Water Replenishment District Draft Budget Workshop Fiscal Year 13-14 Board of Directors Meeting May 10, 2013, 2:00 p.m.

2 1.12-13 Midyear Budget Review and 13-14 Draft Budget Presentation – February 20th Board of Directors Meeting 2:00 p.m. 2.13-14 Draft Budget Presentation – March 6th Board of Directors Meeting 2:00 p.m. 3.Convene Water Code Public Hearing/13-14 Draft Budget Presentation – April 3rd Board of Directors Meeting 2:00 p.m. 4.Budget Workshop – April 17 at 2:00 p.m. – Continuation of Public Hearing on the Replenishment Assessment, Draft Budget Presentation and Replenishment Assessment Discussion. Fiscal Year 13-14 Budget Schedule

3 5.Budget Workshop – April 23 at 2:00 p.m. – Meeting at the City of Norwalk, Norwalk Arts and Sports Complex – Hargit Room. 6.Budget Workshop – April 25 at 9:00 a.m. – Audit and Budget Advisory Committee (ABAC) Meeting 7.Budget Workshop – April 30 at 2:00 p.m. – Special Meeting of the Technical Advisory Committee Fiscal Year 13-14 Budget Schedule

4 8.Budget Workshop – May 1 at 2:00 p.m. - Board of Directors Meeting – Continuation of Public Hearing on the Replenishment Assessment, Draft Budget Presentation and Replenishment Assessment Discussion, Close Public Hearing on the Replenishment Assessment. 9.Budget Workshop – May 10 at 2:00 p.m. - Board of Directors Meeting – Open the Proposition 218 Public Hearing, Draft Budget Presentation and Replenishment Assessment Discussion and possible adoption of Replenishment Assessment. Fiscal Year 13-14 Budget Schedule

WRD service area = 420 square miles 720,000 acre feet used per year 43 cities 250,000 acre feet of groundwater from local water wells WRD supplements natural groundwater recharge Population is about 4 million (over 10% of California’s population)

How Much is an Acre Foot of Water? An acre foot is about 326,000 gallons. It is the amount of water used by two average families in a year. Equals the amount needed to fill a football field one foot deep in water.

Groundwater provides of total water demand In our region… 40%

Water Wells – over 400 active wells

1900s-1950sOVERDRAFT Plunging water levelsPlunging water levels Loss of groundwater supplyLoss of groundwater supply Wells going dryWells going dry Seawater intrusionSeawater intrusion

WRD formed in 1959 by a vote of the citizens to preserve and protect groundwater. LA County built seawater barrier wells and operated spreading grounds. Court established pumping limits for cities and water companies. Solutions Natural groundwater wasn’t enough to meet demand

How WRD Manages the Basins Replenishment of groundwater Groundwater clean up Basin monitoring Basin modeling

Spreading Grounds Alamitos Barrier Dominguez Gap Barrier West Coast Barrier

San Gabriel spreading grounds Rio Hondo spreading grounds Facilities owned and operated by LA County Flood Control District

Forebay (unconfined aquifers) Surface Recharge Spreading Basin Bedrock (Pico Formation) Pressure Area (confined aquifers) Clay (aquitard) Aquifer Ocean Surface Recharge of Groundwater

Seawater Intrusion Coastal Aquifer - No Pumping Water Table Ocean Sea Level Fresh Water Brackish Water Equilibrium

Water Table Ocean Sea Level Brackish Water Coastal Aquifer - With Pumping Seawater Intrusion Fresh Water

Water Table Ocean Brackish Water Fresh Water Sea Level Fresh Water Brackish Water Coastal Aquifer - Intrusion Advancing Seawater Intrusion

Water Table Ocean Brackish Water Fresh Water Sea Level Fresh Water Brackish Water Coastal Aquifer - Pumping and Injection Seawater Intrusion

Water Table Ocean Brackish Water Fresh Water Sea Level Fresh Water Stranded Brackish Water (Saline Plume) BrackishWater Coastal Aquifer - Pumping and Injection Seawater Intrusion

Groundwater Monitoring Nearly 300 monitoring wells at over 50 locations (more wells planned)

ANNUAL GROUNDWATER QUALITY TESTING Over 100 Chemicals Monitored

Two Annual Reports to Describe Basins

Results of WRD basin management Rising water levels & drought protection

BUDGET AWARDS Government Finance Officers Association (GFOA): The Distinguished Budget Presentation Award – WRD received this prestigious award on its first application for the 2011-12 fiscal year and also for 2012-13. California Society of Municipal Finance Officers (CSMFO): The Meritorious Award – WRD has received this award 7 times from 2004-05 through 2010-11 Excellence in Budgeting Award – WRD received this prestigious award on its first application for the 2011-12 fiscal year and also for 2012-13. We will be submitting our 2013-14 budget for consideration. 25 19 Financial Awards

COMPREHENSIVE ANNUAL FINANCIAL REPORT Government Finance Officers Association (GFOA) The Certificate of Achievement for Excellence in Financial Reporting – This has been received by WRD for the last 8 years from 2003-04 through 2010-11. The Comprehensive Annual Financial Report for fiscal year 2011-12 is currently being review by the GFOA. There are a total of only ten public water agencies who have been awarded all three of these awards in the State of California. Only three cities in our service area have attained all three financial awards. 26 19 Financial Awards

27 2013 -14 Draft Budget On May 6, 2011, the Board of Directors adopted the 2011-12 budget along with the District’s 5-year forecast. This analysis projected a Replenishment Assessment of $318 per acre-foot for fiscal year 2013 -14

28 5 Year Replenishment Assessment / Reserve Forecast 244.00 28 Adopted by the Board of Directors with stakeholder input during the District’s 2011-12 annual budget workshops

29 Draft Budget Assumptions*: 1. 1.Estimated pumping of 243,000 acre-feet for 2013-14 2. 2.Net decrease in Project, Program and Administrative costs of ($1,918,000) 3. 3.Includes litigation costs of $2.5M *The 2013-14 draft budget assumes full payment of the Replenishment Assessment 2013 -14 Budget Assumptions

31 COMPARISON 12-13 Adopted vs. 13-14 Draft Budget Upper Limit ($298) Scenario 12-13 13-14 (in millions of dollars) Adopted Draft BudgetBudgetDifference Water Costs$29.39$41.38$12.00 Projects, Programs, Admin17.1915.28(1.92) Other Supportive Costs3.153.770.62 Capital Improvement/Other6.498.481.99 Replenishment of Reserves8.665.75(2.91) Less: Other Sources (5.25) (2.21) 3.04 Cost to Provide Service$59.63$72.45$12.82

Cost of Service - $298 DRAFT WRD FISCAL YEAR 13-14 [A][B][C] [B]-[A] Description2012/132013/1412/13 Budget AdoptedProposedcompared to Budget 13/14 Budget Operating Expenditures Water Supply Purchases $ 29,385,000 $ 41,380,000$ 11,995,000 Water Conservation $ 1,033,000 $ 787,000 $ (246,000) Water Supply Production - Vander Lans $ 2,486,000 $ 2,480,000 $ (6,000) Goldsworthy Desalter $ 1,237,000 $ 1,208,000 $ (29,000) Montebello Forebay Recycled Water $ 630,000 $ 601,000 $ (29,000) Groundwater Resource Planning $ 1,430,000 $ 907,000 $ (523,000) Water Quality Improvement Program $ 290,000 $ 352,000 $ 62,000 Geographic Information Systems (GIS) $ 316,000 $ 242,000 $ (74,000) Groundwater Monitoring $ 1,044,000 $ 1,042,000 $ (2,000) Safe Drinking Water Program $ 116,000 $ 115,000 $ (1,000) Dominguez Gap Barrier Recycled Water $ 252,000 $ 242,000 $ (10,000) Replenishment Operations $ 868,000 $ 571,000 $ (297,000) Hydrogeology Program $ 1,021,000 $ 794,000 $ (227,000) Groundwater Reliability Improvement Prog $ 506,000 $ 310,000 $ (196,000) Water Education $ 1,153,000 $ 796,000 $ (357,000) Board of Directors $ 366,000 $ 364,000 $ (2,000) General Manager $ 374,000 $ 373,000 $ (1,000) Administration $ 3,328,000 $ 3,316,000 $ (12,000) GASB 45 (Required Retirement Funding) $ 745,000 $ 777,000 $ 32,000 Total Project, Program & Administrative Costs $ 46,580,000 $ 56,657,000 $ 10,077,000 Other Special Programs & Supportive Costs Litigation $ 2,553,000 $ 2,498,000 $ (55,000) Proportionality Study, Public Notices & Hearings $ - $ 520,000 Election Expense $ 600,000 $ 750,000 $ 150,000 Total Other Special Programs & Supportive Costs $ 3,153,000 $ 3,768,000 $ 615,000 Capital Improvement Costs Capital Improvement Program (CIP) RA Share $ - $ 50,000 Debt Financing/Other Income and Expense $ 6,488,000 $ 8,426,000 $ 1,938,000 Total Capital Improvement Program Expenses 6,488,000 8,476,000 1,988,000 Replenishment of Reserve $ 8,655,000 $ 5,750,000 $ (2,905,000) Total Revenue Requirements $ 64,876,000 $ 74,651,000 Operating Income Vander Lans Income/MWD Subsidy/OCWD $ 896,000 $ 964,000 $ 68,000 Goldsworthy Desalter Income/MWD Subsidy $ 1,350,000 $ 1,245,000 $ (105,000) Use of Water Purchase Carryover Fund 3,000,000 - Subtotal 5,246,000 2,209,000 $ (3,037,000) Cost to Provide Service $ 59,630,000 $ 72,442,000 $ (12,812,000)

33 The only difference in the following three scenarios is the amount of water purchased to replenish the basin. These costs have a 100% direct pass- through impact to WRD’s replenishment assessment. 2013 -14 Budget Assumptions

34 $298$283$268 Scenario 1Scenario 2Scenario 3 26,100 af21,000 af16,000 af Water Costs$41.38$37.72$34.13 Projects, Programs, Admin15.2815.2815.28 Other Supportive Costs3.773.773.77 Capital Improvement/Other8.488.488.48 Replenishment of Reserves5.755.755.75 Less: Other Revenue(2.21)(2.21)(2.21) Cost to Provide Service72.4568.7965.20 22.2%16.0%9.9% 13-14 Draft Budget Scenarios (in millions)

35 Scenario 1 – 26,100 acre-feet of Replenishment Water Upper Limit If the Board of Directors chooses to increase replenishment water purchases from the current 2,180 acre-feet to the long term average of 21,000 acre-feet plus 5,100 acre-feet of make up water, the assessment would increase from $244.00 to $298.00 in fiscal year 2013-14; an increase of $54.00 or 22.2% 2013 -14 Draft Budget

36 Scenario 2 – 21,000 acre-feet of Replenishment Water If the Board of Directors chooses to increase replenishment water purchases from the current 2,180 acre-feet to the long term average of 21,000 acre-feet, the assessment would increase from $244.00 to $283.00 in fiscal year 2013-14; an increase of $39.00 or 16.0% 2013 -14 Draft Budget

37 Scenario 3 – 16,000 acre-feet of Replenishment Water If the Board of Directors chooses to increase replenishment water purchases from the current 2,180 acre-feet to 16,000 acre-feet, the assessment would increase from $244.00 to $268.00 in fiscal year 2013-14; an increase of $24.00 or 9.9% 2013 -14 Draft Budget

Quantity (AF)Total Cost Spreading - Tier 1 Untreated Imported26,100 $ 19,125,900 Spreading – Recycled50,000 $ 2,000,000 Alamitos Barrier – Imported2,500 $ 2,529,685 Alamitos Barrier – Recycled1,600 $ 100,000 Dominguez Barrier – Imported3,250 $ 3,720,633 Dominguez Barrier – Recycled3,250 $ 2,790,125 West Coast Barrier – Imported0 $ 283,341 West Coast Barrier – Recycled15,000 $ 10,830,000 In-Lieu MWD Member0 $ 0 In-Lieu WBMWD Customer0 $ 0 TOTAL96,600 $ 41,379,684 13-14 Quantity and Cost of Replenishment Water Scenario 1 – Spreading Water – 26,100$19,125,900 Scenario 2 – Spreading Water – 21,000$15,464,100 Scenario 3 – Spreading Water – 16,000$11,874,100

40 13-14 Projects, Programs & Administration Water Conservation Professional Services – Legal fees Other Expenses – Conservation partnerships and outreach, ECO gardener program, distribution materials Other General & Administrative Costs – Staff labor costs Change from prior year – Grants and sponsorship costs re-allocated to other non- operating expenses and offset against non-replenishment assessment revenue. [1] [2] [3] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 3,000 0 R&M / Materials / Equipment000 Other Expenses 653,000 524,000 (129,000) Other General & Administrative 377,000 260,000 (117,000) Total $ 1,033,000 $ 787,000 (246,000)

41 13-14 Projects, Programs & Administration Leo J. Vander Lans Advanced Water Treatment Facility Professional Services – Primarily the District’s operating contract with the Long Beach Water Department. Repairs Maintenance, Materials, Equipment – Capital costs for replacement of ultra-violet lamp, reverse osmosis membranes and microfiltration membrane replacement costs (amortized over a 5 year period) Other Expenses – Residual surcharge fee Other General & Administrative – Staff labor costs [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 1,636,000 1,591,000 (45,000) R&M / Materials / Equipment 514,000 525,000 11,000 Other Expenses 11,000 9,000 (2,000) Other General & Administrative 326,000 355,000 29,000 Total $ 2,486,000 $ 2,480,000 (6,000)

42 13-14 Projects, Programs & Administration Goldsworthy Desalter Professional Services – Primarily the District’s operating contract with the City of Torrance Repairs Maintenance, Materials, Equipment – Cost for chemicals, and other capital replacement costs (amortized over a 5 year period) and general repairs Other Expenses – Electricity costs Other General & Administrative Costs – Residual surcharge fees and staff labor costs [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 295,000 267,000 (28,000) R&M / Materials / Equipment 437,000 370,000 (67,000) Other Expenses 307,000 316,000 9,000 Other General & Administrative 198,000 255,000 57,000 Total $ 1,237,000 $ 1,208,000 (29,000)

43 13-14 Projects, Programs & Administration Montebello Forebay Recycled Water Professional Services – Recycled Water Research SAT and lab analysis costs for regulatory compliance Repairs Maintenance, Materials, Equipment – Costs for general maintenance Other Expenses – Primarily related to WateReuse Association and Research Foundation costs Other General & Administrative Costs – Staff labor costs [1] [2] [3] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 300,000 325,000 25,000 R&M / Materials / Equipment 20,000 32,000 12,000 Other Expenses 52,000 48,000 (4,000) Other General & Administrative 258,000 196,000 (62,000) Total $ 630,000 $ 601,000 (29,000)

44 [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 1,086,000 481,000 (605,000) R&M / Materials / Equipment000 Other Expenses 63,000 12,000 (51,000) Other General & Administrative 281,000 414,000 133,000 Total $ 1,430,000 $ 907,000 (523,000) 13-14 Projects, Programs & Administration Groundwater Resource Planning Professional Services – Legal and legislative consulting fees Other General & Administrative Costs – Staff labor costs Change from prior year – Completion of the Groundwater Basins Master Plan

45 13-14 Projects, Programs & Administration Water Quality Improvement Program Professional Services – Cost/ benefit/risk analysis, legal fees Other Expenses – Majority related to Water Research Foundation fees General & Administrative Costs – Staff labor costs Change from prior year – Increase of $62,000 is primarily due to an increase in legal fees and a reallocation of staff labor costs [1] [2] [3] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 60,000 93,000 33,000 R&M / Materials / Equipment0 11,000 Other Expenses 82,000 74,000 (8,000) Other General & Administrative 148,000 175,000 27,000 Total $ 290,000 $ 352,000 62,000

46 13-14 Projects, Programs & Administration Geographic Information Systems (GIS) Professional Services – Database System Consultant and GIS system maintenance and enhancements Other Expenses – Software licenses General & Administrative Costs – Staff labor costs Change from prior year – The decrease of $74,000 is primarily due to (a) a decrease in database systems consultant costs and (b) an increase in staff labor costs due to a reallocation of staff time to GIS [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 200,000 20,000 (180,000) R&M / Materials / Equipment000 Other Expenses 28,000 26,000 (2,000) Other General & Administrative 88,000 196,000 108,000 Total $ 316,000 $ 242,000 (74,000)

47 13-14 Projects, Programs & Administration Regional Groundwater Monitoring Program Professional Services – Testing and laboratory fees Repairs Maintenance, Materials, Equipment – Costs for data logger and miscellaneous equipment costs Other Expenses – State Water Resources Control Board fees, field operations facility lease fees General & Administrative Costs – Staff labor costs Change from prior year – This program’s staff labor costs have decreased due to reallocation of staff time to other projects or programs [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 545,000 578,000 33,000 R&M / Materials / Equipment 55,000 58,000 3,000 Other Expenses 99,000 146,000 47,000 Other General & Administrative 345,000 261,000 (84,000) Total $ 1,044,000 $ 1,042,000 (2,000)

48 [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 104,000 0 R&M / Materials / Equipment 2,000 0 Other Expenses 10,000 9,000 (1,000) Other General & Administrative 00 0 Total $ 116,000 $ 115,000 (1,000) 13-14 Projects, Programs & Administration Safe Drinking Water Program Professional Services – Planning and design fees

49 [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 100,000 0 R&M / Materials / Equipment 11,000 0 Other Expenses 22,000 15,000 (7,000) Other General & Administrative 120,000 116,000 (4,000) Total $ 252,000 $ 242,000 (10,000) 13-14 Projects, Programs & Administration Dominguez Gap Barrier Recycled Water Professional Services – Compliance monitoring costs Repairs Maintenance, Materials, Equipment – Costs for data logger and miscellaneous equipment expenses Other Expenses – Discharge permits General & Administrative Costs – Staff labor costs

50 13-14 Projects, Programs & Administration Replenishment Operations Professional Services – Consultant fees Repairs Maintenance, Materials, Equipment – Storm water and replenishment water monitoring equipment Other Expenses – Various association fees (i.e., NGWA, GRAC, SGVPA, etc.) General & Administrative Costs – Staff labor costs Change from prior year – District postponed several joint projects with the Los Angeles County Department of Public Works in an effort to minimize impact to the replenishment assessment [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 405,000 28,000 (377,000) R&M / Materials / Equipment 34,000 24,000 (10,000) Other Expenses 45,000 43,000 (2,000) Other General & Administrative 384,000 477,000 93,000 Total $ 868,000 $ 571,000 (297,000)

51 13-14 Projects, Programs & Administration Hydrogeology Program Professional Services – USGS Modeling and GeoChemistry and Stratigraphy consultant fees Repairs Maintenance, Materials, Equipment – Modeling software Other Expenses – Various association fees (i.e., California Groundwater Coalition, Alliance for Water Efficiency, etc.), and costs associated with the Engineering Survey and Report General & Administrative Costs – Staff labor costs Change from prior year – The District has a decrease in costs associated with the Salt/Nutrient Management Plan as well as laboratory costs for well testing [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 653,000 525,000(227,000) R&M / Materials / Equipment 32,000 17,000 (15,000) Other Expenses 61,000 65,000 4,000 Other General & Administrative 275,000 187,000 (88,000) Total $ 1,021,000 $ 794,000 (326,000)

52 13-14 Projects, Programs & Administration Groundwater Reliability Improvement Program Professional Services – Legislative consulting fees for State and Federal funding purposes Other Expenses – Primarily miscellaneous expenses Change from prior year – The District will be funding the majority of the costs from the 2011 Certificate of Participation. [1] [2] [3] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 500,000 300,000 (200,000) R&M / Materials / Equipment000 Other Expenses 6,000 10,000 4,000 Other General & Administrative000 Total $ 506,000 $ 310,000 (196,000)

53 13-14 Projects, Programs & Administration Water Education Professional Services – Consulting support costs and seasonal temporary employee costs Repairs Maintenance, Materials, Equipment – Computer support expenses Other Expenses – Educational expenses (i.e., Think Watershed, groundwater tours, Eco Gardener classes, newsletters, printing, seminar and conferences.) General & Administrative Costs – Staff labor costs Change from prior year – The decrease in other expenses due to reduced sponsorship of educational programs. The District reallocated staff labor to other programs [1] [2] [3] 2012/13 2013/14 13/14 Budget EXPENSE CATEGORY Budget 12/13 Budget Professional Services 84,000 113,000 29,000 R&M / Materials / Equipment 3,000 10,000 7,000 Other Expenses 552,000 399,000 (153,000) Other General & Administrative 514,000 274,000 (240,000) Total $ 1,153,000 $ 796,000 (357,000)

54 13-14 Projects, Programs & Administration Board of Directors Other Expenses – Costs include allowances and expenses for Board of Directors Fiscal Year 2009/10 the Board of Directors decreased their travel budget by 10%. Fiscal Year 2012/13 the Board of Directors decreased their travel budget by 10%. The Board has also foregone the annual CPI adjustment for fiscal years 2012/13 and 2013/14. General & Administrative Costs – Director’s compensation [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services000 R&M / Materials / Equipment000 Other Expenses 96,000 94,000 (2,000) Other General & Administrative 270,000 0 Total $ 366,000 $ 364,000 (2,000)

55 [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services000 R&M / Materials / Equipment000 Other Expenses 22,000 27,000 5,000 Other General & Administrative 352,000 347,000 (5,000) Total $ 374,000 $ 373,0000 13-14 Projects, Programs & Administration General Manager Other Expenses – General costs include communication, transportation and travel General & Administrative Costs – Staff labor costs

Professional Services – Costs Include non-litigation expenses for District Counsel, independent financial audit, Federally required grant audit (Single Audit), GASB 45 required actuarial study. Repairs Maintenance, Materials, Equipment – Building maintenance expenses, technology expenses Other Expenses – Utility expenses, annual membership fees (i.e., AGWA, AWWA, Water Education Foundation, ACWA, LAFCO, CA Special District Association, etc.), printing costs, property/liability/general insurance costs, software licenses, State and Federal legislative workshop costs. General & Administrative Costs – Staff labor costs Change from prior year – The District has re-allocated some professional services costs to Groundwater Resource Planning and GRIP. The District has also re-allocated some staff costs from litigation support to administration. 56 13-14 Projects, Programs & Administration Administration [1] [2] [3] [2]-[1] 2012/13 2013/14 13/14 Budget Adopted Proposed compared to EXPENSE CATEGORY Budget 12/13 Budget Professional Services 935,000 462,000 (473,000) R&M / Materials / Equipment 274,000 254,000 (20,000) Other Expenses 639,000 586,000 (53,000) Other General & Administrative 1,479,000 2,014,000 535,000 Total $ 3,328,000 $ 3,316,000 (12,000)

57 Despite the increase in demands and regulations, the District has cut projects, programs and administrative costs in both fiscal years 2012-13 and 2013-14 by $1.4 million and $1.9 million respectively, for a total decrease of over $3.3 million 13-14 Projects, Programs & Administration

Summary By Department2011/122012/132013/14 General Management General Manager 1.00 Hydrogeology Department Chief Hydrogeologist 1.00 Senior Engineer 1.00 Senior Hydrogeologist 1.00 Hydrogeologist 2.00 Water Quality Specialist 1.00 Associate Hydrogeologist 1.00 Assistant Hydrogeologist 1.00 Engineering Department Chief Engineer 1.00 Senior Engineer 3.00 Resource Planner 1.00 Associate Engineer 1.00 Online Technology and Data Specialist 1.00 Senior Analyst - - 2.00 Finance Department Chief Financial Officer 1.00 Manager of Finance & Administration 1.00 Senior Accountant 1.00 3.00 Accountant 2.00 1.00 Accounting Technician 1.00 - - External Affairs Department Manager of External Affairs 1.00 Senior Government Affairs Representative 1.00 2.00 1.00 Senior Public Affairs Representative 1.00 Public Affairs Representative 2.00 1.00 Associate Government Affairs Representative 1.00 Administrative Specialist 1.00 Administration and Human Resources Deputy Secretary 1.00 Administrative Support Specialist 2.00 Network Administrator 1.00 Total 34

59 13-14 Draft Budget Scenarios (in millions) $298$283$268 Scenario 1Scenario 2Scenario 3 26,100 af21,000 af16,000 af Water Costs$41.38$37.72$34.13 Projects, Programs, Admin15.2815.2815.28 Other Supportive Costs3.773.773.77 Capital Improvement/Other8.488.488.48 Replenishment of Reserves5.755.755.75 Less: Other Revenue(2.21)(2.21)(2.21) Cost to Provide Service72.4568.7965.20 22.2%16.0%9.9%

60 Litigation – $2,498,000 budgeted for fiscal year 2013-14 1. 1.Case BS 120643 – City of Cerritos, et al. v. WRD 2. 2.Case BS 128136 – 09 Central and West Basin Storage Motion filed in Central & West Basin Judgment cases (Downey, Cerritos, Signal Hill & CBWMD) 3. 3.Case C786656 – Proposition 218 challenge to Replenishment Assessment 4. 4.Case B226743 appeal to C786656 – WRD et al v. City of Cerritos et al Court of Appeals 5. 5.Case BS 129817 – Central Basin Municipal Water District v. WRD 13-14 Other Supportive Costs Litigation

61 6. 6.Case C786656 – WRD/Central and West Basin Water Replenishment Districts v. Charles Adams 7. 7.Case BS 132202 – Central Basin Municipal Water District v. WRD 8. 8.Case BS464772/773 – WRD v. the Cities (Cities of Downey, Cerritos and Signal Hill; RA Validation Action and RA Motion for Declaratory Relief) 9. 9.Case LACV11-7531VBF(RZx) – Central Basin Municipal Water District v. WRD 10. 10.Case BS 134295 – WRD v. Central Basin Municipal Water District 11. 11.Case BS 134239 – Tesoro 12. 12.Case VC060546 – WRD v. City of Downey 13-14 Other Supportive Costs Litigation

62 13. 13.Case VC060498 – WRD v. City of Cerritos 14. 14.Case VC060496 – WRD v. City of Signal Hill 15. 15.Case VC060499 – WRD v. City of Bellflower 16. 16.Case VC060592 – WRD v. City of Pico Rivera 17. 17.Case 2:11-cv-07531-VBF-RZ – CBMWD v. WRD 18. 18.Case B 235039 – CBMWD v. WRD, et al 19. 19.Case BS 139228 – City of Pico Rivera v. WRD 20. 20.Case BS 139830 – Tesoro v. WRD (Tesoro II) 21. 21.Case BC 493914 – WRD v. Tesoro 13-14 Other Supportive Costs Litigation

63 Cost of Service Report and Public Notices $520,000 – Expenses associated with the Proposition 218 process, including the cost of service report and public notice costs. Election Expense $750,000 – Mandatory pass-through costs payable to the Los Angeles County Registrar of Voters 13-14 Other Supportive Costs

65 Capital Improvement Program (CIP) RA Share - $50,000 Annual Debt Service 2004 Revenue Certificates of Participation$1,526,000 2008 Revenue Certificates of Participation$2,105,000 2011 Revenue Certificates of Participation$5,206,000 13-14 Capital Improvement Costs/Other

66 Annually, the District receives approximately $400,000 in Property Tax Revenue. This is independent of the annual Replenishment Assessment and is used primarily as an offset for specifically designated expenses: Grant and Sponsorship Program$119,500 Chamber Memberships and Dues$45,000 Water Education Expenses$43,000 Administrative Expenses$31,000 13-14 Capital Improvement Costs/Other

2012/13 ItemDescriptionDivision Budget ARC Walk for Independence Sponsorship1,2,3,4,5 $ 2,500 South Bay Latino Chamber of Commerce Annual Conference1,2,3,4,5 $ 2,500 Tree People Membership1,2,3,4,5 $ 1,000 CORO Water Luncheon Sponsorship1,2,3,4,5 $ 2,500 Cabrillo Marine Aquarium Sponsorship1,2,3,4,5 $ 1,000 Sanitation Districts Annual Earth Day Event Sponsorship1,2,3,4,5 $ 10,000 Friends of the Los Angeles River Sponsorship1,2,3,4,5 $ 1,500 Heal The Bay Annual Conference1,2,3,4,5 $ 2,500 Public Officials for Water and Environment (POWER) Annual Conference1,2,3,4,5 $ 1,500 South Bay Cities Council of Governments (SBCCOG) Annual General Assembly1,2,3,4,5 $ 2,500 International Trade Education Program, Inc. Sponsorship1,2,3,4,5 $ 1,500 California Foundation Environment and the Economy Sponsorship1,2,3,4,5 $ 2,500 Los Angeles County Education Foundation Sponsorship1,2,3,4,5 $ 5,000 Miscellaneous$ 3,000 SUBTOTAL $ 39,500 Board Sponsorships and Grants – $15,000 per Director Regional Sponsorships - $39,500 (see below) 13-14 Projects, Programs & Administration Water Conservation

68 Cash Reserves

69 California Water Code §60290 – “The district may establish an annual reserve fund in an amount not to exceed ten million dollars ($10,000,000) commencing with the 2000-01 fiscal year. The maximum allowable reserve fund may be adjusted annually commencing with the 2001-02 fiscal year to reflect the percentage increases or decreases in the blended cost of water from district supply sources” Cash Reserves

70 March 31, 2013 Cash and Investments UnrestrictedRestricted

71 California Water Code §60291 – “The limitation on the reserve established in §60290 does not apply to the unexpended balance of any appropriated funds in a capital improvement project construction account established to pay the cost of a project or projects under construction” Cash Reserves

72 California Water Code §60328.1 – “The district shall apply the estimated fiscal year end balance in excess of the amount permitted in §60290 to a replenishment assessment rate reduction or to the purchase of water in the succeeding fiscal year” In fiscal year 10-11, WRD utilized $8.27 million to lessen the impact of moving from seasonal spreading water to more expensive Tier 1 Water In fiscal year 11-12, WRD continued the use of the Water Purchase Carryover Fund by using $10.0 million to help stabilize the RA as part of the five-year scenario developed with stakeholder input during the budget process Cash Reserves

73 In fiscal year 12-13, WRD continued the use of the Water Purchase Carryover Fund by using an additional $3.0 million to help stabilize the RA as part of the five-year scenario developed with stakeholder input during the budget process last year In total $21.27 million of the Water Purchase Carryover Fund has been utilized for rate stabilization. This funding is no longer available for make up water purchases. Cash Reserves

74 California Water Code §60328.1 – “The district shall apply the estimated fiscal year end balance in excess of the amount permitted in §60290 to a replenishment assessment rate reduction or to the purchase of water in the succeeding fiscal year” In 2011 from June to August, WRD purchased 19,287 acre-feet of “fire sale” water at $499 per acre-foot (regularly $638 per acre-foot). This resulted in a cash outlay of $9.6 million from the Water Purchase Carryover Fund. Additionally, the District purchased an additional 18,028 acre-feet at a melded rate of $613 per acre foot. As a result 37,315 acre-feet were purchased in 10 months for a total of $20.6 million. WRD collects funds over a 12-month period of time. If not for the Water Purchase Carryover Fund, WRD could not have had the cash flow to purchase such a large amount of “fire sale” water. Cash Reserves

75 California State Auditor, Bureau of State Audits In its May 2002 report (page 18) the California State Auditor wrote, “The district projects that it will have a reserve fund balance of slightly more than $6 million at June 30, 2002, a level that may pose a threat to the district’s ability to maintain the current quantity of groundwater in the basins.” This reserve level was considered to be the minimum by the State Auditor a decade ago and does not take into account the significant increase in the cost of water over the last 10 years. Cash Reserves

76 Water Purchase Carryover

77 13-14 Draft Budget Water Purchase Carryover (in af) [1][2][1]+[2]=[3][4][3]-[4] Actual YearBudgetedCarryoverSubtotalPurchasedDifference 2003-04 35,600 - 27,520 8,080 2004-05 29,895 8,080 37,975 25,145 12,830 2005-06 27,600 12,830 40,430 33,229 7,201 2006-07 21,000 7,201 28,201 40,214 (12,013) 2007-08 21,000 (12,013) 8,987 - 2008-09 21,000 8,987 29,987 - 2009-10 21,000 29,987 50,987 26,286 24,701 2010-11 21,000 24,701 45,701 37,315 8,386 2011-12 21,000 8,386 29,386 - 2012-13 21,000 29,386 50,386 -

78 13-14 Draft Budget Water Purchase Carryover Total Imported Spreading Water Carryover FY 13-14 (af) 50,386 Melded Rate per acre-foot 1 $ 718 Total Amount for Spreading Water owed the Basin 2013-14$36,117,148 1 Melded Rate MWD Untreated Tier 1 – Spreading ($/af)$593 MWD RTS ($/af)$31 CBMWD Administrative Surcharge ($/af) $94 Total$ 718

79 March 31, 2013 Cash and Investments UnrestrictedRestricted

80 13-14 Draft Budget Water Purchase Carryover Amount of Water Purchase Carryover funds available$13,717,000 Amount of payment by Tesoro per court order$948,000 $14,665,000 Total amount for water owed the Basin as of 2013-14 Amount of shortfall to purchase make-up water Total amount of non-payment by litigant parties

WRD has Experienced Significant Water Cost Increases 81 Transition from Seasonal Spreading Water to Tier 1 Water in 2010-11 (per TAC recommendation) * *Central Basin Municipal Water District surcharge calculation does not include $388,800 annual service charge

CBMWD Historic Administrative Surcharge on Replenishment Water 82

83 2003 MWD eliminates Meter Charges CBMWD keeps meter-based charge and renames it Water Service Charge Between 2008 to 2012 CBMWD Water Service Charge to WRD increases from $74,400/year to $372,600/year – an increase of 400% CBMWD Water Service Charge

8484 Imported Water Rate $967/AF WRD RA $244/AF $967/AF IMPORTED WATER GROUNDWATER CURRENT cost difference between groundwater and imported water is approximately $723/AF Value of Groundwater (CBMWD as of 1/1/13) $244/AF

8585 Imported Water Rate $967/AF WRD RA $244/AF $1,042/AF IMPORTED WATER GROUNDWATER FUTURE cost difference between groundwater and imported water is approximately $774/AF Value of Groundwater (Proposed CBMWD as of 1/1/14) $268/AF $75 Increase $24 Increase

87 WRD Efforts to Reduce Water Costs Develop lower cost sources of imported spreading water working with pumpers that are also MWD member agencies New agreement with L.A. County Sanitation Districts to purchase and utilize lower cost recycled water to offset demand for more expensive imported water Developing other replenishment programs such as pressure-area in-lieu replenishment (Long Beach Program)

88 Ad Hoc Budget Committee recommends the Board of Directors approve Scenario 3; a 9.9% increase over the current year with a corresponding replenishment assessment of $268 per acre-foot The District’s Technical Advisory Committee (TAC) also recommends the Board of Directors approve Scenario 3 Recommendations

This presentation can be found at www.wrd.org

Water Replenishment District Draft Budget Workshop Fiscal Year 13-14 Board of Directors Meeting May 10, 2013, 2:00 p.m.

Similar presentations

Presentation on theme: "Water Replenishment District Draft Budget Workshop Fiscal Year 13-14 Board of Directors Meeting May 10, 2013, 2:00 p.m."— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Water Replenishment District Draft Budget Workshop Fiscal Year 13-14 Board of Directors Meeting May 10, 2013, 2:00 p.m.

Similar presentations

Presentation on theme: "Water Replenishment District Draft Budget Workshop Fiscal Year 13-14 Board of Directors Meeting May 10, 2013, 2:00 p.m."— Presentation transcript:

Similar presentations

About project

Feedback