why cost of service
•Meet the intent of Proposition 218
• Generally accepted as “fair and equitable”
•Avoids subsidies
• Revenues track costs
Objectives of Cost of Service
•Determine if subsidies exist
•Develop average unit costs (i.e., cost‐based rates)
12
Generic Cost of Service Approach
‐Admin
‐Treatment
‐Collection
‐Utilities
‐Etc.
Total Expenses
Volume
Related
Strength
Related
Customer
Related
Residential
Multi‐Residential
Commercial
Residential
Multi‐Residential
Commercial
Residential
Multi‐Residential
Commercial
Residential
Customers
Multi‐
Residential
Customers
Commercial
Customers
13
Cost of Service Summary
•Cost of service analysis provides the basis for the
proposed rates
–Based on customer characteristics and system
requirements
•Results show the need for minor cost of service
adjustments
–Reflect cost of service results to meet the intent of
Prop 218
•The cost of service provides two key pieces of
information
–Allocated total costs to each class of service
–Average unit costs
•$ / Customer / Month (Equivalent Meter Cost)
•$ / CCF
14
Summary of the Cost of Service
Present
Rate
Revenues
($000s)
Allocated
Revenue
Requirement
($000s)
$
Difference
($000s)
%
Difference
Residential $2,264 $2,254 $11 ‐0.5%
Multi‐Residential 301 313 (12) 4.1%
Commercial 350 348 1 ‐0.4%
Total $2,915 $2,915 $0 0.0%
15
Rate Design
•Maintained the current rate structure for all classes
–Residential and multi‐family is based on 85% of
winter water consumption
–Commercial is based on 85% of annual water
consumption
•Revised the rates to reflect the unit costs developed
in the cost of service analysis
–Update the fixed charges to be in‐line with the
meter equivalency ratios
–Consumption charge revised to reflect the
allocated costs and strength levels
16
Cost‐Based Rates – Fixed Charges
Current Rates Cost‐Based Rates
Residential $17.08 $16.03
Multi‐Residential / Commercial
¾” $30.50 $16.03
1” 44.94 40.08
1.5” 80.92 80.16
2” 124.12 128.25
3” 224.93 240.47
4” 368.97 400.78
6” 729.04 801.56
8” 1,161.15 1,282.50
10” 1,665.25 1,843.59
17
Cost‐Based Rates – Consumption Charges
Current Rates Cost‐Based Rates
Residential $2.77 $2.87
Multi‐Residential 2.77 2.87
Commercial
Low Strength $2.77 $2.87
Medium Strength 3.98 3.56
High Strength 6.34 4.90
Schools 2.77 2.87
Churches 2.77 2.87
18
Residential Bill Impacts
Winter
Average
Range
(CCF)
# of
Customers
Winter Avg
Monthly
Consumption
(CCF)
Current
Monthly
Charge
Proposed
Monthly
Charge $ Difference % Difference
0 ‐10 2,956 6.1 $31.33 $30.78 ($0.55)‐1.8%
11 – 20 1,315 13.8 $49.55 $49.63 $0.08 0.2%
21 – 29 169 23.7 $73.01 $73.91 $0.90 1.2%
30 and up 76 36.2 $95.92 $97.61 $1.69 1.8%
19
Commercial Bill Impacts ‐Schools
Meter Size
# of
Customers
Winter Avg
Monthly
Consumption
(CCF)
Current
Monthly
Charge
Proposed
Monthly
Charge $ Difference % Difference
1.5 1 5.4 $80.92 $80.16 ($0.76)‐0.9%
2.0 4 88.0 $331.58 $342.93 $11.35 3.4%
3.0 1 448.0 $1,281.08 $1,333.37 $52.29 4.1%
10.0 1 2,478.0 $7,508.65 $7,890.31 $381.66 5.1%
20
Commercial Bill Impacts ‐Churches
Meter Size
# of
Customers
Winter Avg
Monthly
Consumption
(CCF)
Current
Monthly
Charge
Proposed
Monthly
Charge $ Difference % Difference
0.75 1 25.6 $90.81 $78.43 ($12.38)‐13.6%
1.00 1 189.5 $491.68 $502.37 $10.69 2.2%
2.00 2 182.5 $539.04 $557.60 $18.56 3.4%
21
Commercial Bill Impacts –Low Strength
Meter Size
# of
Customers
Winter Avg
Monthly
Consumption
(CCF)
Current
Monthly
Charge
Proposed
Monthly
Charge $ Difference % Difference
0.75 16 9.2 $52.23 $38.52 ($13.71)‐26.3%
1.00 4 18.9 $89.44 $86.14 ($3.31)‐3.7%
1.50 11 35.1 $163.66 $165.79 $2.12 1.3%
2.00 11 60.4 $266.53 $275.62 $9.09 3.4%
6.00 1 472.0 $1,841.77 $1,953.00 $111.23 6.0%
22
Commercial Bill Impacts –Med Strength
Meter Size
# of
Customers
Winter Avg
Monthly
Consumption
(CCF)
Current
Monthly
Charge
Proposed
Monthly
Charge $ Difference % Difference
0.75 3 3.1 $41.08 $25.50 ($15.58)‐37.9%
1.50 4 36.4 $204.05 $190.37 ($13.68)‐6.7%
2.00 5 64.5 $342.19 $323.43 ($18.76)‐5.5%
23
Commercial Bill Impacts –High Strength
Meter Size
# of
Customers
Winter Avg
Monthly
Consumption
(CCF)
Current
Monthly
Charge
Proposed
Monthly
Charge $ Difference % Difference
0.75 1 7.6 $71.36 $47.60 ($23.76)‐33.3%
1.50 4 71.6 $467.08 $378.50 ($88.58)‐19.0%
2.00 2 115.0 $744.10 $607.23 ($136.87)‐18.4%
24
Next Steps…
24
•Presentation to the Board (March)
•Determine overall rate adjustments during the
budgeting process (May)
•Proposition 218 Process
–Set public hearing date and send customer
notification (July)
–Public presentation on proposed rates in
October (Board may adopt the proposed rates if
no major protest)
•Rate implementation (Jan 2019)
DRAFT FINAL REPORT
Otay Water District
Review of the District’s Sewer Rates
January 2018
hdrinc.com
929 108th Ave NE, Suite 1300, Bellevue, WA 98004
T 425-450-6200
January 26, 2018
Mr. Kevin Koeppen
Assistant Chief of Finance
Otay Water District
2554 Sweetwater Springs Blvd.
Spring Valley, California 91978-2004
Subject: Comprehensive Sewer Rate Study
Dear Mr. Koeppen:
HDR Engineering, Inc. (HDR) is pleased to present to the Otay Water District (District) the draft
final report for the 2017 comprehensive sewer rate study. The District’s comprehensive study
was developed to provide a financial plan and rates that generate sufficient revenue to fund
the operating and capital needs of the sewer utility. More specifically, the study was designed
to develop cost-based and equitable sewer rates for the District’s customers. This report
outlines the overall approach used to achieve these objectives, along with our findings,
conclusions, and recommendations.
The District owns and operates the sewer system. It conveys and treats wastewater generated
within the District’s service area. The costs associated with providing sewer service to the
District’s customers has been developed based on the District’s sewer system data and
information and is discussed in more detail within this report. This study was developed
utilizing generally accepted sewer industry rate setting principles and methodologies. This
report provides the basis for developing and implementing sewer rates which are cost-based,
equitable, and legally defensible to the District’s customers.
We appreciate the assistance provided by the District’s project team in the development of this
study. More importantly, HDR appreciates the opportunity to provide these technical and
professional services to Otay Water District.
Sincerely yours,
HDR Engineering, Inc.
Shawn Koorn
Associate Vice President
Table of Contents i
Otay Water District – Comprehensive Sewer Rate Study
Executive Summary
Introduction .................................................................................................................. 1
Overview of the Rate Study Process .............................................................................. 1
Summary of the Sewer Revenue Requirement Analysis ................................................. 2
Summary of the Sewer Cost of Service Analysis ............................................................. 5
Summary of the Sewer Rate Designs ............................................................................. 6
Summary of the Sewer Rate Study ................................................................................. 8
1 Introduction and Overview
1.1 Introduction ........................................................................................................ 9
1.2 Goals and Objectives ........................................................................................... 9
1.3 Overview of the Rate Study Process .................................................................. 10
1.4 Organization of the Study .................................................................................. 11
1.5 Summary ........................................................................................................... 11
2 Overview of the Water Rate Setting Principles
2.1 Introduction ...................................................................................................... 12
2.2 Generally Accepted Rate Setting Principles ........................................................ 12
2.3 Determining the Revenue Requirement ............................................................ 12
2.4 Analyzing Cost of Service ................................................................................... 13
2.5 Designing Utility Rates ....................................................................................... 14
2.6 Economic Theory and Rate Setting .................................................................... 14
2.7 Summary ........................................................................................................... 15
3 Development of the Revenue Requirement Analysis
3.1 Introduction ...................................................................................................... 16
3.2 Development of the Sewer Revenue Requirement Analysis ............................... 16
3.2.1 Establishing a Time Frame and Approach ................................................ 16
3.2.2 Projection of Rate and Other Miscellaneous Revenues ............................ 17
3.2.3 Projection of Operation and Maintenance Expenses ............................... 18
3.2.4 Projection of Taxes and Transfer Payments ............................................. 19
3.2.5 Projection of Capital Improvement Funding Needs.................................. 19
3.2.6 Projection of Debt Service ....................................................................... 21
3.2.7 Reserve Funding ...................................................................................... 22
3.2.8 Summary of the Sewer Revenue Requirement ........................................ 22
3.3 Consultant’s Revenue Requirement Conclusion and Recommendations ............ 23
3.4 Summary of the Sewer Revenue Requirement Analysis ..................................... 24
Table of Contents
Table of Contents ii
Otay Water District – Comprehensive Sewer Rate Study
4 Development of the Cost of Service Analysis
4.1 Introduction ...................................................................................................... 25
4.2 Objectives of the Cost of Service ....................................................................... 25
4.3 Determining the Customer Classes of Service .................................................... 26
4.4 General Cost of Service Procedures ................................................................... 26
4.4.1 Functionalization of Costs ...................................................................... 26
4.4.2 Classification of Costs ............................................................................. 27
4.4.3 Development of the Allocation Factors .................................................. 28
4.5 Summary of the Sewer Cost of Service Analysis ................................................. 29
4.6 Summary of the Average Unit Costs .................................................................. 30
4.7 Consultant’s Cost of Service Conclusions and Recommendations ...................... 31
4.8 Summary ........................................................................................................... 31
5 Development of the Proposed Sewer Rate Designs
5.1 Introduction ..................................................................................................... 32
5.2 Rate Design Criteria and Considerations........................................................... 32
5.3 Development of Cost-Based Sewer Rates ......................................................... 32
5.4 Current Industry Sewer Rate Structure Approach ............................................. 33
5.5 Overview of the Present Sewer Rate Structure................................................. 34
5.6 Development of the Proposed Sewer Rates ..................................................... 35
5.7 Consultant’s Rate Design Conclusions and Recommendations ......................... 36
5.8 Summary.......................................................................................................... 36
Technical Appendix – Sewer Technical Analysis
Executive Summary 1
Otay Water District – Comprehensive Sewer Rate Study
Introduction
HDR was retained by Otay Water District (District) to conduct a comprehensive sewer rate
study. The main objectives of the study were:
x Review the District’s previously adopted sewer rates which were adopted through the
Proposition 218 process.
x Develop a financial plan for projecting operating and capital costs for the sewer utility for
planning purposes.
x Provide the framework and methodology, based on generally accepted industry best
practices, for the development of cost-based sewer rates.
The District owns and operates a sewer collection and treatment system. The District serves
approximately 4,700 connections and the sewer service
area differs from their water service area. More specifically,
the sewer service area covers approximately 8,800 acres or
the equivalent of about 11% of the District’s water service
area. Most wastewater is treated for use in the District’s
recycled water program but some of the wastewater
collected is conveyed to the San Diego Metropolitan
Wastewater Joint Powers Authority (Metro) for treatment.
The costs associated with providing sewer services to the District’s sewer customers has been
developed based on District provided information and it has been utilized in the development
of the proposed sewer rates.
Overview of the Rate Study Process
A comprehensive rate study uses three interrelated analyses to address the adequacy and
equity of the utility’s rates. These three analyses are a revenue requirement analysis, a cost of
service analysis, and a rate design analysis. These three analyses are illustrated below in Figure
ES - 1.
Executive Summary
“The District’s sewer service
area differs from their
water service area in that
the sewer service area
covers approximately 8,800
acres or the equivalent of
about 11% of the District’s
water service area.”
Executive Summary 2
Otay Water District – Comprehensive Sewer Rate Study
Figure ES – 1
Overview of the Comprehensive Sewer Rate Analyses
Shown above is the basic analytical framework that was utilized in the development of this
study for reviewing and evaluating the District’s sewer rates.
Summary of the Sewer Revenue Requirement Analysis
A revenue requirement analysis is the first analytical step in the comprehensive sewer rate
study process. This analysis determines the adequacy of the current rates to fund annual
operating expenses and capital improvement needs. From this analysis, a determination can be
made as to the overall level of sewer rate (revenue) adjustments needed to provide adequate
and prudent funding for the District’s sewer system.
As a practical matter, a multi-year time frame is recommended in an attempt to identify and
plan for any major expenses that may be on the horizon. By anticipating future financial
requirements, the District can begin planning for these changes sooner, thereby minimizing
short-term rate impacts while also stabilizing long-term rates.
For the revenue requirement analysis a “cash basis” approach was utilized. The “cash basis”
approach is the most commonly used methodology by municipal and special district utilities to
set their revenue requirement and in its most basic form, it is composed of O&M expenses,
taxes/transfer payments, annual debt service payments, and rate funded capital projects. The
primary inputs for the District’s revenue requirement analysis were obtained from the District’s
budget documents, the historical billed customer data, and the sewer capital improvement
plan. Budgeted O&M expenses were projected using inflationary factors for the District’s
various expenses to provide sewer collection and treatment services over the projected time
period.
The proper and adequate funding of capital projects is important to help maintain existing
facilities, provide consistent levels of service and minimize rate impacts over time. A general
Revenue Requirement Analysis
Cost of Service Analysis
Rate Design Analysis
Compares the revenues to the expenses of
the utility to determine the overall rate
adjustment required
Allocates the revenue requirement to the
various customer classes of service in a
“fair and equitable" manner
Considers both the level and structure
of the rate design to collect the target
level of revenues
Executive Summary 3
Otay Water District – Comprehensive Sewer Rate Study
financial guideline states that, at a minimum, a utility should fund an amount equal to or
greater than annual depreciation expense through rates. Annual depreciation expense reflects
the current investment in plant being depreciated or “losing” its useful life. Therefore, this
portion of plant investment needs to be replaced or repaired to maintain the existing level of
infrastructure (and service levels). However, it must be kept in mind that, in theory, annual
depreciation expense reflects an investment in infrastructure that was placed in service an
average of 15 years ago, assuming a 30-year useful (i.e., depreciable life). It is important to note
and understand that depreciation expense is not the same as replacement cost. Thus, funding
an amount which exceeds the sewer utilities’ share of depreciation expense is reasonable and
appropriate. In developing this financial plan, HDR and the District have attempted to minimize
rate impacts while funding the planned capital improvement projects.
The District has taken the direction of issuing long-term debt in order to pay for several
substantial infrastructure projects. These projects will not only benefit the current customers of
the District but also future customers. Given this, the use of long-term debt is appropriate and
is used as a tool to attempt to equitably associate the future benefit (to future customers) to
the associated future costs (in the form of annual debt service payments).
The balancing of rate, reserve, and debt funding provides the District with a method to fund
capital over the long-term and minimize rates to the greatest extent possible. Every agency
must balance the use of various sources of capital funding depending on a large number of
variables. Each has a benefit and drawback and therefore, all the considerations must be
evaluated. This type of analysis is appropriate and necessary when developing the funding for
capital improvements and establishing cost-based rates.
Shown below in Table ES – 1 is a summary of the capital improvement plan for the projected
five-year review period.
Table ES – 1
Summary of the Sewer Capital Improvement Plan ($000s)
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Capital Improvement Projects
Total Betterment Projects $2,215 $2,163 $175 $0 $0 $5
Total Replacement Projects 2,864 3,075 1,345 949 1,080 1,990
Total Capital Projects $5,079 $5,238 $1,520 $949 $1,080 $1,995
Less: Other Funding Sources
Sewer Operating Reserves $0 $0 $0 $0 $0 $0
Sewer Replacement Reserves 0 439 1,345 949 1,080 1,990
Sewer Betterment Reserves 2,215 2,163 175 0 0 5
Sewer Expansion Reserves 0 0 0 0 0 0
New Long Term Debt 2,864 2,636 0 0 0 0
Total Other Funding $5,079 $5,238 $1,520 $949 $1,080 $1,995
Executive Summary 4
Otay Water District – Comprehensive Sewer Rate Study
As shown in Table ES-1, the District’s betterment and replacement projects are funded through
available reserve fund balances. A portion of these reserves are funded through annual rate
revenues as well as a long-term borrowing during this five-year period. A more detailed
discussion of the sewer capital improvement funding plan is provided in Section 3 of this study.
Given the projection of O&M and capital improvement funding, the sewer revenue
requirement analysis was completed. Table ES - 2 provides a summary of the revenue
requirement for the District’s sewer utility.
Table ES – 2
Summary of the Sewer Revenue Requirement Analysis ($000)
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Revenues
Sewer Rate Revenues[1] $2,810 $2,915 $2,916 $2,917 $2,918 $2,918
Miscellaneous Revenues 117 118 119 120 121 122
Total Sewer Revenues $2,927 $3,033 $3,034 $3,036 $3,038 $3,040
Expenses
Total O & M $2,830 $2,975 $3,381 $3,328 $3,110 $3,275
Taxes / Transfer 36 37 37 38 39 40
Debt Service 0 0 94 236 236 236
To / (From) Reserves 61 130 (142) (78) 210 115
Total Expenses $2,927 $3,142 $3,371 $3,524 $3,594 $3,666
Bal. / (Def.) of Funds $0 ($109) ($336) ($488) ($556) ($626)
Bal. as a % of Rate Rev. 0.0% 3.8% 11.5% 16.7% 19.1% 21.4%
Proposed Rate Adjustment 0.0% 7.5% 7.5% 2.0% 2.0% 2.0%
Add'l Revenue from Adj. $0 $109 $336 $488 $556 $626
Total Bal. /(Def.) of Funds $0 $0 ($0) $0 $0 $0
[1] Includes adopted 7.5% rate adjustment for FY 2018.
As can be seen above, the revenue requirement has summed the O&M, taxes / transfers, rate
funded capital, net debt service, and the change in working capital. The total revenue
requirement is then compared to the total sources of funds which include the sewer rate
revenues, at present rate levels, and other miscellaneous sewer revenues. From this
comparison a balance or deficiency of funds in each year can be determined. This balance or
deficiency of funds is then compared to the rate revenues to determine the level of rate
adjustment needed to meet the revenue requirement.
During this projected time period, the District’s rates appear to
be deficient for FY 2019 through FY 2023. The total overall
deficiency is approximately 21%. To address that deficiency,
annual sewer rate adjustments are proposed for FY 2019
through FY 2023 as outlined in the table above.
“During this projected
time period, the
District’s rates appear
to be deficient for FY
2019 through FY 2023.”
Executive Summary 5
Otay Water District – Comprehensive Sewer Rate Study
A more detailed discussion of the development of the revenue requirement analysis can be
found in Section 3.2. Detailed technical exhibits of the sewer revenue requirement analysis
have been included within the Technical Appendices.
Summary of the Sewer Cost of Service Analysis
A cost of service analysis determines the equitable allocation of the revenue requirement to the
various customer classes of service (i.e., residential, multi-residential, commercial, etc.). The
objective of the sewer cost of service analysis is different from determining the sewer revenue
requirement analysis. A revenue requirement analysis determines the utility’s overall financial
needs, while the cost of service analysis determines the fair and equitable (i.e., proportional)
manner to collect the overall total revenue requirement. For the District’s study, the cost of
service was performed with an assumed 0.0% rate adjustment. This means that there was only
the cost of service between customer classes that was adjusted and the overall revenue
requirement was not adjusted. This was done because there are a number of capital and
financial assumptions that are yet to be finalized for the District. When this has been
completed, the District will adopt rate adjustments that will simply adjust the level of rates as
the cost of service component will have been adjusted already.
In summary form, the sewer cost of service analysis began by functionalizing the revenue
requirement for the sewer system. Functionalizing the data sorts it into major functions (e.g.,
power, materials, treatment, administrative, etc.). Functionalization of the data was
accomplished via the District’s system of accounting. The functionalized sewer revenue
requirement was then classified into their various cost components (volume, strength,
customer-related). The individual classification totals were then equitably allocated to the
various customer classes of service based on the appropriate and proportional allocation
factors. The allocated expenses for each customer class were then aggregated to determine
each customer class’s overall revenue responsibility. These steps follow generally accepted
industry methodologies and are outlined in the Water Environment Federation Manual of
Practice No. 27, Financing and Charges for Wastewater System. Shown below in Table ES - 3 is a
summary of the sewer cost of service analysis results by customer class of service.
Table ES – 3
Summary of the Sewer Cost of Service Analysis ($000)
Customer Class of Service
Revenues at
Present
Rates
Allocated
Revenue
Requirement
Bal. / (Def.)
of Funds
Required %
Change in
Rates
Residential $2,264 $2,254 $11 -0.5%
Multi-Residential 301 313 (12) 4.1%
Commercial 350 348 1 -0.4%
Total $2,915 $2,915 $0 0.0%
The above results indicate that the customer classes of service are at or near their cost of
service. This means that the District’s overall revenues collected from each customer class of
Executive Summary 6
Otay Water District – Comprehensive Sewer Rate Study
service is as close to their “cost of service” as reasonably possible, based on the proportional
allocation of costs and the customers utilization of the system. In making this statement, it is
important to note that a cost of service study is an analysis of a point in time and the District’s
costs, customer consumption patterns and total usage change over time. In that respect, a cost
of service is a static analysis of a dynamic and ever-changing situation.
While Table ES – 3 summarized the results of the sewer cost of service analysis by customer
class of service, the cost of service analysis also contains sufficient detail to understand costs by
fixed charges and by consumptive use. These unit costs, or cost-based rates, form the basis for
the final proposed sewer rates by customer class of service.
The Technical Appendices contains the various exhibits associated with the District’s cost of
service analysis.
Summary of the Sewer Rate Designs
The final step of the comprehensive sewer rate study process is the design of the sewer rates to
collect the appropriate levels of revenue. The appropriate levels of revenue have been
determined based on the results of the revenue requirement and cost of service analysis. The
revenue requirement analysis provided a set of recommendations related to annual rate
adjustments, while the cost of service results indicated that minor interclass adjustments were
needed at this time. As mentioned previously, for the District’s study, the allocated costs in the
cost of service analysis do not include a rate adjustment. Therefore, the proposed rates are
designed to be “revenue neutral” and collect approximately the same amount of revenue as
the current rates would. The difference, however, is that the cost of service unit costs have
realigned where the revenue is collect for example, between customer classes as well as from
either the fixed or variable charges.
Provided below in Table ES – 4 are the present and proposed sewer rates for the District. This
study has not recommended any changes to the rate structure. However, the relationships
between fixed and consumption charges have been revised to be reflective of the District’s
costs as determined within the cost of service analysis. As no future rate adjustments have
been assumed for the rate design, only the proposed rates have been shown.
Executive Summary 7
Otay Water District – Comprehensive Sewer Rate Study
Table ES – 4
Summary of the Present and Proposed Sewer Rates
Present Rates Proposed Rates
Fixed Charge ($/Month) –
Residential
Monthly System Fee $17.08 $16.03
Multi-Resident. / Comm.
3/4" $30.50 $16.03
1" 44.94 40.08
1-1/2" 80.92 80.16
2" 124.12 128.25
3" 224.93 240.47
4" 368.97 400.78
6" 729.04 801.56
8" 1,161.15 1,282.50
10" 1,665.25 1,843.59
Consumption Charge ($/CCF) –
Residential
Billed @ 85% of WW Avg $2.77 $2.87
Multi-Residential
Billed @ 85% of WW Avg $2.77 $2.87
Commercial
Low Strength $2.77 $2.87
Medium Strength 3.98 3.56
High Strength 6.34 4.90
Schools 2.77 2.87
Churches 2.77 2.87
As can be seen, the District has three rate schedules; residential, multi-residential and
commercial. The rate structure is composed of a fixed monthly charge and a consumption
(volumetric) charge. The volumes of wastewater contributed by individual customer is not
metered. Given that, water consumption is used as a surrogate for wastewater contributions.
The District adjusts the water consumption for residential and multi-residential customers to
85% of the average winter water use. This adjustment in consumption is used to be more
reflective of wastewater contributions for these customers. For commercial customers, annual
water use is adjusted to 85% to determine the sewer billing units.
The customer bill impacts from these proposed rates will vary by customer class of service and
by consumptive use. As an example, in FY 2019 and for a typical residential customer being
billed 8 CCF/month, the change in their monthly bill will be approximately $1.18/month, or a
monthly sewer bill which goes from $39.24 to $40.42.
Executive Summary 8
Otay Water District – Comprehensive Sewer Rate Study
Section 4 of this study provides a more detailed discussion of the present and proposed sewer
rates.
Summary of the Sewer Rate Study
This completes the overview of the development of the comprehensive sewer rate study for
the District. The focus of this study has been the prudent and adequate funding of the District’s
sewer utility, along with the development of equitable and cost-based sewer rates by customer
class of service. A full and complete discussion of the development of the District’s
comprehensive sewer rate study and the proposed sewer rates can be found in the following
sections and exhibits of this report.
Introduction and Overview 9
Otay Water District – Comprehensive Sewer Rate Study
1.1 Introduction
HDR was retained by Otay Water District (District) to conduct a comprehensive sewer rate
study. The objective of the study was to review the District’s operating and capital costs in
order to develop a financial plan and cost-based rates for the District’s sewer customers. This
study determined the adequacy of the existing sewer rates and provides the framework and
cost-basis for any needed future sewer rate adjustments.
The District owns and operates a sewer collection and treatment system. The District serves
approximately 4,700 connections. The District’s sewer service area differs from their water
service area in that the sewer service area covers approximately 8,800 acres or the equivalent
of about 11% of the District’s water service area. Most wastewater is treated for use in the
District’s recycled water program but some of the wastewater collected is conveyed to the San
Diego Metropolitan Wastewater Joint Powers Authority (Metro) for treatment.
The State of California has certain well established legal
constraints regarding utility ratemaking, of which California
Constitution article XIII D, section 6 (commonly referred to as
“Proposition 218”)1 is at the forefront. At its very core, Proposition
218 requires a water (and sewer) utility to establish cost-based
rates for the services provided.
This study has been designed and intended to comply with the legal requirements of
Proposition 218, as they are currently understood. This study has been developed using
industry accepted sewer rate setting methodologies and best practices, along with District
specific sewer system data and information.
1.2 Goals and Objectives
The District had a number of key objectives in developing the sewer rate study. These key
objectives provided a framework for policy decisions in the analysis that follows. These key
objectives were as follows:
x Develop the sewer study in a manner that is consistent with the principles and
methodologies established by the Water Environment Federation (WEF), Manual of Practice
No. 27, Financing and Charges for Sewer Systems.
1 Proposition 218, enacted by California's voters in 1996, imposes certain procedures, requirements and voter
approval mechanisms for local government assessments, fees and charges.
1 Introduction and Overview
“At its very core,
Proposition 218
requires a sewer utility
to establish cost-based
rates for the services
provided.”
Introduction and Overview 10
Otay Water District – Comprehensive Sewer Rate Study
x In financial planning and establishing the District’s rates, review and utilize best industry
practices, while recognizing and acknowledging the specific and unique characteristics of
the District’s sewer system and facilities.
x Review the District’s rates utilizing “generally accepted” rate making methodologies to
determine adequacy and equity of the utility rates.
x Meet the District’s financial planning criteria and goals, such as debt service coverage ratios,
adequate funding of capital infrastructure, and maintenance of adequate and prudent
reserve levels.
x Develop a final proposed financial plan which adequately supports the sewer utility’s
funding requirements, while attempting to minimize overall impacts to rates.
x Provide rates designed to meet the legal requirements of Article XIII D and recent legal
decisions related to Article XIII D.
x Develop proposed rates that are cost-based reflective of the District’s specific costs.
1.3 Overview of the Rate Study Process
User rates must be set at a level where a utility’s operating and capital expenses are met with
the revenues received from customers. This is an important point, as failure to achieve this
objective may lead to insufficient funds to maintain system integrity. To evaluate the adequacy
of the existing water and wastewater rates, a comprehensive rate study is often performed. A
comprehensive rate study consists of three interrelated analyses. Figure 1 - 1 provides an
overview of these analyses.
Figure 1 – 1
Overview of the Comprehensive Sewer Rate Analyses
The study conducted by HDR included the three technical analyses discussed above. In
establishing cost-based rates, the revenue requirement analysis determines the overall revenue
needs of the utility. Next, the cost of service analysis provides an equitable allocation of the
costs to the different types of customers served, while also providing per unit costs which
become the cost-basis for the final rate designs. Finally, the rate design analysis utilizes the
Revenue Requirement Analysis
Cost of Service Analysis
Rate Design Analysis
Compares the revenues to the expenses of
the utility to determine the overall rate
adjustment required
Allocates the revenue requirement to the
various customer classes of service in a
“fair and equitable" manner
Considers both the level and structure
of the rate design to collect the target
level of revenues
Introduction and Overview 11
Otay Water District – Comprehensive Sewer Rate Study
average unit costs from the cost of service analysis to establish the revised cost-based rates.
Each of these elements of the technical analysis is discussed in more detail within this report.
1.4 Organization of the Study
This report is organized in a sequential manner that first provides an overview of utility rate
setting principles, followed by sections that detail the specific steps used to review the District’s
sewer rates. The following sections comprise the District’s sewer cost of service study report:
x Section 2 – Overview of Rate Setting Principles
x Section 3 – Development of the Revenue Requirement Analysis
x Section 4 – Development of the Cost of Service Analysis
x Section 5 – Development of the Proposed Sewer Rate Designs
Technical Appendices are attached at the end of this report which details the various technical
analyses that were undertaken in the preparation of this study.
1.5 Summary
This report will review the various technical analyses undertaken by HDR and the District to
review their current sewer rates. The objective of this study is to develop cost-based sewer
rates which are compliant with the legal requirements of Proposition 218, as it is currently
understood.
Overview of Rate Setting Principles 12
Otay Water District – Comprehensive Sewer Rate Study
2.1 Introduction
This section of the report provides background information about the sewer rate setting
process, including descriptions of generally accepted principles, types of utilities, methods of
determining a revenue requirement, the cost of service analysis, and rate design. This
information is useful for gaining a better understanding of the details presented later in this
report.
2.2 Generally Accepted Rate Setting Principles
As a practical matter, all utilities should consider setting their rates around some generally
accepted or global principles and guidelines. Utility rates should be:
x Cost-based, equitable, and set at a level that meets the utility’s full revenue requirement.
x Easy to understand and administer.
x Designed to conform to “generally accepted” rate setting techniques.
x Stable in their ability to provide adequate revenues for meeting the utility’s financial,
operating, and regulatory requirements.
x Established at a level that is stable from year-to-year from a customer’s perspective.
2.3 Determining the Revenue Requirement
Most public utilities use the “cash basis” approach for establishing their revenue requirement
and setting rates. This approach conforms to most public utility budgetary requirements and
the calculation is easy to understand. A public utility totals its cash expenditures for a period of
time to determine required revenues. The revenue requirement for a public utility is usually
comprised of the following costs or expenses:
x Total Operating Expenses: This includes a utility’s operation and maintenance (O&M)
expenses, plus any applicable taxes or transfer payments. Operation and maintenance
expenses include the materials, electricity, labor, supplies, etc., needed to keep the utility
functioning.
x Total Capital Expenses: Capital expenses are calculated by adding debt service payments
(principal and interest) to capital improvements financed with rate revenues. In lieu of
including capital improvements financed with rate revenues, a utility sometimes includes
depreciation expense to stabilize the annual revenue requirement.
Under the “cash basis” approach, the sum of the total O&M expenses plus the total capital
expenses equals the utility’s revenue requirement during any selected period of time (historical
or projected).
Note that the two portions of the capital expense component (debt service and rate funded
capital) are necessary under the cash basis approach because utilities generally cannot finance
all their capital facilities with long-term debt. At the same time, it is often difficult to pay for
2 Overview of Rate Setting Principles
Overview of Rate Setting Principles 13
Otay Water District – Comprehensive Sewer Rate Study
capital expenditures on a “pay-as-you-go” basis given that some major capital projects may
have significant rate impacts upon a utility, even when financed with long-term debt. Many
utilities have found that some combination of pay-as-you-go funding and long-term financing
will often lead to minimization of rate increases over time.
Public utilities typically use the “cash basis”2 approach to establish their revenue requirements.
An exception occurs if a public utility provides service to a wholesale or contract customer. In
that situation, a public utility could use the “utility basis” approach (see Table 2 - 1) regarding
earning a fair return on its investment.
Table 2 – 1
Cash versus Utility Basis Comparison
Cash Basis Utility Basis (Accrual)
+ O&M Expenses + O&M Expenses
+ Taxes/Transfer Payments + Taxes/Transfer Payments
+ Capital Improv. Funded From Rates
;ш Depreciation Expense) + Depreciation Expense
+ Debt Service (Principal + Interest) + Return on Investment
= Total Revenue Requirement = Total Revenue Requirement
For purposes of this discussion, the District has utilized the cash basis methodology for the
establishment of the revenue requirement analysis. Of these two generally accepted
methodologies, the use of the cash basis methodology for the District is the most appropriate.
2.4 Analyzing Cost of Service
After the total revenue requirement is determined, it is equitably allocated to the users of the
service. The allocation, usually analyzed through a cost of service analysis, reflects the cost
relationships for providing sewer services. A cost of service analysis requires three analytical
steps:
1. Costs are functionalized or grouped into the various cost categories related to providing
service (collection, treatment, etc.). This step is largely accomplished by the utility’s
accounting system.
2. The functionalized costs are then classified to specific cost components. Classification
refers to the arrangement of the functionalized data into cost components. For example,
a utility’s sewer costs are typically classified as volume, strength, or customer-related.
3. Once the costs are classified into components, they are proportionally allocated to the
customer classes of service (e.g., residential, multi-residential, commercial). The allocation
2 “Cash basis” as used in the context of rate setting is not the same as the terminology used for accounting
purposes and recognition of revenues and expenses. As used for rate setting, “cash basis” simply refers to the
specific cost components to be included within the revenue requirement analysis.
Overview of Rate Setting Principles 14
Otay Water District – Comprehensive Sewer Rate Study
is based on each customer class’ proportional contribution to the cost component (i.e.,
benefits received from, and burdens placed on the system and its resources). For
example, customer-related costs are allocated to each class of service based on the total
number of customers in that class of service. Once costs are allocated, the revenues from
each customer class of service required to achieve cost-based rates can be determined.
At the conclusion of the cost of service analysis, two key pieces of information are provided.
First, the cost of service provides an understanding of the total revenues to be collected from
each class of service. In other words, assuming the sewer revenue requirement is $3.0 million
the cost of service provides an equitable method to assign that total cost between the various
sewer customer classes of service (e.g., residential, multi-residential, commercial). The other
important piece of information provided by the cost of service analysis is the average unit costs.
Average unit costs are the allocated costs divided by the appropriate consumption (billing)
units. This provides an understanding of the cost on a $/customer/month and $/hundred cubic
feet (CCF)3 basis. These average unit costs are essentially the cost-based sewer rates.
2.5 Designing Utility Rates
Rates that meet the utility’s objectives are designed based on the findings and conclusions from
both the revenue requirement and cost of service analysis. This approach results in rates that
are strictly cost-based and does not consider other non-cost based goals and objectives
(economic development, ability to pay, revenue stability, etc.). In designing rates, factors such
as revenue stability, continuity of past rate philosophy, ease of administration, and customer
understanding may typically be taken into consideration. However, in order to meet the legal
requirements of Proposition 218, the rates must take into consideration each customer class’s
proportional share of costs allocated through the cost of service analysis. Given this, the utility’s
ability to take goals and objectives other than cost-based is limited. However, in the design of
the rate structure, the utility’s goals and objectives can frame the approach for setting cost-
based rates.
2.6 Economic Theory and Rate Setting
One of the major justifications for a comprehensive cost of service study is founded in
economic theory. Economic theory suggests that the price of a commodity must roughly equal
its cost if equity among customers is to be maintained. This statement’s implications on utility
rate designs are significant. For example, a sewer utility usually
incurs strength-related costs to treat wastewater. It follows
that the customers who have high strength wastewater and
create the need for greater treatment to address the strength
of the wastewater should proportionally pay a higher rate to
address the strength of their wastewater. When costing and
pricing techniques are refined, consumers have a more
accurate understanding of what the commodity costs to produce and deliver. This price-equals-
cost concept provides the basis for the subsequent analysis and comments.
3 A CCF = one-hundred cubic feet. One (1) CCF of water = 748 gallons of water
“Economic theory
suggests that the price of
a commodity must
roughly equal its cost if
equity among customers is
to be maintained.”
Overview of Rate Setting Principles 15
Otay Water District – Comprehensive Sewer Rate Study
2.7 Summary
This section of the report has provided a brief introduction to the general principles,
techniques, and economic theory used to set sewer rates. These principles and techniques will
become the basis for the District’s comprehensive cost of service study.
Development of the Revenue Requirement Analysis 16
Otay Water District – Comprehensive Sewer Rate Study
3.1 Introduction
This section describes the development of the revenue requirement analysis for the District’s
sewer system. The revenue requirement analysis is the first analytical step in the
comprehensive rate study process. From this analysis a determination can be made as to the
overall level of rate adjustments needed to provide adequate and prudent funding for both
operating and capital needs of the sewer utility. The prior section of the report provided an
overview of the general approach and methodology to be used within this portion of the
analysis.
3.2 Development of the Sewer Revenue Requirement Analysis
There are a number of steps associated with the
development of the sewer revenue requirement analysis. In
developing the District’s sewer revenue requirement, the
utility must financially “stand on its own” and be properly
funded. As a result, the revenue requirement analysis, as
developed herein, assumes the full and proper funding
needed to operate and maintain the District’s sewer system
on a financially sound and prudent basis. No subsidies are
assumed from the water operations of the District.
Provided below is a more detailed discussion of the development of the sewer revenue
requirement analysis for District.
3.2.1 Establishing a Time Frame and Approach
The first step in calculating the revenue requirement for the District’s sewer system was to
establish a time frame for the revenue requirement analysis. The review of the five year period
of FY 2019 through FY 2023 was determined to be an appropriate time period for the analysis
and financial plan. The financial plan was developed based on the District’s FY 2018 budget and
capital plan. Reviewing a multi-year time period is recommended since it attempts to identify
any major expenses that may be on the horizon. By anticipating future financial requirements,
the District can then begin planning for these changes sooner, thereby minimizing short-term
rate impacts and overall long-term rates.
The second step in determining the revenue requirement was to decide on the basis of
accumulating costs. In this particular case, for the revenue requirement analysis a “cash basis”
approach was utilized. As noted in Section 2, the “cash basis” approach or methodology is the
most commonly used methodology by municipal and special district utilities to set their
revenue requirement. This is also the methodology that the District has historically used to
3 Development of the Revenue Requirement Analysis
“ . . . the revenue
requirement analysis, as
developed herein, assumes
the full and proper funding
needed to operate and
maintain the District’s sewer
system on a financially
sound and prudent basis.
uring this projected time
Development of the Revenue Requirement Analysis 17
Otay Water District – Comprehensive Sewer Rate Study
establish their water revenue requirements. Table 3 - 1 provides a summary of the “cash basis”
approach and cost components used to develop the District’s sewer revenue requirement.
Table 3 – 1
Overview of the District’s “Cash Basis” Sewer Revenue Requirements
+ Sewer Operation and Maintenance Expenses
9 Power Costs
9 Administrative Expenses
9 Materials and Maintenance (includes Metro O&M)
9 Labor and Benefits
+ Taxes and Transfers
+ Rate Funded Capital
+ Debt Service (P + I) – Existing and Future
± To / (From) Reserves
= Total Sewer Revenue Requirement
о Miscellaneous Revenues
= Net Revenue Requirement (Balance Required from Rates)
Given a time period around which to develop the revenue requirement and a method to
accumulate the costs; the focus shifts to the development and projection of the revenues and
expenses of the District’s sewer system.
The primary financial inputs in the development of the revenue requirement were the District’s
current budget documents, customer billing data, and capital improvement plan. Presented
below is a detailed discussion of the steps and key assumptions contained in the development
of the projections of the District’s sewer revenue requirement analysis.
3.2.2 Projection of Rate and Other Miscellaneous Revenues
The first step in developing the District’s sewer revenue requirement was to develop a
projection of the sewer rate revenues, at the present rate levels. In general, this process
involved developing projected billing units for each customer group (rate schedule). The billing
units (accounts and billed volumes) for each customer group were then multiplied by the
corresponding sewer rates. This method of independently calculating revenues links the
projected revenues used within the analysis to the
projected billing units. Additionally, it aids in
confirming that the billing units used within the
study are reasonable for purposes of projecting
future revenues, allocating costs, and ultimately
establishing the proposed rates. For FY 2018, it is
calculated that the District will receive
approximately $2.8 million in rate revenues for the
sewer utility, with the vast majority of those
Development of the Revenue Requirement Analysis 18
Otay Water District – Comprehensive Sewer Rate Study
revenues being received from the residential customer class of service. With assumed customer
growth on the system, by FY 2023, rate revenues are projected to increase to approximately
$2.9 million. It should be noted that the District’s sewer system is relatively small and has
limited opportunities for customer growth.
In addition to rate revenues, the District also receives a limited amount of non-operating
(miscellaneous) revenues. These miscellaneous revenues are related to property tax proceeds,
late fees, non-operating revenues, etc. In FY 2018, miscellaneous revenues are approximately
$117,000. By 2023, it is projected that miscellaneous revenues will increase slightly to
approximately $122,000.
In total, including rate and miscellaneous revenue sources, the sewer utility is projected to
collect approximately $2.9 million in total revenues in FY 2018. The total revenues are
projected to increase slightly over time and be approximately $3.0 million by FY 2023.
3.2.3 Projection of Operation and Maintenance Expenses
Operation and maintenance (O&M) expenses are incurred by the District to perform the daily
operations and maintain the sewer collection and treatment systems. The District is primarily a
collection system utility. The District does have wastewater treatment capacity for purposes of
their recycled water program, and although the vast majority of the District’s wastewater is
treated locally by the District, the remaining wastewater is conveyed to the San Diego
Metropolitan Wastewater Joint Powers Authority (Metro) for treatment.
The starting point for the projection of the District’s sewer O&M expenses was the District’s
budget. Budgeted O&M expenses were projected over the rate
study time period based on both historical inflationary factors and
known future inflationary factors. These factors took into
consideration the District’s historical cost increases and projected
increases. Depending upon the specific cost, the escalation factors
for each year ranged from 2.0% to 6.0% for the various types of
expenses (e.g., labor, benefits, materials). The higher escalation
factors are related to medical benefits.
A major O&M expense for the District is wastewater treatment from Metro. For FY 2019, the
Metro expense is projected to be approximately $920,000. This Metro expense estimate, and
the expense estimates for Metro for all five years was provided by the District. Over time, the
expense is expected to increase to approximately $1.3 million in FY 2020 and then slowly
reduce over time to about $852.000 in FY 2023. Metro treatment expenses are approximately a
third of the total sewer O&M expenses of the District.
In total, for FY 2018, the budgeted O&M expenses are $2.8 million and with the assumed
escalation of costs over time, it is projected that the FY 2023 O&M expenses will be just under
$3.3 million.
“A major O&M
expense for the
District is wastewater
treatment from
Metro.”
Development of the Revenue Requirement Analysis 19
Otay Water District – Comprehensive Sewer Rate Study
3.2.4 Projection of Taxes and Transfer Payments
The District’s sewer utility does not pay any taxes or payment in lieu of taxes (PILOT) to any
other governmental entity. There are, however, annual transfers to the OPEB fund which equals
$35,900 in FY 2018.
3.2.5 Projection of Capital Improvement Funding Needs
A key component in the development of the sewer revenue requirement was properly and
adequately funding capital improvement project needs (i.e., infrastructure). One of the major
issues facing many utilities across the U.S. is the amount of deferred capital projects and the
funding pressure from regulatory-related improvements. The proper and adequate funding of
capital projects is an important issue for all sewer utilities and is not just a local issue or concern
of the District.
In general, there are three types of capital projects that the District may need to fund. These
include the following types:
x Renewal and replacement projects
x Growth / capacity expansion projects
x Regulatory-related projects
A renewal and replacement project is essentially maintaining the existing system that is in place
today. As the existing plant becomes worn out, obsolete, etc., the District should be making
continuous investments to maintain the integrity of its sewer facilities. In contrast to this, the
District may make capital investments to expand the capacity of facilities to accommodate
future customers. Finally, certain projects may be a function of a regulatory requirement in
which the Federal and / or State government mandates the need for an improvement to the
system to meet a regulatory standard.
Understanding these different types of capital projects is important because it may help to
explain why costs are increasing and the cost drivers for any needed rate adjustment. In
addition, and more importantly, the way in which projects are funded may vary by the type of
capital project. For example, renewal and replacement projects may be paid for via rates and
funded on a “pay-as-you-go basis”. In contrast to this, growth or capacity expansion projects
may be funded through the collection of a capacity fee (i.e., growth-related charges) in which
new development pays a proportional and equitable share of the cost of improvements
required as a result of their connection (impact). Finally, regulatory projects may be funded by a
variety of different means, which may include rates, long-term debt, grants, etc.
While the above discussion appears to neatly divide capital projects into three clearly defined
categories, the reality of working with specific capital projects may be more complex. For
example, a pump may be replaced, but while being replaced, it is also up-sized to accommodate
greater capacity. There are various projects that share these “joint” characteristics. At the same
time, projects may not be “replacement” related, but rather “betterment/improvement”
Development of the Revenue Requirement Analysis 20
Otay Water District – Comprehensive Sewer Rate Study
related. The District utilizes the terms “replacement” and “betterment” to describe their capital
projects.
While the total amount of a project may vary from year to year, the sewer capital funding plan
should be developed in an attempt to provide a consistent funding source for the utility. A
desirable funding target for rate funded capital is an amount equal to or greater than annual
depreciation expense. Depreciation expense reflects the amount of capital infrastructure that is
becoming worn out or obsolete. While funding an amount equal to depreciation is considered
an industry best practice, even with this level of funding, depending upon the timing of future
replacement capital projects, additional funding from rates may be needed at some point in
time to address the replacement or betterment of the District’s existing assets. It is important
to note and understand that depreciation expense is not the same as replacement cost. Thus,
funding an amount which exceeds depreciation expense is considered to be both prudent and
appropriate. In developing this financial plan, HDR and the District have attempted to minimize
rate impacts while funding the planned capital improvement projects of the District.
The District has taken the direction of issuing long-term debt in order to pay for a few
substantial infrastructure projects. These projects will not only benefit the current customers of
the District but also future customers. Given this, the use of long-term debt is appropriate and
is used as a tool to attempt to equitably associate the future benefit (to future customers) to
the associated future costs (in the form of annual debt service payments).
The balancing of rate, reserve, and debt funding provides the District with a method to fund
capital over the long-term and minimize rates to the greatest extent possible. Shown below in
Table 3 – 2 is summary of the District’s capital improvement plan that was used in the
development of the sewer revenue requirement.
Table 3 – 2
Summary of the Sewer Capital Improvement Plan ($000s)
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Capital Improvement Projects
Total Betterment Projects $2,215 $2,163 $175 $0 $0 $5
Total Replacement Projects 2,864 3,075 1,345 949 1,080 1,990
Total Capital Projects $5,079 $5,238 $1,520 $949 $1,080 $1,995
Less: Other Funding Sources
Sewer Operating Reserves $0 $0 $0 $0 $0 $0
Sewer Replacement Reserves[1] 0 439 1,345 949 1,080 1,990
Sewer Betterment Reserves 2,215 2,163 175 0 0 5
Sewer Expansion Reserves 0 0 0 0 0 0
New Long Term Debt 2,864 2,636 0 0 0 0
Total Other Funding $5,079 $5,238 $1,520 $949 $1,080 $1,995
As mentioned, the District is funding capital through a mix of rates, reserves, and long-term
Development of the Revenue Requirement Analysis 21
Otay Water District – Comprehensive Sewer Rate Study
debt. Given this, it is important to understand the level of funding from each source. Provided
below In Table 3 – 3 is a more detailed summary of the funding plan for the five-year period of
FY 2019 through FY 2023.
Table 3 – 3
Summary of the Sewer Capital Improvement Plan ($000s)
FY 2019 –
FY 2023
Funding
% of
Total Notes
Capital Improvement Projects
Total Betterment Projects $2,343 21.7%
Total Replacement Projects 8,439 78.3%
Total Capital Projects $10,782 100.0%
Capital Improvement Funding Sources
Reserves –
9 Replacement Reserves $3,323 30.8%
9 Betterment Reserves 923 8.6%
Long-Term Debt 5,500 51.0% FY 2020; 30 years @ 1.7%
Rate Funded 1,037 9.6%
Total CIP Funding $10,782 100.0%
As can be seen above, the District is funding capital projects from a variety of different sources.
It is important to note that the District is strategically reducing reserve levels based on recent
policy discussions; however, the reserve levels are projected to remain at or above target based
on the current financial plan. The District should continue to monitor reserve levels in order to
maintain the target or minimum balances. The level of rates will also play into this analysis as
they should be increased in the future to cover capital expenses which are currently being
funded through reserve funds or long-term borrowing.
3.2.6 Projection of Debt Service
The District currently has no outstanding long-term debt issues for the sewer utility. However,
there is a new long-term debt issue assumed for FY 2020. The District has assumed a $5.5
million long-term debt issue to fund replacement capital projects. The annual debt service
associated with this debt issuance is estimated at approximately $236,000/year. For purposes
of this analysis, the District assumed this debt carried an interest rate of 1.7%, with a
repayment period or term of 30 years. There are no additional long-term debt issuances
assumed over the projected five-year period. The District has made a concerted effort to
strategically plan debt issuances and continues to also focus on cash (rate) financing capital
improvement projects.
Development of the Revenue Requirement Analysis 22
Otay Water District – Comprehensive Sewer Rate Study
3.2.7 Reserve Funding
The final component of the revenue requirement analysis is the “To / (From) Reserves” line
item or additional transfers to reserve funds to maintain targeted fund balances or for future
funding of specific projects. The rate analysis assumes annual transfers both into and out of the
operating, replacement, and betterment reserves. These transfers are used to fund capital
improvements in future years. This provides funding for planned improvements in order to
provide funding prior to the need for adjusting rates or long-term borrowing to fund
improvements. The average transfer is approximately $183,000 per year over the review
period.
3.2.8 Summary of the Sewer Revenue Requirement
Given the above projections of revenues and expenses, a summary of the sewer revenue
requirement analysis can be developed. In developing the revenue requirement analysis,
consideration was given to the financial planning considerations of the District. In particular,
emphasis was placed on attempting to minimize rates, yet still have adequate funds to support
the operational activities and capital projects throughout the projected time period.
The revenue requirement has summed the O&M, taxes and transfers, rate funded capital, net
debt service and the reserve funding. The total revenue requirement is then compared to the
total sources of funds which include the rate revenues, at present rate levels, and other
miscellaneous revenue sources. From this comparison a balance or deficiency of funds in each
year can be evaluated. This balance or deficiency of funds is then compared to the rate
revenues to determine the level of rate adjustment needed to meet the revenue requirement
(i.e., support cost-based levels). Table 3 – 3 provides a summary of the revenue requirement
analysis for the District’s sewer utility.
Development of the Revenue Requirement Analysis 23
Otay Water District – Comprehensive Sewer Rate Study
Table 3 – 3
Summary of the Sewer Revenue Requirement Analysis ($000)
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Revenues
Sewer Rate Revenues[1] $2,810 $2,915 $2,916 $2,917 $2,918 $2,918
Miscellaneous Revenues 117 118 119 120 121 122
Total Sewer Revenues $2,927 $3,033 $3,034 $3,036 $3,038 $3,040
Expenses
Total O & M $2,830 $2,975 $3,381 $3,328 $3,110 $3,275
Taxes / Transfer 36 37 37 38 39 40
Debt Service 0 0 94 236 236 236
To / (From) Reserves 61 130 (142) (78) 210 115
Total Expenses $2,927 $3,142 $3,371 $3,524 $3,594 $3,666
Bal. / (Def.) of Funds $0 ($109) ($336) ($488) ($556) ($626)
Bal. as a % of Rate Rev. 0.0% 3.8% 11.5% 16.7% 19.1% 21.4%
Proposed Rate Adjustment 0.0% 7.5% 7.5% 2.0% 2.0% 2.0%
Add'l Revenue from Adj. $0 $109 $336 $488 $556 $626
Total Bal. /(Def.) of Funds $0 $0 0 $0 $0 $0
[1] Includes adopted 7.5% rate adjustment for FY 2018.
As can be seen in the above table, the revenue requirement analysis indicates that for FY 2018
the revenues balance to the projected expenses of the utility. However, over time, there are
deficiencies within the revenue requirement analysis. Over the five-year projected period, and
in FY 2023, the District’s sewer rates are projected to be deficient by approximately $626,000 or
21.4% of the present rates. This implies that over the five-year period rates should be adjusted
by an overall 21.4%. These deficiencies are caused in part by the increasing costs of Metro
treatment, the added debt service associated with the funding of the District’s capital projects,
and the assumed escalation of O&M costs over time.
3.3 Consultant’s Revenue Requirement Conclusions
and Recommendations
The revenue requirement analysis has clearly demonstrated the projected deficiencies for the
sewer utility. HDR concludes that the District’s sewer rates should be adjusted to adequately
meet the District’s revenue requirements. Failure to adjust the rates could potentially lead to
reduced O&M, reduced service levels, deferred capital maintenance and declining reserves
which may fall below desired minimum levels.
To mitigate the funding deficiencies shown in Table 3-3, a rate transition plan was developed
which proposes rate adjustments over the five year period. Financially, the need for the largest
adjustments occur in the FY 2019 and FY 2020 and annual adjustments of 7.5% have been
proposed. Once the rates are adjusted in FY 2020, 2.0% annual adjustments are projected to be
sufficient. As can be seen at the bottom of Table 3-3, with these proposed adjustments, the
Development of the Revenue Requirement Analysis 24
Otay Water District – Comprehensive Sewer Rate Study
additional revenue generated by the rate adjustment in each year balances to the deficiencies
shown in that year. In that way, the rate adjustments for each year balance to revenue
requirements developed for each year.
The revenue requirement analysis for the District was developed to meet the financial planning
and policy objectives of the District. More specifically, the revenue requirements are designed
to adequately and prudently fund the District’s sewer operating and capital needs.
3.4 Summary of the Sewer Revenue Requirement Analysis
This section of the report has provided a discussion of the District’s sewer revenue requirement
analysis. As a part of the revenue requirement analysis, a proposed rate transition plan was
developed to support the District’s operating and capital needs. The proposed sewer rate
adjustments are designed to be cost-based and balance the total revenues to the total revenue
requirement in each year.
The next section of the report will discuss the development of the sewer cost of service analysis
for District.
Development of the Cost of Service Analysis 25
Otay Water District – Comprehensive Sewer Rate Study
4.1 Introduction
In the previous section, the revenue requirement analysis focused on the total sources and
application of funds required to adequately fund the District’s sewer system. This section of the
report will provide an overview of the sewer cost of service analysis developed for the District.
The sewer cost of service analysis is concerned with the
equitable allocation of the total sewer revenue
requirement between the various sewer customer
classes of service (e.g., residential, multi-residential,
commercial). The sewer revenue requirement developed
in Section 3 was utilized in the development of the sewer
cost of service analysis. For the District’s study, the cost
of service was performed with an assumed 0.0% rate
adjustment. This means that there was only the cost of
service between customer classes that was adjusted and the overall revenue requirement was
not adjusted. This was done because there are a number of capital and financial assumptions
that are yet to be finalized for the District. When this has been completed, the District will
adopt rate adjustments that will simply adjust the level of rates as the cost of service
component will have been adjusted already.
4.2 Objectives of a Cost of Service Analysis
There are two primary objectives in conducting a sewer cost of service study:
x Allocate the District’s revenue requirement among the customer classes of service
x Derive average unit costs for subsequent rate designs
The objectives of the cost of service analysis are different from determining the District’s
revenue requirement. As noted in the previous section, a revenue requirement analysis
determines the utility’s overall financial needs, while the cost of service analysis determines the
fair and equitable manner to proportionately collect the revenue requirement from the
District’s various customer classes of service.
The second rationale for conducting a cost of service analysis is to ensure that proposed rates
are designed such that it properly reflects the costs incurred by the District. For example, a
sewer utility typically incurs costs related to flow (wastewater volumes), strength, and
customer cost components. Each of these types of costs may be collected in a slightly different
manner as to allow for the development of rates that collect costs in the same manner as they
are incurred.
4 Development of the Cost of Service Analysis
“The sewer cost of service
analysis is concerned with the
equitable allocation of the total
sewer revenue requirement
between the various potable
water customer classes of
service (e.g., residential, multi-
residential, and commercial).”
Development of the Cost of Service Analysis 26
Otay Water District – Comprehensive Sewer Rate Study
Terminology of a Sewer
Cost of Service Analysis
Functionalization – The arrangement of
the cost data by functional category
(e.g. collection, pumping, treatment).
Classification – The assignment of
functionalized costs to cost
components (e.g. volume, strength, and
customer related).
Allocation – Allocating the classified
costs to each class of service based
upon each class’s proportional
contribution to that specific cost
component.
Volume-Related Costs – Costs that are
classified as volume related vary with
the total flow of wastewater (e.g.,
power for pumping).
Strength-Related Costs – Costs
classified as strength related refer to
the wastewater treatment function.
Typically, strength-related costs are
further defined as biochemical oxygen
demand (BOD) and suspended solids
(SS). Different types of customers may
have high wastewater strength
characteristics and high strength
wastewater costs more to treat.
Treatment facilities are often designed
and sized around meeting these costs.
Customer-Related Costs – Costs
classified as customer related vary with
the number of customers on the
system, e.g., billing costs.
Direct Assignment – Costs that can be
clearly identified as belonging to a
specific customer group or group of
customers.
4.3 Determining the Customer Classes of Service
The first step in a cost of service analysis is to determine the customer classes of service. Based
on the District’s current rate schedules, the customer classes of service used within the
District’s sewer cost of service analysis were as follows:
x Residential
x Multi-Residential
x Commercial
9 Low-Strength
9 Medium Strength
9 High Strength
In determining customer classes of service for cost of
service purposes, the objective is to group customers
together into similar or homogeneous groups based upon
facility requirements and/or flow characteristics. HDR
reviewed the current customer classes of service used by
the District and found them to be consistent with typical
industry practices.
As can be seen, the commercial class of service has been
segregated between low-strength, medium strength and
high-strength customers. This allows for the
development of cost-based sewer rates for commercial
customers reflective of their relative wastewater
strength levels.
4.4 General Cost of Service Procedures
In order to determine the cost to serve each customer
class of service on the District’s sewer system, a cost of
service analysis is conducted. A cost of service study
utilizes a three-step approach to review costs. These
steps take the form of functionalization, classification and
allocation. Provided below is a detailed discussion of the
sewer cost of service study conducted for the District,
and the specific steps taken within the analysis.
4.4.1 Functionalization of Costs
The first analytical step in the cost of service process is
called functionalization. Functionalization is the
arrangement of expenses and asset (plant) data by major
operating functions (e.g., collection, pumping). Within
this study, there was a limited amount of
functionalization of the cost data, as the District’s records functionalized a majority of the costs.
Development of the Cost of Service Analysis 27
Otay Water District – Comprehensive Sewer Rate Study
4.4.2 Classification of Costs
The second analytical task performed in a sewer cost of service study is the classification of the
costs. Classification determines why the expenses were incurred or what type of need is being
met. The following cost allocators were used to develop the cost of service analysis:
x Volume-Related Costs: Volume related costs are those costs which tend to vary with the
total quantity of wastewater collected and treated.
x Strength-Related Costs: Strength related costs are those costs associated with the
additional handling and treatment of high “strength” wastewater. Strength of wastewater
is typically measured in biochemical oxygen demand4 (BOD) and total suspended solids5
(SS). Increased levels of BOD or SS generally equate to increased treatment costs.
x Customer-Related Costs: Customer-related costs vary with the addition or deletion of a
customer or a cost which is a function of the number of customers served. Customer
related costs typically include the costs of billing, collecting, and accounting.
x Revenue-Related Costs: Some costs associated with the utility may vary with the amount
of revenue received by the utility. An example of a revenue related cost would be a utility
tax which is based on gross utility revenue.
As a part of this study, the District’s plant in service (assets) were functionalized and classified.
Provided below in Table 4-1 is a summary of the functionalization and classification of plant in
service.
Table 4 - 1
Summary of the Functionalization and Classification
of the District’s Sewer Plant in Service
Asset Category
Volume
Related
Strength
BOD
Related
Strength
Sus. Solids
Related
Customer
Related
Revenue
Related
Collection 85.0% 0.0% 0.0% 15.0% 0.0%
Treatment 40.0% 30.0% 30.0% 0.0% 0.0%
Lift Stations 100.0% 0.0% 0.0% 0.0% 0.0%
General Plant 83.8% 0.8% 0.8% 14.6% 0.0%
Total Net Plant In Service 83.8% 0.8% 0.8% 14.6% 0.0%
The classification of plant in service was based upon generally accepted cost of service
principles. The details of the functionalization and classification of plant in service can be found
on Exhibit 10 of the Technical Appendix.
4 BOD is the amount of dissolved oxygen that must be present in water in order for microorganisms to decompose
the organic matter in the wastewater. 5 TSS is the entire amount of organic and inorganic particles dispersed in wastewater.
Development of the Cost of Service Analysis 28
Otay Water District – Comprehensive Sewer Rate Study
The classification of the total revenue requirements followed a similar approach as the plant in
service. As a general cost of service rule, the expense for a plant item should follow the
corresponding classification of the related plant item. For example, the operation and
maintenance of collection lines should be classified in the same manner as the corresponding
plant in service (e.g., collection plant). This approach has been used within this cost of service
analysis. A major O&M expense for the District is the Metro treatment costs. These costs were
classified as 49.0% volume-related, 24.1% BOD-related and 26.9% SS-related. These
classification splits were based upon a review of the Metro bills and how those costs are passed
along to the District. It is important to note that the revenue requirement that was allocated in
the cost of service analysis does not include a revenue adjustment (i.e., 0.0% rate adjustment is
assumed). This has been done in order to purely look at the cost of service and not incorporate
any change in the level of rate revenues. The District is in the process of determining the level
of rate adjustment and once the adjustment is determined, only the level of rates will be
adjusted. Provided below in Table 4-2 is a summary of the classification of the FY 2019 total
revenue requirements.
Table 4 – 2
Summary of the Classification of the FY 2019 Revenue Requirement ($000’s)
Total
Volume
(VOL)
Biochemical
Oxygen
Demand
(BOD)
Suspended
Solids
(SS)
Customer
Related
(AC + WCA)
Revenue
Related
(RR)
$2,915 $1,363 $214 $238 $1,101 $0
100.0% 46.8% 7.3% 8.2% 37.8% 0.0%
The detailed exhibit of the functionalization and classification of the District’s sewer revenue
requirement can be found on Exhibit 11.1 of the Technical Appendix.
4.4.3 Development of the Allocation Factors
Once the classification process is complete, and the customer groups have been defined, the
various classified costs were then allocated to each customer class of service. The District’s
classified costs were allocated to the customer classes of service using the following allocation
factors.
x Volume Allocation Factor: Volume-related costs are generally allocated on the basis of
the estimated contribution to wastewater flows. Unlike water usage, wastewater is not
metered and must be estimated. The basis for estimating wastewater contributions is a
customer’s water consumption data. However, for residential and multi-residential,
wastewater flows were calculated based on 85% of the average winter use (January
through April of the previous year). The use of winter water use and the 85% adjustment
factor is intended to eliminate outdoor water use from the sewer billing which clearly
does not enter the collection system and return to the wastewater treatment plant. In
contrast to residential and multi-residential, wastewater flow estimates for commercial
customers is based upon 85% of their billed annual water usage. Most large commercial
Development of the Cost of Service Analysis 29
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customers with significant landscaping have a separate irrigation meter. Given the
estimated volumes of wastewater from each class of service, a proportional allocation
factor was developed. The volume allocation factor developed as a part of this study can
be found on Exhibit 6 within the Technical Appendix and is based on FY 2017 water
consumption data.
x Strength Allocation Factor: Strength-related costs are classified between BOD and SS.
Both of these types of costs are allocated to each of the classes of service based upon the
assumed domestic strength level of 200 mg/l for BOD and 200 mg/l for SS. For the
medium strength customer class, 400 mg/l for BOD and SS was used. Lastly, for high
strength customer class a BOD of 1,000 mg/l was used and 600 mg/l of SS. The strength
levels were based on historical District information and industry data. The detailed
strength allocation factor developed for this cost of service can be found on Exhibit 8 of
the Technical Appendix.
x Customer Allocation Factor: Customer costs within the cost of service analysis are
allocated to the various customer classes of service based upon their respective customer
counts. Two types of customer allocation factors were developed; actual and weighted.
The actual customer allocation factor assumes that there is no disproportionate cost
associated with serving a customer (e.g., postage for bills is the same regardless of the
size or usage of the customer) and is based on the number of actual accounts. In contrast,
a weighted customer allocation factor assumes that there is some disproportionality
associated with serving different types of customers and attempts to estimate the level of
difference in serving the customers. For the District’s study, the weighting factors were
based on the safe operating capacity of a meter based on the AWWA standards. This
allocation is done in order to reflect the capacity of a water meter and, therefore, show
the potential impact to the sewer system based on water meter size. The development of
the customer allocation factors can be found on Exhibit 7 of the Technical Appendix.
x Revenue-Related Allocation Factor: The revenue-related allocation factor was developed
from the projected rate revenues for FY 2019. The revenue-related allocation factor can
be found on Exhibit 9 of the Technical Appendix.
x Direct Assignment: Any costs that can be identified or shown to be directly related to a
specific customer class are directly assigned within the cost of service study. In this
particular study, there were no direct assignments.
The development of allocation factors is based on generally accepted cost of service principles
as discussed in the Water Environment Federation, Manual of Practice #27.
4.5 Summary of the Sewer Cost of Service Analysis
In summary form, the cost of service analysis began by functionalizing the District’s plant asset
records and O&M expenses. The functionalized plant and expense accounts were then
classified into their various cost components. Next, the individual classification totals were then
allocated to the various customer groups based on the appropriate allocation factors. For
example, volume-related costs were allocated based on each customer class’ share of total
wastewater contributions. The total costs classified to each cost component were allocated
Development of the Cost of Service Analysis 30
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between the customer classes using the allocation factors. Table 4 – 3 provides a summary of
allocated cost components to each customer class of service.
Table 4 – 3
Summary of the Allocation of the Classified FY 2019
Revenue Requirements to the District’s Customer Classes of Service ($000’s)
Classified Multi-
Residential
Commercial
Costs Total Residential Low-Strength Med-Strength High-Strength
Volume $1,363 $1,045 $159 $128 $20 $12
BOD 214 145 24 19 6 9
TSS 238 177 27 22 7 6
Customer 1,101 876 103 122 0 0
RR 0 0 0 0 0 0
DA 0 0 0 0 0 0
Total $2,915 $2,254 $313 $290 $32 $26
The distributed expenses for each customer group were then aggregated to determine each
customer group’s overall revenue responsibility. Provided in Table 4-4 is a summary of the
District’s sewer cost of service analysis.
Table 4 – 4
Summary of the Sewer Cost of Service Analysis ($000)
Customer Class of Service
Revenues at
Present
Rates
Allocated
Revenue
Requirement
Bal. / (Def.)
of Funds
Required %
Change in
Rates
Residential $2,264 $2,338 ($74) 3.3%
Multi-Residential 301 325 (24) 8.0%
Commercial 350 362 (12) 3.3%
Total $2,915 $3,024 ($109) 3.7%
The above results indicate that the customer classes of service are at or near their cost of
service. This means that the District’s overall sewer rate revenues collected from each customer
class of service is reasonably close to their “cost of service” and reflect the proportional
allocation of costs. In making this statement, it is important to note that a cost of service study
is an analysis of a point in time and the District’s sewer costs, customer consumption patterns
and total wastewater volumes will vary and change over time.
4.6 Summary of the Average Unit Costs
As noted at the start of this section of the report, there are two key pieces of information which
are derived from the cost of service analysis; the equitable allocation of the total revenue
requirement (i.e., total costs) and the derivation of the average unit costs. Average unit costs
Development of the Cost of Service Analysis 31
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are essentially cost-based rates in that they are derived from the classified costs within the cost
of service study. Each classified cost is divided by the appropriate billing unit (number of
accounts or wastewater volumes) and a per unit charge or cost is derived. Provided below in
Table 4 – 5 is a summary of the average unit costs for the District’s sewer cost of service
analysis.
Table 4 – 5
Summary of the Sewer Cost of Service Unit Costs
Commercial
Total Residential
Multi-
Residential
Low
Strength
Medium
Strength
High
Strength
Volume Costs ($ / CCF) $2.17 $2.17 $2.17 $2.17 $2.17 $2.17
Strength Costs ($ / CCF) 0.69 0.69 0.69 1.44 1.38 2.73
RR / DA ($ / CCF) 0.00 0.00 0.00 0.00 0.00 0.00
Total $2.87 $2.87 $2.87 $2.87 $3.56 $4.90
Customer Costs ($ / Cust / Mo) $16.03
The average unit costs shown in Table 4 – 5 will be used to develop the final proposed sewer
rates. A more detailed discussion of the development of the proposed sewer rate designs can
be found on in the next section of the report.
4.7 Consultant’s Cost of Service Conclusions and Recommendations
The sewer cost of service analysis conducted for the District utilized generally accepted cost of
service principles and methodologies. The results indicated some cost differences between the
various customer classes of service, but no significant cost issues. It is recommended that the
results of the cost of service be used in the development of the final proposed sewer rate
designs. By using the results of the cost of service analysis the District’s rates will be cost-based
and reflect the requirements of Proposition 218, as it is currently understood.
4.8 Summary
This section of the report has discussed the sewer cost of service analysis developed for the
District. This analysis reflects the specific and unique characteristics of the District’s sewer
system and was developed using generally accepted cost of service techniques and principles.
The next section of the report will review the present and proposed sewer rates for the District.
Development of the Proposed Sewer Rate Designs 32
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5.1 Introduction
The final step of the District’s comprehensive sewer rate study is the design of proposed sewer
rates to collect the desired levels of revenues, based upon the results of the revenue
requirement and cost of service analyses. As previously mention, the cost of service analysis
allocated the revenue requirement that did not include any proposed revenue adjustment. This
means that the unit costs utilized in this rate design do assume a 0.0% rate adjustment. In
reviewing District’s rates, consideration is given to both the level of the rates and the structure
of the rates. Level refers to the amount of revenue to be collected from the rate design and
structure refers to the way in which it is collected (e.g., fixed charges, volumetric charges, etc.).
5.2 Rate Design Criteria and Considerations
Prudent rate administration dictates that several criteria must be considered when setting
utility rates. Some of these rate design criteria are listed below:
x Rates which are easy to understand from the customer’s perspective
x Rates which are easy for the utility to administer
x Consideration of the customer’s ability to pay
x Continuity, over time, of the rate making philosophy
x Policy considerations (encourage efficient use, economic development, etc.)
x Provide revenue stability from month-to-month and year-to-year
x Promote efficient allocation of the resource
x Equitable and non-discriminatory (cost-based)
x Compliance with any State laws or requirements
It is important that the District provide its customers with a proper price signal as to what their
wastewater services are costing. This goal may be approached through the rate designs level
and structure. When developing the proposed rate designs, all the above-listed criteria were
taken into consideration. However, it should be noted that it is difficult, if not impossible, to
design a rate that meets all the goals and objectives listed above. For example, it may be
difficult to design a rate that takes into consideration customers’ ability to pay, and one which
is cost-based. However, to meet the intent of Proposition 218, equitable and cost-based rates is
the key criterion that needs to be considered when developing the District’s proposed rates.
However, the other goals and objectives may be taken into consideration to develop the rate
structure, and proposed rates would be based on the cost of service analysis to meet the intent
of Proposition 218.
5.3 Development of Cost-Based Sewer Rates
A key objective for this study is to meet the legal requirements of Proposition 218 and clearly
document the steps taken to meet those requirements, which results in the development of
5 Development of the Proposed Sewer Rate Designs
Development of the Proposed Sewer Rate Designs 33
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cost-based and equitable sewer rates. Given this, the development of the District’s proposed
sewer rates have been closely reviewed to meet the legal requirements of California
Constitution article XIII D, section 6 (Article XIII D). A key component of Article XIII D is the
development of rates which reflect the cost of providing service and are proportionally
allocated between the various customer classes of service. HDR would point out that there is no
single methodology for equitably assigning sewer costs to the various customer groups. The
Water Environment Federation Manual of Practice No. 27 provides various and differing
methodologies which may be used to establish cost-based sewer rates. Unfortunately, Article
XII D is not prescriptive and does not provide a single or specific methodology for establishing
legally compliant sewer rates. Given that, HDR conducted this study using generally accepted
rate setting methodologies, tailored to the District’s specific facilities and customers, in order
meet the intent (i.e., requirements) of Article XIII D. Furthermore, the rate setting methodology
used in the District’s study are based on the WEF MOP #27 and are, therefore, reasonable and
appropriate.
HDR is of the opinion that the proposed rates meet the legal requirements of Article XIII D. HDR
reaches this conclusion based upon the following:
x The revenue derived from sewer rates does not exceed the funds required to provide
the property related service (i.e., sewer service). The proposed rates are designed to
collect the overall revenue requirement of the District’s sewer system.
x The revenues derived from sewer rates shall not be used for any purpose other than
that for which the fee or charge is imposed. The revenues derived from the District’s
sewer rates are used exclusively to operate and maintain the District’s sewer system.
x The amount of a fee or charge imposed upon a parcel or person as an incident of
property ownership shall not exceed the proportional costs of the service attributable
to the parcel. This cost of service analysis, and this report, has focused on the issue of
proportional assignment of costs to customer classes of service in accordance with
generally accepted cost of service principles. The proposed rates have appropriately
grouped customers into customer classes of service (e.g., residential, multi-residential,
commercial) that reflect the varying consumption patterns and system requirements (i.e.,
the benefits they receive from and burdens they place on the system) of each customer
class of service. The grouping of customers and rates into these classes of service creates
the equity and fairness expected under Proposition 218 by having differing rates by
customer classes of service which reflect both the level of revenue to be collected by the
utility, and the manner in which these costs are incurred and equitably assigned to
customer classes of service based upon their proportional impacts.
5.4 Current Industry Sewer Rate Structure Approach
At the present time, there are no specific federal or state agencies or national association
requirements/regulation on sewer rate structures. The vast majority of wastewater utilities
follow the guiding principles of establishing cost-based rates that meet the utility’s O&M and
capital infrastructure requirements. The Environmental Protection Agency (EPA) provides
Development of the Proposed Sewer Rate Designs 34
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pricing guidelines for wastewater utilities, but the focus is primarily on assuring adequate
funding to maintain facilities, and not on a specific rate structure.
The California Water Efficiency Partnership (formerly the California Urban Water Conservation
Council) does have Best Management Practices (BMP) encouraging the adoption of volumetric-
based wastewater utilities. The Partnership and other water conservation experts believe that
having volume-based wastewater rates, where the billing is based upon water consumption,
encourages water conservation. Whether the majority of consumers make the connection
between the volumetric portion of their bill and their water consumption is unclear. Simply
stated, most wastewater utilities do not adopt volume-based wastewater rates to encourage
water conservation. Rather, most utilities view volumetric-based billing as a method that
enhances customer/rate equity.
5.5 Overview of the Present Sewer Rate Structure
The District currently has three rate schedules; a residential rate schedule, a multi-residential
rate schedule, and a commercial rate schedule. Provided below is a more detailed discussion of
the present rate structures by customer class of service.
Residential - The District’s current residential sewer rate has a flat monthly fixed charge and a
variable consumption charge based on 85% of the customers’ winter water average. This is a
generally-accepted sewer rate structure and it is used by sewer utilities across California and
the U.S. The fixed charge provides revenue stability for the District as well as reflects the fact
that the majority of the District’s costs are fixed in nature and not a function of the volume of
wastewater contributed or conveyed on the system. As noted under the discussion of the
volume allocation factor, the reasoning behind billing residential customers on 85% of average
winter water use is to attempt to extract outdoor use or non-returned usage.
Multi-Residential - Multi-residential customers have essentially the same rate structure as
residential customers. The rate design has a fixed monthly charge and a volumetric component
charged on 85% of the customer’s winter water average. However, an important difference is
that the fixed component is based upon the service meter size. This is done in an attempt to
reflect the fact that a customer with a larger meter has the potential to use a great amount of
system capacity. Just as with residential, the consumption charge is based on the average
winter water usage to reflect a customers’ sewer flow contribution.
Commercial - Commercial customers also have a similar structure with a fixed monthly charge
based on meter size with a volumetric consumption charge on a per CCF basis. There are two
key differences in the commercial rates compared to the other rates. First, the commercial rate
is segregated between low, medium and high-strength wastewater. Additionally, commercial
customers are billed on 85% of their average annual consumption as opposed to just the winter
water average as is used for residential and multi-residential customers. As noted within the
discussion of the volume allocation factor this difference in determining volumetric billing units
is based upon the assumption that large commercial customers will have an irrigation meter for
outdoor water use and therefore domestically metered water should closely represent their
wastewater flow contributions.
Development of the Proposed Sewer Rate Designs 35
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5.6 Development of the Proposed Sewer Rates
The revenue requirement analysis was used to determine the adequate and prudent level of
funding needed to operate the District’s sewer system. The results of the revenue requirement
analysis provided the recommended rate adjustments needed to fully fund the sewer utility.
Given the development of the overall revenue needs of the utility, the next component of the
sewer rate study was the cost of service analysis. The average unit costs developed in the cost
of service analysis are used within the design of the final proposed rates. In doing so, the
average unit costs is reflective of the allocation of costs to each specific customer class of
service, but more importantly, provides the cost-basis for the relationship between the fixed
and volumetric charges. Provided below in Table 5-1 is a summary of the present and proposed
sewer rates for the District.
Table 5 – 1
Summary of the Present and Proposed Sewer Rates
Present Rates FY 2019
Fixed Charge ($/Month) –
Residential
Monthly System Fee $17.08 $16.03
Multi-Resident. / Comm.
3/4" $30.50 $16.03
1" 44.94 40.08
1-1/2" 80.92 80.16
2" 124.12 128.25
3" 224.93 240.47
4" 368.97 400.78
6" 729.04 801.56
8" 1,161.15 1,282.50
10" 1,665.25 1,843.59
Consumption Charge ($/CCF) –
Residential
Billed @ 85% of Winter Water Avg $2.77 $2.87
Multi-Residential
Billed @ 85% of Winter Water Avg $2.77 $2.87
Commercial (85% of Annual Water Avg)
Low Strength $2.77 $2.87
Medium Strength 3.98 3.56
High Strength 6.34 4.90
Schools 2.77 2.87
Churches 2.77 2.87
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In viewing the present and proposed rate designs it should be noted that the structure of the
rates has not changed, but the relationships between the fixed and consumption charges has
changed. For example, for residential customers the proposed fixed monthly charge for FY 2019
has decreased slightly and the consumption charge has increased. The proposed fixed monthly
charge for multi-residential and commercial has been decreased to be reflective of the average
unit costs derived in the cost of service study. At the same time, the consumption charges have
increased. This is indicative of the cost of service which indicated a slightly lower level of fixed
charges and a slightly greater level of volumetric charges. The proposed rates are only shown
for FY 2019 as there are no proposed rate adjustments only the cost of service adjustment for
FY 2019. The District is in the process of developing the needed rate adjustment which will be
adopted and provides the adjustment to the revenue levels.
The customer bill impacts from these proposed rates will vary by customer class of service and
by consumptive use. As an example, in FY 2019 and for a typical residential customer being
billed 8 CCF/month, a decrease in their monthly bill will be approximately $0.27/month, or a
monthly sewer bill which goes from $39.24 to $38.97.
5.7 Consultant’s Rate Design Conclusions and Recommendations
The development of the proposed sewer rates is based on the overall level of revenues
developed as part of the revenue requirement analysis and the proportional allocation of costs
to the customer classes of service based on the cost of service recommendations. HDR would
recommend the adoption of the proposed rates which are cost-based, equitable, proportionate
to the cost of service, and reflect the specific costs of the District’s sewer system.
5.8 Summary
This completes the comprehensive sewer rate study for the District. This study has provided a
comprehensive review of the District’s sewer rates. The study is intended to provide to the
District a set of cost-based rates that will allow the District to meet their current and projected
sewer system financial obligations and major capital projects for the time period reviewed,
while meeting the requirements of Proposition 218.
Technical Appendix – Sewer Technical Analysis
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Revenues
Rate Revenues $2,810,164 $2,914,969 $2,915,844 $2,916,719 $2,917,594 $2,918,469
Miscellaneous Revenues 116,900 117,755 118,614 119,676 120,741 121,911------------------------------------------------------------------------------------------Total Revenues $2,927,064 $3,032,724 $3,034,457 $3,036,394 $3,038,335 $3,040,380
Expenses
Total Operations & Maintenance $2,829,900 $2,975,099 $3,381,484 $3,328,094 $3,109,663 $3,275,225
Total Taxes / Transfer 35,900 36,618 37,350 38,097 38,859 39,637
Rate Funded Capital 0 0 0 0 0 0
Net Debt Service 0 0 93,500 235,600 235,600 235,600
Total To / (From) Reserves 61,264 130,319 (141,644)(77,776)210,087 115,450------------------------------------------------------------------------------------------Total Expenses $2,927,064 $3,142,036 $3,370,691 $3,524,015 $3,594,209 $3,665,911
Bal. / (Def.) of Funds $0 ($109,311)($336,233)($487,621)($555,874)($625,531)
Bal. as a % of Rate Revenues 0.0%3.7%11.5%16.7%19.1%21.4%
Proposed Rate Adjustment 0.0%7.5%7.5%2.0%2.0%2.0%
Add'l Revenue from Adj.$0 $109,311 $336,233 $487,621 $555,874 $625,531
Total Bal. / (Def.) of Funds $0 $0 $0 $0 $0 $0
Add'l Rate Increase Needed 0.0%0.0%0.0%0.0%0.0%0.0%
Avg Residential Monthly Bill (Flat rate + 12 CCF)$50.32 $54.09 $58.15 $59.31 $60.50 $61.71
Debt Service Coverage Ratio
Before Rate Adjustment 0.00 0.00 N/A N/A N/A N/A
After Proposed Rate Adj.0.00 0.00 N/A N/A 2.06 1.66
Total Reserves $11,352,810 $9,022,718 $7,494,033 $6,589,308 $5,840,561 $4,064,509
Revenue Requirement Summary
Exhibit 1
Sewer Cost of Service Study
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Exhibit 2
Escalation Factors
Budget
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Revenues
As Customer GrowthCustomer Growth Budget 0.03%0.03%0.03%0.03%0.03%
As Miscellaneous RevenuesMiscellaneous Revenues Budget 1.0%1.0%1.0%1.0%1.0%
As FlatFlat Budget 0.0%0.0%0.0%0.0%0.0%
Expenses
As LaborLabor Budget 0.0%0.0%0.0%0.0%0.0%
As Benefits - OtherBenefits - Other Budget 3.0%6.0%14.5%19.5%24.5%
As Benefits - MedicalBenefits - Medical Budget 6.0%5.5%5.0%5.0%5.0%
As Materials & MaintenanceMaterials & Maintenance Budget 4.0%4.0%4.0%4.0%4.0%
As AdministrativeAdministrative Budget 3.0%3.0%3.0%3.0%3.0%
As EquipmentEquipment Budget 4.0%4.0%4.0%4.0%4.0%
As MiscellaneousMiscellaneous Budget 2.0%2.0%2.0%2.0%2.0%
As FlatFlat Budget 0.0%0.0%0.0%0.0%0.0%
As UtilitiesUtilities Budget 3.0%3.0%3.0%3.0%3.0%
As PowerPower Budget 3.5%3.5%3.5%3.5%3.5%
Growth Budget 0.0%0.0%0.0%0.0%0.0%
Interest Earnings 1.2%1.3%1.5%1.6%1.8%1.9%
Revenue Bond
Term in Years 20 20 20 20 20 20
Interest Rate 5.0%5.0%5.0%5.0%5.0%5.0%
Projected
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Exhibit 3
Revenue Requirement
Budget
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Revenues
Rate Revenues
Residential $2,182,251 $2,264,467 $2,265,147 $2,265,826 $2,266,506 $2,267,186 As Customer Growth
Multi-Residential 290,154 300,629 300,719 300,809 300,899 300,989 As Customer Growth
Commercial 337,759 349,873 349,978 350,083 350,188 350,293 As Customer Growth------------------------------------------------------------------------------------------Total Rate Revenues $2,810,164 $2,914,969 $2,915,844 $2,916,719 $2,917,594 $2,918,469
Miscellaneous Revenues
Tax Revenues $51,600 $52,100 $52,600 $53,300 $54,000 $54,800 District Provided
Non-operating Revenues 35,500 35,855 36,214 36,576 36,941 37,311 As Miscellaneous Revenues
Late Fee 29,800 29,800 29,800 29,800 29,800 29,800 As Flat------------------------------------------------------------------------------------------Total Miscellaneous Revenues $116,900 $117,755 $118,614 $119,676 $120,741 $121,911
Total Revenue $2,927,064 $3,032,724 $3,034,457 $3,036,394 $3,038,335 $3,040,380
Power Costs $133,500 $138,173 $143,009 $148,014 $153,194 $158,556 As Power
Administrative Expenses
Directors Fees $0 $0 $0 $0 $0 $0 As Labor
Travel and Meetings 0 0 0 0 0 0 As Miscellaneous
Conservation and Outreach 0 0 0 0 0 0 As Labor
General Office Expense 0 0 0 0 0 0 As Materials & Maintenance
Equipment 10,900 11,336 11,789 12,261 12,751 13,262 As Equipment
Fees 4,100 4,182 4,266 4,351 4,438 4,527 As Miscellaneous
Services 82,500 82,500 82,500 82,500 82,500 82,500 As Labor
Training 0 0 0 0 0 0 As Labor
Utilities 0 0 0 0 0 0 As Utilities
Bad Debt Expense 5,200 5,304 5,410 5,518 5,629 5,741 As Miscellaneous
Interest Expense 0 0 0 0 0 0 As Miscellaneous
Other Employee Benefits 0 0 0 0 0 0 As Benefits - Other
WO Allocation - Sewer 172,500 175,950 179,469 183,058 186,720 190,454 As Miscellaneous------------------------------------------------------------------------------------------Total Administrative Expenses $275,200 $279,272 $283,434 $287,689 $292,038 $296,483
Notes
Projected
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Exhibit 3
Revenue Requirement
Budget
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Notes
Projected
Materials & Maintenance
Fuel & Oil $0 $0 $0 $0 $0 $0 As Utilities
Meters & Materials 0 0 0 0 0 0 As Materials & Maintenance
Fleet Parts & Equipment 5,000 5,200 5,408 5,624 5,849 6,083 As Equipment
Communication Equipment 0 0 0 0 0 0 As Equipment
Landscaping Materials 0 0 0 0 0 0 As Materials & Maintenance
Infrastructure Equipment & Supplies 142,800 148,512 154,452 160,631 167,056 173,738 As Equipment
Chemicals 5,900 6,018 6,138 6,261 6,386 6,514 As Miscellaneous
Safety Equipment 0 0 0 0 0 0 As Equipment
Laboratory Equipment & Supplies 8,700 9,048 9,410 9,786 10,178 10,585 As Equipment
Other Materials & Supplies 100 104 108 112 117 122 As Materials & Maintenance
Building & Grounds Materials 0 0 0 0 0 0 As Materials & Maintenance
Contracted Services 167,600 167,600 167,600 167,600 167,600 167,600 As Labor
Metro O&M Costs 820,700 919,800 1,271,500 1,139,100 819,300 852,100 District Provided
Spring Valley Sewer Charge 190,000 193,800 197,676 201,630 205,662 209,775 As Miscellaneous
Chula Vista Capacity Fee 0 0 0 0 0 0 As Miscellaneous
Metro Capacity Fee 0 0 0 0 0 0 As Miscellaneous------------------------------------------------------------------------------------------Total Materials & Maintenance $1,340,800 $1,450,082 $1,812,293 $1,690,744 $1,382,148 $1,426,517
Labor & Benefits
Labor $407,000 $407,000 $407,000 $407,000 $407,000 $407,000 As Labor
WO Allocation - Sewer 295,600 307,424 319,721 332,510 345,810 359,643 As Materials & Maintenance
Vacation/Sick/Holidays 43,000 44,290 46,947 53,755 64,237 79,975 As Benefits - Other
FICA (Soc Sec/Medicare)30,200 32,012 33,773 35,461 37,234 39,096 As Benefits - Medical
Pension 132,200 136,166 144,336 165,265 197,491 245,877 As Benefits - Other
Health/Dental/Life Insurance 103,600 109,816 115,856 121,649 127,731 134,118 As Benefits - Medical
Worker's Compensation 24,200 24,926 26,422 30,253 36,152 45,009 As Benefits - Other
Salary Continuation Insurance 1,800 1,854 1,965 2,250 2,689 3,348 As Benefits - Other
Employee Awards 0 0 0 0 0 0 As Benefits - Other
OPEB 42,800 44,084 46,729 53,505 63,938 79,603 As Benefits - Other
State Unemployment Insurance 0 0 0 0 0 0 As Benefits - Other
Employee Assistance Program 0 0 0 0 0 0 As Benefits - Other
Employee Programs 0 0 0 0 0 0 As Benefits - Other
Uniforms 0 0 0 0 0 0 As Benefits - Other------------------------------------------------------------------------------------------Total Labor & Benefits $1,080,400 $1,107,572 $1,142,749 $1,201,647 $1,282,283 $1,393,668
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Exhibit 3
Revenue Requirement
Budget
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Notes
Projected
Taxes / Transfer
General Fund $0 $0 $0 $0 $0 $0 As Miscellaneous
Betterment Fund 0 0 0 0 0 0 As Miscellaneous
Replacement Fund 0 0 0 0 0 0 As Miscellaneous
OPEB Fund 35,900 36,618 37,350 38,097 38,859 39,637 As Miscellaneous------------------------------------------------------------------------------------------Total Taxes / Transfer $35,900 $36,618 $37,350 $38,097 $38,859 $39,637
Rate Funded Capital $0 $0 $0 $0 $0 $0 FY 2016 Depr. Exp. =$1,017,180
Debt Service
Existing Debt $0 $0 $0 $0 $0 $0
New Sewer Loan 0 0 93,500 235,600 235,600 235,600 Calculated @ 1.7% for 30 yrs------------------------------------------------------------------------------------------Total Debt Service $0 $0 $93,500 $235,600 $235,600 $235,600
Total Less Replacement Reserves $0 $0 $0 $0 $0 $0
Net Debt Service $0 $0 $93,500 $235,600 $235,600 $235,600
To / (From) Reserves
To / (From) Operating Reserves ($2,039,936)($10,081)($57,344)($77,776)($0)($0)
To / (From) Replacement Reserves (156,800)(1,027,600)(171,500)0 207,887 109,650
To / (From) Betterment Reserves 2,258,000 1,168,000 87,200 0 2,200 5,800
To / (From) Expansion Reserves 0 0 0 0 0 0------------------------------------------------------------------------------------Total To / (From) Reserves $61,264 $130,319 ($141,644)($77,776)$210,087 $115,450
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Exhibit 3
Revenue Requirement
Budget
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Notes
Projected
Total Revenue Requirement $2,927,064 $3,142,036 $3,370,691 $3,524,015 $3,594,209 $3,665,911
Bal. / (Def.) of Funds $0 ($109,311)($336,233)($487,621)($555,874)($625,531)
Bal. as a % of Rate Revenues 0.0%3.7%11.5%16.7%19.1%21.4%
Proposed Rate Adjustment 0.0%7.5%7.5%2.0%2.0%2.0%
Months of Adjustment 6 6 6 6 6 6
Add'l Revenue from Adj.$0 $109,311 $336,233 $487,621 $555,874 $625,531
Total Bal. / (Def.) of Funds $0 $0 $0 $0 $0 $0
Add'l Rate Increase Needed 0.0%0.0%0.0%0.0%0.0%0.0%
Avg Residential Monthly Bill (Flat rate + 12 CCF)
After Rate Adjustment $50.32 $54.09 $58.15 $59.31 $60.50 $61.71
Annual $ Change 0.00 3.77 4.06 1.16 1.19 1.21
Debt Service Coverage Ratio
Before Rate Adjustment 0.00 0.00 N/A N/A N/A N/A
After Proposed Rate Adj.0.00 0.00 N/A N/A 2.06 1.66
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Exhibit 3
Revenue Requirement
Budget
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Notes
Projected
Sewer Operating Reserves
Beginning Cash Reserve Balance $3,312,754 $1,300,332 $1,307,090 $1,268,922 $1,210,827 $1,232,621
Plus: Additions 0 0 0 0 0 0
Interest 27,513 16,839 19,176 19,681 21,795 23,420
Less: Transfer to Betterment 0 0 0 0 0 0
Less: Uses of Funds (2,039,936)(10,081) (57,344) (77,776)(0)(0)
Ending Balance $1,300,332 $1,307,090 $1,268,922 $1,210,827 $1,232,621 $1,256,041
Target Minimum - 90 Days of O&M $697,784 $733,586 $833,791 $820,626 $766,766 $807,590
Sewer Replacement Reserves
Beginning Cash Reserve Balance $9,038,200 $8,988,918 $7,629,641 $6,216,211 $5,359,079 $4,575,580
Plus: Additions 0 0 0 0 207,887 109,650
Interest 107,518 107,323 103,071 91,867 88,614 69,073
Less: Debt Funding 0 0 0 0 0 0
Less: Uses of Funds (156,800) (1,466,600) (1,516,500) (949,000) (1,080,000) (1,990,000)
Ending Balance $8,988,918 $7,629,641 $6,216,211 $5,359,079 $4,575,580 $2,764,303
Target Minimum - 4% of current assets $1,886,901 $1,886,901 $1,886,901 $1,886,901 $1,886,901 $1,886,901
Sewer Betterment Reserves
Beginning Cash Reserve Balance $1,002,837 $1,058,129 $70,417 ($16,985) ($16,985) ($14,785)
Plus: Additions 2,258,000 1,168,000 87,200 0 2,200 5,800
Plus: Transfer From Operating 0 0 0 0 0 0
Interest 12,292 7,288 398 0 0 0
Less: Uses of Funds (2,215,000) (2,163,000)(175,000)0 0 (5,000)
Ending Balance $1,058,129 $70,417 ($16,985) ($16,985) ($14,785) ($13,985)
Target Min - 180 days of Betterment exp.$1,066,685 $86,301 $0 $0 $2,466 $2,466
Sewer Expansion Reserves
Beginning Cash Reserve Balance ($4,574)$5,431 $15,570 $25,884 $36,388 $47,145
Plus: Additions 0 0 0 0 0 0
Plus: Capacity Fees 10,000 10,003 10,006 10,009 10,012 10,015 As Customer Growth
Interest 5 136 309 494 745 991
Less: Uses of Funds 0 0 0 0 0 0
Ending Balance $5,431 $15,570 $25,884 $36,388 $47,145 $58,151
Target Min - 180 days of Expansion exp.$0 $0 $0 $0 $0 $0
Total Reserves $11,352,810 $9,022,718 $7,494,033 $6,589,308 $5,840,561 $4,064,509
Total Target $3,651,369 $2,706,788 $2,720,692 $2,707,527 $2,656,133 $2,696,956
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Sewer Cost of Service Study
Exhibit 4 Page 1 of 2
Capital Improvement Plan
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Betterment
Campo Road Sewer Main Replcmnt $2,125,000 $2,125,000 $25,000 $0 $0 $0
RWCWRF Sludge Handling System 30,000 0 0 0 0 5,000
Asset Management - Sewer Implementation 30,000 28,000 0 0 0 0
RWCWRF Aeration Controls Upgrades 30,000 10,000 150,000 0 0 0------------------------------------------------------------------------------------Total Betterment Projects $2,215,000 $2,163,000 $175,000 $0 $0 $5,000
Replacement
San Diego County Sanitation District Outfall $20,000 $200,000 $250,000 $300,000 $350,000 $400,000
Campo Road Sewer Main Replacement 2,125,000 2,125,000 25,000 0 0 0
Rancho San Diego Pump Station Rehab 5,000 5,000 5,000 444,000 0 0
Sewer System Rehabilitation 10,000 10,000 0 0 0 0
Trenchless Sewer Rehabilitation 75,000 5,000 0 0 0 0
Fuerte Drive Sewer Relocation 50,000 130,000 0 0 0 0
RWCWRF - Aeration Panels Replacement 50,000 100,000 200,000 0 0 0
Hillsdale Road Sewer Repairs 400,000 270,000 0 0 0 0
Calavo Basin Sewer Rehabilitation - Phase 2 19,000 130,000 845,000 5,000 0 0
Rancho San Diego Basin Sewer Rehab - Phase 2 0 0 20,000 180,000 550,000 500,000
RWCWRF - Headworks Improvements 50,000 100,000 0 0 0 0
RWCWRF - Sedimentation Basins Weirs Replcmnt 60,000 0 0 0 0 0
Calavo Basin Sewer Rehabilitation - Phase 3 0 0 0 20,000 180,000 1,090,000------------------------------------------------------------------------------------Total Replacement Projects $2,864,000 $3,075,000 $1,345,000 $949,000 $1,080,000 $1,990,000
Notes
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Sewer Cost of Service Study
Exhibit 4 Page 2 of 2
Capital Improvement Plan
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Notes
Future Unidentified CIP $0 $0 $0 $0 $0 $0
Total Capital Projects $5,079,000 $5,238,000 $1,520,000 $949,000 $1,080,000 $1,995,000
Less: Other Funding Sources
Sewer Operating Reserves $0 $0 $0 $0 $0 $0
Sewer Replacement Reserves 0 439,000 1,345,000 949,000 1,080,000 1,990,000
Sewer Betterment Reserves 2,215,000 2,163,000 175,000 0 0 5,000
Sewer Expansion Reserves 0 0 0 0 0 0
New Long Term Debt 2,864,000 2,636,000 0 0 0 0------------------------------------------------------------------------------------Total Less: Other Funding Sources $5,079,000 $5,238,000 $1,520,000 $949,000 $1,080,000 $1,995,000
Rate Funded Capital $0 $0 $0 $0 $0 $0
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Exhibit 5
Revenues at Present Rates
1-Jan-17 1-Jan-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Total
Residential
Fixed Charge
Monthly System Fee $15.89 $17.08 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552-------------------------------------------------------------------------------------------------------------------------------------------------$72,331 $72,331 $72,331 $72,331 $72,331 $72,331 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $900,477
Consumption Charge
Billed @ 85% of WW Avg $2.58 $2.77 43,610 43,610 43,610 43,610 43,610 43,610 36,504 36,504 36,504 36,504 36,504 36,504 480,682--------------------------------------------------------------------------------------------------------------------------------------------------------------$112,513 $112,513 $112,513 $112,513 $112,513 $112,513 $101,116 $101,116 $101,116 $101,116 $101,116 $101,116 $1,281,775
Total Residential Revenue $184,844 $184,844 $184,844 $184,844 $184,844 $184,844 $178,864 $178,864 $178,864 $178,864 $178,864 $178,864 $2,182,251
Multi-Residential
Fixed Charge
3/4"$28.37 $30.50 0 0 0 0 0 0 0 0 0 0 0 0 0
1"41.80 44.94 0 0 0 0 0 0 0 0 0 0 0 0 0
1 1/2"75.27 80.92 0 0 0 0 0 0 0 0 0 0 0 0 0
2"115.46 124.12 39 39 39 39 39 39 39 39 39 39 39 39 39
3"209.24 224.93 5 5 5 5 5 5 5 5 5 5 5 5 5
4"343.23 368.97 6 6 6 6 6 6 6 6 6 6 6 6 6
6"678.18 729.04 0 0 0 0 0 0 0 0 0 0 0 0 0
8"1,080.14 1,161.15 0 0 0 0 0 0 0 0 0 0 0 0 0
10"1,549.07 1,665.25 0 0 0 0 0 0 0 0 0 0 0 0 0--------------------------------------------------------------------------------------------------------50 50 50 50 50 50 50 50 50 50 50 50 50
Consumption Charge
Billed @ 85% of WW Avg $2.58 $2.77 6,185 6,185 6,185 6,185 6,185 6,185 5,998 5,998 5,998 5,998 5,998 5,998 73,097------------------------------------------------------------------------------------------------------------------------------------------------------------$15,956 $15,956 $15,956 $15,956 $15,956 $15,956 $16,615 $16,615 $16,615 $16,615 $16,615 $16,615 $195,428
Total Multi-Residential Revenue $23,565 $23,565 $23,565 $23,565 $23,565 $23,565 $24,794 $24,794 $24,794 $24,794 $24,794 $24,794 $290,154
Rates Effective
$ / CCF
$ / Acct. / Mo.
$ / Acct. / Mo.
$ / CCF
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Exhibit 5
Revenues at Present Rates
1-Jan-17 1-Jan-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Total
Rates Effective
Commercial
Fixed Charge
3/4"$28.37 $30.50 22 22 22 22 22 22 22 22 22 22 22 22 22
1"41.80 44.94 5 5 5 5 5 5 5 5 5 5 5 5 5
1 1/2"75.27 80.92 20 20 20 20 20 20 20 20 20 20 20 20 20
2"115.46 124.12 24 24 24 24 24 24 24 24 24 24 24 24 24
3"209.24 224.93 1 1 1 1 1 1 1 1 1 1 1 1 1
4"343.23 368.97 0 0 0 0 0 0 0 0 0 0 0 0 0
6"678.18 729.04 1 1 1 1 1 1 1 1 1 1 1 1 1
8"1,080.14 1,161.15 0 0 0 0 0 0 0 0 0 0 0 0 0
10"1,549.07 1,665.25 2 2 2 2 2 2 2 2 2 2 2 2 2-------------------------------------------------------------------------------------------------------- 75 75 75 75 75 75 75 75 75 75 75 75 75
Consumption Charge (85% of water use)
Low Strength $2.58 $2.77 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 21,185
Medium Strength 3.70 3.98 754 754 754 754 754 754 754 754 754 754 754 754 9,050
High Strength 5.90 6.34 444 444 444 444 444 444 444 444 444 444 444 444 5,333
Schools 2.58 2.77 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 33,489
Churches 2.58 2.77 339 339 339 339 339 339 339 339 339 339 339 339 4,068-----------------------------------------------------------------------------------------------------------------------------------------------6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 73,125
Total Commercial Revenue $27,137 $27,137 $27,137 $27,137 $27,137 $27,137 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $337,759
$ / CCF
$ / Acct. / Mo.
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Exhibit 5
Revenues at Present Rates
1-Jan-17 1-Jan-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Total
Rates Effective
Summary
Customers
Residential 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552
Multi-Residential 50 50 50 50 50 50 50 50 50 50 50 50 50
Commercial 75 75 75 75 75 75 75 75 75 75 75 75 75--------------------------------------------------------------------------------------------------------4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677
Consumption
Residential (85% of WW avg)43,610 43,610 43,610 43,610 43,610 43,610 36,504 36,504 36,504 36,504 36,504 36,504 480,682
Multi-Residential (85% of WW avg)6,185 6,185 6,185 6,185 6,185 6,185 5,998 5,998 5,998 5,998 5,998 5,998 73,097
Commercial (85% of annual use)6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 73,125--------------------------------------------------------------------------------------------------------55,888 55,888 55,888 55,888 55,888 55,888 48,596 48,596 48,596 48,596 48,596 48,596 626,904
Revenue
Residential $184,844 $184,844 $184,844 $184,844 $184,844 $184,844 $178,864 $178,864 $178,864 $178,864 $178,864 $178,864 $2,182,251
Multi-Residential 23,565 23,565 23,565 23,565 23,565 23,565 24,794 24,794 24,794 24,794 24,794 24,794 290,154
Commercial 27,137 27,137 27,137 27,137 27,137 27,137 29,156 29,156 29,156 29,156 29,156 29,156 337,759-----------------------------------------------------------------------------------------------------------------------------------------------$235,546 $235,546 $235,546 $235,546 $235,546 $235,546 $232,815 $232,815 $232,815 $232,815 $232,815 $232,815 $2,810,164
FY 2018 Budget $2,839,600
Difference ($29,436)
Percent -1.0%
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Exhibit 5
Revenues at Present Rates - FY 2019
Rates Effective
1-Jan-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Total
Residential
Fixed Charge $ / Acct. / Mo.
Monthly System Fee $17.08 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552-------------------------------------------------------------------------------------------------------------------------------------------------$77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $77,748 $932,978
Consumption Charge $ / CCF
Billed @ 85% of WW Avg $2.77 43,610 43,610 43,610 43,610 43,610 43,610 36,504 36,504 36,504 36,504 36,504 36,504 480,682--------------------------------------------------------------------------------------------------------------------------------------------------------------$120,799 $120,799 $120,799 $120,799 $120,799 $120,799 $101,116 $101,116 $101,116 $101,116 $101,116 $101,116 $1,331,490
Total Residential Revenue $198,547 $198,547 $198,547 $198,547 $198,547 $198,547 $178,864 $178,864 $178,864 $178,864 $178,864 $178,864 $2,264,467
Multi-Residential
Fixed Charge $ / Acct. / Mo.
3/4"$30.50 0 0 0 0 0 0 0 0 0 0 0 0 0
1"44.94 0 0 0 0 0 0 0 0 0 0 0 0 0
1 1/2"80.92 0 0 0 0 0 0 0 0 0 0 0 0 0
2"124.12 39 39 39 39 39 39 39 39 39 39 39 39 39
3"224.93 5 5 5 5 5 5 5 5 5 5 5 5 5
4"368.97 6 6 6 6 6 6 6 6 6 6 6 6 6
6"729.04 0 0 0 0 0 0 0 0 0 0 0 0 0
8"1,161.15 0 0 0 0 0 0 0 0 0 0 0 0 0
10"1,665.25 0 0 0 0 0 0 0 0 0 0 0 0 0--------------------------------------------------------------------------------------------------------50 50 50 50 50 50 50 50 50 50 50 50 50
Consumption Charge $ / CCF
Billed @ 85% of WW Avg $2.77 6,185 6,185 6,185 6,185 6,185 6,185 5,998 5,998 5,998 5,998 5,998 5,998 73,097------------------------------------------------------------------------------------------------------------------------------------------------------------$17,131 $17,131 $17,131 $17,131 $17,131 $17,131 $16,615 $16,615 $16,615 $16,615 $16,615 $16,615 $202,479
Total Multi-Residential Revenue $25,310 $25,310 $25,310 $25,310 $25,310 $25,310 $24,794 $24,794 $24,794 $24,794 $24,794 $24,794 $300,629
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Exhibit 5
Revenues at Present Rates - FY 2019
Rates Effective
1-Jan-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Total
Commercial
Fixed Charge $ / Acct. / Mo.
3/4"$30.50 22 22 22 22 22 22 22 22 22 22 22 22 22
1"44.94 5 5 5 5 5 5 5 5 5 5 5 5 5
1 1/2"80.92 20 20 20 20 20 20 20 20 20 20 20 20 20
2"124.12 24 24 24 24 24 24 24 24 24 24 24 24 24
3"224.93 1 1 1 1 1 1 1 1 1 1 1 1 1
4"368.97 0 0 0 0 0 0 0 0 0 0 0 0 0
6"729.04 1 1 1 1 1 1 1 1 1 1 1 1 1
8"1,161.15 0 0 0 0 0 0 0 0 0 0 0 0 0
10"1,665.25 2 2 2 2 2 2 2 2 2 2 2 2 2-------------------------------------------------------------------------------------------------------- 75 75 75 75 75 75 75 75 75 75 75 75 75
Consumption Charge (85% of water use)$ / CCF
Low Strength $2.77 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 1,765 21,185
Medium Strength 3.98 754 754 754 754 754 754 754 754 754 754 754 754 9,050
High Strength 6.34 444 444 444 444 444 444 444 444 444 444 444 444 5,333
Schools 2.77 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 2,791 33,489
Churches 2.77 339 339 339 339 339 339 339 339 339 339 339 339 4,068-----------------------------------------------------------------------------------------------------------------------------------------------6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 73,125
Total Commercial Revenue $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $29,156 $349,873
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Exhibit 5
Revenues at Present Rates - FY 2019
Rates Effective
1-Jan-18 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Total
Summary
Customers
Residential 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552 4,552
Multi-Residential 50 50 50 50 50 50 50 50 50 50 50 50 50
Commercial 75 75 75 75 75 75 75 75 75 75 75 75 75--------------------------------------------------------------------------------------------------------4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677 4,677
Consumption
Residential (85% of WW avg)43,610 43,610 43,610 43,610 43,610 43,610 36,504 36,504 36,504 36,504 36,504 36,504 480,682
Multi-Residential (85% of WW avg)6,185 6,185 6,185 6,185 6,185 6,185 5,998 5,998 5,998 5,998 5,998 5,998 73,097
Commercial (85% of annual use)6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 6,094 73,125--------------------------------------------------------------------------------------------------------55,888 55,888 55,888 55,888 55,888 55,888 48,596 48,596 48,596 48,596 48,596 48,596 626,904
Revenue
Residential $198,547 $198,547 $198,547 $198,547 $198,547 $198,547 $178,864 $178,864 $178,864 $178,864 $178,864 $178,864 $2,264,467
Multi-Residential 25,310 25,310 25,310 25,310 25,310 25,310 24,794 24,794 24,794 24,794 24,794 24,794 300,629
Commercial 29,156 29,156 29,156 29,156 29,156 29,156 29,156 29,156 29,156 29,156 29,156 29,156 349,873-----------------------------------------------------------------------------------------------------------------------------------------------$253,013 $253,013 $253,013 $253,013 $253,013 $253,013 $232,815 $232,815 $232,815 $232,815 $232,815 $232,815 $2,914,969
FY 2018 Budget $2,839,600
Difference $75,369
Percent 2.7%
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Exhibit 6
Volume Allocation Factor
FY 2017 10%Total Annual Avg. Daily
Flow Inflow and Flow at Plant Flow At % of
(CCF) [1]Infiltration (CCF)Plant (MGD)Total
Residential 480,682 48,068 528,750 1.08 76.7%
Multi-Residential 73,097 7,310 80,407 0.16 11.7%
Commercial
Low StrengthLow Strength 58,742 5,874 64,616 0.13 9.4%
Medium StrengthMedium Strength 9,050 905 9,955 0.02 1.4%
High StrengthHigh Strength 5,333 533 5,866 0.01 0.9%0 -----------------------------------------------------------Total 626,904 62,690 689,594 1.41 100.0%
Actual Flows [2]0
(VOL)
Notes
[1] - Increased by 15% to account for billing discount
[2] - Provided by District
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Exhibit 7
Customer Allocation Factors
Number of % of Number of Weighting Weighted % of
Bills [1]Total Bills Factor [2]Customer Total
Residential 4,552 97.3%4,552 1.00 4,552 79.6%
Multi-Residential 50 1.1%50 10.74 537 9.4%
Commercial 75 1.6%75 8.43 633 11.1%-----------------------------------------------------Total 4,677 100.0%4,677 5,722 100.0%
(AC)(WCA)
Notes
[1] - Based on FY 2017 Billing Data
[2] - Developed in the weighted meter exhibit Table 1
Actual Customer Weighted Customer
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Exhibit 8
Strength Allocation Factors
Annual Flow Avg. Factor Calculated % of Avg. Factor Calculated % of
(MG)(mg/l) Pounds [1]Total (mg/l)Pounds [1]Total
Residential 396 200 0.66 73.1%200 0.66 74.3%
Multi-Residential 60 200 0.10 11.1%200 0.10 11.3%
Commercial
Low StrengthLow Strength 48 200 0.08 8.9%200 0.08 9.1%
Medium StrengthMedium Strength 7 400 0.02 2.8%400 0.02 2.8%
High StrengthHigh Strength 4 1,000 0.04 4.1%600 0.02 2.5%------------------------------------------------------Total 516 0.90 100.0%0.89 100.0%
(BOD)(SS)
Notes
[1] - Calculated Pounds = Annual Flow * Strength Factor * (8.345 lbs / One Million Gallons)
Suspended SolidsBiological Oxygen Demand
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Exhibit 9
Revenue Allocation Factor
Projected % of
FY 2019 Total
Residential $2,264,467 77.7%
Multi-Residential 300,629 10.3%
Commercial 349,873 12.0%-------------------------Total $2,914,969 100.0%
(RR)
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Development of Equivalent Meter Allocation Factor
Table 1
3/4"1"1 1/2"2"3"4"6"8"10"Total % of Total Factor
Residential 4,552 0 0 0 0 0 0 0 0 4,552 97.3%
Multi-Residential 0 0 0 39 5 6 0 0 0 50 1.1%
Commercial 22 5 20 24 1 0 1 0 2 75 1.6%----------------------------------------------------------------------------------------------------Total Meters 4,574 5 20 63 6 6 1 0 2 4,677
District Weighting [2]1.50 2.50 5.00 8.00 15.00 25.00 50.00 80.00 115.00
Residential 4,552 0 0 0 0 0 0 0 0 4,552 79.6%1.00
Multi-Residential 0 0 0 312 75 150 0 0 0 537 9.4%10.74
Commercial 33 13 100 192 15 0 50 0 230 633 11.1%8.43--------------------------------------------------------------------------------------------------------------4,585 13 100 504 90 150 50 0 230 5,722
Notes
[1] - Provided by the City
[2] - Based on AWWA 5/8" capacity ratios
[3] - Residential set at 5/8" equivalent
Number of Meters
Equivalent Meters
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Exhibit 10
Net Plant In Service
Operating Bio-oxygen Suspended Actual Customer Revenue Direct
As of:Volume Demand Solids Customer Acct/Svcs Related Assignment
07/31/17 (VOL)(BOD)(SS)(AC) (WCA)(RR)(DA)
Collection $15,420,555 $13,107,472 $0 $0 $0 $2,313,083 $0 $0 85.0% VOL 15.0%WCA
Treatment $434,162 $173,665 $130,248 $130,248 $0 $0 $0 $0 40.0%VOL 30.0%BOD 30.0%SS
Lift Station $0 $0 $0 $0 $0 $0 $0 $0 100.0%VOL
Plant Before General Plant $15,854,717 $13,281,137 $130,248 $130,248 $0 $2,313,083 $0 $0
% Plant Before General Plant 100.0%83.8%0.8% 0.8% 0.0%14.6%0.0%0.0% Factor PBGP
General Plant $0 $0 $0 $0 $0 $0 $0 $0 As Factor PBGP
Total Net Plant In Service $15,854,717 $13,281,137 $130,248 $130,248 $0 $2,313,083 $0 $0
Strength Related Weighted
Basis of Classification
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Exhibit 11.1
Classification of the Revenue Requirement
Operating Bio-oxygen Suspended Actual Customer Revenue Direct
Test Year Volume Demand Solids Customer Acct/Svcs Related Assignment
FY 2019 (VOL)(BOD)(SS)(AC)(WCA)(RR)(DA)
Power Costs $138,173 $138,173 $0 $0 $0 $0 $0 $0 100.0%VOL
Administrative Expenses
Directors Fees $0 $0 $0 $0 $0 $0 $0 $0 100.0%WCA
Travel and Meetings 0 0 0 0 0 0 0 0 100.0%WCA
Conservation and Outreach 0 0 0 0 0 0 0 0 100.0%WCA
General Office Expense 0 0 0 0 0 0 0 0 100.0%WCA
Equipment 11,336 0 0 0 0 11,336 0 0 100.0%WCA
Fees 4,182 0 0 0 0 4,182 0 0 100.0%WCA
Services 82,500 0 0 0 0 82,500 0 0 100.0%WCA
Training 0 0 0 0 0 0 0 0 100.0%WCA
Utilities 0 0 0 0 0 0 0 0 100.0%WCA
Bad Debt Expense 5,304 0 0 0 0 5,304 0 0 100.0%WCA
Interest Expense 0 0 0 0 0 0 0 0 100.0%WCA
Other Employee Benefits 0 0 0 0 0 0 0 0 100.0%WCA
WO Allocation - Sewer 175,950 147,389 1,445 1,445 0 25,670 0 0 As Net Plant In Service------------------------------------------------------------------------------------------------------------------------Total Administrative Expenses $279,272 $147,389 $1,445 $1,445 $0 $128,992 $0 $0
Materials & Maintenance
Fuel & Oil $0 $0 $0 $0 $0 $0 $0 $0 As Net Plant In Service
Meters & Materials 0 0 0 0 0 0 0 0 100.0%WCA
Fleet Parts & Equipment 5,200 0 0 0 0 5,200 0 0 100.0%WCA
Communication Equipment 0 0 0 0 0 0 0 0 100.0%WCA
Landscaping Materials 0 0 0 0 0 0 0 0 100.0%WCA
Infrastructure Equipment & Supplies 148,512 124,405 1,220 1,220 0 21,667 0 0 As Net Plant In Service
Chemicals 6,018 5,041 49 49 0 878 0 0 As Net Plant In Service
Safety Equipment 0 0 0 0 0 0 0 0 100.0%WCA
Laboratory Equipment & Supplies 9,048 0 0 0 0 9,048 0 0 100.0%WCA
Other Materials & Supplies 104 0 0 0 0 104 0 0 100.0%WCA
Building & Grounds Materials 0 0 0 0 0 0 0 0 100.0%WCA
Contracted Services 167,600 140,395 1,377 1,377 0 24,452 0 0 As Net Plant In Service
Metro O&M Costs 919,800 450,702 221,672 247,426 0 0 0 0 49.0%VOL 24.1%BOD 26.9%SS
Spring Valley Sewer Charge 193,800 193,800 0 0 0 0 0 0 100.0%VOL
Chula Vista Capacity Fee 0 0 0 0 0 0 0 0 As Net Plant In Service
Metro Capacity Fee 0 0 0 0 0 0 0 0 As Net Plant In Service------------------------------------------------------------------------------------------------------------------------Total Materials & Maintenance $1,450,082 $914,343 $224,318 $250,073 $0 $61,348 $0 $0
Weighted for:Strength Related
Basis of Classification
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Exhibit 11.1
Classification of the Revenue Requirement
Operating Bio-oxygen Suspended Actual Customer Revenue Direct
Test Year Volume Demand Solids Customer Acct/Svcs Related Assignment
FY 2019 (VOL)(BOD)(SS)(AC) (WCA)(RR)(DA)
Weighted for:Strength Related
Basis of Classification
Labor & Benefits
Labor $407,000 $0 $0 $0 $0 $407,000 $0 $0 100.0%WCA
WO Allocation - Sewer 307,424 257,522 2,526 2,526 0 44,851 0 0 As Net Plant In Service
Vacation/Sick/Holidays 44,290 0 0 0 0 44,290 0 0 100.0%WCA
FICA (Soc Sec/Medicare)32,012 0 0 0 0 32,012 0 0 100.0%WCA
Pension 136,166 0 0 0 0 136,166 0 0 100.0%WCA
Health/Dental/Life Insurance 109,816 0 0 0 0 109,816 0 0 100.0%WCA
Worker's Compensation 24,926 0 0 0 0 24,926 0 0 100.0%WCA
Salary Continuation Insurance 1,854 0 0 0 0 1,854 0 0 100.0%WCA
Employee Awards 0 0 0 0 0 0 0 0 100.0%WCA
OPEB 44,084 0 0 0 0 44,084 0 0 100.0%WCA
State Unemployment Insurance 0 0 0 0 0 0 0 0 100.0%WCA
Employee Assistance Program 0 0 0 0 0 0 0 0 100.0%WCA
Employee Programs 0 0 0 0 0 0 0 0 100.0%WCA
Uniforms 0 0 0 0 0 0 0 0 100.0%WCA------------------------------------------------------------------------------------------------------------------------Total Labor & Benefits $1,107,572 $257,522 $2,526 $2,526 $0 $844,999 $0 $0
Total Operations & Maintenance $2,975,099 $1,457,427 $228,289 $254,044 $0 $1,035,339 $0 $0
Taxes / Transfer
General Fund $0 $0 $0 $0 $0 $0 $0 $0 100.0%WCA
Betterment Fund 0 0 0 0 0 0 0 0 100.0%WCA
Replacement Fund 0 0 0 0 0 0 0 0 100.0%WCA
OPEB Fund 36,618 0 0 0 0 36,618 0 0 100.0%WCA------------------------------------------------------------------------------------------------------------------------Total Taxes / Transfer $36,618 $0 $0 $0 $0 $36,618 $0 $0
Rate Funded Capital $0 $0 $0 $0 $0 $0 $0 $0 As Total O&M Expenses
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Exhibit 11.1
Classification of the Revenue Requirement
Operating Bio-oxygen Suspended Actual Customer Revenue Direct
Test Year Volume Demand Solids Customer Acct/Svcs Related Assignment
FY 2019 (VOL)(BOD)(SS)(AC) (WCA)(RR)(DA)
Weighted for:Strength Related
Basis of Classification
Debt Service
Existing Debt $0 $0 $0 $0 $0 $0 $0 $0 As Total O&M Expenses
New Sewer Loan 0 0 0 0 0 0 0 0 As Total O&M Expenses------------------------------------------------------------------------------------------------------------------------Total Debt Service $0 $0 $0 $0 $0 $0 $0 $0
Total Less Replacement Reserves $0 $0 $0 $0 $0 $0 $0 $0 As Total O&M Expenses
Net Debt Service $0 $0 $0 $0 $0 $0 $0 $0
To / (From) Reserves
To / (From) Operating Reserves ($10,081)$0 $0 $0 $0 ($10,081)$0 $0 100.0%WCA
To / (From) Replacement Reserves (1,027,600)0 0 0 0 (1,027,600)0 0 100.0%WCA
To / (From) Betterment Reserves 1,168,000 0 0 0 0 1,168,000 0 0 100.0%WCA
To / (From) Expansion Reserves 0 0 0 0 0 0 0 0 100.0%WCA
Mid-Year Adjustment Revenue (109,311) (53,549) (8,388) (9,334)0 (38,041)0 0 As Total O&M Expenses------------------------------------------------------------------------------------------------------------------------Total To / (From) Reserves $21,008 ($53,549) ($8,388) ($9,334)$0 $92,279 $0 $0
Total Revenue Requirement $3,032,724 $1,403,878 $219,901 $244,709 $0 $1,164,236 $0 $0
Less: Miscellaneous Revenue
Tax Revenues $52,100 $24,118 $3,778 $4,204 $0 $20,001 $0 $0 As Total Revenue Requirements
Non-operating Revenues 35,855 16,598 2,600 2,893 0 13,764 0 0 As Total Revenue Requirements
Late Fee 29,800 0 0 0 0 29,800 0 0 100.0%WCA------------------------------------------------------------------------------------------------Total Miscellaneous Revenues $117,755 $40,715 $6,378 $7,097 $0 $63,565 $0 $0
Net Revenue Requirement $2,914,969 $1,363,163 $213,524 $237,612 $0 $1,100,671 $0 $0
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Exhibit 12
Allocation of Total Revenue Requirement
FY 2019
Expenses
Volume Related $1,363,163 $1,045,213 $158,945 $127,730 $19,679 $11,596 (VOL)
Strength Related
Bio-oxygen Demand $213,524 $156,153 $23,746 $19,083 $5,880 $8,662 (BOD)
Suspended Solids 237,612 176,636 26,861 21,586 6,651 5,879 (SS)------------------------------------------------------------------------------Total Strength Related $451,136 $332,789 $50,607 $40,668 $12,531 $14,541
Customer Related
Actual Customer $0 $0 $0 $0 (AC)
Weighted Customer 1,100,671 875,689 103,305 121,677 (WCA)----------------------------------------------------Total Customer Related $1,100,671 $875,689 $103,305 $121,677
Revenue Related $0 $0 $0 $0 (RR)
Direct Assignment $0 $0 $0 $0 (DA)
Total Revenue Requirements $2,914,969 $2,253,690 $312,857 $290,076 $32,210 $26,137
High
Strength
Medium
StrengthLow Strength
Multi-
ResidentialResidential Basis of Allocation
Commercial
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Exhibit 13
Cost of Service Analysis Summary
Revenues at Present Rates $2,914,969 $2,264,467 $300,629 $349,873
Allocated Revenue Requirement $2,914,969 $2,253,690 $312,857 $348,422--------------------------------------------------------Balance/(Deficiency) of Funds $0 $10,777 ($12,228)$1,451
Required % Change in Rates 0.0%-0.5%4.1%-0.4%
Residential Commercial
Multi-
Residential
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Exhibit 14
Average Unit Costs Summary
Volume Costs - $/CCF $2.23 $2.17 $2.17 $2.17 $2.17 $2.17
Strength Costs - $/CCF $0.74 $0.69 $0.69 $0.69 $1.38 $2.73
Revenue/Direct - $/CCF $0.00 $0.00 $0.00 $0.00 $0.00 $0.00------------------------------------------------------------Total $/CCF $2.96 $2.87 $2.87 $2.87 $3.56 $4.90
Current Rates (1.1.18)$2.77 $2.77 $2.77 $3.98 $6.34
Customer Costs - $/Customer/Month $16.03 $16.03 $16.03
Current Rates (1.1.18) + Rate Adj $17.08 $30.50 $30.50 $30.50 $30.50
Total Average Cost - $/Cust/Month $42.46 $41.26 $48.55 $45.91
Alloc RevReq/Consumption $4.76 $4.69 $0.00 $5.93
Rev Req/Consumption 4.76 4.71 0.00 5.96
Basic Data
Annual Flow - 100 CF 612,521 480,682 73,097 58,742 9,050 5,333
Number of Actual Customers 4,677 4,552 50 75
Number of Equiv. Customers 5,722 4,552 537 633
Multi-
ResidentialResidential
$16.03
Commercial
High
Strength
Medium
StrengthLow Strength
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STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: March 7, 2018
SUBMITTED BY:
Dan Martin
Engineering Manager
PROJECT: VARIOUS DIV. NO. ALL
APPROVED BY:
Rod Posada, Chief, Engineering
Mark Watton, General Manager
SUBJECT: Informational Item – Second Quarter Fiscal Year 2018 Capital
Improvement Program Report
GENERAL MANAGER’S RECOMMENDATION:
No recommendation. This is an informational item only.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To update the Board about the status of all CIP project expenditures
and to highlight significant issues, progress, and milestones on
major projects.
ANALYSIS:
To keep up with growth and to meet our ratepayers' expectations to
adequately deliver safe, reliable, cost-effective, and quality water,
each year the District staff prepares a Six-Year CIP Plan that
identifies the District’s infrastructure needs. The CIP is comprised
of four categories consisting of backbone capital facilities,
replacement/renewal projects, capital purchases, and developer's
reimbursement projects.
The Second Quarter Fiscal Year 2018 update is intended to provide a
detailed analysis of progress in completing these projects within the
allotted time and budget of $20.1 million. Expenditures through the
Second Quarter totaled approximately $5.8 million. Approximately 29%
of the Fiscal Year 2018 expenditure budget was spent (see Attachment
B).
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
No fiscal impact as this is an informational item only.
STRATEGIC GOAL:
The Capital Improvement Program supports the District’s Mission
statement, “To provide high value water and wastewater services to
the customers of the Otay Water District in a professional,
effective, and efficient manner” and the District’s Vision, “A
District that is at the forefront in innovations to provide water
services at affordable rates, with a reputation for outstanding
customer service.”
LEGAL IMPACT:
None.
DM/RP:jf
P:\Forms\D-Construction\CIP Quarterly Reports\CIP Qtr Reports\FY 2018\Q2\Staff Report\BD 03-07-18 Staff
Report Second Quarter FY 2018 CIP Report (DM-RP).docx
Attachments: Attachment A – Committee Action
Attachment B - Fiscal Year 2018 Second Quarter CIP
Expenditure Report
Attachment C – Presentation
ATTACHMENT A
SUBJECT/PROJECT:
VARIOUS
Informational Item – Second Quarter Fiscal Year 2018
Capital Improvement Program Report
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee (Committee)
reviewed this item at a Committee Meeting held on February 20, 2018,
and the following comments were made:
Staff reviewed the PowerPoint presentation with the Committee
and indicated that the expenditures through the second quarter
of FY 2018 totaled $5.8 million, which is about 29% of the
District’s fiscal year budget.
Staff indicated that the District’s FY 2018 CIP budget consists
of 87 projects that total $20.1 million and is divided into
four categories:
o Capital Facilities= $1.4 million
o Replacement/Renewal= $18.3 million
o Capital Purchases= $0.4 million
o Developer Reimbursement= $45.0 thousand
The PowerPoint presentation included the following:
o Total Life-to-Date Expenditures
o CIP Budget Forecast vs. Expenditures
o Major CIP Projects
o CIP Projects in Construction
o Construction Contract Status of projects, contract amount
with allowances, net change orders, and percent of project
completion
o Consultant Contract Status of contract amounts, approve
payments to date, change orders, dates when contracts were
signed and the end date of contracts
Staff stated that during the second quarter of FY 2018 the rate
for Change Orders with Allowance Credit equaled to -2.7%.
Staff stated that although the 978-1 & 850-2 Reservoirs
Interior/Exterior Coating & Upgrades Project (P2534/02544) was
behind schedule, the 850-2 Reservoir was back in service in
January 2018. It was noted that a punch list is currently in
progress for the 850-2 Reservoir. The District has deducted
approximately $250,000 out of the developer’s progress pay
applications for liquidated damages associated with late
delivery of the Project.
In response to a question from the Committee, staff stated that
they will look into bringing forward other projects to help
meet the CIP Budget Expenditure goal for Fiscal Year 2018.
Following the discussion, the Committee supported staffs’
recommendation and presentation to the full board as an informational
item.
FISCAL YEAR 2018 2nd QUARTER REPORT
(Expenditures through 12/31/2017)
($ In Thousands)
ATTACHMENT B
2018 12/31/17
CIP No.Description
Project
Manager
FY 2018
Budget Expenses Balance
Expense to
Budget %Budget Expenses Balance
Expense to
Budget %Comments
CAPITAL FACILITY PROJECTS -
P2040 Res - 1655-1 Reservoir 0.5 MG Cameron 20$ 12$ 8$ 60%3,400$ 514$ 2,886$ 15%
Project is in the early Planning stage.
Construction is scheduled for FY 2020.
P2267 36-Inch Main Pumpouts and Air/Vacuum Ventilation Installations Marchioro 10 4 6 40%700 697 3 100%
Construction completed in FY 2017 Q4. Project one year warranty scheduled to complete in FY
2018 Q4.
P2382 Safety and Security Improvements Payne 150 158 (8) 105%3,251 2,965 286 91%
For FY 2018, advancing $50K from FY 2019. CIP
to close at the end of FY 2019.
P2405 PL - 624/340 PRS, Paseo Ranchero and Otay Valley Road Cameron 5 - 5 0%650 - 650 0%
This project is tied to P2553 and is driven by the
City of Chula Vista. Construction is scheduled for FY 2022.
P2451 Otay Mesa Desalination Conveyance and Disinfection System Kennedy 50 41 9 82%4,300 3,806 494 89%
EIR/EIS complete and Presidential Permit issued.
Continue meetings with DDW and AdR.
P2453 SR-11 Utility Relocations Marchioro 50 19 31 38%4,000 1,640 2,360 41%
Project accelerated to meet Caltrans' current
schedule. Completion of Design phase scheduled March 2018. Completion of
construction dependent on Caltrans' contractor
and anticipated for FY 2020.
P2460 I.D. 7 Trestle and Pipeline Demolition Beppler 5 - 5 0%600 5 595 1%
Demolition scheduled for FY 2020; environmental work to be performed in FY 2019.
P2485 SCADA - Infrastructure and Communications Replacement Kerr 181 148 33 82%2,328 1,921 407 83%Expenses on target for remainder of fiscal year.
P2494 Multiple Species Conservation Plan Coburn-Boyd 30 1 29 3%950 909 41 96%Project on schedule.
P2500 Padre Dam - Otay Interconnection Dehesa Valley Marchioro 60 - 60 0%140 - 140 0%
Project is driven by Padre Dam pipeline extension
to District boundary.
P2504 Regulatory Site Access Road and Pipeline Relocation Cameron 20 - 20 0%462 331 131 72%Project is driven by County Fire.
P2516 PL - 12-Inch, 640 Zone, Jamacha Road - Darby/Osage Marchioro - - - 0%900 - 900 0%
No project expenditures anticipated in FY 2018.
Construction scheduled for FY 2021.
P2520 Motorola Mobile Radio Upgrade Martinez 30 - 30 0%120 82 38 68%
Anticipate this project to be completed this Fiscal Year.
P2521 Large Meter Vault Upgrade Program Carey 25 38 (13) 152%620 300 320 48%
2nd meter raise from Crossroads carried over
from FY17 to FY18. No other work planned for
FY18. Expenditures within overall project budget.
P2547 District Administration Vehicle Charging Stations Cameron 20 36 (16) 180%125 69 56 55%
Construction completed in FY 2018 Q2. Project one year warranty scheduled to complete in FY
2019 Q2. Expenditures originally anticipated for
FY 2017 Q4 occurred in FY 2018. Expenditures
within overall project budget.
P2553 Heritage Road Bridge Replacement and Utility Relocation Cameron 50 4 46 8%1,430 19 1,411 1%
Project is in the Planning stage. Project is driven
by the City of Chula Vista's schedule for
replacement.
P2568 Technology Business Processes Improvement - Enterprise Content Management System Kerr 36 64 (28) 178%245 210 35 86%
Purchases from FY 2017 were expensed in Q1 FY 2018. Budget of $36K on target to be
expensed in FY 2018. Expenditures within overall
project budget. This CIP will be closed at the end
of FY 2018.
P2571 Datacenter Network- Data, Storage, and Infrastructure Enhancements Kerr - - - 0%200 - 200 0%Project on schedule for FY 2019.
P2572 Enterprise Resource Planning (ERP) Replacement Kerr - - - 0%500 - 500 0%Project on schedule for FY 2021.
P2584 Res - 657-1 and 657-2 Reservoir Demolitions Marchioro - - - 0%35 - 35 0%
No expenditures anticipated in FY 2018. These
reservoirs are scheduled to be removed at the end of their useful life.
P2608 PL - 8-inch, 850 Zone, Coronado Ave, Chestnut/Apple Cameron 10 - 10 0%350 - 350 0%
Project is in the early Planning stage and on schedule.
P2611 Quarry Road Bridge Replacement and Utility Relocation Cameron 5 1 4 20%1,000 1 999 0%
Project is in the early Planning stage. Project is
driven by County's schedule for replacement.
P2612 PL - 12-inch, 711 Zone, Pas de Luz/Telegraph Canyon Rd Cameron 5 - 5 0%500 - 500 0%
Project is in the early Planning stage and on
schedule.
P2613 PL - 12-inch, 520 Zone, Rancho San Diego Towne Center Loop Cameron 10 2 8 20%150 2 148 1%This project is not needed and will be closed.
P2614 485-1 Reservoir Interior/Exterior Coating Cameron - - - 0%895 - 895 0%No project expenditures in FY 2018.
P2617 Lobby Security Enhancements Payne 75 1 74 1%75 1 74 1%
Planning to be completed in FY 2018; construction during FY 2019.
P2619 PS - Temporary Lower Otay Pump Station Redundancy Marchioro 20 13 7 65%635 13 622 2%
Project on track. District engineering staff
commenced concept development/alternatives analysis in-house. Completion of construction
anticipated FY 2020.
P2620 Radio and Emergency Communication System Kerr 20 - 20 0%20 1 19 5%Expenses on target for remainder of fiscal year.
P2623 Central Area to Otay Mesa Interconnection Pipelines Combination Air/Vacuum Valve Replacements Marchioro 20 31 (11) 155%270 32 238 12%
Project accelerated to advance work in FY 2018. Purchase Order to procure long lead-time valves
issued October 2017. Award of a construction
contract will coincide with valve delivery
anticipated in March 2018. Completion of
construction anticipated FY 2018. Expenditures within overall project budget.
FISCAL YEAR-TO-DATE, 12/31/17 LIFE-TO-DATE, 12/31/17
P:\Forms\D-Construction\CIP Quarterly Reports\CIP Qtr Reports\FY 2018\Q2\Expenditures\Copy of Copy of FY18 2nd qtr exp.xlsx Page 1 of 4 2/6/2018
FISCAL YEAR 2018 2nd QUARTER REPORT
(Expenditures through 12/31/2017)
($ In Thousands)
ATTACHMENT B
2018 12/31/17
CIP No.Description
Project
Manager
FY 2018
Budget Expenses Balance
Expense to
Budget %Budget Expenses Balance
Expense to
Budget %Comments
FISCAL YEAR-TO-DATE, 12/31/17 LIFE-TO-DATE, 12/31/17
R2077 RecPL - 24-Inch, 860 Zone, Alta Road - Alta Gate/Airway Beppler 20 - 20 0%2,920 2,920 - 100%
Construction and reimbursement completed in FY
2017 Q4. Project complete.
R2079 RecPL - 6-Inch, 450 Zone, Otay Valley Road - Otay Valley/Entertainment Beppler 10 - 10 0%150 - 150 0%
Project is driven by City of Chula Vista's schedule
for replacement of the Heritage Road Bridge.
R2110 RecPS - 944-1 Optimization and Pressure Zone Modifications Marchioro 20 5 15 25%200 135 65 68%
Project on track. Pressure reducing station work
will be completed FY 2018.
R2116 RecPL - 14-Inch, 927 Zone, Force Main Improvements Marchioro 200 129 71 65%2,500 1,999 501 80%
Construction on schedule to complete in FY 2018 Q3.
R2118 Steele Canyon Sewer PS Large Solids Handling Improvements Beppler 50 7 43 14%75 29 46 39%
Construction bids received FY 2018 Q3 are higher than estimated and are being evaluated to
determine if they will be repackaged and re-bid.
R2120 RWCWRF Filtered Water Storage Tank Improvements Beppler 25 - 25 0%500 29 471 6%Construction is scheduled for FY 2020.
R2123 Repurpose Otay Mesa Recycled Water Lines Beppler 5 - 5 0%350 - 350 0%
Initiate study this fiscal year with construction
scheduled for FY 2021.
R2125 RecPRS - 927/680 PRS Improvements, Otay Lakes Road Marchioro 50 3 47 6%200 3 197 2%Construction scheduled for FY 2020.
S2012 San Diego County Sanitation District Outfall and RSD Outfall Replacement Beppler 20 - 20 0%2,540 1,111 1,429 44%
This CIP reimburses the County for work on
transportation pipeline rehabilitation. On track.
S2027 Rancho San Diego Pump Station Rehabilitation Beppler 5 3 2 60%3,500 3,046 454 87%
County invoiced in FY 2017. Construction to be
completed in FY 2018 Q4. Final budget adjustment with County to be done in FY 2019.
S2033 Sewer System Rehabilitation Beppler 10 3 7 30%3,000 2,993 7 100%
Construction complete in FY 2017 Q4. Project one year warranty to complete in FY 2018 Q4.
S2043 RWCWRF Sludge Handling System Beppler 30 - 30 0%76 40 36 53%
Budget was set for outside consultant to reassess
the project feasibility based on updated Metro
costs. Adequate long-term Metro costs are now not anticipated to be available this fiscal year, so
this report will be delayed.
S2047 Asset Management - Info Master Sewer Implementation Zhao 30 - 30 0%58 - 58 0%
Anticipate the purchase of the sewer master
software within Fiscal Year 2018.
S2061 RWCWRF Aeration Controls Consolidation & Optimization Upgrades (S)Beppler 30 - 30 0%190 - 190 0%
Construction is scheduled for FY 2020, after
replacement aeration process is confirmed.
Total Capital Facility Projects Total:1,412 723 689 51%45,110 25,823 19,287 57%
REPLACEMENT/RENEWAL PROJECTS
P2083 PS - 870-2 Pump Station Replacement Marchioro 4,000 175 3,825 4%18,750 2,518 16,232 13%
Construction on track for completion in FY 2020
Q2.
P2174 PS - 1090-1 Pump Station Replacement (400 gpm)Marchioro 1 - 1 0%2,500 4 2,496 0%Planning phase deferred until FY 2019.
P2400 PL - 20-Inch Pipeline Replacement, 711 Zone, Otay Lakes Road - at Santa Paula Marchioro - - - 0%2,280 - 2,280 0%Planning phase deferred until FY 2020.
P2493 624-2 Reservoir Interior/Exterior Coating Cameron 35 37 (2) 106%1,610 1,605 5 100%
Warranty work complete. Project is completed.
Expenditures within overall project budget.
P2507 East Palomar Street Utility Relocation Cameron 5 2 3 40%735 725 10 99%
Waiting for reimbursement and As-Builts from
Caltrans.
P2508 Pipeline Cathodic Protection Replacement Program Marchioro 100 225 (125) 225%725 678 47 94%
Construction for the first phase on schedule to
complete in FY 2018 Q3. Second phase
construction project scheduled to be awarded FY 2019 Q1. Expenditures originally anticipated for
FY 2017 occurred in FY 2018 due to heavy rains
and environmental requirements. Expenditures
within overall project budget.
P2518 803-3 Reservoir Interior/Exterior Coating Cameron 5 - 5 0%685 661 24 96%Expenditures anticipated in Q4 FY 2018.
P2529 711-2 Reservoir Interior & Exterior Coating Cameron 5 - 5 0%820 803 17 98%
Construction completed FY 2017 Q2. Project is in
the 2 year warranty period.
P2530 711-1 Reservoir Interior & Exterior Coating Cameron 5 - 5 0%980 954 26 97%
Construction completed FY 2017 Q2. Project is in
the 2 year warranty period.
P2531 944-1 Reservoir Interior & Exterior Coating Cameron 5 - 5 0%345 319 26 92%
Construction contract completed FY 2016 Q4. Currently in two year warranty period.
P2532 944-2 Reservoir Interior & Exterior Coating Cameron 5 - 5 0%960 937 23 98%
Construction contract completed FY 2016 Q4.
Currently in two year warranty period.
P2533 1200-1 Reservoir Interior & Exterior Coating Cameron 10 - 10 0%810 7 803 1%Project is in the Planning stage.
P2534 978-1 Reservoir Interior & Exterior Coating Cameron 10 85 (75) 850%650 582 68 90%
Construction contract completed FY 2017 Q4. Currently in two year warranty period.
Expenditures originally anticipated for FY 2017 Q4
occurred in FY 2018 due to contractor delays.
Expenditures within overall project budget.
P2535 458-2 Reservoir Interior & Exterior Coating & Upgrades Cameron 5 - 5 0%810 778 32 96%
Construction contract completed FY 2016 Q4.
Currently in two year warranty period.
P2539 South Bay Bus Rapid Transit (BRT) Utility Relocations Cameron 5 10 (5) 200%1,090 897 193 82%
Project is driven by SANDAG. More construction
work was completed than anticipated.
Expenditures within overall project budget.
P:\Forms\D-Construction\CIP Quarterly Reports\CIP Qtr Reports\FY 2018\Q2\Expenditures\Copy of Copy of FY18 2nd qtr exp.xlsx Page 2 of 4 2/6/2018
FISCAL YEAR 2018 2nd QUARTER REPORT
(Expenditures through 12/31/2017)
($ In Thousands)
ATTACHMENT B
2018 12/31/17
CIP No.Description
Project
Manager
FY 2018
Budget Expenses Balance
Expense to
Budget %Budget Expenses Balance
Expense to
Budget %Comments
FISCAL YEAR-TO-DATE, 12/31/17 LIFE-TO-DATE, 12/31/17
P2542 850-3 Reservoir Interior Coating Cameron 5 1 4 20%540 528 12 98%
Construction contract completed FY 2016 Q2. Warranty assessment complete.
P2543 850-1 Reservoir Interior/Exterior Coating Cameron 5 - 5 0%875 5 870 1%No expenditures until Q4 FY 2018.
P2544 850-2 Reservoir Interior/Exterior Coating Cameron 700 620 80 89%980 707 273 72%
Construction completion anticipated in FY 2018
Q3.
P2545 980-1 Reservoir Interior Exterior Coating Cameron 5 - 5 0%1,190 1,188 2 100%
Construction completed FY 2017 Q2. Project is in
the two year warranty period.
P2546 980-2 Reservoir Interior/Exterior Coating Cameron 1,100 80 1,020 7%1,450 80 1,370 6%Construction began in FY 2018 Q2.
P2555 Administration and Operations Parking Lot Improvements Cameron 265 417 (152) 157%775 537 238 69%
Construction of Phase 1 improvements complete
in FY 2018 Q2. Expenditures originally
anticipated for FY 2017 Q4 occurred in FY 2018. Expenditures within overall project budget.
P2557 520 Res Recirculation Pipeline Chemical Supply and Analyzer Feed Replacement Project Beppler 35 6 29 17%100 39 61 39%
Construction bids received FY 2018 Q3 are higher than estimated and are being evaluated to
determine if they will be repackaged and re-bid.
P2559 Pressure Vessel Repair and Replacement Program Marchioro 30 37 (7) 123%650 288 362 44%
RWCWRF surge tank and piping completed in FY
2017 Q3. CIP P2559 will be closed and split into
several new site specific CIP projects for FY 2019. Expenditures within overall project budget.
P2561 Res - 711-3 Reservoir Cover/Liner Replacement Marchioro 1 - 1 0%1,800 8 1,792 0%
Replacement deferred since existing cover/liner materials, analyzed by laboratory in FY 2017,
suggested two years remaining life.
P2562 Res - 571-1 Reservoir Cover/Liner Replacement Marchioro 2,700 6 2,694 0%2,900 52 2,848 2%
Construction began in FY 2018 Q2. Reservoir
scheduled to be placed back into service in FY
2018 Q4.
P2563 Res - 870-1 Reservoir Cover/Liner Replacement Marchioro 1 - 1 0%1,000 3 997 0%
Replacement deferred until FY 2022 to coincide with completion of new 870-2 Pump Station.
Existing cover/liner materials analyzed by laboratory in FY 2017 suggested sufficient
remaining life.
P2565 803-2 Reservoir Interior/Exterior Coating & Upgrades Cameron - - - 0%940 - 940 0%No expenditures for FY 2018.
P2566 520-2 Reservoir Interior/Exterior Coating & Upgrades Cameron - - - 0%1,500 - 1,500 0%No expenditures for FY 2018.
P2567 1004-2 Reservoir Interior/Exterior Coating & Upgrades Cameron - - - 0%905 - 905 0%No expenditures for FY 2018.
P2573 PL - 12-Inch Pipeline Replacement, 803 Zone, Hillsdale Road Beppler 1,600 643 957 40%2,450 881 1,569 36%
Contract awarded and Notice to Proceed issued
in FY 2018 Q1. Project on schedule to be
completed by the end of the fiscal year.
P2574 PL - 12-Inch Pipeline Replacement, 978 Zone, Vista Vereda Beppler 450 116 334 26%2,500 194 2,306 8%
PDR completed in FY 2018 Q2; Public Outreach
to occur in FY 2018 Q3; 60% Design in FY 2018 Q4. CIP P2625, established for Hidden Mesa
portion of work, is to be completed prior to this
project; schedule adjusted to reflect this.
P2578 PS - 711-2 (PS 711-1 Replacement and Expansion) - 14,000 gpm Marchioro - - - 0%10,000 - 10,000 0%
Replacement deferred until FY 2023-2024 to
coincide with development of Villages 4, 8, 9, & 3.
P2593 458-1 Reservoir Interior/Exterior Coating & Upgrades Cameron - - - 0%840 - 840 0%No expenditures for FY 2018.
P2594 Large Meter Replacement Carey 150 14 136 9%485 266 219 55%Most work will take place in FY 2018 Q3 & Q4.
P2604 AMR Change Out Carey 1,510 907 603 60%9,605 2,173 7,432 23%Project on track.
P2605 458/340 PRS Replacement, 1571 Melrose Ave Marchioro 1 2 (1) 200%250 2 248 1%
Design scheduled for FY 2019. Advanced planning work performed in FY 2018.
Expenditures within overall project budget.
P2606 803-2 Reservoir Repair/Replacement of Caulking and Tree Removal Marchioro 1 - 1 0%75 - 75 0%Design scheduled for FY 2019.
P2607 Douglas Ave SWA and OWD Interconnection Upgrade Beppler 10 - 10 0%50 - 50 0%Project is driven by Sweetwater Authority.
P2609 PL - 8-inch, 1004 Zone, Eucalyptus St, Coronado/Date/La Mesa Cameron - - - 0%400 - 400 0%
No expenditures for FY 2018. Construction scheduled for FY 2021.
P2610 Valve Replacement Program - Phase 1 Cameron 30 - 30 0%150 - 150 0%Project is in the early Planning stage.
P2615 PL - 12-Inch Pipeline Replacement, 803 PZ, Vista Grande Beppler - - - 0%1,200 - 1,200 0%
No expenditures for FY 2018. Construction
scheduled for FY 2021.
P2616 PL - 12-Inch Pipeline Replacement, 978 Zone, Pence Dr/Vista Sierra Dr Marchioro 20 5 15 25%2,500 5 2,495 0%
On track. District engineering staff commenced
concept development/alternatives analysis in
house. Construction scheduled for 2020.
P2625 PL - 12-inch, 978 Zone, Hidden Mesa Road Beppler 90 - 90 0%1,500 1 1,499 0%
PDR under CIP P2574 completed in FY 2018 Q2.
60% Design underway with Final Design due in FY 2018 Q4.
R2121 Res - 944-1 Reservoir Cover/Liner Replacement Marchioro 1 - 1 0%1,400 19 1,381 1%
Replacement scheduled for FY 2021 since dive inspection completed FY 2016 suggested five
years remaining life.
R2139 RWCWRF - Filter Troughs Replacement Beppler 30 - 30 0%30 - 30 0%Replacement to be performed FY 2018.
R2143 AMR Change Out Carey 350 62 288 18%525 105 420 20%
Project on track with additional changes
scheduled for Q4 FY 2018.
S2024 Campo Road Sewer Main Replacement Beppler 4,250 1,193 3,057 28%10,100 2,761 7,339 27%Construction on track to complete in FY 2019 Q4.
P:\Forms\D-Construction\CIP Quarterly Reports\CIP Qtr Reports\FY 2018\Q2\Expenditures\Copy of Copy of FY18 2nd qtr exp.xlsx Page 3 of 4 2/6/2018
FISCAL YEAR 2018 2nd QUARTER REPORT
(Expenditures through 12/31/2017)
($ In Thousands)
ATTACHMENT B
2018 12/31/17
CIP No.Description
Project
Manager
FY 2018
Budget Expenses Balance
Expense to
Budget %Budget Expenses Balance
Expense to
Budget %Comments
FISCAL YEAR-TO-DATE, 12/31/17 LIFE-TO-DATE, 12/31/17
S2044 Trenchless Sewer Rehabilitation Beppler 75 372 (297) 496%550 476 74 87%
Construction contract completed in FY 2018 Q1.
In one year warranty period. Expenditures
originally anticipated for FY 2017 Q4 occurred in FY 2018. Expenditures within overall project
budget.
S2045 Fuerte Drive Sewer Relocation Beppler 100 12 88 12%250 72 178 29%
Project start date delayed to FY 2018 Q4 by
County of San Diego. Construction contractor has requested termination due to delayed start.
Staff has approached second low bidder for project.
S2046 RWCWRF - Aeration Panels Replacement Beppler 50 7 43 14%450 85 365 19%
Negotiations with existing aeration panels
manufacturer are on-going; replacement options
to be considered once completed.
S2048 Hillsdale Road Sewer Repairs Beppler 400 14 386 4%720 71 649 10%
Construction on track for completion in FY 2018
Q4.
S2049 Calavo Basin Sewer Rehabilitation - Phase 2 Beppler 19 - 19 0%1,000 1 999 0%
Planning to begin in FY 2018 Q3 and continue
into FY 2019 with easement issues to be vetted
before starting Design.
S2050 Rancho San Diego Basin Sewer Rehabilitation - Phase 2 Beppler - - - 0%1,250 - 1,250 0%
Planning to start in FY 2020; construction anticipated in FY 2022.
S2051 RWCWRF - Headworks Improvements Beppler 50 9 41 18%150 9 141 6%
Design consultant selection in FY 2018 Q3;
Design to be completed in FY 2019 Q1.
S2053 RWCWRF - Sedimentation Basins Weirs Replacement Beppler 60 - 60 0%60 - 60 0%Replacement to be performed FY 2018 Q4.
S2054 Calavo Basin Sewer Rehabilitation - Phase 3 Beppler - - - 0%1,290 - 1,290 0%
Planning to start in FY 2021; construction
anticipated in FY 2023.
Total Replacement/Renewal Projects Total:18,290 5,057 13,233 28%99,135 22,024 77,111 22%
CAPITAL PURCHASE PROJECTS
P2282 Vehicle Capital Purchases Rahders 363 - 363 0%5,175 3,863 1,312 75%
$278.6K encumbered. Anticipate 100% expensed
in FY 2018.
P2286 Field Equipment Capital Purchases Rahders 72 21 51 29%1,746 1,424 322 82%
Out to bid on two of the three budget items.
Anticipate 100% expensed in FY 2018.
Total Capital Purchase Projects Total:435 21 414 5%6,921 5,287 1,634 76%
DEVELOPER REIMBURSEMENT PROJECTS
p2430 PL - 20-inch, 980 Zone, Proctor Valley Road – Village 14 Phase 1 Cameron 5 - 5 0%35 - 35 0%Developer driven project.
P2595 PL - 16-inch, 624 Zone, Village 3N - Heritage Road, Main St/Energy Way Beppler - - - 0%150 - 150 0%Construction anticipated to begin in FY 2018 Q4.
R2084 RecPL - 20-Inch, 680 Zone, Village 2 - Heritage/La Media Beppler 40 - 40 0%365 1 364 0%Under construction in FY 2018.
Total Developer Reimbursement Projects Total:45 - 45 0%550 1 549 0%
104 20,182$ 5,801$ 14,381$ 29%151,716$ 53,135$ 98,581$ 35%
GRAND TOTAL 20,182$ 5,801$ 14,381$ 29%151,716$ 53,135$ 98,581$ 35%
P:\Forms\D-Construction\CIP Quarterly Reports\CIP Qtr Reports\FY 2018\Q2\Expenditures\Copy of Copy of FY18 2nd qtr exp.xlsx Page 4 of 4 2/6/2018
Otay Water District
Capital Improvement Program
Fiscal Year 2018
Second Quarter
(through December 31, 2017)
ATTACHMENT C
571-1 Reservoir –Removal of Reservoir Floating Cover and Liner
11/27/2017
Background
The approved CIP Budget for Fiscal Year 2018
consists of 87 projects that total $20.1 million. These
projects are broken down into four categories.
1.Capital Facilities $ 1.4 million
2.Replacement/Renewal $18.3 million
3.Capital Purchases $ 0.4 million
4.Developer Reimbursement $ 45.0 thousand
Overall expenditures through the Second Quarter of
Fiscal Year 2018 totaled $5.8 million, which is
approximately 29% of the Fiscal Year budget.
2
Fiscal Year 2018
Second Quarter Update
($000)
CIP
CAT Description FY 2018
Budget
FY 2018
Expenditures
%
FY 2018
Budget
Spent
Total
Life-to-Date
Budget
Total
Life-to-Date
Expenditures
%
Life-to-Date
Budget
Spent
1 Capital
Facilities $1,412 $723 51%$45,110 $25,823 57%
2 Replacement/
Renewal $18,290 $5,057 28%$99,135 $22,024 22%
3 Capital
Purchases $435 $21 5%$6,921 $5,287 76%
4 Developer
Reimbursement $45 $0 0%$550 $1 0%
Total:
$20,182 $5,801 29%$151,716 $53,135 35%
3
Fiscal Year 2018
Second Quarter
CIP Budget Forecast vs. Expenditures
4
$20,182,000
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
FISCAL YEAR PERIOD IN MONTHS
Budget Forecast
Total Expenditures
$5,801,000
5
CIP Projects in Construction
870-2 Pump Station
Replacement Project
(P2083/P2562)
Replacement of existing
870 High Head and
Low Head Pump
Stations
Remove and Replace
the existing 571-1
Reservoir liner and
cover
$18.75M Budget
Start: July 2017
Completion: October
2019 6
870-2 Pump Station –New Inlet/Outlet
Pipe Excavation
Division No. 2
Location:
North East corner
of Otay Mesa.
Existing 571-1
Reservoir and High
Head/Low Head
Pump Station Site.
12/12/2017
CIP Projects in Construction
978-1 & 850-2
Reservoirs
Interior/Exterior
Coating & Upgrades
Project (P2534/P2544)
Remove and replace
existing interior and
exterior coatings.
Construct structural
upgrades to increase
the service life.
$1.79M Budget
Start: November 2016
Estimated Completion:
January 2018 7
850-2 (3.1 MG) –Interior After Wash down
Division Nos. 3 and 5
Locations:
978-1 is located on
Pence Drive.
850-2 is located on
Ledgeside Street.
12/29/2017
CIP Projects in Construction
Campo Road Sewer
Replacement Project
(S2024)
Replace existing 10-
inch sewer with 7,420
linear feet of new 15-
inch sewer.
Reconnection of sewer
laterals
Night Work
$10.10M Budget
Start: July 2017
Estimated Completion:
April 2019
8
Manhole No. 21 –Base
Installation on Jamacha Blvd.
Division No. 5
Location:
Campo Road (SR
94) between
Rancho San Diego
Village Shopping
Center and Rancho
Towne Center.
CIP Projects in Construction
14-Inch Force Main
Rehabilitation
(R2116/P2508)
Replace force main
blow-offs, valves, and
piping at 15 locations.
Rehabilitate force main’s
cathodic protection
system.
Increase Service Life.
$2.50M Budget
Start: August 2016
Estimated Completion:
January 2018
9
Station 51+43 -14-Inch Force Main Point
Repair
Location: From
RWCWRF,
Spring Valley to
area North of
Salt Creek Golf
Course, Chula
Vista.
Division No. 3
11/17/2017
CIP Projects in Construction
Hillsdale Road
Waterline Replacement
and Sewer Repairs
(P2573/S2048)
Replacement of 4,050
linear feet of 12-inch
waterline.
Replacement of 760
liner feet of 8-inch
sewer.
$3.17M Budget
Start: October 2017
Estimated Completion:
May 2018
10
Hillsdale Road across from Valhalla High
School–Installation of Water Line
Division No. 5
Location:
Hillsdale Road
between Jamacha
Road and Vista
Grande Road.
12/29/2017
Construction Contract Status
11
PROJECT
TOTAL %
S2044 Trenchless Sewer
Rehabilitation
Insituform
Technologies, LLC $353,954 $373,954 ($24,120)-6.8%$333,467 $333,467 -10.8%100.0%August
2017
P2555
P2547
OWD Administration
& Operations
Parking Lot
Improvements Ph. 1
- Lighting and
Vehicle Charging
Station
Ace Electric, Inc.$344,495 $369,495 $34,408 10.0%$378,903 $378,903 2.5%100.0%October
2017
P2534
P2544
978-1 & 850-2
Reservoir
Interior/Exterior
Coating & Upgrades
Blastco Inc.$963,280 $1,106,200 $16,208 1.7%$1,106,158 $722,125 0.0%65.3%January
2018
P2508
R2116
14-Inch Force Main
Rehabilitation
Project
Charles King
Company Inc.$1,045,100 $1,101,250 $112,228 10.7%$1,166,476 $1,059,333 5.9%90.8%January
2018
S2045 Fuerte Drive Sewer
Relocation Ortiz Corporation $131,000 $147,650 $0 0.0%$131,000 $0 -11.3%0.0%June 2018
P2573
S2048
Hillsdale Road 12-
inch Waterline
Replacement and
Sewer Repairs
TC Construction
Company, Inc.$2,245,060 $2,396,060 $0 0.0%$2,245,060 $543,223 -6.3%24.2%May 2018
P2546
980-2 Reservoir
Interior/Exterior
Coating & Upgrades
Simpson
Sandblasting &
Special Coating, Inc.
$998,502 $1,146,377 $0 0.0%$998,502 $24,964 -12.9%2.5%May 2018
S2024
Campo Road Sewer
Replacement
Project
Wier Construction
Corporation $7,623,281 $7,816,781 $0 0.0%$7,665,281 $1,255,785 -1.9%16.4%April 2019
P2083
P2562
870-2 Pump Station
Replacement/ 571-1
Reservoir Liner and
Cover Replacement
Pacific Hydrotech
Corporation $16,500,900 $16,925,900 $0 0.0%$16,500,900 $0 -2.5%0.0%October
2019
TOTALS:$30,205,572 $31,383,667 $138,723 0.5%$30,525,746 $4,317,799 -2.7%
FY 2018 CIP CONSTRUCTION PROJECTS
CURRENT
CONTRACT
AMOUNT
TOTAL
EARNED
TO DATE
**THIS CHANGE ORDER RATE INCLUDES THE CREDIT FOR UNUSED ALLOWANCES
*NET CHANGE ORDERS DO NOT INCLUDE ALLOWANCE ITEM CREDITS. IT'S A TRUE CHANGE ORDER PERCENTAGE FOR THE PROJECT
CIP NO.PROJECT TITLE CONTRACTOR BASE BID
AMOUNT
CONTRACT
AMOUNT W/
ALLOWANCES
% CHANGE
ORDERS W/
ALLOWANCE
CREDIT**
%
COMPLETE
EST.
COMP.
DATE
NET CHANGE ORDERS
LTD*
Consultant Contract Status
12
Consultant Contract Status
13
Consultant Contract Status
14
QUESTIONS?
15
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: March 7, 2018
PROJECT: Various DIV. NO. ALL
SUBMITTED BY: Adolfo Segura, Chief of Administrative Services
APPROVED BY: Mark Watton, General Manager
SUBJECT: FY18 MID-YEAR REPORT FOR THE DISTRICT’S FY15-18 STRATEGIC PLAN
GENERAL MANAGER’S RECOMMENDATION:
No recommendation. This is an informational item only.
COMMITTEE ACTION:
Please see “Attachment A”.
PURPOSE:
To provide a mid-year report on the District’s FY15-18 Strategic
Performance Plan for FY18.
ANALYSIS:
Summary
The current Otay Water District Strategic Plan is a four-year plan
ranging from the start of FY15 through the end of FY18. This report
details the mid-year results for the last year of our four-year plan.
Strategic Plan Objectives – Target 90%
Strategic Plan objectives are designed to ensure the District is
executing mission designed objectives and making the appropriate high-
level changes necessary to guide the agency’s efforts to meet new
challenges and positively adapt to change. FY18 mid-year results are on
target at 95%, with 19 of 20 active items completed or on schedule. One
objective is on hold.
The following objective has been put on hold:
1. Streamline Input of Operations Data – The SCADA Roadmap has been
received, however, review and implementation of the plan will be
incorporated into the new 3-5 year Strategic Plan.
Performance Measures (Metrics) – Target 75%
Performance measures are designed to track the District’s day-to-day
performance. These items measure the effectiveness and efficiency of
daily operations and essential services. The overall goal is that at
least 75% of these measures be rated “on target”. FY18 mid-year results
are above target with 32 of 37 (86%) items achieving the desired level
or better. Five measures are reported at year’s end:
Enterprise Technology Services Availability
Injury Incident Rate
Debt Coverage Ratio
Reserve Level
Accounts Per FTE
0
2
4
6
8
10
12
14
16
18
COMPLETED ON SCHEDULE BEHIND ON HOLD
2
17
0 1
Completed On Schedule Behind On Hold
19 of 20 Active Objectives are Completed or On Schedule (95%)
Items Not On Target
1. CIP Project Expenditures vs. Budget – Year-to-date CIP expenditures
amounted to $5,801,000 vs. the budgeted amount of $20,182,000. YTD
result is approximately 7% below the established target.
2. Project Closeout – Second quarter results were influenced by the
Trenchless Sewer Rehabilitation Project, S2044, by 103 days.
Substantial completion was reached on August 3, 2017. At that point
in time, Insituform Technologies (Insituform), the contractor for the
project, was provided with a construction contract punch list of items
required by the District for contract acceptance. Insituform did not
complete all punch list items until November 13, 2017. Contract
Acceptance and the Notice of Completion was processed by staff on
November 14, 2017.
3. Overtime Percentage – Year-to-date expenditures amounted to $72,395
vs. the budgeted amount of $65,000. The primary reason overtime
exceeded budget was due to disruptions in the treatment process caused
by abnormal effluent characteristics, which led the Reclamation Plant
to have unplanned overtime.
4. Planned Recycled Water Maintenance Ratio in $ – The year-to-date total
spent on all recycled tasks amounted to $457,559.92, of which
$306,826.74 (67%) was spent on preventative maintenance of effluent
pumps, pumps, motors, etc. The second quarter was not on target due
to the amount of corrective maintenance spent on a recycled lateral
leak.
5. Direct Cost of Treatment per MGD – The year-to-date result is
$1,380.45 vs. the year-to-date target of $1,050.00. The Reclamation
Plant experienced process upsets and more material was used to improve
effluent quality to meet regulatory compliance.
0
2
4
6
8
10
12
14
16
18
ON TARGET NOT ON TARGET
32
5
On Target Not on Target
32 of 37 Performance Measures are On Target (86%)
Next Steps
During FY18, which is the last phase of the plan, staff will focus on
the completion of remaining objectives, prioritization of a project
action list from a recently developed multi-year SCADA roadmap,
improvement to our asset management decision analysis, and enhancements
to the District’s CIP framework. Lastly, staff will also be working on
the development of the District’s new 3-5 year Strategic Plan.
Committee Reports – Slideshow
The Strategic Plan results are presented to both the Finance,
Administration, and Communications Committee and the Engineering,
Operations, and Water Resources Committee with a specific focus on the
most relevant information for each Committee (see “Attachment B”).
Strategic Plan is available on the Board VPN
All of the Strategic Plan results and associated details are provided
in a real-time, interactive web-based application available to the Board
via secured remote access, VPN. The District Secretary can facilitate
any password or access issues.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Informational item only; no fiscal impact.
STRATEGIC GOAL:
Strategic Plan and Performance Measure reporting is a critical element
in providing performance reporting to the Board and staff.
LEGAL IMPACT:
None.
ATTACHMENTS:
Attachment A – Committee Action Report
Attachment B – PowerPoint Presentation
5
ATTACHMENT A
SUBJECT/PROJECT: FY18 MID-YEAR REPORT FOR THE DISTRICT’S FY15-18 STRATEGIC
PLAN
COMMITTEE ACTION:
The Engineering, Operations and Water Resources and the Finance and
Administration Committees reviewed this item at a meeting held on
February 20 and 21, 2018, respectively, and the following comments were
made:
Staff indicated that the purpose of this report is to provide a mid-
year report on the District’s FY 2015-2018 Strategic Performance
Plan for FY 2018.
It was indicated that the District is currently in the last year (FY
2018) of the 4-year plan.
The District continues to utilize the Balanced Scorecard methodology
for the performance management system focusing on:
Financial
Customer
Learning and Growth; and
Business/Internal processes
Staff is currently reviewing the latest American Water Works
Association (AWWA) Benchmarks from 2017. The benchmark’s new
metrics will be reflected in the upcoming four-year Strategic Plan.
It was indicated in response to an inquiry from the Committee that
every year agencies throughout all regions are asked if they wish to
participate in providing data for the benchmarks. Thus, every year
the benchmarks are updated or receive some manner of fine tuning.
Staff indicated that 95% (19 of 20) of the District’s “Objectives”
are completed or on schedule. The target is 90%.
Staff indicated with regard to the completed objective, “Electric
Power and Fuel Management Practices,” there was a slight issue with
Orpak as they were bought out by another company which delayed the
6
project’s completion. It is now 99% complete and the system is in
place. It provides for features, such as, GPS tracking of vehicle
routes, fuel consumption and tracking, etc. These features are now
in place and is being used by staff.
It was indicated that the objective to Streamline Input of
Operations Data is on hold. Staff noted that the new SCADA system
that replaced the Legacy system is in place. Twelve to fourteen
roadmap items have been developed which will be included in the new
3 to 5 year Strategic Plan. The system will provide for mobile
cyber security, value added analytics for enhanced reporting, fuel
usage, etc.
Eighty-six percent of the District’s Performance Measures are on
target. The target is 75%.
Staff reviewed the items that were not on target (please reference
page 3 of the staff report).
Staff indicated that the Percent of Customers Paying Bills
Electronically metric now has a performance target of 75% per
quarter throughout the year.
The Committee discussed the performance measure for Distribution
System Loss. It was indicated as the technology improves to
identify system leaks, the District’s target should go lower. Staff
indicated that last year the State Water Resources Control Board
(SWRCB) began an extensive review and grading of agencies with
regard to their distribution system water loss. Staff will reach out
to the SWRCB to acquire the report on the outcome of their grading.
Staff noted that the District did very well on SWRCB’s grading for
FY 2017.
Staff is currently working on new project plans for the new 3–5 year
Strategic Plan. The new proposed plan also includes a review of all
objectives, measures, etc., to see if they need to be updated,
deleted because they are no longer relevant, etc. Staff will
present the new Strategic Plan in the upcoming months.
The Committee inquired if each department has their own goals.
Staff stated yes and that each department also has a project plan in
place for their respective objectives.
The Committee inquired if staff has reviewed the Ralph W. Chapman
Water Recycling Facility (RWCWRF) to determine if it is more cost
effective to keep it open or to close it. Staff indicated that an
analysis was completed recently and it was found that it was more
7
cost effective to keep it open as the District would have to send
the sewer to the City of San Diego’s Metro System where it is more
costly to treat sewer water. In response to a request by the
Committee, staff indicated they would present at a future meeting
the analysis on the RWCWRF.
Upon completion of the discussion, the committee supported staffs’
recommendation and presentation to the full board as an informational
item.
1
STRATEGIC PLAN
FY18 MID-YEAR REPORT
2
Introduction
3OWDStrategicPlanFY15–FY18:
The District’s Strategic Plan is developed with the Balanced Scorecard (BSC)strategic planning and
management methodology,which is used and widely adopted by businesses across the globe.The BSC
itself was developed by Kaplan and Norton and was originally published in 1992,in the Harvard
Business Review.The model has evolved over time and is now in its third-generation.In brief,the BSC
emphasizes alignment of business activities to the vision and strategy of the organization with goals and
measures in four basic areas:financial,customer,business processes,and learning and growth.
The District’s strategic plan is designed to track key organizational project objectives,and essential day-
to-day performance measures.During FY18,staff continues to execute the completion of targeted
projects and evaluate the potential to further streamline work-group processes and elevate performance
metrics if warranted.Additional improvements to our Asset Management program will also be
addressed via a recently developed multi-year strategic SCADA roadmap and a planned update to our
decision analysis CIP management framework.
4
Deliver high quality services to meet and increase confidence
of the customer
1.Increase customer confidence in the District
2.Improve and expand communications
3.Provide effective water services
Manage the financial issues that are critical to the District
1.Improve financial information and systems
2.Maintain District financial strength
Maximize efficiency and effectiveness
1.Actively manage water supply as well as support for water and sewer
services
2.Identify and evaluate improvements to enterprise and departmental
business processes
Provide leadership and management expertise
1.Reinforce a results-oriented and accountable culture
2.Focus on achieving a lean flexible workforce
Balanced Scorecard Strategies and Goals
Customer
Financial
Business
Processes
Learning
& Growth
$$
5AWWA Benchmarks
1 Technical Quality Complaint
Potable Water Compliance Rate
Collection System Integrity
Sewer Overflow Rate
2
3
4
6Objectives
95% are Completed or On Schedule
0
2
4
6
8
10
12
14
16
18
Completed
On Schedule
Behind
On Hold
2
17
0 1
Completed
On Schedule
Behind
On Hold
Objective Report
20 Total
7
COMPLETED
Objectives
1.Evaluate Implementation of an On-line Performance Management System
2.Electric Power and Fuel Management Practices
8
ON HOLD
Objectives
1.Streamline Input of Operations Data
9Performance Measures
86% On Target
Measure Report
37 Total
0
5
10
15
20
25
30
35
On Target
Not on Target
32
5
On Target
Not on Target
10Performance Measures
1.CIP Project Expenditures vs. Budget
2.Project Closeout Time
3.Overtime Percentage
4.Planned Recycled Water Maintenance Ratio in $
5.Direct Cost of Treatment per MGD
NOT ON TARGET
11
Mid-Year Results
Administrative Services
12Employee Turnover Rate
Target: Less than 5%turnover in a year
0 0 0
5 5 5 5 5
0
1
2
3
4
5
6
Q1 Q2 Q3 Q4 YTD
Result Target
QTR:# of voluntary resignations (not
including retirements)/average # of
employees
Measurement Method
YTD:YTD # of voluntary resignations
(not including retirements)/average # of
employees
No turnovers in Q1 & Q2
13Training Hours Per Employee
Target: 12 hours or more general formal training per employee in a year
(excludes safety training)
4.94 5.5 10.44
3 3 3 3
12
0
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4 YTD/AVG
Result Target
Measurement Method
QTR:Total qualified training hours for all
employees/average # of FTEs
YTD:YTD Total qualified training hours for
all employees/Average # of FTEs
14Safety Training Program
Target: 24 hours or more safety training per field employee in a year
6.5
11.14
17.56
6 6 6 6
24
0
5
10
15
20
25
30
Q1 Q2 Q3 Q4 YTD/AVG
Result Target Measurement Method
QTR:# of safety training hours for the
quarter/ # of field employees
YTD:YTD Total qualified safety training
hours for field employees/average # of field
employees
15
Engineering
16CIP Project Expenditures vs. Budget
Target: 95% of budget but not to exceed 100%in a year
Being below target gives the measure a “not on target” status
Measurement Method
OTR:Actual quarterly expenditures/Annual
budget
YTD:YTD expenditures/Annual budget
9.3 19.5 28.715
21
29
35
100
0
20
40
60
80
100
120
Q1 Q2 Q3 Q4 YTD
Result Target
17Construction Change Order Incidence (w/o allowances)
Target: No more than 5%per quarter in a year
0.1 0.5 0.5
5 5 5 5 5
0
1
2
3
4
5
6
Q1 Q2 Q3 Q4 YTD
Result Target
*QTR and YTD result are the life to dare change
order rates for all active projects in FY17
Measurement Method
Total cost of Change Orders (not including allowances)/Total original
construction contract amount (not including allowances)
18
Mark-Out Accuracy
Target: No less than 100%mark-out accuracy per quarter in a year
100 100 100
100 100 100 100 100
0
20
40
60
80
100
120
Q1 Q2 Q3 Q4 YTD
Result Target
Measurement Method
# of mark-outs performed without an at-fault
hit, which is damage to a District facility that
results from a missing or erroneous mark-
out/Total # of mark-outs performed
19Project Closeout Time
Target: No more than a 45 day average per quarter in a year
0
64.5 64.5
45 45 45 45 45
0
10
20
30
40
50
60
70
Q1 Q2 Q3 Q4 YTD
Result Target
Measurement Method
QTR:# of days between NOSC and NOC for
all construction projects within the quarter/# of
construction projects within the quarter
YTD:YTD # of days between NOSC and
NOC for all construction projects within the
quarter/YTD # of construction projects
within the quarter
20Annual Recycled Water Site Inspections
Target: 100%of recycled sites inspected in a year
(There are 153 recycled water use sites scheduled for FY18)
Measurement Method
Cumulative % of recycled sites inspected per
quarter of those required by DEH
28.75
54.9 54.925
50
75
100 100
0
20
40
60
80
100
120
Q1 Q2 Q3 Q4 YTD
Result Target
21Recycled Water Shutdown Testing
Target: No less than 90%of recycled site shut down tests in a year
(There are 39 recycled water use sites due for shutdown in FY18)
Measurement Method
Cumulative % of recycled site shutdown tests
performed per year compared to those
scheduled
28.2
48.71 48.7122.5
45
67.5
90 90
0
10
20
30
40
50
60
70
80
90
100
Q1 Q2 Q3 Q4 YTD
Result Target
22
Finance
23
Measurement Method
QTR:# of all calls answered/ # of all calls
received during a quarter
YTD:YTD # of all calls answered/ YTD #
of all calls received
Answer Rate
Target: No less than 97%average answer rate per quarter in a year
97.82
97.27
97.55
97 97 97 97 97
95
95.5
96
96.5
97
97.5
98
Q1 Q2 Q3 Q4 YTD
Result Target
24
Measurement Method
QTR:Total operations O&M costs/ # of
accounts
YTD:YTD total operations O&M
costs/ # of accounts
O&M Cost Per Account
Target: Less than $561.00 per account in a single year
(Target is based on Operating Budget)
117 149
265
122
153 143 143
561
100
150
200
250
300
350
400
450
500
550
Q1 Q2 Q3 Q4 YTD
Result Target
25
Measurement Method
QTR:# of correct bills during the reporting
period/ # of total bills during the reporting
period
YTD:YTD # of correct bills during the
reporting period/ YTD # of total bills during the
reporting period
Billing Accuracy
Target: No less than 99.8%billing accuracy per quarter in a year
99.97 99.99 99.98
99.8 99.8 99.8 99.8 99.8
98
98.5
99
99.5
100
100.5
Q1 Q2 Q3 Q4 YTD
Result Target
26Overtime Percentage
Target: Less than 100%of budgeted overtime per quarter in a year
(Target is based on Operating Budget; FY18 Overtime Budget is $133,800)
Measurement Method
QTR: Actual overtime costs (including comp
time)/ Budgeted overtime costs
YTD:YTD actual overtime costs
(including comp time)/ YTD budgeted
overtime costs
103.4 117 111
100 100 100 100 100
0
20
40
60
80
100
120
140
160
Q1 Q2 Q3 Q4 YTD
Result Target
27Sewer Rate Ranking
Target: Bottom 50 percentile for the 28 sewer service providers in San Diego
(Otay ranks 6 out of 28 sewer service providers)
Measurement Method
Otay ranking for the average bill for sewer/ # of
sewer agencies
6 6
14 14
0
5
10
15
20
25
Q1 YTD
Result Target
28Water Rate Ranking
Target: Bottom 50 percentile for the 22 member agencies in San Diego
(Otay ranks 3 out of 22 member agencies)
Measurement Method
Otay ranking for the average water bill among
CWA member agencies
11 11
3 3
0
5
10
15
20
Q1 YTD
Target Result
29Percent of Customers Paying Bills Electronically
Target: No less than 75%per quarter in a year
Measurement Method
YTD:YTD # of customers paying bills
electronically/ Total # of customers
QTR:# of customers paying bills
electronically/ Total # of customers
76.95 76.78 76.86
75 75 75 75 75
0
10
20
30
40
50
60
70
80
90
100
Q1 Q2 Q3 Q4 YTD
Result Target
30Distribution System Loss
Target: Less than 5%of unaccounted water loss per quarter in a year
Measurement Method
100 [volume purchased (from CWA) –(volume sold (to customers) + volume used District
usage)] / volume purchased (from CWA))
4.1 4 4
5 5 5 5 5
0
1
2
3
4
5
6
7
8
9
10
Q1 Q2 Q3 Q4 YTD
Result Target
31
Operations
32Technical Quality Complaint (AWWA)
Target: No more than 9 complaints
per 1000 customer accounts in a year
Measurement Method
QTR:1000 (# of technical quality complaints
per quarter)/# of active customer accounts per
reporting period
YTD:1000 (YTD # of technical quality
complaints per year)/ # of active customer
accounts per reporting period)
1.49 1.19
2.68
13.1
2.25 2.25 2.25 2.25
9
0
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4 YTD
Result AWWA Target
AW
W
A
B
e
n
c
h
m
a
r
k
33Planned Potable Water Maintenance Ratio in $
Target: 66% or greater of all labor dollars spent on preventative maintenance
per quarter in a year
Measurement Method
Total planned maintenance cost/ Total
maintenance cost
72 72 71
66 66 66 66 66
50
55
60
65
70
75
80
85
90
95
100
Q1 Q2 Q3 Q4 YTD
Result Target
34
Measurement Method
Total planned maintenance costs/Total
maintenance costs
Planned Recycled Water Maintenance Ratio in $
Target: 70%or greater of all labor spent on preventative maintenance
per quarter in a year
70 64 67
70 70 70 70 70
0
10
20
30
40
50
60
70
80
Q1 Q2 Q3 Q4 YTD
Result Target
35Planned Wastewater Maintenance Ratio in $
Target: 77% or greater of all labor dollars spent on preventative maintenance
per quarter in a year
Measurement Method
Total planned maintenance cost/Total
maintenance cost
67.72
96.38
80.95
77 77 77 77 77
50
55
60
65
70
75
80
85
90
95
100
Q1 Q2 Q3 Q4 YTD
Result Target
36Direct Cost of Treatment Per MGD
Target: No more than $1050 per MG spent on wastewater treatment per quarter in a single year
(Targets each quarter will vary based on high and low demand times)
Measurement Method
Total O&M costs directly attributable to
sewer treatment/ Total volume in MG
1238.54
1573.51
1380.45
900
1200 1200
900
1050
0
200
400
600
800
1000
1200
1400
Q1 Q2 Q3 Q4 YTD
Result Target
37O&M Cost Per MG Processed of Wastewater
Target: No more than $1925 per MG spent on O&M for wastewater treatment in a year
(Targets each quarter will vary based on high and low demand times)
Measurement Method
QTR:Total O&M cost/ MGP
FYTD O&M Cost = (Power Cost) + (Staff Cost) +
(Equipment Cost) / FYTP MGP
YTD:FYTD O&M Cost MGP/ FYTD Total
MGP
1978.39 1825.9 1913.79
1550
2100 2100
1550
1925
0
500
1000
1500
2000
2500
Q1 Q2 Q3 Q4 YTD
Result Target
38Percent of PMs Completed –Fleet Maintenance
Target: No less than 90%of scheduled PM’s completed
per quarter in a year
Measurement Method
# of PM’s completed/ # of PM’s
scheduled to be completed
100 100 100
90 90 90 90 90
0
20
40
60
80
100
Q1 Q2 Q3 Q4 Annual
Result Target
39Percent of PMs Completed –Reclamation Plant
100
95
97
90 90 90 90 90
75
80
85
90
95
100
105
110
Q1 Q2 Q3 Q4 YTD
Result Target
Target: No less than 90%of scheduled PM’s completed
per quarter in a year
Measurement Method
# of PM’s completed/ # of PM’s scheduled
to be completed in a reporting period
40Percent of PMs Completed –Pump/Electric Section
100 100 100
90 90 90 90 90
75
80
85
90
95
100
105
110
Q1 Q2 Q3 Q4 YTD
Result Target
Target: No less than 90%of scheduled PM’s completed
per quarter in a year
Measurement Method
# of PM’s completed/ # of PM’s scheduled to
be completed in a reporting period
41System Valve Exercising Program
Target: Exercise 770 valves per quarter or
3080 valves by the end of fiscal year
Measurement Method
Actual number of valves exercised in
the reporting period
974 775
1749770770770770
3080
0
500
1000
1500
2000
2500
3000
3500
Q1 Q2 Q3 Q4 YTD
Result Target
42Potable Water Distribution System Integrity
Target: No more than 16 leaks and breaks
per 100 miles of distribution piping in a year
Measurement Method
100 (annual total number of leaks + annual
total number of breaks) / total miles of
distribution piping
3.26 1.82
5.08
4 4 4 4
16
0
2
4
6
8
10
12
14
16
18
20
Q1 Q2 Q3 Q4 YTD
Result Target
43Potable Water Compliance Rate (AWWA)
Target: No less than 100%of all health related drinking
water standards each quarter in a year
Measurement Method
100 (# of days the primary health regulations
are met)/ # of days in the reporting period
100 100 100
100
100 100 100 100 100
50
60
70
80
90
100
110
Q1 Q2 Q3 Q4 YTD
Result AWWA Target
44Collection System Integrity (AWWA)
Target: No more than 3.6 system failures
per 100 miles of collection system pipeline in a year
Measurement Method
QTR:100 (total number of collection system
failures during the year) / total miles of
collection system piping
YTD:Cumulative number of failures per
quarter in a FY
0 0 0
4.9
0.9 0.9 0.9 0.9
3.6
0
1
2
3
4
5
6
7
8
Q1 Q2 Q3 Q4 YTD
Result AWWA Target
0 Failures in Q1 & Q2
45Recycled Water System Integrity
Target: No more than 6.6 leaks or breaks per 100 miles
of recycled distribution system in a year
Measurement Method
(100 x # of leaks or breaks)/ # of miles of
distribution system
0.89
0
0.89
1.65 1.65 1.65 1.65
6.6
0
1
2
3
4
5
6
7
Q1 Q2 Q3 Q4 YTD
Result Target
0 leaks or breaks Q2
46Sewer Overflow Rate (AWWA)
Target: 0 overflows per quarter in a year
Measurement Method
QTR:100 (total number of sewer overflows
during the reporting period) / total miles of
pipe in the sewage collection system
0 0 0
14.7
0 0 0 0 00
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4 YTD
Result AWWA Target
YTD:Cumulative number of overflows per
quarter in a FY
0 Failures in Q1 & Q2
47Emergency Facility Power Testing
Target: 100%of the District’s facilities tested per year
(The District currently has 34 powered ready facilities)
Measurement Method
Number of facilities tested / total facilities
29
47 47
26
44
70
100 100
0
20
40
60
80
100
Q1 Q2 Q3 Q4 YTD
Result Target
48Tank Inspection and Cleaning
Annual Target: Clean and inspect 7 tanks or more per year
Measurement Method
Number of tanks cleaned and inspected
1
4 5
7 7 7 7 7
0
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4 YTD
Result Target
49Main Flushing and Fire Hydrant Maintenance
Target: 215 or more mains flushed and fire hydrants maintained in a single year
(The target of 215 is comprised of 165 hydrants and 50 mains)
Measurement Method
Number of mains flushed and hydrants
maintained
50
141
191
54 54 54 54
215
0
50
100
150
200
250
Q1 Q2 Q3 Q4 YTD
Result Target
50Critical Valve Exercising
Annual Target: Exercise 631 identified critical valves in a year
Measurement Method
Number of critical valves exercised in a
reporting period
625
6
631
631 631 631 631 631
0
100
200
300
400
500
600
700
800
900
1000
Q1 Q2 Q3 Q4 YTD
Result Target
51
Next Steps
52
1 Complete remaining objectives
Prioritization of a project action list from the
SCADA roadmap
Improvement to our asset management decision
analysis and development of CIP framework
Development of District’s new 3-5 year Strategic Plan
2
3
4
STAFF REPORT
TYPE
MEETING:
Regular Board
MEETING
DATE:
March 7, 2018
SUBMITTED
BY:
Mark Watton
General Manager
W.O./G.F.
NO:
N/A DIV.
NO.
N/A
APPROVED BY:
Mark Watton, General Manager
SUBJECT: General Manager’s Report
ADMINISTRATIVE SERVICES:
GIS:
GIS Interactive Map – The development of the new public facing GIS
interactive map is nearly complete. Esri-based interactive maps have
been quite popular among government agencies to communicate
efficiently with customers based on the geographic locations and
their related information. The development is being done by the
District’s in-house GIS group. Staff will be testing during the month
of March.
Human Resources: Wellness Program - As a part of the District’s Wellness Program, a
pilot program for standing workstations was implemented this month
for some employees. Employees have expressed appreciation and
provided positive feedback for the program thus far.
In addition, RSIGuard was installed on computers for those employees
who spend the majority of their time at their workstations. This new
program is a comprehensive tool for managing and preventing
repetitive strain injuries. The software is designed to help reduce
repetitive computer activity and encourage healthier computer work
habits.
Meetings - Staff attended the recent Water Utilities Human Resources
Consortium meeting (WUHRC) at San Diego County Water Authority in
Kearny Mesa. The WUHRC group consists of HR staff at all the water
agencies in the San Diego County region. The group meets on a
quarterly basis for networking and to discuss HR best practices and
trends.
2
Recruitments/New Hires/Promotions:
o The District is recruiting for a Disinfection Technician and
preparing to recruit for an Accounting Technician. These
positions are related to upcoming retirements and are critical
to District operations.
o The Accountant position has been filled and the incumbent will
begin employment in March.
IT Operations:
District Satellite Phones - In an effort to strengthen the District’s
Emergency Operations Center (EOC) services, staff is evaluating
satellite (SAT) phones to assist with emergency communications. The
SAT phones will be used monthly at the scheduled WebEOC meetings and
will supplement District emergency communications resources.
Board Room Streaming Audio – In February 2018, staff completed the
setup and configuration of live audio streaming of Board meetings.
District customers and other interested parties will be able to
listen to live, real-time audio of monthly Board meetings starting
March 7. Live audio broadcast of monthly meetings can be heard on
most desktop browsers and a range of popular mobile devices.
Purchasing & Facilities:
Administration Parking Lot LED kWh Trends – The recent parking lot
LED lighting upgrades are providing benefits not only in improved
nighttime visibility but also in energy reductions. A partial year-
over-year evaluation of the Administration SDG&E account indicates an
average of 6,241 kilowatts saved per month. A more complete analysis
will be conducted at the one year mark to include both Admin and
Operations accounts.
3
BidSync Solicitations – During the previous period, there were 3
solicitations out on BidSync:
o “As-Needed Land Surveying Services Consultant FY 2019-2021” –
For the services of a land surveying consulting firm to provide
professional services in support of the District’s Capital
Improvement Program, USA Mark-out Program, Right-of-Way Program,
and Cadastral Base Mapping Program for a period of three fiscal
years (FY 2019 - FY 2021) with a not-to-exceed amount of
$250,000.
o “OWD Admin & Ops Parking Lot PH II - Pavement Restoration” - The
general scope of work includes pavement rehabilitation of the
Otay Water District’s Administration and Operations parking
lots, new carport and fencing. The engineer’s estimate is
$281,500.00.
o “As-Needed Asset Management Services” – For the services of
engineering consulting firm(s) to provide professional services
in support of the Asset Management Program for a period of three
Fiscal Years (FY 2018 - FY 2020), for a not-to-exceed amount of
$175,000.
Safety & Security:
Mutual Aid Agreement – Staff attended the first meeting and
participated as part of a committee to review the current agreement
and revise as necessary, an initiative spearheaded by San Diego
County Water Authority. The agreement provides for emergency
assistance among water member agencies. More information and updates
will be provided as they develop.
Monthly WebEOC Exercise – Staff completed February’s monthly WebEOC
exercise, which consisted of: “Assume a major storm has hit the area,
and County OES has opened the EOC at a level 2. Assign a task to the
Water Authority in Task Tracker and attach the mutual aid request
form”. The exercise was completed successfully.
District Safety Programs - Staff developed a Hepatitis B procedure
following Cal/OSHA’s regulatory guidelines and worked with
HR/stakeholders in the development and completion of procedural and
training guidelines for the District’s HAZWOP Team. Under this
procedure, the District offers free vaccination against Hepatitis B
virus for all employees who are at increased risk for blood borne
pathogen exposures at work. Emergency Response workers who have
contact with blood, infected tissue or secretions, and render aid
during trauma, cuts, and abrasions, are most at risk for acquiring
Hepatitis B.
4
District Safety Committee - The District’s Committee met last month.
Topics discussed included:
o HAZWOP and Confined Space Rescue Team Update
o Electronic conversion of confined space C7 Form: No-Permit
Required
o Uniform names for confined space District locations
o Update on standing work stations and standardization of basic
ergo office equipment
o Hepatitis B Program for HAZWOP Team
o Exploring Facilities performing basic electrical work and
training requirements
o Commercial vehicles’ cabin entry steps and side handle
o Flu/cold prevention
o Changes to Safety Committee Program composition
o Cal/OSHA Treatment Plant Inspection Update
o District’s Safety Program Review and Completions (Lock-Out/Tag-
Out/Block-out, Low & High Voltage, etc.)
o SDRMA Safety Videos
o Next meeting is scheduled for March 20, 2018.
FINANCE:
Financial Reporting:
o For the seven months ending January 31, 2018, there are total
revenues of $63,207,894 and total expenses of $59,515,289. The
revenues exceeded expenses by $3,692,605.
o The market value shown in the Portfolio Summary and in the
Investment Portfolio Details as of January 31, 2018 total
$86,348,086 with an average yield to maturity of 1.283%. The
total earnings year-to-date are $556,134.
ENGINEERING AND WATER SYSTEM OPERATIONS:
Engineering:
870-2 Pump Station Replacement: This project consists of a new pump
station to replace the existing Low Head 571-1 and High Head 870-1
Pump Stations. The project also includes the replacement of the
existing liner and cover for the 571-1 Reservoir (36.7 MG). During
the month of February 2018 Pacific Hydrotech completed the
installation of the planned 30-inch cement mortar lined coated steel
recirculation pipe and the planned 66-inch cement mortar lined coated
steel suction pipe within the 571-1 Reservoir. Reconstruction of the
earthen reservoir wall, which was removed to complete the pipe
installation, also began during the month of February 2018. Work to
install the new 571-1 Reservoir liner also began. The project is
5
within budget and scheduled to complete in October 2019. (P2083 &
P2562)
SR-11 Utility Relocations: This project consists of relocating
several District potable water pipelines located in Otay Mesa Road,
Sanyo Avenue, Enrico Fermi Drive, Alta Road, and within District
easements. The first two rounds of relocations (Caltrans Utility
Agreement Numbers 33592 and 33622) were completed in FY 2016. The
District’s water main relocation consultant (NV5) submitted a Basis of
Design Report and 60% drawings for the relocations in Enrico Fermi
Drive and Alta Road in late January 2018. Caltrans has scheduled
completion of the design in March 2018 and the start of construction
in April 2019. Utility agreements corresponding to the final design
will be presented to the District’s Committee and Board in the
April/May 2019 timeframe. As part of the SR-11 project, Caltrans will
need to acquire a portion of the District’s fee-owned right-of-way
that is located in the Alta Road alignment south of Otay Mesa Road.
Caltrans has submitted an appraisal of the District’s property they
intend to acquire, which is currently under review. (P2453)
978-1 & 850-2 Reservoir Interior/Exterior Coatings & Upgrades: This
project consists of removing and replacing the interior and exterior
coatings of the 978-1 (0.5 MG) Reservoir and the 850-2 (3.1 MG)
Reservoir along with providing structural upgrades to ensure the tanks
comply with both state and federal OSHA standards as well as the
American Water Works Association and the County Health Department
standards. The 978-1 Reservoir was placed back in service in July
2017. The 850-2 Reservoir was placed back into service on January 12,
2018. During the month of February, 2018, Blastco, Inc., the
District’s contractor, completed punch list work required for contract
acceptance. Contract acceptance by the District is anticipated in
March 2018 pending remaining punch list items. Project delivery by
the contractor was behind schedule due to contractor coordination. As
a result, the District has assessed liquidated damages for the late
delivery of the project starting in September 2017 through substantial
completion, which occurred when the 850-2 Reservoir was placed back
into service. The project is within budget. (P2534 & P2544)
Campo Road Sewer Replacement: The existing sanitary sewer from
Avocado Road to Singer Lane is undersized and located in
environmentally sensitive areas that are difficult to access. The
Campo Road Sewer Replacement project will install approximately 7,420
linear feet of new 15-inch gravity sewer and include abandonment of
the existing sewer main. Work in February 2018 included the
installation of the new sewer main in Campo Road in the area that
fronts the Sheriff’s substation up to Jamacha Boulevard within the
limits of westbound Campo Road temporary traffic control and K-rail
where the project’s East Bore Pit is located. During March 2018, it
is anticipated that the contractor will complete sewer pipe
6
installation between the Campo Road/Jamacha Road intersection and the
Campo Road/Jamacha Boulevard intersection. It is anticipated that
excavation of the East Bore Pit will begin at the end of March 2018,
once the West Bore Pit construction operations are complete. The
Contractor’s schedule indicates the completion of sewer associated
with the East Bore Pit in July 2018. During February 2018, boring
operations continued at the West Bore Pit, which is located adjacent
to the intersection of Campo Road and Via Mercado. Boring and pipe
jacking operations at the West Boring Pit were constructed under and
across State Route 94 to within 5 feet of the planned West Bore
Receiving Pit location. It is anticipated that sewer installation
work at the West Bore Pit will be completed in March 2018. A majority
of the work in Campo Road, within the Caltrans right-of-way, continues
to be performed at night under traffic control. During February 2018
a survey of environmentally sensitive areas for active nesting of
endangered species was completed. The survey results indicate that
the location of active nesting is far enough away from the planned
construction to allow project work to continue. Monitoring during the
breeding season of endangered species will continue in conformance
with the project’s permit. The project is within budget and the
overall project is scheduled for completion in May 2019. (S2024)
927 Zone, Force Main Assessment and Repair Project: This project
consists of inspection, condition assessment, and repair of the
existing Ralph W. Chapman Water Reclamation Facility (RWCWRF) 1980
era, 16,000 feet long, 14-inch diameter steel force main. All work
by the District’s contractor, Charles King, including construction of
the flow meter vault, cathodic protection improvements, replacement
of existing blowoff valves, rehabilitation of an existing access
road, and spot repairs was completed and accepted by the District in
January 2018. Verification of the District’s force main inspection
and condition assessment consultant (PICA) predictions for the upper
4,000 feet (Class 200 pipe) of the force main was completed in 2015.
Verification of PICA’s predictions for the lower 12,000 feet (Class
400 pipe) is still progressing pending analysis of the steel removed
from four (4) spot repairs completed in December 2017. The overall
project is within budget. (R2116/P2508)
Hillsdale Road Potable Water and Sewer Replacement: The existing
water line in Hillsdale Road between Jamacha Road and Vista Grande
Road has experienced several leaks and is nearing the end of its
useful life. This project consists of replacing approximately 4,050
linear feet of steel water line with a 12-inch Polyvinyl Chloride
(PVC) water line. The project also includes the replacement of
approximately 760 linear feet of 8-inch PVC sewer within Hillsdale
Road. During February 2018, T C Construction Company, Inc., the
District’s contractor, continued installation of the 12-inch water
line along Hillsdale in the area between Valhalla High School and
Vista Grande Road. Base paving operations along Hillsdale Road also
7
began during February 2018. The project is within budget and on
schedule to complete in May 2018. (P2573 & S2048)
Vista Vereda and Hidden Mesa Water Pipelines Replacement: The
existing 1950’s steel water line along Vista Vereda between Vista
Grande Road and Hidden Mesa Trail in the Hillsdale area has
experienced leaks and is nearing the end of its useful life. The
existing water main is located primarily within easements, many of
which have had significant improvements performed over the years
since the water line was constructed. Through the District’s As-
Needed Engineering Design contract, a Task Order was issued on May 2,
2017 to Rick Engineering to design the project. A preliminary design
report has been completed, with the final report submitted to the
District on January 10, 2018. The changing of the Vista Vereda water
line from a transmission main to local distribution only and
upgrading the water lines in Hidden Mesa Road to become a
transmission main is recommended based upon assessment of the
challenges of reconstructing a transmission main along the same
current alignment. The Hidden Mesa Road water line upgrade portion
is now covered under CIP P2625, as approved by the Board at the
November 1, 2017 meeting. The initial design budget approved for the
Vista Vereda project was based upon replacing the existing water line
in place, but an alternative fee was included in Rick Engineering’s
proposal for including the design in Hidden Mesa Road. A task order
change has been executed to revise the scope of work and work has
begun on the 60% design. A community meeting was held on February
10, 2018 with this feedback to be considered in the project design.
The project is on schedule for completion of the design in July 2018
(the community outreach efforts delayed this a month from the
original schedule). (P2574 & P2625)
OWD Administration and Operations Parking Lot Improvements, Phase II –
Pavement Restoration: Phase I of this project, completed in October
2017, upgraded the parking lot light fixtures in both the
Administration and Operations lots. Phase II consists of repairing
the asphalt concrete paving, slurry sealing, and restriping both
asphalt concrete parking lots. In addition to the pavement
improvements, a carport will be installed to protect the larger fleet
vehicles, and gates will be installed to better secure the Operations’
parking lot. Phase II was advertised for a construction bid on
January 24, 2018. Bids were opened on February 21, 2018, and will be
presented to the Board for award at the April Board Meeting. The
project is on schedule and within budget. (P2555)
980-2 Reservoir Interior/Exterior Coating and Upgrades: This project
consists of removing and replacing the interior and exterior coatings
of the 980-2 (5.0 MG) Reservoir, along with providing structural
upgrades, to ensure the tank complies with both state and federal OSHA
standards as well as the American Water Works Association and the
8
County Health Department standards. During the month of February
2018, the contractor began the structural upgrade work on the rafter
system that supports the reservoir’s roof as included in the
construction contract. A detailed inspection of the reservoir roof
support system has revealed the need for extensive replacement of the
structural rafters and girders beyond what was anticipated in the
construction contract. Staff anticipates bringing a recommendation to
complete the structural repairs to the Board for approval at the April
Board Meeting. The project is scheduled to complete in May 2018.
(P2546)
Rancho San Diego Pump Station Rehabilitation: On April 30, 2014, the
District and the San Diego County Sanitation District (Sanitation
District) executed a reimbursement agreement for the improvements to
the Rancho San Diego Pump Station that were expected to be completed
on or about March 2016. The Sanitation District awarded a
construction contract to T C Construction Company, Inc. on
September 14, 2016. Start-up and testing of the pump station is
scheduled to begin in April of 2018 and construction is to be
completed in May 2018. (S2027)
Filipponi Reservoir Site: On December 8, 2017, staff received a
letter from an attorney representing the property owners below the
District’s 978-2 Reservoir, also known as the Filipponi Reservoir.
They noted that over the previous two years, modifications to “uphill
real property” was the cause of flooding and drainage related damage
to his client’s property. Staff noted that the District has not
altered this site in the last two years, but checked the condition of
the District’s storm drains at the Reservoir to make sure they were
functioning and traced runoff from the District’s property and found
it did not drain to his client’s property. The District’s Legal
Counsel contacted their attorney and relayed this information. No
further contact has been received.
Trails at Habitat Management Area (HMA): Otay Staff has been
participating as a stakeholder in the Otay Regional Trail Alignment
Study being carried out by the County Department of Parks and
Recreation. Other stakeholders include the City of San Diego, the
City of Chula Vista, Sweetwater Authority (SWA), the National
Wildlife Refuge, USFWS, CDFW, US Border Patrol, and the BLM. RECON
Environmental is the consultant being used by the County. The
purpose of the study is to identify trail alignments that protect
sensitive natural and cultural resources and will ensure a
sustainable trail system that minimizes erosion and impacts to water
quality. The District is a stakeholder because of our facilities in
the area being studied for possible trail creation, including the HMA
(see attached location map). The County is proposing one potential
trail as part of their study that passes through a portion of the
HMA, on the edge of the HMA, adjacent to the Golf Course on a
9
disturbed path, most of which is paved. It also follows an SDG&E
dirt access road that goes through the HMA to meet a trail that is
proposed through the National Wildlife Refuge. This is a highly
coveted trail because it provides a loop for trail users rather than
forcing them to dead end at the HMA. There is still a lot of work
that would need to be done before any of the proposed trails,
including this trail, would be approved. In discussions with County
trails staff, District staff mentioned that liability was a big
concern for the District and the County expressed that they would not
be opposed to working out an agreement where the County would assume
liability for the trail. In addition, they were not opposed to
maintaining some kind of buffer between the trail and the HMA that
would keep users from going off the trail (details to be worked out).
Since USFWS and CDFW are stakeholders in this group, and also are the
agencies that oversee the District’s management of the HMA, they
would most likely approve this trail through the HMA, particularly
since it is on established paths (that trail users use anyway,
although illegally). A major goal of this study is to establish
trails that will benefit trail users so that they will be less likely
to establish and/or use illegal trails. Staff has contacted SWA,
which has County trails through their property surrounding the
Sweetwater Reservoir. SWA has an agreement with the County for the
public use of these trails. They will be sending the District copies
of the original agreement and the current updated agreement for our
review. This will be valuable information if the District does
decide to go forward with an agreement with the County for the use of
a trail at the HMA.
For the month of January 2018, the District sold 32 meters (58.5
EDUs), generating $519,860 in revenue. Projection for this period was
23.6 meters (30.8 EDUs), with a budgeted revenue of $270,083. Total
revenue for Fiscal Year 2018 is $3,066,513 against the annual budget
of $3,241,000.
Water System Operations (reporting for January):
The District recently enrolled the Administration and Operations
buildings along with 5 other qualifying District sites in the
distribution system in SDG&E’s EcoChoice program. This program allows
the District to purchase 100% renewable energy at a lower rate than
the District was paying for electricity before. Power purchased in
the EcoChoice program is Green-e Energy certified. This renewable
power is currently comprised of 100% solar energy from facilities
located in Southern California, and other renewable generation
technologies, such as wind, may be added in the future.
10
On January 4, Water Systems Supervisor, Charles Mederos met with City
of San Diego representatives to obtain and compare the recycled
inflow meter reads with Otay Water District reads to reconcile and
note variances for the month of December 2017.
On January 4, it was discovered the previously isolated 10-inch
ductile iron pipe between Telegraph Canyon Road and Pass de Luz had a
leak-by and water was percolating from the break down to Telegraph
Canyon Road. Utility Maintenance staff cut and capped the main to
prevent any further leaks. A CIP is in place for the replacement of
this main line.
On January 9, the District reported to the Regional Water Quality
Control Board all water losses incurred during calendar year 2017.
The report included all required emergency and planned discharge
notifications.
On January 11, Utility Maintenance staff assisted Water Systems staff
to identify an unknown lateral at 13881 Campo Road, Jamul as part of
the Department of Drinking Water’s request for all public water
systems to identify all unknown lateral services.
In January 23, the Treatment Plant reported a permit violation
regarding the following: Total coliform bacteria measured in the
disinfected tertiary recycled water shall not exceed a Most Probable
Number (MPN) of 240 total coliform bacteria per 100 ml. Staff
received notification from EnviroMatrix Analytical (EMA), Lab
confirming results on January 27 at 11:30 AM that the effluent total
coliform bacteria sample result for January 23 was reported as 500
MPN-100mL. On February 1 a written submission that contains a
description of the noncompliance, its possible cause, and the period
of noncompliance for the Otay Water District Ralph W. Chapman Water
Recycling Facility was submitted to the Regional Water Quality
Control Board (RWQCB). The Total coliform bacteria measured in the
disinfected tertiary recycled water three days before and after had
non-detect (ND) results, showing we were and are still in compliance
of the permit limits, with exception to January 23.
On January 24, staff performed a planned shutdown at Castellon
Terrace in El Cajon to remove a valve and cut and cap the 8-inch main
that runs in between homes and has no future use. Twelve homes were
affected and a water trailer was in place for those customers.
On January 24, a recycled low water pressure complaint from the
Olympic Training Center in Chula Vista was forwarded from
Engineering. A pressure recorder was installed on the nearest blow
off to monitor and record water pressure for a week. After a week,
there were no issues found with the pressure in the system.
11
On January 25, Operations staff performed an emergency unplanned
shutdown at 2916 Jamacha Road due to a defective fire hydrant valve.
Eight commercial meters were affected (shopping center). Water
trailers were on site and the shutdown lasted 5.5 hours.
On January 25, Sweetwater Authority (SWA) requested to have the
Douglas emergency interconnect remain open since their water main
replacement project is expected to continue for another month. The
interconnect was opened on December 4.
Ten reservoirs were dosed during the month of January.
Purchases and Change Orders:
The following table summarizes purchases and Change Orders issued
during the period of January 17, 2018 through February 20, 2018 that
were within staff signatory authority:
Date
Action
Amount
Contractor/
Consultant Project
01/17/18 P.O. $3,778.00 The Howard E.
Nyhart Co., Inc. Benefit Study
01/18/18 P.O. $1,552.00 D & D Wildlife
Habitat
Vegetation
Pruning
01/18/18 P.O. $2,055.25 Scripps Center for
Executive Health
Executive
Physical
01/23/18 P.O. $6,299.07 Spatial Wave, Inc. GETAC S410
Toughbooks
01/23/18 P.O. $56,137.74 Zayo Group, LLC 2-Yr Colocation
Services
01/24/18 P.O. $2,026.44 Protective Life
Insurance Co. Life Insurance
01/25/18 P.O. $252.05 GHA Technologies,
Inc.
Cradlepoint
Renewal
01/30/18 P.O. $8,023.28 Webb Information
Systems Desktop Computers
02/05/18 P.O. $500.00 Mainstream
Unlimited
Consulting
Services
02/7/2018 Check
Request $35,526.00 SDG&E
870-2 Pump
Station
Replacement
Project
(P2083)
02/08/18 P.O. $20,000.00
Atkinson,
Andelson, Loya,
Ruud
Legal/Consulting
Services
02/08/18 P.O. $6,163.00 D & D Wildlife
Habitat Brush Management
12
Water Conservation and Sales:
Water Conservation – Due to higher than normal temperatures and
little rainfall, January 2018 usage was 13% higher than January
2013. Since January 2017, customers have saved an average of 10%
over 2013 levels.
02/12/18 P.O. $28,560.00 SCS Engineers Cal-ARP Updates
02/13/18 P.O. $7,000.00 Southwestern
College SDCOC Partnership
02/13/2018 Credit
Card $866.49 Parker Supply
Company
RWCWRF Effluent
Pump Station
Surge Tank
(P2559)
02/15/18 P.O. $2,700.00 1903 Solutions,
Inc. Software License
02/15/18 P.O. $9,220.95 GHA Technologies,
Inc. Software Support
02/20/2018 P.O. $23,445.00 C Below
Vista Vereda
Potholing
(P2625 & P2574)
13
The January potable water purchases were 2,057.0 acre-feet which is
32.3% above the budget of 1,554.4 acre-feet. The cumulative
purchases through January were 18,189.3 acre-feet which is 11.0%
above the cumulative budget of 16,392.4 acre-feet.
The January recycled water purchases and production were 155.5
acre-feet which is 39.7% above the budget of 111.3 acre-feet. The
cumulative production and purchases through January were 2,657.6
acre-feet which is 9.0% above the cumulative budget of 2,437.5
acre-feet.
14
Potable, Recycled, and Sewer (Reporting up to the month of January):
Total number of potable water meters: 49,864.
Recycled water consumption for the month of January:
o Total consumption: 202.2 acre-feet or 65,869,628 gallons.
Average daily consumption: 2,124,827 gallons per day.
o Total cumulative recycled water consumption since July 1, 2017:
2,773.7 acre-feet.
o Total number of recycled water meters: 720.
Wastewater flows for the month of January:
o Total basin flow: 1,603,355 gallons per day.
This is a decrease of 3.84 from January 2017.
o Spring Valley Sanitation District Flow to Metro: 529,706 gallons
per day.
o Total Otay flow: 1,073,581 gallons per day.
o Flow Processed at the Ralph W. Chapman Water Recycling Facility:
769,710 gallons per day.
o Flow to Metro from Otay Water District: 303,871 gallons per day.
By the end of January there were 6,109 wastewater EDUs.
January flows were low due to process upset causing poor effluent
quality:
o Total basin flow was 49.70 MG of which 33.28 MG was Otay’s
portion, the Plant treated 23.86 MG sending 9.42 MG to the
Metro.
Attachment: Location Map of HMA Trails
FIGURE 1
Potential Trails on
Otay Water District Land
M:\JOBS5\8212\common_gis\fig1_Potential_Alignments_OWD.mxd 11/21/2017 fmm
Image source: NAIP (flown April 2016)
Existing Trails
Potential SDNWR Draft CCP Trails
Potential Trails for Trail Alignment Study
Mother Miguel/Rockhouse Connector
Rolling Hills Ranch Connector Pathway
SDNWR Connector Trail
Conserved Lands
San Diego National Wildlife Refuge
San Miguel HMA
0 1,000Feet [
Check Total
3,329.87
4,155.84
12,180.00
LEGAL/CONSULTING SERVICES (DEC 2017)1,126.13 1,126.13204978102/14/18 18599 ATKINSON, ANDELSON, LOYA, RUUD 536966 12/31/17
35.00
2049819 02/21/18 07785 AT&T 000010772071 01/12/18 TELEPHONE SERVICES (12/12/17-1/11/18)4,292.82 4,292.82
36,430.25 36,430.25
2049703 01/31/18 01396 ASBURY ENVIRONMENTAL SERVICES I50000276608 12/15/17 WASTE OIL PICKUP 35.00
UB Refund Cst #0000241413 34.30 34.30
2049735 02/07/18 17264 ARTIANO SHINOFF 300098 01/22/18 LEGAL SERVICES (THRU 12/31/17)
2049734 02/07/18 18597 AMERICAN HERITAGE PROPERTY Ref002498841 02/05/18
CM20181 01/09/18 MGMT/INSP (12/1/17-12/31/17)900.00
CM20182 01/09/18 MGMT/INSP (12/1/17-12/31/17)880.00
CM20183 01/09/18 MGMT/INSP (12/1/17-12/31/17)3,200.00
CM20185 01/09/18 MGMT/INSP (12/1/17-12/31/17)3,040.00
1,954.10 1,954.10
2049702 01/31/18 14462 ALYSON CONSULTING CM20184 01/09/18 MGMT/INSP (12/1/17-12/31/17)4,160.00
UTILITY LOCATING SVCS (12/1/17-12/31/17)12,972.00 12,972.00
2049818 02/21/18 17959 ALLEN INSTRUMENTS & SUPP LLC 303221IN 12/27/17 SOFTWARE MAINTENANCE
2049701 01/31/18 15024 AIRX UTILITY SURVEYORS INC 2412312017 01/09/18
561.00
2049700 01/31/18 07732 AIRGAS SPECIALTY PRODUCTS INC 131524860 01/10/18 AQUA AMMONIA 1,935.00 1,935.00
3,717.38 3,717.38
2049733 02/07/18 07732 AIRGAS SPECIALTY PRODUCTS INC 131524859 01/10/18 AQUA AMMONIA 561.00
DISINFECTION SYSTEM (12/29/17)1,217.50 1,217.50
2049699 01/31/18 07951 AHLEE BACKFLOW SERVICE INC 77154 01/03/18 WELDING / FABRICATION
2049698 01/31/18 12174 AECOM TECHNICAL SERVICES INC 56 01/02/18
1,072.20
2049817 02/21/18 18258 ADP LLC 505609732 12/20/17 PAYROLL IMPLEMENTATION (ENDING 12/18/17)350.00 350.00
1,575.00 1,575.00
2049816 02/21/18 18122 ACC BUSINESS 180152818 01/27/18 INTERNET CIRCUITS (12/11/17-1/10/18)1,072.20
SHAREPOINT SERVICES (12/6/17-12/21/17)900.00 900.00
2049780 02/14/18 08488 ABLEFORCE INC 7810 02/01/18 SHAREPOINT SERVICES (1/17/18-1/31/18)
1019170 01/03/18 SODIUM HYPOCHLORITE 334.23
2049697 01/31/18 08488 ABLEFORCE INC 7771 01/08/18
1019310 01/08/18 SODIUM HYPOCHLORITE 448.53
1019192 01/04/18 SODIUM HYPOCHLORITE 384.18
1019110 01/02/18 SODIUM HYPOCHLORITE 674.23
1019456 01/11/18 SODIUM HYPOCHLORITE 480.22
SODIUM HYPOCHLORITE 1,056.49
1019193 01/04/18 SODIUM HYPOCHLORITE 777.96
2049696 01/31/18 01910 ABCANA INDUSTRIES INC 1019309 01/08/18
1020255 01/25/18 SODIUM HYPOCHLORITE 453.33
1019943 01/25/18 SODIUM HYPOCHLORITE 345.76
1019706 01/18/18 SODIUM HYPOCHLORITE 874.97
1019829 01/22/18 SODIUM HYPOCHLORITE 756.83
Amount
2049779 02/14/18 01910 ABCANA INDUSTRIES INC 1019705 01/18/18 SODIUM HYPOCHLORITE 898.98
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
Page 1 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
334.84
7,164.00
72,504.38
5,819.24
9,651.10 9,651.10
2049789 02/14/18 00184 COUNTY OF SAN DIEGO 2003193E623980118 02/04/18 SHUT DOWN TEST (1/22/18)153.00
BUSINESS MEETING 80.00 80.00
2049706 01/31/18 00099 COUNTY OF SAN DIEGO DPWAROTAYMWD121701/10/18 EXCAVATION PERMITS (DEC 2017)
I269713 01/11/18 3G MOBILE RECEIVER DMMR/ANTENNA 314.29
2049788 02/14/18 02612 COUNCIL OF WATER UTILITIES 01162018 01/16/18
CREDIT MEMO -808.13
I244496 01/05/18 INVENTORY 6,313.08
66,287.80
I188452 12/05/17 ALLEGRO RECEIVERS 6,216.58
2049705 01/31/18 18331 CORE & MAIN LP I188453
W/O ORDER REFUND D0684-060121 504.22 504.22
2049787 02/14/18 18331 CORE & MAIN LP I145492 01/26/18 INVENTORY
2049743 02/07/18 11690 CONCORDIA LUTHERAN CHRCH & SCH 0684013018 01/30/18
3,744.00
2200 01/12/18 1" METER SETS (1/08/18-1/12/18)2,460.00
2204 01/19/18 REGISTER REPLACEMENT (1/15/18-1/19/18)960.00
UB Refund Cst #0000240452 1,894.34 1,894.34
2049786 02/14/18 17923 CONCORD UTILITY SERVICES 2196 01/05/18 REGISTER REPLACEMENT(1/01/18-1/05/18)
2049823 02/21/18 18615 CITY OF CHULA VISTA Ref002499040 02/16/18
8,518.22
2049822 02/21/18 00446 CITY OF CHULA VISTA 15976LIN 01/29/18 CLAIM SETTLEMENT 3,744.96 3,744.96
320.08 320.08
2049742 02/07/18 06252 CHULA VISTA ELEMENTARY SCHOOL 0026013018 01/30/18 W/O ORDER REFUND D0026-090286 8,518.22
GARDEN TOUR (12/13/17)158.23 158.23
2049741 02/07/18 02026 CHULA VISTA ELEM SCHOOL DIST AR048290 01/30/18 GARDEN TOUR (1/30/18)
2049785 02/14/18 02026 CHULA VISTA ELEM SCHOOL DIST AR048343 02/06/18
13,861.00
2049740 02/07/18 18595 CHARLES KING COMPANY Ref002498839 02/05/18 UB Refund Cst #0000241148 2,046.00 2,046.00
45.00 45.00
2049704 01/31/18 15177 CAROLLO ENGINEERS INC 0163926 01/12/18 870-2 PS (12/1/17-12/31/17)13,861.00
TUITION REIMBURSEMENT 238.00 238.00
2049784 02/14/18 04071 CAPITOL WEBWORKS LLC 28965 01/31/18 OTHER AGENCY FEES (JAN 2018)
17548 01/19/18 GARDEN TOURS (1/17/18)167.42
2049821 02/21/18 15447 CANNON, LARRY 02202018LC 02/20/18
1,146.60
2049739 02/07/18 02401 CAJON VALLEY UNION SCHOOL DIST 17541 01/18/18 GARDEN TOURS (1/16/18)167.42
6,082.35 6,082.35
2049738 02/07/18 18608 CA DEPT OF TRANSPORTATION 0566013018 01/30/18 W/O ORDER REFUND D0566-090121 1,146.60
LEGISLATIVE ADVOCACY (THRU 12/31/17)2,255.00 2,255.00
2049783 02/14/18 08156 BROWNSTEIN HYATT FARBER 708907 02/07/18 LEGISLATIVE ADVOCACY (THRU 1/31/18)
2049737 02/07/18 08156 BROWNSTEIN HYATT FARBER 708404 01/31/18
2,046.00
2049736 02/07/18 16624 BRIAN SCIUTTO Ref002498833 02/05/18 UB Refund Cst #0000093513 137.85 137.85
7,693.35 7,693.35
2049820 02/21/18 18613 BLASTCO INC Ref002499038 02/16/18 UB Refund Cst #0000239122 2,046.00
LEGAL/CONSULTING SERVICES (DEC 2017)1,126.13 1,126.13
2049782 02/14/18 11519 BACKFLOW APPARATUS & VALVE CO 833185 12/08/17 TEMP BACKFLOWS
2049781 02/14/18 18599 ATKINSON, ANDELSON, LOYA, RUUD 536966 12/31/17
Page 2 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
306.00
374.46
8,769.10
10,254.13
2,913.56
666.23
x1207982 12/15/17 FLEET VEHICLE WASHING 101.09
x1096767 07/21/17 FLEET VEHICLE WASHING 101.09
x1143046 09/22/17 FLEET VEHICLE WASHING 107.83
x1130783 09/01/17 FLEET VEHICLE WASHING 107.83
x1203586 12/08/17 FLEET VEHICLE WASHING 128.14
x1161976 10/13/17 FLEET VEHICLE WASHING 114.57
x1137326 09/15/17 FLEET VEHICLE WASHING 133.46
x1164931 10/20/17 FLEET VEHICLE WASHING 128.24
x1216455 12/22/17 FLEET VEHICLE WASHING 149.79
x1083703 07/07/17 FLEET VEHICLE WASHING 141.52
x1148853 09/29/17 FLEET VEHICLE WASHING 206.55
x1175748 11/03/17 FLEET VEHICLE WASHING 176.84
FLEET VEHICLE WASHING 243.00
x1133525 09/08/17 FLEET VEHICLE WASHING 236.07
2049746 02/07/18 11962 FLEETWASH INC x1155323 10/06/17
COFFEE SERVICES 626.63
096275 01/05/18 COFFEE SERVICES 39.60
0620253 01/10/18 INVENTORY 495.65
2049710 01/31/18 16469 FIRST CHOICE SERVICES 095960 01/03/18
82.03
2049709 01/31/18 03546 FERGUSON WATERWORKS # 1083 0618164 01/03/18 INVENTORY 2,417.91
4,101.59 4,101.59
2049825 02/21/18 09153 EILEEN BANGALAN Ref002499034 02/16/18 UB Refund Cst #0000024134 82.03
UB Refund Cst #0000233768 111.32 111.32
2049745 02/07/18 18603 EASTLAKE PROF'L OWNERS ASSOC 0951013018 01/30/18 W/O ORDER REFUND D0951-060170
I20171340 12/15/17 ANALYZERS & ENCORE700 4,802.20
2049824 02/21/18 18612 DENNIS BATES Ref002499037 02/16/18
6,163.00
2049744 02/07/18 11797 D&H WATER SYSTEMS INC I20180019 01/04/18 CHLORINE PM 5,451.93
22,105.00 22,105.00
2049792 02/14/18 15898 D & D WILDLIFE HABITAT 54515 02/02/18 BRUSH MANAGEMENT 6,163.00
BUSINESS MEETING 60.00 60.00
2049708 01/31/18 04443 CSI SERVICES INC 7929 01/09/18 COATING INSPECTION (11/27/17-12/22/17)
0301012818 01/28/18 TELECOM SVCS / METRO-E (1/28/18-02/27/18)133.77
2049791 02/14/18 00693 CSDA, SAN DIEGO CHAPTER 02152018 02/08/18
TELECOM SVCS / METRO-E (1/24/18-2/23/18)8,501.56
9601012618 01/26/18 TELECOM SVCS / METRO-E (1/25/18-2/24/18)133.77
2049790 02/14/18 17770 COX BUSINESS 6702012518 01/25/18
TELECOM SVCS / METRO-E (1/12/18-2/11/18)240.72
6701011418 01/14/18 TELECOM SVCS / METRO-E (1/14/18-2/13/18)133.74
2003193E623760118 02/04/18 SHUT DOWN TEST (1/5/18)153.00
2049707 01/31/18 17770 COX BUSINESS 6801011318 01/13/18
2049789 02/14/18 00184 COUNTY OF SAN DIEGO 2003193E623980118 02/04/18 SHUT DOWN TEST (1/22/18)153.00
Page 3 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
2,594.93
290.41
3,449.13
3,098.25
10,116.04
BILL PROCESSING SVCS (DEC 2017)2,216.02 2,216.02204971401/31/18 08969 INFOSEND INC 130438 01/02/18
BILL PROCESSING SVCS (1/2/18-1/19/18)7,742.61
131629 01/19/18 BILL PROCESSING SVCS (1/2/18-1/19/18)2,373.43
2049798 02/14/18 08969 INFOSEND INC 131630 01/19/18
5,628.00
2049713 01/31/18 15622 ICF JONES & STOKES INC 0127229 01/05/18 ENVIRONMENTAL SVCS (10/28/17-11/24/17)6,339.74 6,339.74
7,989.55 7,989.55
2049712 01/31/18 13349 HUNSAKER & ASSOCIATES 2017120062 01/08/18 LAND SURVEYING (11/25/17-12/31/17)5,628.00
UB Refund Cst #0000241596 766.27 766.27
2049797 02/14/18 02008 HELIX ENVIRONMNTL PLANNING INC 64055 01/18/18 ENVIRONMENTAL SERVICES (12/1/17-12/31/17)
2049828 02/21/18 18616 HELIX ENVIRONMENTAL CONST GRP Ref002499041 02/16/18
10811448 01/26/18 HACH MODULES 1,393.00
10811445 01/26/18 HACH MODULES 264.00
3,238.82
2049796 02/14/18 00174 HACH COMPANY 10811442 01/26/18 HACH MODULES 1,441.25
162.00 162.00
2049750 02/07/18 00174 HACH COMPANY 10771321 12/26/17 HACH APA6000 3,238.82
CRADLEPOINT RENEWAL 253.21 253.21
2049711 01/31/18 09715 GUTIERREZ, JUAN 01302018JG 01/30/18 TUITION REIMBURSEMENT
2049795 02/14/18 03537 GHA TECHNOLOGIES INC 9999690 01/25/18
1,149.71
S118687833004 12/14/17 PLC MODULES 1,149.71
S118687833005 12/15/17 PLC MODULES 1,149.71
UB Refund Cst #0000127526 22.91 22.91
2049794 02/14/18 10817 GEXPRO S118687833003 12/04/17 PLC MODULES
2049749 02/07/18 18590 GAYLE BROWNLOW Ref002498834 02/05/18
MILEAGE REIMBURSEMENT (DEC 2017)179.23
010318013118 02/06/18 MILEAGE REIMBURSEMENT (JAN 2018)111.18
2049793 02/14/18 17855 GASTELUM, HECTOR 120117123117 02/07/18
58.45
2049748 02/07/18 17815 FRED C SANDERS 0966013018 01/30/18 W/O ORDER REFUND D0966-090299 2,434.41 2,434.41
125.00 125.00
2049747 02/07/18 18586 FRANCISCO RAMIREZ Ref002498829 02/05/18 UB Refund Cst #0000004937 58.45
FLEET VEHICLE WASHING 83.62 83.62
2049827 02/21/18 18600 FRANCHISE TAX BOARD Ben2499057 02/22/18 BI-WEEKLY PAYROLL DEDUCTION
2049826 02/21/18 11962 FLEETWASH INC x1235329 01/26/18
x1100284 07/28/17 FLEET VEHICLE WASHING 47.17
x1104264 08/04/17 FLEET VEHICLE WASHING 33.70
x1077909 06/30/17 FLEET VEHICLE WASHING 60.65
x1196967 12/01/17 FLEET VEHICLE WASHING 53.91
x1186678 11/17/17 FLEET VEHICLE WASHING 74.13
x1121471 08/25/17 FLEET VEHICLE WASHING 74.13
x1219612 12/29/17 FLEET VEHICLE WASHING 94.35
x1112731 08/11/17 FLEET VEHICLE WASHING 80.87
Page 4 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
2,707.00
TRAVEL ADVANCE (2/20/18-2/23/18)302.00 302.00204980502/14/18 01715 PORRAS, PEDRO 022018022318a 01/05/18
73.18
2049716 01/31/18 00137 PETTY CASH CUSTODIAN 013018 01/30/18 PETTY CASH REIMBURSEMENT 787.80 787.80
29,511.50 29,511.50
2049761 02/07/18 18601 PATRICIA NIEVES 2037020218 02/05/18 CUSTOMER REFUND 73.18
870-2 PS REPLACEMENT (ENDING 12/31/17)560,718.56 560,718.56
2049804 02/14/18 18562 PACIFIC WESTERN BANK 112312017 01/17/18 RET/PAC HYDRO (ENDING 12/31/17)
2049803 02/14/18 06646 PACIFIC HYDROTECH CORPORATION 112312017 01/17/18
2,383.43
2049760 02/07/18 18605 OTAY RANCH VILLAGE II PC13 LLC 0724013018 01/30/18 W/O ORDER REFUND D0724-060041 471.16 471.16
8,196.50 8,196.50
2049802 02/14/18 07447 NTU TECHNOLOGIES INC 10133 01/18/18 POLYMER 929 TOTE 2,383.43
GEOTECHNICAL SERVICES (11/25/17-12/29/17)19,344.00 19,344.00
2049759 02/07/18 00761 NINYO & MOORE GEOTECHNICAL AND 214007 12/27/17 GEOTECHNICAL SERVICES (10/28/17-11/24/17)
2049832 02/21/18 00761 NINYO & MOORE GEOTECHNICAL AND 214566 01/29/18
14,361.12
2049758 02/07/18 16255 NATIONWIDE RETIREMENT Ben2498902 02/08/18 BI-WEEKLY DEFERRED COMP PLAN 14,233.79 14,233.79
1,286.39 1,286.39
2049831 02/21/18 16255 NATIONWIDE RETIREMENT Ben2499047 02/22/18 BI-WEEKLY DEFERRED COMP PLAN 14,361.12
CONSULTING SERVICES (12/8/17)500.00 500.00
2049757 02/07/18 01183 MCMASTER-CARR SUPPLY CO 51629637 12/04/17 CAM-LOCK 3/4"SS
2049756 02/07/18 18598 MAINSTREAM UNLIMITED OTAY122017 12/09/17
17.85
2049755 02/07/18 18596 LUIS GOMEZ Ref002498840 02/05/18 UB Refund Cst #0000241261 45.71 45.71
82.16 82.16
2049754 02/07/18 18593 LINDA SITTLOH Ref002498837 02/05/18 UB Refund Cst #0000217468 17.85
W/O ORDER REFUND D0959-090253 196.09 196.09
2049830 02/21/18 18610 LINDA HALEY Ref002499035 02/16/18 UB Refund Cst #0000047730
4119 06/27/17 GARDEN TOURS (4/27/17)203.00
2049753 02/07/18 18607 LAKE VIEW 88 LLC 0684013018 01/30/18
4147 09/19/17 GARDEN TOURS (3/15/17)295.00
4185 12/21/17 GARDEN TOURS (12/20/17)236.00
4087 05/25/17 GARDEN TOURS (5/17/18-5/18/17)590.00
4150 09/26/17 GARDEN TOURS (10/3/17 & 10/6/17)590.00
575.00
2049752 02/07/18 02063 LA MESA - SPRING VALLEY 4130 07/18/17 GARDEN TOURS (6/12/17 & 6/15/17)793.00
192.68 192.68
2049829 02/21/18 12276 KONECRANES INC SDG001019383 02/08/18 CRANE INSPECTIONS (FEB 2018)575.00
PAVING SERVICE 750.61 750.61
2049801 02/14/18 14808 KOEPPEN, KEVIN 121917013118 02/02/18 TRAVEL/MILEAGE REIMB (12/19/17-1/31/18)
2049800 02/14/18 05840 KIRK PAVING INC 6710 01/29/18
1,837.80
2049751 02/07/18 18592 JOSH MORALES Ref002498836 02/05/18 UB Refund Cst #0000204009 18.10 18.10
1,673.00 1,673.00
2049799 02/14/18 10563 JCI JONES CHEMICALS INC 745814 01/17/18 CHLORINE GAS 1,837.80
2049715 01/31/18 17106 IWG TOWERS ASSETS II LLC 435035 02/01/18 ANTENNA SUBLEASE (FEB 2018)
Page 5 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
10,780.97
264.83
110,252.18
3,343.29
35,526.00 35,526.00
UTILITY EXPENSES (MONTHLY)63,917.45 63,917.45
2049769 02/07/18 00871 SAN DIEGO GAS & ELECTRIC 298369 02/01/18 870-2 PS NEW GAS SERVICE
013118 01/31/18 UTILITY EXPENSES (MONTHLY)446.87
2049809 02/14/18 00121 SAN DIEGO GAS & ELECTRIC 020118 02/01/18
UTILITY EXPENSES (MONTHLY)2,324.95
012318 01/23/18 UTILITY EXPENSES (MONTHLY)571.47
012218 01/22/18 UTILITY EXPENSES (MONTHLY)93.16
2049768 02/07/18 00121 SAN DIEGO GAS & ELECTRIC 012518 01/25/18
012418a 01/24/18 UTILITY EXPENSES (MONTHLY)29,928.26
011818 01/18/18 UTILITY EXPENSES (MONTHLY)24,643.89
2,088.52 2,088.52
2049723 01/31/18 00121 SAN DIEGO GAS & ELECTRIC 012418 01/24/18 UTILITY EXPENSES (MONTHLY)55,586.87
SAFETY TRAINING 160.00 160.00
2049767 02/07/18 18602 SALT CREEK PARENT TEACHER GRP 0928013018 01/30/18 W/O ORDER REFUND D0928-060131
2049722 01/31/18 18033 SAFETY-R-US LLC 20180105157 01/05/18
9,936.17
2049766 02/07/18 02683 SAFECHECKS INC 0532607 01/17/18 PAYROLL CHECKS 198.03 198.03
33.67 33.67
2049721 01/31/18 15729 ROCKWELL SOLUTIONS INC 1782 01/08/18 ROTATING ASSEMBLY 9,936.17
MILEAGE REIMBURSEMENT (JAN 2018)47.96 47.96
2049765 02/07/18 18588 ROBERT HUTSLAR Ref002498831 02/05/18 UB Refund Cst #0000042723
2049808 02/14/18 04542 ROBAK, MARK 010118013118 02/09/18
100117103117 01/23/18 MILEAGE REIMBURSEMENT (OCT 2017)52.97
120117123117 01/22/18 MILEAGE REIMBURSEMENT (DEC 2017)32.10
01/23/18 MILEAGE REIMBURSEMENT (NOV 2017)116.63
080117083117 01/23/18 MILEAGE REIMBURSEMENT (AUG 2017)63.13
7,754.11
17829D7 01/18/18 DESIGN SERVICES (11/25/17-12/31/17)3,026.86
2049720 01/31/18 04542 ROBAK, MARK 110117113017
TRAFFIC ENG SVCS (10/27/17-11/24/17)1,295.00 1,295.00
2049807 02/14/18 08972 RICK ENGINEERING COMPANY 0059023 01/17/18 CAMPO RD SUPP SVCS (11/25/17-12/31/17)
2049719 01/31/18 08972 RICK ENGINEERING COMPANY 0058935 01/02/18
11,450.00
2049764 02/07/18 18591 RICHARD RACHAL Ref002498835 02/05/18 UB Refund Cst #0000194018 73.71 73.71
12.88 12.88
2049718 01/31/18 15647 RFYEAGER ENGINEERING LLC 18001 01/02/18 CORROSION SERVICES (12/1/17-12/31/17)11,450.00
PUMP EFFICIENCY TESTING 8,750.00 8,750.00
2049763 02/07/18 18589 REBECA FAJARDO Ref002498832 02/05/18 UB Refund Cst #0000085860
2049806 02/14/18 01409 PUMP CHECK 7184 01/22/18
1,697.69
2049717 01/31/18 15083 PUBLIC AGENCY SAFETY MGMT ASSN OR011118 01/11/18 2018 ANNUAL MEMBERSHIP (INDIVIDUAL)75.00 75.00
2,040.00 2,040.00
2049833 02/21/18 18611 PRESIDIO OTAY 225, LLC Ref002499036 02/16/18 UB Refund Cst #0000225184 1,697.69
TRAVEL ADVANCE (2/20/18-2/23/18)302.00 302.00
2049762 02/07/18 18572 PRECISION TECH CONNECT INC 11266 01/24/18 MAINTENANCE & PARTS
2049805 02/14/18 01715 PORRAS, PEDRO 022018022318a 01/05/18
Page 6 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
4,701.38
45.30
572.45
7,833.07 7,833.07
BI-WEEKLY 401A PLAN 9,963.72 9,963.72
2049837 02/21/18 06414 VANTAGEPOINT TRANSFER AGENTS Ben2499055 02/22/18 BI-WEEKLY 401A PLAN
2049776 02/07/18 06414 VANTAGEPOINT TRANSFER AGENTS Ben2498908 02/08/18
15,463.57
2049836 02/21/18 01095 VANTAGEPOINT TRANSFER AGENTS Ben2499053 02/22/18 BI-WEEKLY DEFERRED COMP PLAN 15,400.93 15,400.93
110.00 110.00
2049775 02/07/18 01095 VANTAGEPOINT TRANSFER AGENTS Ben2498910 02/08/18 BI-WEEKLY DEFERRED COMP PLAN 15,463.57
PREPAID POSTAGE MACHINE 6,000.00 6,000.00
2049814 02/14/18 06829 US SECURITY ASSOCIATES INC 2038829 01/31/18 PATROLLING SERVICES (JAN 2018)
2049835 02/21/18 00350 UNITED STATES POSTAL SERVICE 3951022018 02/20/18
60377 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)79.18
60373 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)79.18
60375 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)79.18
60374 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)79.18
60372 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)79.18
60371 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)79.18
1,311.46 1,311.46
2049729 01/31/18 15675 UNITED SITE SERVICES INC 60376 12/19/17 PORT. TOILET RENTAL (12/19/17-1/15/18)97.37
FY18 CP#6 COMPACT PICKUP 27,336.26 27,336.26
2049813 02/14/18 18609 TRANSENE COMPANY INC 154122 01/24/18 ACETATE BUFFER SOLUTION
2049774 02/07/18 18561 TOYOTA SAN DIEGO 2181824 01/28/18
59.95
2049773 02/07/18 18604 TOSARA R-10 LLC 0921013018 01/30/18 W/O ORDER REFUND D0921-090188 5,655.99 5,655.99
4,780.00 4,780.00
2049772 02/07/18 14177 THOMPSON, MITCHELL 010118013118 01/29/18 MILEAGE REIMBURSEMENT (JAN 2018)59.95
COMMUNICATION CONSULTANT (DEC 2017)2,500.00 2,500.00
2049728 01/31/18 17704 T&T JANITORIAL INC 20174354 12/31/17 JANITORIAL SERVICES (DEC 2017)
2049727 01/31/18 18376 SVPR COMMUNICATIONS 1198 12/01/17
105.00
2049726 01/31/18 15075 SUNRISE MANAGEMENT 3700012418 01/25/18 CUSTOMER REFUND 298.53 298.53
1,500.00 1,500.00
2049725 01/31/18 01460 STATE WATER RESOURCES 35306012518 01/25/18 CERTIFICATE RENEWAL 105.00
PROP & LIAB PROG/PRORATED 2,871.52 2,871.52
2049834 02/21/18 01460 STATE WATER RESOURCES 021518 02/15/18 PERMIT
01/29/18 SDCOC PARTNERSHIP (1/1/18-12/31/18)7,000.00 7,000.00
2049724 01/31/18 03516 SPECIAL DISTRICT RISK 62066 01/12/18
36.58
010118013118 02/09/18 MILEAGE REIMBURSEMENT (JAN 2018)8.72
2049812 02/14/18 07728 SOUTHWESTERN COLLEGE OWD012918
ML RETURN PUMP REPAIRS 6,575.02 6,575.02
2049811 02/14/18 16229 SMITH, TIMOTHY 010118013118a 02/09/18 EXPENSE REIMBURSEMENT (JAN 2018)
0675013018 01/30/18 W/O ORDER REFUND D0675-060125 369.67
2049810 02/14/18 00258 SLOAN ELECTRIC COMPANY 0069395 01/23/18
959.89
2049771 02/07/18 18606 SHARP HEALTH CARE 0675013018a 01/30/18 W/O ORDER REFUND D0675-060119 4,331.71
2049770 02/07/18 01208 SAN DIEGO GAS & ELECTRIC 0912013018 01/30/18 W/O ORDER REFUND D0912-090242 959.89
Page 7 of 8
Check Total Amount
CHECK REGISTER
Otay Water District
Date Range: 1/25/2018 - 2/21/2018
Check #Date Vendor Vendor Name Invoice Inv. Date Description
375.00
UB Refund Cst #0000239285 38.94 38.94
Amount Pd Total:1,684,266.84
Check Grand Total:1,684,266.84
2049838 02/21/18 18614 ZUHAIR ALSABTI Ref002499039 02/16/18
33.61
UB Refund Cst #0000221177 8.22 8.22204977802/07/18 18594 YACENIA WEIGAND Ref002498838 02/05/18
284,772.00 284,772.00
2049777 02/07/18 18587 WILLIAM HEATH Ref002498830 02/05/18 UB Refund Cst #0000005391 33.61
RET/WEIR CONSTRUCTION (12/1/17-12/31/17)14,988.00 14,988.00
2049732 01/31/18 18101 WIER CONSTRUCTION CORP 612312017 01/11/18 SEWER REPLACEMENT (12/1/17-12/31/17)
2049731 01/31/18 18173 WESTERN ALLIANCE BANK 612312017 01/11/18
119930 01/16/18 BEE REMOVAL 125.00
119768 01/09/18 BEE REMOVAL 125.00
1,941.92
2049815 02/14/18 01343 WE GOT YA PEST CONTROL INC 120164 01/24/18 BEE REMOVAL 125.00
7,833.07 7,833.07
2049730 01/31/18 15807 WATCHLIGHT CORPORATION 558578 01/15/18 ALARM MONITORING (FEB 2018)1,941.92
2049837 02/21/18 06414 VANTAGEPOINT TRANSFER AGENTS Ben2499055 02/22/18 BI-WEEKLY 401A PLAN
Page 8 of 8
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: March 7, 2018
PROJECT: DIV. NO. ALL
SUBMITTED BY: Kelli Williamson, Human Resources Manager
APPROVED BY: Adolfo Segura, Chief, Administrative Services
Mark Watton, General Manager
SUBJECT: ADOPT RESOLUTION #4343 TO APPROVE A ONE (1) YEAR EXTENSION TO
THE CURRENT MEMORANDUM OF UNDERSTANDING BETWEEN THE OTAY WATER
DISTRICT AND THE OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION, AND
APPROVE THE SAME PROVISIONS FOR MANAGEMENT, CONFIDENTIAL AND
EXECUTIVE EMPLOYEES
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution #4343 to approve a one (1) year
extension (July 1, 2018 through June 30, 2019) to the current Memorandum
of Understanding (MOU) between the Otay Water District (District) and
the Otay Water District Employees’ Association (OWDEA), to include a
cost-of-living adjustment (COLA) under the same terms as referenced in
the MOU for years 2015 through 2017 for Represented employees, and
approve the same provisions for Management, Confidential and Executive
employees.
PURPOSE:
To request that the Board adopt Resolution #4343 (Attachment A) to
approve a one (1) year extension to the current MOU, to include a COLA
under the same terms as referenced in the MOU for years 2015 through
2017 for Represented employees, and apply the same provisions for
Management, Confidential and Executive employees.
ANALYSIS:
The District and the OWDEA expressed a mutual desire to extend the
existing MOU for one (1) additional year from July 1, 2018 through June
30, 2019. In February 2018, they reached a tentative agreement and this
desire to extend the MOU was solidified and approved by an OWDEA member
vote on February 28, 2018. The MOU will continue with the same
provisions and COLA effective July 1, 2018 as was applied on July 1,
2015 through July 1, 2017 (Exhibit 1). The same provisions will apply
to Management, Confidential and Executive employees.
MOU COLA Formula
The District’s MOU includes the following language/formula related to
the COLA for July 1, 2015 through July 1, 2017, and this formula will
also be applied for the July 1, 2018 COLA:
Effective July 1, 2015 through July 1, 2017, the salary schedule and
base pay of all Represented employees shall be increased by the San
Diego CPI-U, Less Medical Care, Annual (SDCPI-U), pursuant to the
following formula:
The minimum increase shall be two percent (2%) and the maximum
of the increase shall not exceed three percent (3%).
If the SDCPI-U increase is between two percent (2%) and two-and-
a-half percent (2.5%), the increase shall equal the SDCPI-U.
If the SDCPI-U is between two and six tenths percent (2.6%) and
three-and-a-half percent (3.5%), the salary range shall be
increased by two-and-a-half percent (2.5%) plus one-half (1/2)
of the amount between two-and-six-tenths percent (2.6%) and
three-and-a-half percent (3.5%). The maximum COLA increase would
be three percent (3.0%) if the CPI is three-and-a-half percent
(3.5%).
Consumer Price Index (CPI)/Cost-of-Living Adjustment (COLA)
The SDCPI-U Less Medical Annual figure, which will be used to calculate
the July 1, 2018 COLA, was reported at 3.1%; therefore the COLA for
July 1, 2018 will be 2.8% [2.5% + 1/2(3.1-2.5) = 2.8%]. The cost related
to the 2.8% COLA for FY 2018 is estimated to be approximately $460,000.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The cost related to the 2.8% COLA for FY 2018 is estimated to be
$460,000. This amount includes the wage adjustment ($363,000), increase
in employer taxes ($22,000), and increase in liability to vacation/sick
accruals ($75,000).
This agreement maintains the status quo on other benefits such as Health
insurance, Social Security matching, Workers’ Compensation insurance,
CalPERS and various other benefits. By extending the current MOU, some
costs will increase; however, the overall payroll costs resulting from
the extension of the MOU are within the District’s anticipated rate
model, and therefore the increased costs will have no unexpected or
unplanned impact on the foreseen rates.
STRATEGIC GOAL:
4.1.1.4 - Negotiate a successor Memorandum of Understanding for
Represented employees for 2018 and beyond and related compensation and
benefits for Unrepresented employees (Management, Confidential, and
Executive employees).
LEGAL IMPACT:
None.
ATTACHMENTS:
Attachment A – Resolution #4343
Exhibit 1 – Side Letter Agreement between the Otay Water District and
the Otay Water District Employees’ Association
RESOLUTION NO. 4343
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE OTAY WATER DISTRICT TO EXTEND THE
PROVISIONS OF THE CURRENT MEMORANDUM OF
UNDERSTANDING WITH THE REPRESENTED EMPLOYEES, AND
APPROVE EXTENDING THE SAME PROVISIONS FOR
MANAGEMENT, CONFIDENTIAL AND EXECUTIVE EMPLOYEES
WHEREAS, the Board of Directors set compensation and benefits
for all employees; and
WHEREAS, the Board of Directors wishes to extend the Memorandum
of Understanding with the Otay Water District Employees’ Association
for one (1) year with the same cost-of-living provision provided to
employees July 1, 2015 through July 1, 2017, and to apply the same
provisions for Management, Confidential and Executive employees; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the
Otay Water District as follows:
1. That the Board of Directors extend the current Memorandum
of Understanding (MOU) from July 1, 2018 through June 30, 2019 for
Represented employees with the same cost-of-living provision provided
to employees on July 1, 2015 through July 1, 2017 and to apply the
same provisions for Management, Confidential and Executive employees;
2. The effective date of this resolution shall be March 7,
2018.
BE IT FURTHER RESOLVED that the Board authorizes and directs the
appropriate staff of the District to take any and all actions
necessary to implement the above-referenced changes.
PASSED, APPROVED AND ADOPTED by the Board of Directors of the
Otay Water District at a regular meeting held this 7th day of March
2018.
Ayes:
Noes:
Abstain:
Absent:
President
ATTEST:
District Secretary
SIDE LETTER AGREEMENT
BETWEEN
THE OTAY WATER DISTRICT
AND
THE OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION
TO EXTEND THE MEMORANDUM OF UNDERSTANDING
The current Memorandum of Understanding (MOU) for the period from July 1, 2014 through June 30, 2018, between the Otay Water District (District) and the Otay Water District Employees’ Association (Association) is hereby amended as set forth herein.
District Management and Association Employee Representatives have met and
conferred and have agreed to the following additional provisions, which shall constitute
an amendment to the MOU effective March 7, 2018, as follows: 1. The District and the Association hereby enter into this Side Letter Agreement,
which shall be considered an amendment to the MOU in effect from July 1, 2014
to June 30, 2018. This Side Letter Agreement and the MOU shall expire June
30, 2019. 2. Summary: Extend term of MOU for one (1) year with cost of living increase
subject to the provisions of Article 4, Section 1: Wages.
3. The District submits the following proposal for Article 2. ARTICLE 2 - TERM
Upon adoption by the Board of Directors of the District, the provisions of this
Memorandum of Understanding shall be effective during the period commencing at 8:00 a.m. on July 1, 2018 through 5:00 p.m. on June 30, 2019 for those employees working in the Field and Administrative Units, subject to the
provisions of Article 13, Section 7: Implementation.
4. The District submits the following proposal for Article 4, Section 1: Wages. ARTICLE 4, SECTION 1: WAGES
A. WAGES:
Effective July 1, 2018, the salary schedule and base pay of all represented employees shall be increased by the San Diego CPI-U, Less Medical Care,
Annual (SDCPI-U), pursuant to the following formula:
• The minimum increase shall be two percent (2%) and the maximum of the increase shall not exceed three percent (3%).
• If the SDCPI-U increase is between two percent (2%) and two-and-a-half
percent (2.5%), the increase shall equal the SDCPI-U.
• If the SDCPI-U is between two and six tenths percent (2.6%) and three-and-
a-half percent (3.5%), the salary range shall be increased by two-and-a-half
percent (2.5%) plus one half (1/2) of the amount between two-and six tenths
percent (2.6%) and three-and-a-half percent (3.5%).
5. Except as modified herein, all other terms and conditions of the MOU shall
remain unchanged and in full force and effect.
Association:
Dale Strunks, Association President
Otay Water District Employees’ Association
Otay Water District:
Mark Watton, General Manager
Otay Water District
ARTICLE 2 - TERM
Upon adoption by the Board of Directors of the District, the provisions of this
Memorandum of Understanding shall be effective during the period commencing at 8:00 a.m. on July 1, 201817 through 5:00 p.m. on June 30, 201918 for those employees
working in the Field and Administrative Units, subject to the provisions of Article 13,
Section 7: Implementation.
ARTICLE 4, SECTION 1: WAGES
A. WAGES:
Effective July 1, 201817, the salary schedule and base pay of all represented
employees shall be increased by the San Diego CPI-U, Less Medical Care, Annual (SDCPI-U), pursuant to the following formula:
• The minimum increase shall be two percent (2%) and the maximum of the
increase shall not exceed three percent (3%).
• If the SDCPI-U increase is between two percent (2%) and two-and-a-half percent (2.5%), the increase shall equal the SDCPI-U.
• If the SDCPI-U is between two and six tenths percent (2.6%) and three-and-a-
half percent (3.5%), the salary range shall be increased by two-and-a-half
percent (2.5%) plus one half (1/2) of the amount between two-and six tenths
percent (2.6%) and three-and-a-half percent (3.5%).