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Home My WebLink About04-28-09 Board PacketOTAY WATER DISTRICT SPECIAL MEETING OF THE BOARD OF DIRECTORS This meeting will be held at: VIA LAGO TRATTORIA RESTAURANT 866 EASTLAKE PARKWAY CHULA VISTA,CA 91914 TUESDAY APRIL 28,2009 9:30 A.M. AGENDA 1.ROLL CALL 2.PLEDGE OF ALLEGIANCE 3.APPROVAL OF AGENDA 4.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 WORKSHOP 5.REVIEW OF PROCESS TO DEVELOP THE OPERATING AND CAPITAL IM- PROVEMENT PROJECT BUDGETS (BEACHEM I POSADA) 6.DISCUSSION OF BOARD GOVERNANCE AND PROCESS 7.CROSS BORDER UPDATE (WATTON) 8.LEGISLATION UPDATE (FRAHM I BAUER) 9.ADJOURNMENT 1 All items appearing on this agenda,whether or not expressly listed for action,may be de- liberated and may be subject to action by the Board. The Agenda,and any attachments containing written information,are available at the Dis- trict'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 con- tacting her at (619)670-2280. If you have any disability which would require accommodation in order to enable you to participate in this meeting,please call the District Secretary at 670-2280 at least 24 hours prior to the meeting. Certification of Posting I certify that on April 24,2009,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 24 hours in advance of the special meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley,California on April 24,2009. 2 I\II AGENDA ITEM 5 Presented April 28,2009 Board Workshop 1 ·---..- t!: Budget Overview •January o Budget Workbooks prepared •February o Chiefs submit personnel changes to HR •March D Chiefs submit administrative and materials budget to Finance D HR reviews personnel changes,Finance reviews admin &materials budgets D Reviews of budgets with Finance,departmental staff, Chiefs,AGM &GM 2 Budget Overview •April o Rate Model loaded,and budget assumptions reviewed with GM o Assumptions and rates reviewed with Chiefs,AGMs & GM •May o Practice run of budget presentation with Finance, Chiefs,AGMs &GM o Budget workshop with Board •June o Adopt budget and rates 3 \,"'II':.,;',. Budget Overview •August o Proposition 218 Hearing •September o Rate Increase 4 Budget Workbooks •Budget submittal deadlines •Budget overview •Historical expenditure data •Operating budget worksheets from prior year •Personnel procedures and forms 5 •·-"-..~ Personnel Procedures •Department evaluates staffing needs •Submit appropriate forms for o Addition of new personnel D Reclassifications D Advancements D Temporary staffing needs •Department prepares long-term staffing plan 6 •,- ~71II; _ Personnel Requests •HR reviews request and meets with each Chief to fully understand requirements •HR makes recommendations to AGMs and GM •AGMs and GM consider appropriateness of requests and approves any changes •Personnel changes are submitted to Finance to be included in the position budgeting process 7 ...-.-'• Position Budgeting •Eden Position Budgeting Module is loaded with all positions current and proposed changes •Changes to salaries and benefits are made based on: D MOU (cola and merit increases) D Leave accrual changes due to longevity D Benefit cost changes provided by vendors •PERS •Medical/Dental •Workers Compensation &Unemployment •Position budgeting calculates total salary and benefit costs •Cost are allocated to funds (operating and CIP)based on Labor Budget Worksheet allocations submitted by departments 8 ..-'..-.. Departmental Submittal of Administrative and Materials Budget Using the Eden budgeting module department staff submits budget request D Each expense category is scrutinized using the zero based budget approach.Budget item must be justified and aligned with: •Strategic Plan •Regulatory requirements •Daily workload requirements •Cost and volume changes •Prior and current year expenses to ensure budget requests are reasonable •Departmental staff reviews requests with the Chief •Separately Finance reviews departmental input 9 •-.. Budget Edit List Budget Preparation Document Edit List Department -3200 Reference: Date: 420 112712009 Description: Fiscal Year: 3243-Laboratory 2010 Account Mask ?1-3243-5261153* Account No Account Title *2008 2009 *2009 2010 Calculated Actuals Board Actuals Budget Request (2010 Budget Request Approved -2009Board Approved) 3243 11-3243-5261 Outside Services 51,900.00 40,000.00 27,200.00 15,000.00 -25,000.00 Additional Laboratory 15,000.00 analysis to meet the monitoring and reporting requirements ofTitle 220fthe CA Code or Regulations. 11-3243-5318 Laboratory Equipment 31,200.00 30,000.00 25,800.00 35,000.00 5,000.00 and Supplies 10 ••••..~. Administrative and Materials Budget Requests •Finance completes review and explanation of budget requests with each Chief •Finance prepares a summary of all budget requests and highlights the following: D Strategic Plan items D Regulatory items D Large increases or decreases to budget •Price changes •Volume changes (meters,chemical,fuel) 11 •-~••,. Administrative and Materials Budget •GM and AGMs request more information or explanation of budget items •Chiefs review changes with their staff •Appropriate changes are made and resubmitted to Finance for inclusion in budget and rate model •Final requests are reviewed again with AGMS and GM 12 Water Sales •Examine current water sales volume and make projection for current fiscal year •Estimate future water sales volume using the following information: D Growth -determined by Engineering D Consumption demands/Conservation D Weather •Review the District's allocation determined by CWA to ensure water sales projection is within the allocation 13 Water Purchases •Volume is based on water purchases as projected in prior slide,district usage needs,and water loss estimates •Price is obtained from water suppliers oCWA D City of San Diego 14 Sewer •Obtain Metro Wastewater and Spring Valley Sanitation District projected cost •Determine winter-average for both Otay and Helix water customers •Calculate ASUs for commercial customers 15 •--••• Power •Examine current power usage for potable, recycled,sewer,and administrative support area,make projection for current fiscal year D Changes in volume based on sales volume as determined above D Changes in costs as projected by SDG&E 16 .---.~ • I • -~.• Other Fees &Charges •Capacity Fee Funding of Operating Expenses o Based on anticipated workload in the planning and development services areas of Engineering •Betterment Fee Funding of Maintenance Expenses o Based on anticipated workload for preventative and corrective maintenance on the District's facilities in these betterment IDs •Meter Fees &Annexation Fees D Based on Sale of Meters determined by Engineering a ; 17 Non-Operating Revenues •Non-Operating Revenues D Rents &Leases •Based on Current and Projected leases and scheduled lease increases o Grants •Based on input from department staff D Miscellaneous •Based on analysis of each item and the related revenue source 18 Operating Budget Input into Rate Model •Once all of this data has been collected and reviewed by staff and management it is loaded into the Rate Model along with all other Rate Model data such as CIP budget,grant revenue, interest rates,debt issuances,etc. •Rate Model scenarios are run and output is reviewed •Finance presents rate model assumptions and preliminary results to the Chiefs,AGMs and GM 19 Budget Workshop •At the budget workshop the following items are presented: D Proposed Operating and CIP budgets D Rate Model assumptions and results D Recommended rate increases D Draft Proposition 218 notices •Staff receives direction from the Board and any necessary changes are incorporated 20 ~..' Board Action •The following is presented to the Board: D Operating and CI P budget D Recommended Rates D Proposition 218 Notices •Board adoption of Budgets and Rates 21 Next Steps •Proposition 218 Notices mailed 45 days prior to hearing •Proposition 218 Hearing held and new rates are adopted •New rates are implemented 22 Final Step •Each month department staff reviews their budget to actual variance report and reports on any variance that is more than 10 %over or under budget,and more than $3,000 in amount •Finance staff monitors water sales,purchases,and other revenues and expenses •Finance reviews this data and compiles a monthly comparative report •The monthly comparative report is reviewed by Senior Management and presented to the Board 23 AGENDA FFEM 5 CAPITAL IMPROVEMENT PROGRAM FY2009-2010 Rod Posada,P.E.,P.L.S. Chief of Engineering GROWTH PROJECTIONS 450-1 Reservoir Disinfection Facility (R2092l. 850..4 Reservoir {P2191} Calavo Sewer Lift {S2015} +Development has slowed down and the District has experienced a significant decrease in growth in the last two years. +The housing market in the region and within the City of Chula Vista is projected to remain quite slow for at least another year with a modest upturn in the following year. +Projected EDU sales for FY2009 are 263,with 236 for FY201 0,and 413 for FY2011. 2 C1P BUDGET ASSUMPTIONS •Growth to remain flat for at least another year. •Projects for Expansion,Betterment,and Replacement are included within the CIP. •Six-year CIP expenditure plan to be as level as possible. •The Engineering News-Record Construction Cost Index is reported to have increased by 5.1 %in 2008. Cost Indexes flCQnstructionCost Index INFLATION'S PULSE Building Cost lridex Construction Cost Index Despite this month's 0.1%decline in the co,the index's annual inflation rate held at 5.1%. J F M AoNOJ F M A MJ J A S 0 . _'".':Iflmlllll. I 1_,II 'I......III!!!II"!1""-_...'"I ·.1 I II II n ••...Jfll:J1]L 2U/';III'n"Ff'11 In I'll ,I 1IIII 1 III ~I ~rJ~_.,,:11 J II I.I JI !_1111 I rill I II II I II',, ' I II II 1.11 I =7.0 '-----'--'-----'---'---'-.---,-------,--,-----,---.---r 135.5 1--+-+--+-+-1---+----+--+--1--+---1- =::'4.0 I-I--+--+---l---+-l------+--_+_§=2.5 f---=+:::--=c:t 1.0 +5.1 +5.4 +5.4 %CHG. YEAR 0.0 0.0 -0.1 %CHG. MONTH APRIL 2009 20-CITY:1913=100 INoEXVALUE CQMMON LABOR 18015.79 WAGE $JHR.34.23 CONSTRUCTION COST 8528.39 o N 0 J ,F M A MJ J A SON 0 J F M A 3 ENGINEERING NEWS-RECORD (ENR) 03-09-09 04-06-09 1992-1 00 READY~M1X CONCRETE 186'r=T=~~~r-----;--'--- 20:1,II 200 I Prices have leveled off after decl(nes In the fourth quarter of 2008. JASONDJFMA 200812009 Prices increased for the third consecutive morlth. tllll2~l00 PVC WATER PIPE 206,--r----'---r-r--------r-----' 204 ·200I-#-~"""'~__ 202---- 19!1GlOO RElHFORCm CONCRETE PIPE 154 - 150,J I 148-~t ---1--I --+-I , 146 ---j- 144 I I i JASONDJFMA ~009/"OOll 1992~100 PORRANDCCMENT 164 I I I I I I 163 I I I 162 'ITT l"'\. 161 'I J I \..'..-160 I 1 I 1&9 I I I I I J A SON D J F M A 2008-2009 Prices declined lor tile lllird consecutive month, leaving levels just 0.3%above ayear iIlIO. "Recession KO's Inflation in 2009" Excerpts from December 22129,2008 Magazine •Steel prices also started to head down and economists expect them to keep falling through most of next year. •It's safe to say that the only direction for steel in the next six m.onths is down,"says John Mothersole,an economist with Washington,D.C. •The materials co.mponent of both EN.R cost indexes consists of lumber,cement and structural steel.Prices for all three are forecast to decline in 2009. •ENR's forecast calls for lumber pric.es to fall another 3.5°/0 next year. Source McGraw-Hili Construction Research and Analytics/ENR Tills montll's 0.2%dip is cI1ecking asteady Increase in prices. CIP PROJECT CRITERIA +INTEGRATED WATER RESOURCES PLAN (IRP), WATER RESOURCES MASTER PLAN (WRMP), SEWER SYSTEM MANAGEMENT PLAN (SSMP), SUB AREA MASTER PLAN (SAMP), URBAN WATER MANAGEMENT PLAN (UWMP) •Condition of Existing Facilities •Operating System Requirements •Water,Recycled,and Sewer System Deficiencies •Regulatory and Permitting Requirements •Agreement Commitments •Developer Driven Facilities •Economic Outlook and Growth Projection •Board of Directors and Management Directives 5 CIP PROJECT DEVELOPMENT PROCESS ------------------~------------------------i I I I I I Integrated Water Resources Plan Planning Preliminary Design Water Resources Master Plan Sub Area Master Plan Design Annual 6·Year CIP Plan Construction Capital Improgement Pro.gram BUdge1 Approval OperaltiOns I I I I I I I I L ~~~,~ 6 CIP INTERNAL BUDGET PROCESS FY 2009-FY 2010 •January 26,2009 •February 13,2009 •February 13-April21,2009 CIP Memo to Chiefs Project Manager's CIP Project Submittal Discussions with Project Managers, Finance,Chiefs,and AssistanfGeneral Managers FY 2009 -FY 20t4 Total Cost Estimate:$170,434,000 FY 2010 •2015 FY 2016·2030 (Phase II) Total Cost Estimate Total Cost Estimate ($1,000)($1,000) 1st Submittal 2nd Revision 3rd Revision 4th Revision 5th Revision 6th Revision 7th RevIsion 8th Revision $209,245 $207,748 $221,921 $225,190 $225,390 $221,210 $221,760 $222,230 $196,053 $196,183 $196,183 $196,183 $196,183 $196,183 $196,183 $196,183 7 CIP 6-YEAR BUDGET LOOK FORWARD ($Millions) FY 2009 FY FY FY FY FY 2009 2011 2012 2013 2014 t----------+---- T.otals $30.9 $23.4 $24.7 $30.5 $34.1 Six-Year Total: $170.4 FY 2010 Totals FY 2011 $30.5 FY 2012 $42.2 FY 2013 $43.7 FY 2014 $35.0 FY 2015 $33.9 Six-Year Total: $222.2 8 FY 201 OCIP BUDGET CATEGORIES ($MiHions) Actual Actual Budget Budget FY 2007 FY 2008 FY 2009 FY 2010 •Capital Backbone $30.9 $20.1 $24.9 $28.6 •Developer Reimbursement $2.8 $1.1 $1.5 $0.0 •Replacement &Renewal.$1.1 $5.5 $6.6 $6.7 •Capital Purch~ses $1.5 $1.2 $1.5 $1.6 Totals..............$36.3 $27.9 $34.5 $36.9* (Projected -less the 36-lnch Pipeline Project)$26.0 *Includes the monies not spent for the 36-lnch Pipeline Project in FY2009. 9 OTAY WATE DISTRICT INITIATIVES Six-Year CIP Expenditure Projections ($Millions) •Integrated Water Resources Plan Supply Projects $122.0 •Renewal &Replacement ProJects......$19.7 •Multiple Species Conservation Plan and San Miguel.Habitat Management...$1 .2 •Strategic Plan Elements ....................$29.7 Total Expenditure Projection.....$172.6 10 HIGH PROFILE CIP PROJECTS FY 2010 Projections ($Millions) •East County Regional Treated Water Improvement Plan (ECRTWIP)Agreement 36-inch Main $15.0 •CIP Projects Currently Under Construction $4.6 •Automated Meter Reader -Manual Meter Replacement.............................................$1.4 •Middle Sweetwater River Groundwater Well...:..$1.0 •Rancho del Rey WelL $1.5 •Otay River Groundwater Desalinization $0.6 •Otay Mesa Recycled Water Supply Link $1.5 Total Expenditure Projection .$25.6 Representing approximately 70%of the total projected expenditures of $36~9million for FY 2010. 11 UESTIONS?