5. CONSIDER APPROVAL OF THE MINUTES OF THE NOVEMBER 14, 2018 REGULAR FINANCE COMMITTEE MEETING

Transcription

1 NOTICE OF A SPECIAL MEETING OF THE OLIVENHAIN MUNICIPAL WATER DISTRICT S FINANCE COMMITTEE 1966 Olivenhain Road, Encinitas, CA Tel: (760) Fax: (760) Pursuant to AB 3035, effective January 1, 2003, any person who requires a disability related modification or accommodation in order to participate in a public meeting shall make such a request in writing to the District for immediate consideration. DATE: THURSDAY, JANUARY 10, 2019 TIME: PLACE: 10:00 A.M. DISTRICT OFFICE Note: Items On The Agenda May Be Taken Out Of Sequential Order As Their Priority Is Determined By The Committee 1. CALL TO ORDER 2. ROLL CALL (BOARD MEMBERS) 3. ADOPTION OF THE AGENDA 4. PUBLIC COMMENTS 5. CONSIDER APPROVAL OF THE MINUTES OF THE NOVEMBER 14, 2018 REGULAR FINANCE COMMITTEE MEETING 6. REVIEW AND DISCUSS STAFF PROPOSED 2019 POTABLE AND RECYCLED WATER RATES AND CHARGES 7. CONSIDER FUTURE AGENDA ITEMS 8. ADJOURNMENT

2 Agenda Item 6 Memo Date: January 10, 2019 To: From: Via: Subject: Finance Committee Rainy Selamat, Finance Manager Kimberly Thorner, General Manager REVIEW AND DISCUSS STAFF PROPOSED 2019 POTABLE AND RECYCLED WATER RATES AND CHARGES Staff has prepared the attached presentation for discussion with the Committee during the meeting. If approved by the Committee at the meeting, the proposed 2019 potable and recycled water rates and charges will be presented to the Board at its January 16, 2019 meeting for review and consideration.

3 Proposed 2019 Rates and Charges (Potable and Recycled) Finance Committee Meeting January 10,

4 Reasons for OMWD Rate increases Increased purchased water wholesale cost from San Diego County Water Authority (SDCWA) starting January 1, 2019 A 2.9% increase in County s untreated water cost per acre foot of water OMWD s Fixed Charge portion of purchased water wholesale costs stays the same for 2019 Reduction in OMWD s volume of purchased water from SDCWA No pass through increase in SDCWA Infrastructure Access Charge on water meters Increases in cost to operate and maintain the water system and planned spending for ongoing repairs, replacements, and upgrades to the water system Based on SDCPI-U for 2017: 3.0% SDCPI-U for 2018 will not be available until next month ( February 2019) Maintain OMWD Existing Debt Service Coverage Ratio AAA/AA+ Access to lower borrowing rates 2

5 SDCWA Drives OMWD s Increases Source: Bureau of Labor Statistics, SDCWA and OMWD. This chart uses 2017 annual CPI for CPI increase for 2018 will be updated once BLS releases 2018 yearly average on February

6 OMWD Purchased Water Wholesale Costs for Fiscal Year Rates and Charges Faced by OMWD CY 2018 Rates CY 2019 Rates Wholesale Variable cost per AF SDCWA Melded Supply Rate $ 894 $ 909 SDCWA Transportation Untreated cost/af 1,009 1,029 Wholesale Fixed charges SDCWA Storage 2,869,047 2,843,795 SDCWA Customer Service 1,071,755 1,035,047 SDCWA Supply Reliability Charge 1,299,466 1,361,399 SDCWA Infrastructure Access Charge 1,013,016 1,022,628 MWD Capacity Charge 425, ,685 MWD Readiness to Serve Charge (est) 1 858, ,296 Total Fixed Costs $ 7,537,670 $ 7,408,850 ¹This charge is fiscal year based. 4

7 Fixed/Variable O&M Costs & Revenues (Board Revenue Policy) Variable expenses include variable water purchases costs only. 5

8 Monthly Water Bills for Single Family Residential (5 units) Estimated monthly total includes fixed monthly fees as well as variable commodity charges. Surveyed rates are based off of either approved 2018 rates, or approved/proposed 2019 rates if marked with an *. Source: December 2018 survey 6

9 Monthly Water Bills for Single Family Residential (14 units) Estimated monthly total includes fixed monthly fees as well as variable commodity charges. Surveyed rates are based off of either approved 2018 rates, or approved/proposed 2019 rates if marked with an *. Source: December 2018 survey 7

10 Monthly Water Bills for Single Family Residential (22 units) Estimated monthly total includes fixed monthly fees as well as variable commodity charges. Surveyed rates are based off of either approved 2018 rates, or approved/proposed 2019 rates if marked with an *. Source: December 2018 survey 8

11 Recycled Water Rate Key Drivers Increases in costs of purchasing water from from District suppliers Vallecitos Water District San Elijo JPA Rancho Santa Fe Community Services District Increases in recycled water facilities repairs and maintenance costs 4S Water Reclamation Facility Pay for recycled water capital facilities to diversify water supply portfolio Manchester Recycled Pipeline Recycled Water Quality Improvements City of San Diego Purchase Recycled Capacity 9

12 Recent Recycled Water Rate Increases from OMWD Suppliers 1 - Estimated increase for FY City of SD amounts include a $25 premium fee per agreement 3 - SEJPA amounts are net of a $450 credit per agreement Source: OMWD 10

13 OMWD Recycled Customer s Monthly Average Water Bill Estimated monthly total includes fixed monthly fees as well as variable commodity charges. Source: December 2018 survey 11

14 Prop. 218 Notice PASS THROUGH INCREASES 12

15 OMWD Water Rates Pass Through Ordinance The 2015 ordinance authorized the board to: Pass Through Increased Purchased Water Wholesale cost to OMWD Water Rates and Charges for next five years SDCWA Pass Through ( April 1, 2015 December 31, 2019) Pass Through any increases in the rates of the IAC imposed on the District by SDCWA SDCWA-IAC Pass Through for the next five years ( April 1, December 31, 2019) Pass Through future increases in the costs of operating and maintaining the water system, including capital facility Inflationary Pass Through for next five years ( April 1, 2015 December 31, 2019) Pass Through any reduction in the allocation of ad valorem property tax revenues by the State of California Ad Valorem Pass Through. Annually impose a Prop 1A adjustment, for property tax revenue loss to the State, on OMWD Water Rates and Charges for next five years (April 1, 2015 December 31, 2019) All of the above not to exceed 15% per year In no event, will rates and charges be increased by more than the cost of providing water services Rate payers will be notified at least 30 days prior to rate changes Board will set and approve rate increases each year 13

16 Current and Proposed Commodity Rates: 14

17 Current and Proposed Irrigation Unit Allotments Tier 1 Allotment / Based upon water use by meter size Current Irrigation Unit Allotments Tier 1 Allotment / Based upon water use by meter size Meter Size Winter (Dec-May) Summer (Jun-Nov) 5/8" /4" " /2" " " " " 3,100 11,800 8" 5,600 21,300 Proposed Irrigation Unit Allotments Tier 1 Allotment / Based upon water use by meter size Meter Size Winter (Dec-May) Summer (Jun-Nov) 5/8" /4" " /2" " " " " 3,100 11,800 8" 5,600 21,300 No proposed changes for irrigation unit allotments 15

18 Current and Proposed System Access Charges 16

19 Current and Proposed SDCWA Infrastructure Access Charge (IAC) 17

20 Current and Proposed Fire Meter Charge Rates 18

21 Future Actions Mail out a rate increase notice by 1/31/19 Receive comments (2/1/19-3/6/19) Adoption of rate ordinance (if approved) 3/6/19 Adjusted rates, if approved, will be seen on March 31, 2019 water bills 19

22 Questions? 20