1. Long Beach Water Department Review of FY 12 Budget

2. Long Beach Water Department May 19, 2011 Water Fund Summary

3. Long Beach Water Department May 19, 2011 Core Costs of Water Service 5.0% 28 $590 $512 $562Per Acre Foot (AF) % Budget Change $ Budget Change FY 12 Proposed FY 11 ETC FY 11 Budget Purchased Water(40% of supply) Purchased Water(40% of supply) MWD Tier 1 rate increase – 6.1% MWD Tier 1 rate increase – 6.1% Adjusted total demand and imported water forecast Adjusted total demand and imported water forecast Pumping(60% of supply) Pumping(60% of supply) Replenishment Assessment increase – 19% per AF Replenishment Assessment increase – 19% per AF Full pumping Full pumping

4. Long Beach Water Department May 5, 2011 Imported Water Rates $350 $400 $450 $500 $550 $600 $650 $700 $750 $800 $850 July 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Sept 2009 Jan 2011 Jan 2012 Dollars per Acre Foot 2003 rate restructured, shifts to additional charges 2004 MWD Projection - $596 AF 2008 MWD Projection - $655 AF Adopted - $794 AF

5. Long Beach Water Department May 5, 2011 Imported Water Purchases

6. Long Beach Water Department May 19, 2011 FY 12 Budget Water Fund Expenditures Non Personal 61,320 Personal Services 19,138 CIP 19,457 Water 99,915 Sewer 21,261 ($ in thousands)

7. Long Beach Water Department May 19, 2011 Water Personal Services 10.48 11.25 10.83 11.45 8.73 8.62 8.26 8.90 - 5 10 15 20 25 FY 10 (Adopted) FY 10 (Actuals) FY 11 (Adopted) FY 12 (Proposed) *Preliminary – City benefit rates not final Salaries Benefits 19.21 19.87 19.09 20.35* ($)Millions

8. Long Beach Water Department May 19, 2011 Water Fund O&M Expenditures Total - $61,320 ($ in thousands)

9. Long Beach Water Department May 19, 2011 Capital Improvement Program Water Fund Total - $19,457 ($ in thousands) Cast Iron Main Replacement 5,815 Water Resources Facilities 8,395 Water Distribution System 1,202 Facility Maintenance 1,430 Meters and Valves 495 Recycled Water Facilities 2,120

10. Long Beach Water Department Cast Iron Main Replacement Program Remaining CI Mains (LF) Main Breaks

11. Long Beach Water Department May 19, 2011 Water Fund Revenue Budget Total - $89,912 ($ in thousands)

12. Long Beach Water Department May 19, 2011 FY 11 Budget FY 12 Proposed Sales and Charges 82,111 81,378 Reimbursements & Other9,2437,733 Grant Revenue 340 800 Total Revenue 91,694 89,912 Personal Services 19,094 20,349 O&M Expenses 57,450 60,108 CIP 14,696 19,457 Total Expenditures 91,240 99,915 Water Fund Summary ($ in thousands)

13. Long Beach Water Department May 19, 2011 Sewer Fund Summary FY 11 Budget FY 12 Proposed Sales and Charges 15,902 16,616 Commercial Paper5,3925,270 Reimbursements & Other 163 Total Revenue 21,997 22,049 Personal Services 3,827 4,266 O&M Expenses 10,837 10,408 CIP 7,415 6,587 Total Expenditures 22,078 21,261 ($ in thousands)

14. Long Beach Water Department May 19, 2011 Water Rate Comparison * Includes Pasadena, Pomona, Los Angeles, Glendale, Inglewood and Golden State Source: Black and Veatch Rate Study, 5/2011 70.54 58.90 49.40 32.54 48.78 59.24 66.12 38.06 40.59 $0 $10 $20 $30 $40 $50 $60 $70 $80 Sacramento San Jose Long Beach Oakland LA County Avg* San Francisco Los Angeles San Diego Golden State $ Per Month

15. Long Beach Water Department May 19, 2011 Sewer Rate Comparison * Includes LA County Sanitation Districts Charges of $12.70 Source: Black and Veatch Rate Study, 5/2011 ** Includes Pomona, Los Angeles, Glendale, Inglewood 21.65 88.33 56.13 40.47 34.24 33.85 33.68 23.66 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 LA County Avg** Long Beach* Los Angeles San Jose Sacramento Oakland San Diego San Francisco $ Per Month

16. Long Beach Water Department May 19, 2011 Combined Rate Comparison Source: Black and Veatch Rate Study, 5/2011 Includes Pasadena, Pomona, Los Angeles, ** Combined Golden State Water & LB Sewer Rates Glendale, Inglewood and Golden State 66.78 64.25 147.23 92.19 89.25 92.92 71.05 71.91 122.25 $0 $20 $40 $60 $80 $100 $120 $140 $160 Long Beach Sacramento LA County Avg* San Jose Oakland Golden State** Los Angeles San Diego San Francisco $ Per Month

17. Long Beach Water Department May 19, 2011 Rate Impact on Typical Monthly Bill Combined Rate Increase in FY 12 – $0.52 or 1.0% Water Sewer 4.87 5.65 6.55 7.85 9.57 10.44 10.96 26.93 28.00 28.84 30.42 34.99 40.59 - 10 20 30 40 50 60 FY 05FY 06FY 07FY 08FY 09FY 10FY 11FY 12 Dollars ($) $51.03 $31.80 $32.87 $34.49 $36.97 $42.84 $50.16 $51.55

18. Long Beach Water Department May 19, 2011 Next Steps For June For June Return with recommended budget and rates for approval Return with recommended budget and rates for approval July – August July – August Mail out Prop 218 notice Mail out Prop 218 notice Budget briefings with Mayor and City Council Budget briefings with Mayor and City Council September September Prop 218 Public Hearing (September 8) Prop 218 Public Hearing (September 8) City Council Adoption City Council Adoption Budget and rates effective October 1, 2011 Budget and rates effective October 1, 2011

19. Long Beach Water Department May 19, 2011