FY 2017/18 General Budget Workshop March 27, 2016

Assumptions Projects identified for FY 2017/18 in proposed 5-Year Infrastructure Plan will be approved and funded. All budgeted positions will remain filled. All merit step increases will be earned. Fund OPEB Trust as recommended by auditor

General Budget Expenses

General Budget Revenue

Total Assessments FY 2013/14 – 2017/18

Comparison of Peninsula Sewer Rates

Comparison of Similar Agencies AGENCY TOTAL EEs AVG ANNUAL FLOW MILES OF PIPE # of PUMP STATIONS O & M BUDGET FY 2016/17 SEWER RATE per EDU Castro Valley Sanitary District 21   160 9 $10,070,730 $ 380.00 Ross Valley Sanitary District 38 200 19 $ 8,439,815 $ 797.00 West Bay Sanitary District 27 208 12 $ 7,024,786 $ 1,031.00 Carmel Area Wastewater District 25 1.8 88 7 $ 6,942,485 $ 575.46 Mt View Sanitary District 1.3 73 4 $ 6,717,190 $ 544.44 Sausalito-Marin City Sanitary District 13 10 14 $ 4,243,447 $ 833.00 East Palo Alto Sanitary District 35 $ 3,948,185 $ 575.00 Average 1.6 111 11 $ 6,769,520 $ 676.56 SAM (excludes Infrastructure budget) 16.00 102 20 $ 4,353,744 $ 302.12 Above/-Below the Average -23% -20% -8% 85% -36% -55% SAM EDU = Total Assessments/Total # of Member Agency Connections

Operations & Maintenance Administrative Services, Treatment, and Environmental Compliance divisions Expenses increased by $281,755 (8.1%) Assessments increased by $310,780 (9.2%) Assessments based on flow from CY 2016

O & M Expenses by Division

O & M Assessments by Agency

Flow Distribution CY 2016 Month/Year HMB GCSD MWSD Plant   Average Daily Flow % of Plant Flow January 2016 0.946 47.3% 0.520 26.0% 0.532 26.6% 1.998 February 2016 0.657 46.0% 0.446 31.2% 0.326 22.8% 1.429 March 2016 1.233 47.6% 0.717 27.7% 0.641 24.7% 2.591 April 2016 0.695 47.5% 0.460 31.4% 0.308 21.1% 1.463 May 2016 0.597 46.6% 0.414 32.3% 0.270 1.281 June 2016 0.578 48.4% 0.375 0.241 20.2% 1.194 July 2016 0.648 54.1% 0.328 27.4% 0.222 18.5% 1.198 August 2016 0.795 61.9% 0.272 21.2% 0.218 17.0% 1.285 September 2016 0.730 60.5% 0.265 22.0% 0.212 17.6% 1.207 October 2016 0.821 61.1% 0.284 0.239 17.8% 1.344 November 2016 58.8% 22.1% 0.267 19.1% 1.396 December 2016 0.975 54.3% 0.379 0.442 24.6% 1.796 Total Annual 9.496 52.2% 4.768 26.2% 3.918 21.5% 18.182

Flow Distribution CY 2016

Average Daily Flows 2012 - 2016

Flow Distribution Comparison HMB GCSD MWSD FY 2017/18 52.2% 26.2% 21.5% FY 2016/17 50.7% 28.7% 20.6% Change 1.6% -2.5% 0.9%

Contract Collection Services Expenses decrease $55,414 (-6.2%) Funded positions 5.00 Assessments based on % of type of service (feet of pipe cleaned; # of lift stations maintained) F. O. G. inspection costs/revenue moved here Set aside funds for equipment replacement General support provided by O&M-funded staff

Collection Services Expenses by Type

Collection Services Assessments

Collection Services Assessments (% Total Hours)

Contract Assessments by Fiscal Year

Infrastructure Expenses increase $2.46 million (330%) Projects identified in first year of 5-Year Infrastructure Plan Assessments based on flow from CY 2016 Minimum replacement expense should equal annual depreciation cost Staff looking for grants or loans to reduce impact on assessments

Infrastructure Spending by Year

Infrastructure Assessments by Agency

Challenges Deferred infrastructure projects now critical No infrastructure or equipment replacement funds – significant increase in assessments Cash flow for infrastructure projects Increasing CalPERS rates and OPEB costs Workforce transition (7 of 16 at/exceed retirement age (55 years); 2 more w/in 4 years; 3 have 25 years or more service)

Budget Timeline 3/27/17 – SAM Board Workshop 4/10/17 – SAM Board approves proposed budget for submission to member agencies May – Member agency council/boards consider proposed budget 6/1/17 – Deadline for member agencies to submit budget approval resolutions to SAM 6/12/17 – SAM Board adopts budget