Please silence cell phones and refrain from side conversations during the meeting.

Transcription

1 SAN JUAN WATER DISTRICT BOARD MEETING AGENDA June 14, :00 p.m Auburn Folsom Road Granite Bay, CA The Board may take action on any item on the agenda, including items listed on the agenda as information items. The Board may add an item to the agenda (1) upon a determination by at least three Board members that an emergency situation exists, or (2) upon a determination by at least four Board members (or by three Board members if there are only three Board members present) that the need to take action became apparent after the agenda was posted. The public may address the Board concerning an agenda item either before or during the Board s consideration of that agenda item. Public comment on items within the jurisdiction of the Board is welcome, subject to reasonable time limitations for each speaker. Upon request, agenda items may be moved up to accommodate those in attendance wishing to address that item. Please inform the General Manager. Documents and materials that are related to an open session agenda item that are provided to the District Board less than 72 hours prior to a regular meeting will be made available for public inspection and copying at the District office during normal District business hours. In compliance with the American s with Disabilities Act, if you have a disability and need a disability-related modification or accommodation to participate in this meeting, please contact the Board Secretary at Requests must be made as early as possible, and at least one full business day before the start of the meeting. Please silence cell phones and refrain from side conversations during the meeting. I. PUBLIC FORUM During the Public Forum, the Board may briefly respond to statements made or questions posed by the public, or ask District staff for clarification, refer the matter to District staff or ask District staff to report back at a future meeting. The Board will not take action on any matter raised during the Public Forum, unless the Board first makes the determinations to add the matter to the agenda. II. CONSENT CALENDAR All items under the Consent Calendar are considered to be routine and will be approved by one motion. There will be no separate discussion of these items unless a member of the Board, Audience, or Staff request a specific item removed after the motion to approve the Consent Calendar. 1. Minutes of the Board of Directors Meeting, May 24, 2017 (W & R) Recommendation: Approve draft minutes 2. Payment of Bills and Claims (W & R) Recommendation: Adopt Resolution No III. NEW BUSINESS 1. Fiscal Year Wholesale and Retail Proposed Budget (W & R) Recommendation: Review proposed budget and provide direction to staff on any desired changes in anticipation of the public hearing and budget adoption scheduled for June 28, 2017.

2 2. Tyler Technologies Utility Billing Software Agreement (R) Recommendation: Authorize staff to enter into an agreement with Tyler Technologies to implement a Customer Relationship Management Software program to replace the District s current Customer Information System Fort Rock Court Easement Encroachment Request (R) Recommendation: Consider a motion to approve an easement encroachment request for 524 Fort Rock Court and direct staff to execute the necessary agreement with the property owner. 4. Sierra National Asphalt Contract (R) Recommendation: Consider a motion to award the annual paving services contract to Sierra National Asphalt for the amount of $114,120 and authorize a 10% contingency for a total budget of $125, GM Construction Contract Renewal (R) Recommendation: Consider a motion to authorize and approve staff to exercise the second year contract renewal with GM Construction (Contract #15-53) for construction services agreement in the amount of $147,089 with a 10% contingency for a total budget of $162,000. IV. INFORMATION ITEMS 1. General Manager s Report 1.1 Strategic Plan Update (W & R) Provide update on Strategic Planning 1.2 Miscellaneous District Issues and Correspondence 2. Director of Finance s Report 2.1 Update on Pricing of 2009A COP Refunding (W & R) 2.2 Miscellaneous District Issues and Correspondence 3. Legal Counsel s Report 3.1 Legal Matters V. DIRECTORS REPORTS 1. SGA 2. RWA 3. ACWA 3.1 Local Government/Federal Affairs/Region 4 - Pam Tobin 3.2 JPIA - Bob Walters 3.3 Energy Committee - Ted Costa 4. CVP Water Users Association 5. Other Reports, Correspondence, and Comments (W) Wholesale Page 2 of 3 SJWD Board of Directors (R) Retail Meeting Agenda June 14, 2017

3 VI. VII. VIII. COMMITTEE MEETINGS 1. Public Information Committee June 2, Finance Committee June 13, 2017 UPCOMING EVENTS 1. CSDA's Legislative Round-Up August 31, 2017 Webinar ADJOURN UPCOMING MEETING DATES June 28, 2017 July 12, 2017 I declare under penalty of perjury that the foregoing agenda for the June 14, 2017 regular meeting of the Board of Directors of San Juan Water District was posted by June 9, 2017, on the outdoor bulletin boards at the District Office Building, 9935 Auburn Folsom Road, Granite Bay, California, and was freely accessible to the public. Teri Grant, Board Secretary (W) Wholesale Page 3 of 3 SJWD Board of Directors (R) Retail Meeting Agenda June 14, 2017

4 AGENDA ITEM II-1 DRAFT SAN JUAN WATER DISTRICT Board of Director s Meeting Minutes May 24, :00 p.m. BOARD OF DIRECTORS Ken Miller Bob Walters Ted Costa Dan Rich Pam Tobin President Vice President (Absent) Director Director Director SAN JUAN WATER DISTRICT MANAGEMENT AND STAFF Paul Helliker General Manager Donna Silva Director of Finance Tony Barela Operations Manager Teri Grant Board Secretary/Administrative Assistant Lisa Brown Customer Service Manager George Machado Field Services Manager Jason Mayorga SJWD Staff Rose Strohmaier SJWD Staff Greg Zlotnick Water Resources Specialist OTHER ATTENDEES Sandy Harris Dave Underwood Francesca Martone & Family Ethan Tattersfield & Family Mitch Dion Stacy McCoy Dave Fama Dennis McGuire Wing-See Fox AGENDA ITEMS I. Presentation II. Public Forum III. Consent Calendar IV. Old Business V. New Business VI. Information Items VII. Directors Reports VIII. Committee Meetings IX. Upcoming Events X. Adjourn Customer FOWD Poster Contest Winner Poster Contest Winner Self Self Jones Hall, Bond Counsel Piper Jaffray, Bond Underwriter Urban Futures, Financial Advisor

5 May 24, 2017 Board Minutes Page 2 President Miller called the meeting to order at 6:00 p.m. With no objections from the Board, he moved Agenda Item I after Agenda Item III to allow time for the contest winners to arrive to the meeting. The meeting minutes will remain in the original agenda order. I. PRESENTATION 1. Poster Contest Winners President Ken Miller President Miller presented the Poster Contest awards to student winners in attendance, Francesca Martone and Ethan Tattersfield. The Poster Contest winners for SJWD are as follows: 1st Place - Francesca Martone Mrs. Nelson s 4th grade class 2nd Place - Asha Karmakar Mrs. Harper s 5th grade class 3rd Place - Ethan Tattersfield Mrs. Nelson s 4th grade class II. PUBLIC FORUM There were no public comments. III. CONSENT CALENDAR All items under the consent calendar are considered to be routine and are approved by one motion. There will be no separate discussion of these items unless a member of the Board, audience, or staff request a specific item removed after the motion to approve the Consent Calendar. 1. Minutes of the Board of Directors Meeting, April 26, 2017 Recommendation: Approve draft minutes 2. Payment of Bills and Claims Recommendation: Adopt Resolution No Treasurer s Report Quarter Ending March 31, 2017 Recommendation: Receive and File 4. Authorization to Procure Grazing Services for Baldwin and Kokila Reservoirs Recommendation: Authorize staff to procure grazing services for the Baldwin and Kokila Reservoirs in the amount of $16,000 to NM Ranch for FY16-17 Director Tobin moved to approve Consent Calendar. Director Rich seconded the motion and it carried with 4 Aye Votes. (Director Walters absent) Director Costa requested that the Finance Committee discuss the CalPERS payments and what programs they cover.

6 May 24, 2017 Board Minutes Page 3 IV. OLD BUSINESS 1. Recruitment of AGM and Other Positions (W & R) Mr. Helliker reviewed the written staff report which will be attached to the meeting minutes. He explained that, with Keith Durkin retiring, the duties of the Assistant General Manager (AGM) position were reviewed. The AGM s primary duties fell into three categories external activities, infrastructure projects, and management activities. Mr. Helliker reviewed the list of external activities (attachment 1 of the staff report) and explained that, with the addition of Greg Zlotnick, many of the external activities are already being covered by Mr. Zlotnick and himself. Mr. Helliker explained that Mr. Durkin over-saw many infrastructure projects and those responsibilities could be delegated to Mr. Tony Barela along with the engineering staff. Mr. Helliker explained that should there be any engineering work which staff cannot handle then an outside contractor could be hired. Furthermore, many of the management staff activities could be covered through some changes in the organizational structure. Mr. Helliker recommends that an HR Specialist position and a Safety/Regulatory Compliance Coordinator position be created so that certain duties could be removed from Ms. Silva and Mr. Barela. By removing those duties, Ms. Silva and Mr. Barela could then utilize the additional time to take over duties from the AGM position, thus eliminating the need for the AGM position. In addition, he mentioned that the both positions have been recommended in HR audits from 2005 and He provided the Board with a needs assessment for the Safety/Regulatory Compliance Coordinator position (attachment 6 of the staff report). Mr. Helliker provided the Board with a cost analysis for three scenarios (attachment 7 of the staff report). He explained that scenario 2 is the recommended scenario, which would eliminate the AGM position and create the two new positions. This scenario would cost less than the total compensation of the current AGM position and slightly more than the proposed total compensation of a new AGM. Mr. Helliker informed the Board that staff discussed this topic with the Personnel Committee at two meetings. At the first meeting, the need to fill the AGM position was discussed and the committee asked questions regarding the organizational structure and other needs at the District. At the second meeting, Mr. Helliker provided further analysis, as referenced in the staff report. He commented that the Personnel Committee liked staff s recommendation and requested that the Board discuss the recommendation. Director Costa voiced concern regarding the process, how the positions would affect PERS, and not having an Acting General Manager in the absence of the General Manager. Director Costa suggests that the topic be sent back to the Personnel Committee for review and recommendation. Director Rich (chair of

7 May 24, 2017 Board Minutes Page 4 the Personnel Committee) commented that the Personnel Committee did review the information and supported the re-organization of the District; however, due to potential far reaching implications, the committee wanted the Board to discuss the topic since the proposal was not to just replace a position, but to restructure the District. Mr. Helliker commented that he discussed his plan with the committee to move the Customer Service & Conservation Department from reporting under Mr. Barela to report under Ms. Silva. In response to Director Costa s comment, Director Rich informed the Board that PERS costs are included in the total compensation for the two positions. Mr. Helliker explained that the cost of the two recommended positions would be covered by avoiding the cost of filling the one AGM position. Director Tobin commented that she prefers scenario 3 keeping the AGM and adding an HR position. She voiced concern regarding eliminating the AGM position and strongly feels that the AGM position is needed as a back up to the General Manager. In response to Director Tobin s question, Mr. Barela explained that moving the Customer Service & Conservation Department to Ms. Silva will not free up his time to cover the extra duties of the AGM along with the safety and regulatory compliance duties. Director Tobin mentioned that succession planning is also an issue without an AGM position. Mr. Helliker commented that well-run organizations have a management structure that allows the organization to continue on in the event of the General Manager s absence. He explained that he has not had an AGM in previous General Manager positions which he held, and with the reorganization of responsibilities he feels that all AGM duties would be covered. His goal was to present an alternative that would meet the District s needs within the budget parameters in order to provide support and fill responsibilities. Director Costa suggested that the HR position be considered a half-time position. In addition, he voiced concern that somebody has to be in charge when the General Manager is not available. Mr. Helliker commented that he would appoint an Acting General Manager in the event of his absence, which would be either Ms. Silva, Mr. Barela or another manager. In addition, Mr. Helliker explained that the HR position is not strictly an HR position and other duties would be assigned so the position would need to be a full-time position, as outlined in the HR Audit that Bryce Consulting completed. President Miller referred further discussion on this topic to the Personnel Committee for review of concerns and to provide a recommendation to the Board. Director Rich commented that the Personnel Committee has had two meetings on this topic and at the first meeting the discussion was to replace the AGM but in addition the committee suggested that the General Manager look at other ways to fill the needs of the District, which is what was presented at the second committee meeting and at this Board meeting. Director Tobin would like more information regarding filling the HR position as a half-time position, keeping the AGM, and filling the Safety/Regulatory Compliance Coordinator position as a half-time position. President Miller declined Director Costa s request to have

8 May 24, 2017 Board Minutes Page 5 Director Tobin serve as the Alternate on the Personnel Committee should Director Walters not be available. V. NEW BUSINESS 1. Advance Refunding of the Series 2009A Certificates of Participation (W & R) Ms. Silva introduced the financing team which consists of Wing-See Fox, Financial Advisor from Urban Futures; Dennis McGuire, Bond Underwriter from Piper Jaffray; and Dave Fama, Bond Counsel from Jones Hall. She explained that the financing team has been working to pull the documents together for the advance refunding of the Series 2009A Certificates of Participation. She reviewed the written staff report which will be attached to the meeting minutes. Ms. Silva explained that the bonds were originally issued in June 2009 in the amount of $30,510,000 at an average interest rate of 5.83%. She informed the Board that the interest amount would have been $38.4 million for a total cost of $68.9 million. There are $28,375,000 of the 2009 Certificates still outstanding at this time and the refunding average interest rate is approximately 4.97% (and an All-in True Interest Cost of approximately 3.73%). The reduction in interest rate will reduce debt service payments by approximately $11.21 million through Fiscal Year 2039, and provided an annual savings of approximately $400,000. She informed the Board that the total interest payment will amount to approximately $17.8 million. Ms. Silva informed the Board that Standards & Poor affirmed the District s AA bond rating. In addition, she explained that the bonds are allocated 64% to wholesale and 36% to retail. Mr. Helliker commented that this information was presented to the Finance Committee and their recommendation was to move forward with the bond refunding. Ms. Silva commented that one question which the committee asked was whether there was an alternative funding avenue. She commented that this seems to be the best funding source to use and had Ms. Wing-See Fox further explain the funding. Ms. Fox explained that they looked at both public offering and private placement for refunding the bonds. Ms. Fox explained that due to the length of the bond, until 2039, the best rates are with a public offering. Ms. Fox explained that private placement, typically through a bank, has a term of years and the rate was higher than the public offering. In addition, Ms. Fox explained that borrowing through the NSRF or State Water Resources Control Board would not work as those funds are for financing capital projects, not for refinancing. In response to Director Costa s question, Ms. Fox explained that Union Bank would be the escrow agent and trustee, which was selected by staff, and there would not be any cost savings to hire a different trustee. In response to Director Rich s question, Ms. Silva explained that the fee for Bond Counsel is a negotiated fixed fee and is a combination of Bond Counsel and

9 May 24, 2017 Board Minutes Page 6 Disclosure Council fees, the Financial Advisor cost is a negotiated fixed fee, and the Bond Underwriter fee is a negotiated fee based on the sale of the bonds. Ms. Fox explained that the fee per bond is 0.45% which comes to $4.50 for a $1,000 bond. Ms. Fox commented that the savings which Ms. Silva referenced is net of all costs. In response to President Miller s question, the financing team agreed that the staff report reflects the financing team s conclusions. Director Costa moved to adopt Resolution authorizing the issuance and sale of water revenue refunding bonds for the purpose of refinancing the costs of acquiring and constructing water system improvement projects, approving an official statement and related matters. Director Tobin seconded the motion and it carried with 4 Aye votes. (Director Walters absent) 2. Payment Towards Unfunded Pension Liability (W & R) Ms. Silva reviewed the written staff report which will be attached to the meeting minutes. She explained that by paying down the unfunded pension liability the District will save approximately $4.1 million. In addition, she mentioned that CalPERS is changing their discount rate from 7.5% to 7% over the next three years which will result in an increase to the District s unfunded liability. Ms. Silva recommends that the Board authorize staff to utilize funds from reserves, as shown in the staff report, to pay $4,112,000 towards the first tier plan, which has the largest unfunded liability. She explained that the District is paying more in interest (7.5%) to CalPERS than those reserves are earning at 1.3%. Director Costa moved to authorize staff to make a payment of $4,112,000 to pay down a portion of the current unfunded pension liability. Director Tobin seconded the motion and it carried with 4 Aye votes. (Director Walters absent) 3. Fair Oaks 40-Inch Pipeline Relining Project Design/Bidding Services Mr. Barela informed the Board that Phase II of the Fair Oaks 40-Inch Pipeline Rehabilitation Project has begun. He explained that approximately 5 years ago Phase I of the project was completed and it was explained at that point that additional work would be needed. He provided the Board with a staff report which will be attached to the meeting minutes. Director Tobin moved to award a services contract to Quincy Engineering, Inc. for the amount of $179,540 for design engineering services for the FO- 40 Relining Project with an 8% Contingency for a total authorized budget of $194,000. Director Rich seconded the motion and it carried with 4 Aye votes. (Director Walters absent)

10 May 24, 2017 Board Minutes Page 7 VI. INFORMATION ITEMS 1. GENERAL MANAGER S REPORT 1.1 General Manager s Monthly Report Mr. Helliker reviewed the written staff report which will be attached to the meeting minutes. He explained that this report will be provided on a monthly basis and covers operations and monthly financial reports. He requested the Board let him know if they want any changes made to the report. In addition, he informed the Board that the Los Lagos Tank Recoating Project was completed within budget on April 19, 2017, and the Notice of Completion was recorded with the county. 1.2 Miscellaneous District Issues and Correspondence Mr. Helliker informed the Board that he and Ms. Silva met with Tom Gray, FOWD, regarding the flyer that the FOWD Board wanted to send to their customers regarding rate increases. Mr. Helliker mentioned that the 2x2 SJWD/FOWD committee reviewed the flyer and he had some comments on the flyer as well. Mr. Helliker and Ms. Silva worked with Mr. Gray to help make the message clear and concise, and Mr. Gray will provide a second draft. Mr. Helliker informed the Board that Mr. Keith Durkin gave final testimony on phase one of the Cal WaterFix hearing regarding impacts on other water users. He explained that phase two will begin soon regarding environmental issues, during which the modified flow management standard will be addressed. In addition, he mentioned that the Bureau of Reclamation released their proposed approach on cost allocations for Cal WaterFix, which is basically an opt-in approach - meaning if you want to participate in getting the benefits of the tunnels then you will have to pay for it. In response to Director Costa s question, Mr. Helliker explained that the District would have to decide on opting into the tunnel capacity by September. However, Mr. Helliker suggests that the District not opt in and instead just pay for the use of the tunnels in conjunction with specific water transfers. Mr. Helliker reported that he attended Cap-to-Cap in Washington DC and the ACWA Spring Conference. Director Tobin commented that there might be an opportunity to participate in only the R3 Group meetings in Washington DC and she would like to consider this for next year. Mr. Helliker reported that he and Mr. Zlotnick will be meeting with the Department of Water Resources to discuss specifically what is needed to complete conserved water transfers. In addition, he informed the Board that Director Tobin discussed water transfers with a couple of water agencies that are interested in receiving the water at the ACWA Spring Conference.

11 May 24, 2017 Board Minutes Page 8 2. DIRECTOR OF FINANCE S REPORT 2.1 Miscellaneous District Issues and Correspondence Ms. Silva reported that the District received the Certificate of Achievement for Excellence in Financial Reporting for the CAFR from the Government Finance Officers Association. Ms. Silva informed the Board that the budget will be brought to the Board for review at the June 14 th Board meeting and to the public hearing at the June 28 th Board meeting, with any Board revisions, for adoption. 3. LEGAL COUNSEL S REPORT 3.1. Legal Matters No report. VII. DIRECTORS REPORTS 1.1 SGA No report. 1.2 RWA Director Tobin reported that RWA Executive Committee met May 24, She provided a written report which will be attached to the meeting minutes. She reported that they discussed the Executive Director s Evaluation Committee, the Defined Benefit Pension Plan Funding Policy , Legislative and Regulatory Updates, and Strategic Plan Progress Updates. Mr. Helliker commented that RWA has taken a lead on the water conservation bills and has been very effective. 1.3 ACWA Local/Federal Government/Region 4 - Pam Tobin Director Tobin reported that she attended the Federal Affairs Committee, the Local Government Committee, and the Legal Affairs Committee meetings at the ACWA Spring Conference. She provided a written report which will be attached to the meeting minutes JPIA - Bob Walters Director Tobin reported that she represented the District at the JPIA meeting in Director Walters absence. She provided a written report which will be attached to the meeting minutes Energy Committee - Ted Costa Director Costa reported that he attended the Energy Committee meeting at the ACWA Spring Conference. He reported that he also attended the small hydro meeting. Mr. Helliker informed the Board that the District has been notified by PG&E and SMUD that they are changing the time of use peak period

12 May 24, 2017 Board Minutes Page 9 window. The peak period will be moving to later in the day. This is due to the fact that there is enough capacity to meet demand during the current peak period with solar power produced and distributed in California. He explained that the District s energy rates will be changing which will affect the net metering on the solar energy. He will report back when more information is received. Director Costa suggested that staff reconcile the energy bills with the solar net metering to assure that the District is receiving the appropriate rebates. 1.4 CVP Water Users Association Director Costa reported that he attended the CVP cost allocation meeting, along with Mr. Helliker. 1.5 Other Reports, Correspondence and Comments There were no others items discussed. VIII. COMMITTEE MEETINGS 1. Personnel Committee (5/5/17) The committee meeting minutes will be attached to the original board minutes. 2. Finance Committee (5/16/17) The committee meeting minutes will be attached to the original board minutes. IX. UPCOMING EVENTS 1. CSDA's Legislative Round-Up August 31, 2017 Webinar X. ADJOURN The meeting was adjourned at 8:00 p.m. ATTEST: KENNETH MILLER, President Board of Directors San Juan Water District TERI GRANT, Board Secretary

13 The meeting minute attachments are located under Meeting Minutes Draft on the webpage.

14 AGENDA ITEM III-1 As of June 14, 2017

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16 Fiscal Year Budget Prepared by the Finance Department under Direction of the General Manager

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18 9935 Auburn Folsom Road Granite Bay, California (916) Elected Officials Kenneth H. Miller, President/Director Bob Walters, Vice President/Director Edward J. Ted Costa, Director Dan Rich, Director Pamela Tobin, Director Appointed Officials Paul Helliker, General Manager Management Team Donna Silva, Director of Finance Tony Barela, Operations Manager Lisa Brown, Customer Services Manager Rob Watson, Engineering Services Manager George Machado, Field Services Manager Greg Turner, Water Treatment Plant Superintendent

19 Table of Contents Letter of Transmittal... 1 DISTRICT PROFILE... 3 Wholesale Service Area Map... 5 Organization Chart by Functional Area... 6 By The Numbers Summary of District Information... 7 ABOUT THE DISTRICT Budget Purpose, Process and Control Budget Format Financial Policies Reserve Policy Debt Policy Investment Policy Procurement Policy Accounting System and Controls Fund Structure and Descriptions Enterprise Funds Capital Outlay Funds Budget Assumptions Estimated Sources and Uses of Funds Summary MAJOR REVENUES AND EXPENDITURES Water Sales Wholesale Water Deliveries - Acre Feet Retail Water Deliveries (in CCF*) Water Sale Revenues Property Tax Salaries and Benefits Water Supply Costs Reserve Summary i

20 Table of Contents (con't) OPERATING FUNDS Administration and General Conservation Customer Service Engineering Services Water Treatment Distribution (Field Services) Wholesale Operating Fund Retail Operating Fund CAPITAL FUNDS Wholesale Capital Outlay Fund Retail Capital Outlay Fund SUPPLEMENTAL INFORMATION Transfers In and Transfers Out Debt Service Schedules Labor Allocation Resolution ii

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22 June 28, 2017 Board of Directors Citizens of the San Juan Water District On behalf of the San Juan Water District and its staff, I am pleased to present the Budget for Fiscal Year The Budget has been developed to be fiscally responsible in support of the District s Mission Statement: Our mission, and highest priority to our customers, is to take all necessary actions to ensure the delivery of a reliable water supply of the highest quality at reasonable and equitable costs. As part of accomplishing our mission, we commit to working cooperatively with others on projects of mutual public benefit to achieve the greatest possible efficiency and effectiveness. We further commit to communicate what we are doing, and why we are doing it. Adoption and implementation of this budget will allow the District to accomplish major priorities in Fiscal Year , detailed throughout this document. The District works hard to ensure that ratepayer dollars are used in the most cost-effective manner to provide reliable, clean water supplies to its customers. During the current fiscal year, the District completed an extensive financial analysis and rate study, and in April, 2017, adopted a five-year program to provide the financial foundation to carry out its mission. Every year, the District will review its revenues and expenses, and will do its best to minimize any increase in rates. I would like to thank District staff for their conscientious efforts in prudent management of District resources, enabling the District to reduce expenses whenever possible without reducing the levels of service necessary to meet the demands of good customer service and responsible facilities maintenance. I want to thank the Board of Directors for their leadership and continued interest in prudent fiscal management. Respectfully Submitted, Paul Helliker General Manager 1

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24 DISTRICT PROFILE ii S I N C E

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26 Wholesale Service Area Map (SJWD Retail Service Area in blue) San Juan Water District SAN JUAN WATER DISTRICT (RETAIL SERVICE AREA) FOLSOM LAKE CITRUS HEIGHTS WATER DISTRICT ORANGE VALE WATER DISTRICT NORTH FOLSOM (ASHLAND) FAIR OAKS WATER DISTRICT 5

27 Organization Chart by Functional Area Board of Directors Legal Counsel Treasurer General Manager Administrative Assistant/ Board Secretary Assistant General Manager Information Technology Engineering Services Operations Finance & Administrative Services Water Treatment Plant Customer Service Field Services Finance Conservation Human Resources/Payroll Purchasing Allocation of Costs Wholesale Retail Risk Management/ Safety 6

28 By The Numbers Summary of District Information Water System Total Water Supply Available 82,200 acre feet Treatment Plants 1 Treatment Plant Capacity 150 MGD Reservoirs 2 Miles of Water Main 217 Storage Tanks 2 Booster Stations 9 Number of Booster Pumps 38 Number of Control Valve Stations 12 Number of Solar Facilities 1 Number of Pressure Zones Retail Service Area 8 Number of Active Service Connections Retail Service Area 10,608 Miscellaneous Statistical Information Size of Service Area 46 square miles Size of Retail Service Area Only 17 square miles Population of Service Area (2015) 152,614 Population of Retail Service Area Only (2015) 29,578 Number of Active Employees 47 Number of Bond Issues Outstanding 2 Wholesale Operating Budget $ 9,136,300 Wholesale Capital Budget $ 3,272,100 Retail Operating Budget $10,709,100 Retail Capital Budget $ 5,649,000 7

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30 ABOUT THE DISTRICT 9 S I N C E

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32 ABOUT THE DISTRICT The San Juan Water District (District) initially began as the North Fork Ditch Company dating back to 1854 providing water to the area. The San Juan Water District as in existence today was formed as the result of petitions being presented to the Board of Supervisors of Sacramento and Placer Counties by Citrus Heights Water District, Fair Oaks Water District, Orange Vale Water Company and a group of homeowners in South Placer County. An election was then held within the boundaries of the sponsoring districts on February 10, At this election, voters approved the formation of the San Juan Water District by nearly a two-thirds majority and elected five Directors. The District is a community services district formed under Section et seq., Title 5, Division 3 of the California Government Code. The District provides water on a wholesale and retail basis to an area of approximately 46 square miles for wholesale (which includes the District s retail area) and 17 square miles for retail in Sacramento and Placer Counties. The District s wholesale agency consists of delivering water to the retail agencies under negotiated contracts; operating a surface water treatment plant and storage, transmission facilities; and providing the administrative support related to those activities. The Retail agency consists of storage, pumping, transmission and distribution facilities (which deliver water to approximately 10,600 active retail service connections located in a portion of Northeast Sacramento County and the Granite Bay area of South Placer County), and providing the administrative, customer service, conservation and engineering support related to those activities. The District s existing water supply consists of three separate raw water contracts. The first source of water is 33,000 acre-feet of pre-1914 water rights on the American River. The second source is a contract with the U.S. Bureau of Reclamation for 24,200 acrefeet of Central Valley Project water. The District completed the process of long-term water contract negotiations with the U. S. Bureau of Reclamation for Central Valley Project water resulting in a 40 year long-term contract that expires February 28, 2045, but is subject to renewal. The third water source is a contract with Placer County Water Agency for 25,000 acre-feet of water. All sources of surface water are either stored or flow through Folsom Lake and delivery is taken at Folsom Dam outlets, either by gravity or pumped by the U. S. Bureau Folsom Pumping Plant. Total raw water delivery for the Fiscal Year was 30,907 acre-feet and is anticipated to be 30,379 acre-feet for Fiscal Year , and 37,230 for Fiscal Year excluding pass through deliveries for Sacramento Suburban Water District. The District s water treatment facilities, Sidney N. Peterson Water Treatment Plant, was constructed in three phases and completed between the years of 1975 to The facilities include two flocculation-sedimentation basins, two filter basins, operations building and storage reservoir. Major upgrades and improvements to the plant in 2005 and added a solids handling facility and chlorine storage/handling facility to the plant. These two projects along with other capital projects increased efficiency and 11

33 productivity to meet the required demands of customers and improved operations to help meet federal and state regulatory requirements. With a maximum capacity of 150 million gallons per day, the plant receives delivery of raw water directly from Folsom Dam outlets. The raw water undergoes an extensive water treatment process to ensure the highest quality of water for all District customers. From the water treatment plant, the water flows into the 62 million gallon Hinkle Reservoir for storage and distribution. The District maintains approximately 217 miles of transmission and distribution pipelines, which transport the high quality treated water to wholesale and retail customers. Budget Purpose, Process and Control The District adopts an annual operating budget and an annual capital improvement budget to ensure the adequacy of resources to meet District needs and to accomplish the District s mission. As required by certain debt covenants, the annual operating budget is evaluated, to ensure that net revenues, as defined by the various debt covenants, are equal to or exceed a minimum of 115 percent of the anticipated debt service for the budget year. The District's official budget process usually begins with a Board Workshop wherein the Board of Directors identifies short and long term strategic goals. Those goals are then communicated with Department Managers who prepare and submit draft budgets to the Finance Department. The Finance Department prepares the revenue budget, and reviews and compiles the various department budgets. A budget workshop is held to present and discuss the draft budget with the Board of Directors and interested members of the public. Feedback from that meeting is used to adjust the draft budget, if necessary. A public hearing is then held after which the Board of Directors votes on budget adoption. Budget to actual financial data is monitored continuously throughout the year by management and is reported on a quarterly and annual basis to the Finance Committee and the Board of Directors. The General Manager has the authority to move budget between specific lines within a fund, or between funds to correct posting errors. Transfers between funds, for purposes other than error correction, require approval from the Board of Directors. Budget Format The budget is prepared on an accrual basis (reporting revenues and expenses are earned and incurred, respectively) and is the same as reported in the Comprehensive Annual Financial Report. The program budget format is used versus a line item detail format to provide the most valuable information to the reader on all of the District s major areas of service (Distribution, Water Treatment Plant, Administration, Conservation, Customer Service and Engineering). Expenditure data is also presented in a functional format (Salaries & Benefits, Materials & Supplies, etc.) to provide readers with an alternate view. 12

34 For financial reporting purposes, the District operates a single enterprise fund. However for management of the two divisions, Wholesale and Retail, the District utilizes four distinct funds, one each for operations and one each for Capital Outlay. Financial Policies Key District Financial Policies include the Reserve Policy, the Debt Policy, the Investment Policy and the Procurement Policy. Reserve Policy In accordance with Board Resolutions, Board Motions, and/or District Ordinances, certain reserve funds have been established and maintained as follows: WHOLESALE OPERATING RESERVES: NAME PURPOSE AMOUNT/LEVEL Operating Rate Stabilization PERS Rate Stabilization Compensated Absences Delta/Water Rights Established in 1998 to provide working capital for operations and unexpected needs. Established in 1998 to help ensure financial and rate stability for wholesale customers. To level out the amount budgeted for PERS payments on an annual basis. To accumulate funds for accrued employees vacation and sick leave time. To cover legal expenses, public information, and other costs associated with Delta issues that affect the District s water rights. 20% of operating expenses $1,000,000 (target) When the actual PERS costs are lower than the actuarially determined normal costs, the difference is placed in this fund. When the PERS costs are higher than the normal costs, the difference is withdrawn from this reserve. Entire balance was used to reduce the Unfunded Liability in May Dependent upon the dollar value of the accrued vacation and vested sick leave amounts. Determined annually by Board of Directors. 13

35 WHOLESALE CAPITAL RESERVES: NAME PURPOSE AMOUNT/LEVEL Capital Improvement Program Connection Fee Hinkle Lining Vehicle and Equipment Established in 1998 to fund capital replacements, rehabilitation, upgrades and improvements. Established in 2007 to hold and expend connection fees paid by new connections to the distribution system. The fee is designed to recognize the current value of providing capacity necessary to serve additional users. Established in the 1980 s to accumulate monies for the eventual replacement of the lining and cover for Hinkle Reservoir. To accumulate sufficient funds to replace vehicles and equipment on an annual basis, and larger equipment on an as-need basis. Determined annually by Board of Directors. Fluctuates based on fees received and capital improvements planned and completed. There is not a recommended amount for this fund. $50,000 plus accrued interest on the existing fund balance is added to this fund at the end of each fiscal year. Varies depending on the future planned replacements of vehicles and equipment. 14

36 RETAIL OPERATING RESERVES: NAME PURPOSE AMOUNT/LEVEL Operating PERS Rate Stabilization Compensated Absences Customer Deposits To provide working capital for retail operations, as wells as readily available capital for unexpected needs and modest variations between expected and actual water demands. To provide stability in the amount budgeted for PERS payments on an annual basis. To accumulate funds for accrued employees vacation and sick leave time. Established to segregate funds contributed as a deposit for work to be completed by the District. 20% of annual operating expenditures. When the actual PERS costs are lower than the normal costs, the difference is placed in this reserve. When the PERS costs are higher than the normal costs, the difference is withdrawn from this reserve. Entire balance was used to reduce the Unfunded Liability in May Dependent on the dollar value of the accrued vacation and vested sick leave amounts. This reserve must be used for funds on deposit for developers or customers. When projects are completed, any remaining funds are returned to the developer or customer. 15

37 RETAIL CAPITAL RESERVES: NAME PURPOSE AMOUNT/LEVEL General CIP Kokila Reservoir Replacement Vehicles Established to accumulate sufficient funds for use due to unforeseen and unexpected emergency expenditures for repair, replacement or rehabilitation of the District s water pipeline systems and pumping stations. In practice, the Capital Improvement Reserve is used for planned and unplanned capital replacements, rehabilitation, upgrades, and improvements. Established to accumulate funds for eventual replacement of the lining and cover of Kokila Reservoir. Established to accumulate sufficient funds to replace vehicles and equipment on an annual basis and larger equipment on an as need basis. Fluctuates based on capital improvements planned and completed. Funded annually in the amount of $10,000 plus accrued interest earned on the existing reserve balance. No designated amount for this reserve; however in practice it is adjusted at the end of each fiscal year to be equal to the next years planned expenditures on vehicles and equipment. Debt Policy The Debt Policy, adopted in compliance with Government Code Section 8855(i), governs all debt undertaken or refinanced by the District. It describes the purposes for which Debt may be issued, the types of debt the District may issue, and the relationship of debt to the Capital Improvement Program and the Operating Budget. Investment Policy In accordance with District Ordinance No management responsibility for the investment program is delegated to the General Manager. The Finance Director has been designated as the Investment Officer in charge of operational management. Investments by the Investment Officer are limited to those instruments specifically described in the District s investment policy. The Investment Officer submits quarterly reports to the Board of Directors detailing all investment holdings. In order of importance, the following five fundamental criteria are followed in the investment program: 1) safety of principal; 2) limiting credit risk liquidity; 3) limiting interest rate risk; 4) liquidity and; 5) return on investment. 16

38 Procurement Policy The District s procurement policy creates uniform procedures for acquiring equipment, and goods and services for its operations. The primary purpose of the this policy is to provide for the purchase of materials and trade services with the objective that they will be available at the proper time, in the proper place, in the proper quantity, in the proper quality, and at the best available price, consistent with the needs of the District. Accounting System and Controls The District uses the Tyler Technologies financial accounting system to record its financial transactions. Management has established a system of internal controls that provide a reasonable basis for protecting the District s assets from loss, theft, and misuse and compile sufficient reliable information for the preparation of the District s financial statements. At the end of the year, the District prepares a Comprehensive Annual Financial Report (CAFR) consisting of management s representations concerning the District s finances. An independent auditing firm audits this report and examines District internal controls and provides an opinion on the financial reporting and provides suggestions on ways to improve the internal control processes of the District. Fund Structure and Descriptions Legally, the San Juan Water District is a single enterprise fund. For purposes of rate setting, reserve segregation and managerial reporting, the District utilizes four distinct funds as follows: Enterprise Funds: Wholesale Operating Fund Retail Operating Fund Capital Outlay Funds: Wholesale Capital Outlay Fund Retail Capital Outlay Fund The funds are combined for purposes of formal financial reporting (audited financial statements). Budgets and descriptions for these funds can be found starting on page

39 Budget Assumptions A budget is an estimate of revenues and expenditures for a set period of time. The creation of estimate involves a set of assumptions and it is important that the reader of this budget understands the assumptions used in preparing the revenue and expenditures estimates contained herein. The list below shares the primary assumptions used in the creation of this budget: Water rates from Board adopted 5-Year Rate Schedule 22.5% increase in Wholesale water deliveries, based on estimates provided by wholesale customers. Treatment of 7,500 acre feet of water for Sacrament Suburban Water District 15% increase in Retail Water Sales Property taxes increase 4% No Central Valley Project water to be purchased 6% increase Workers Compensation rates 6.6% increase in Health Care costs Cost of Living Allowance (COLA) 2.5%, tied to the Western Cities CPI 18

40 Estimated Sources and Uses of Funds Summary All District Revenues $26,749,200 $2,172,400 $2,180,000 $485,000 $809,900 $21,101,900 Water Sales Taxes & Assessments Capital Contributions Connection Fees Other Revenues All District Expenditures $28,766,500 $2,872,200 $4,697,700 $8,921,100 $4,451,800 $7,823,700 Capital Improvement Projects Other Expenses Debt Service Salaries & Benefits Water Supply 19

41 Estimated Sources and Uses of Funds Summary Wholesale Operations Wholesale Capital Outlay Retail Operations Retail Capital Outlay Est. Beginning Available Reserves July 1, 2017 $ 1,887,212 $ 5,465,972 $ 2,342,317 $ 6,368,622 $ 16,064,124 Total Sources Water Sales 10,385,100-10,716,800-21,101,900 Taxes & Assessments - 1,090,000-1,090,000 2,180,000 Capital Contributions - 2,172, ,172,400 Connection Fees - 35, , ,000 Other Revenues 150,500 60, ,400 60, ,900 Total Revenues 10,535,600 3,357,400 11,256,200 1,600,000 26,749,200 Uses Capital Improvement Projects - 3,272,100-5,649,000 8,921,100 Salaries & Benefits 3,440,900-4,382,800-7,823,700 Water Supply 1,617,100-3,080,600-4,697,700 Debt Service - Interest 939, ,300-1,462,100 Debt Service - Principal 906, ,800-1,410,100 Other Expenses 2,232,200-2,219,600-4,451,800 Total Expenses 9,136,300 3,272,100 10,709,100 5,649,000 28,766,500 Net Sources and Uses $ 1,399,300 $ 85,300 $ 547,100 $ (4,049,000) $ (2,017,300) Transfer In/(Out) (1,342,600) 1,342,600 (437,200) 437,200 - Ending Available Reserves Est. $ 1,943,912 $ 6,893,872 $ 2,452,217 $ 2,756,822 $ 14,046,824 20

42 MAJOR REVENUES AND EXPENDITURES 21 S I N C E

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44 FY FY FY FY San Juan Water District MAJOR REVENUES AND EXPENDITURES In order to assist in understanding the fiscal trends facing the San Juan Water District, and the assumptions utilized in preparing this budget, the following discussion and analysis of the District s major revenues and expenditures are presented. Water Sales Revenue from the sale of water accounts for 79% of all District revenues. Water revenues are driven by two primary factors, the amount of water sold and the rate per unit. The Board of Directors considers and adopts rates through separate processes for wholesale and retail. Wholesale customers are presented with a rate study and are given 150 days to provide comments to the Board of Directors on proposed rate changes. After the 150 day comment period, the Board of Directors review the comments and make a decision on rates for the upcoming calendar year. Retail rates are subject to the provision of Proposition 218 wherein customers are provided information on proposed rate changes, and are invited to attend a public hearing on the proposed changes. Proposed rate changes can be denied if a majority of ratepayers submit votes against the proposed change. If a majority of no votes is not received, the Board of Directors will vote on the proposed rate increase and set the effective date for any proposed and approved changes. The District recently completed a Financial Plan and adopted a 5-Year Rate Schedule for both wholesale and retail water rates. The charts below show water deliveries and water revenues from fiscal year to current. Wholesale Water Deliveries - Acre Feet 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 FY FY FY est. FY Budget SSWD 16,978 11,016 2, ,468 11,891 7,500 City of Folsom 1,308 1,469 1,507 1,299 1, ,050 Orangevale Water Company 4,215 4,506 5,023 4,586 3,671 3,190 3,145 4,250 Fair Oaks Water District 10,307 10,122 10,740 8,766 3,493 7,137 7,182 8,618 Citrus Heights Water District 12,684 13,091 14,526 12,160 10,016 9,134 8,641 11,000 San Juan Retail Service Area 12,934 13,823 15,018 13,475 10,780 10,484 10,430 12,312 23

45 San Juan Water District Retail Deliveries(in(in CCF*) Retail Water Water Deliveries CCF*) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 FY FY FY FY FY FY FY est. FY Budget * CCF = centrum cubic feet or "hundreds of cubic feet" 1 CCF = 7.48 gallons The recent drought caused a significant decline in water deliveries. Wholesale water deliveries began a steady decline in FY , followed by Retail two years later. Wholesale water deliveries reached their low in FY and retail reached its low in FY With the drought officially over, the District anticipates increased wholesale water demand in FY , at a total of 44,730 acre feet. The District periodically treats water for the Sacramento Suburban Water District (see orange component in chart). Sacramento Suburban Water District confirmed they will be requesting treatment of 7,500 acre feet of water by December 2017, therefore the associated revenues were included in this budget. The estimates for water deliveries to the other listed water agencies are based upon their respective estimates. The end of the drought is expected to result in increased water demand in the retail service area as well. This budget assumes retail water deliveries of 4.66 million CCFs, a 15% increase from the prior fiscal year. 24

46 Water Sale Revenues $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- FY FY FY FY FY FY FY Est. FY Budget Wholesale $7,764,983 $7,361,832 $7,013,144 $6,603,306 $6,379,836 $7,067,960 $9,166,900 $10,385,100 Retail $7,821,378 $8,083,178 $8,542,597 $8,506,899 $7,846,601 $8,255,437 $9,248,800 $10,716,800 Wholesale water sale revenues declined steadily from fiscal year through fiscal year Revenues began to increase in FY due to increased consumption. FY revenues are expected to continue to increase due to increased consumption assumptions combined with an effective 16% rate increase that went into effect on January 1, 2017 and a Board approved 9% rate increase that goes into effect on January 1, In FY , Retail water use was relatively constant from the prior year, but due to a 2% rate increase, effective the prior January, revenues were slightly up. In FY , water use increased 11% and while there was no rate increase in the prior year, there was an inflation adjustment of 2% mid-way through the year, resulting in an increase in revenues. In FY , water use began a multi-year decline, but a mid-year 2% rate increase, combined with the prior year 2% increase resulted in revenues that were just slightly lower than the prior year. In FY , water use dropped significantly as a result of the drought. The District restructured their rates and at the end of the year, in June 2015, implemented a drought surcharge. Revenues for FY fell 7.8% from the prior year. In FY , water use continued its sharp decline but due to the drought surcharge and a 15% rate increase in January 2016, revenues were restored to FY levels. The drought surcharge was removed March 1, The District is experiencing increased retail water demand in FY and with the drought over anticipates water use will increase further in FY The Board of Directors approved a Five-Year rate schedule that resulted in an effective 8% rate increase on May 1, 2017 and will cause a 9% rate increase on January 1, Those rate increases, combined with increased consumption are expected to produce 15.9% increase in retail water sale revenues for FY

47 Property Tax Representing approximately 10% of total District revenues, the Property Tax is the second largest revenue source. Property Tax revenue is shared evenly between Wholesale and Retail and has been designated by the Board of Directors to be spent on capital projects, not operations. Property Tax Revenues $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- FY FY FY FY FY FY FY est. FY Budget Retail Wholesale Property Tax revenues have been increasing over the past four years, a result of the rebound in the housing market after the Great Recession. This budget anticipates a 4% increase in Property Tax revenues. 26

48 Salaries and Benefits Aside from the Capital Improvement Program, Salaries and Benefits represent the largest expense of the District. Salaries and Benefits $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 Retail Wholesale $2,000,000 $1,000,000 $- FY FY FY FY est. FY Budget Salary and Benefit costs are expected to increase by $515,400 or 7% due to the following factors: 1. Addition of Water Treatment Plant Operator position ($123,400 - wholesale) 2. Potential Merit Pay Increases ($52,100: $29,800 wholesale and $22,300 retail) (calculated after application of cost of living adjustment) 3. Cost of Living Adjustment 2.5% ($134,800: $58,200 wholesale and $76,600 - retail) The level of District staffing (number of employees) has remained relatively unchanged for many years. In FY the Board of Directors approved the addition of one Water Treatment Plant Operator. The budget anticipates a modest amount for merit pay increases, if earned and awarded, for those employees who are not at the top of their range. Approximately 30% of the District s employees are at the top of the salary range. The District does periodic compensation studies to ensure it is offering a fair and competitive compensation package to its employees. Between compensation studies, 27

49 the District considers annual cost of living adjustments (COLA), generally tied to the Western Cities Consumer Price Index (CPI). The award of the COLA is not automatic. It is subject to Board of Directors approval via adoption of the budget. The chart below summarizes historical COLA s approved by the Board of Directors and provides a comparison of those adjustments to both the Western Cities Consumer Price Index, as well as the COLA s awarded to Social Security recipients. Social Security uses a different index to calculate and award COLA s. Hisotrical COLA's and CPI Data 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% CPI-U Western Cities A 3.3% 3.4% 0.5% 1.4% 2.0% 2.5% 2.2% 1.4% 1.0% 2.5% 3.2% COLA SJWD 3.3% 3.3% 0.0% 1.0% 0.0% 3.1% 2.0% 1.4% 1.0% 2.5% 2.5% COLA Social Security 3.3% 2.3% 5.8% 0.0% 0.0% 3.6% 1.7% 1.5% 1.7% 0.0% 0.3% The Board of Directors considers annual Cost of Living Adjustments with each budget cycle. The District completed and implemented a compensation study in The implementation of the study to salary ranges is effectively a re-start on the comparison of cumulative COLA adjustments as the study brought compensation to market levels, removing any disparity from previous year COLA s. This budget includes a 2.5% COLA adjustment for employees, slightly less than the 3.2% increase in the Western Cities CPI. Water Supply Costs The District s existing water supply consists of three separate raw water contracts. The first source of water is 33,000 acre-feet of pre-1914 water rights on the American River. The second source is a contract with the U.S. Bureau of Reclamation for 24,200 acrefeet of Central Valley Project water (CVP water). The third water source is a contract with 28

50 Placer County Water Agency (PCWA) for 25,000 acre-feet of water. All sources of surface water are either stored or flow through Folsom Lake and delivery is taken at Folsom Dam outlets, either by gravity or pumped by the U. S. Bureau Folsom Pumping Plant. Total raw water delivery for the Fiscal Year was 30,907 acre-feet and is anticipated to be 30,379 acre-feet for Fiscal Year , and 37,230 for Fiscal Year , excluding pass through deliveries for Sacramento Suburban Water District. $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Wholesale Water Supply Cost FY FY FY FY FY FY FY est. FY Budget Total Excludes Groundwater As illustrated in the chart above, water supply costs increased significantly in Fiscal Year There are two primary reasons for this increase. First, in 2008 a surface water shortage and reimbursement agreement to provide groundwater supplies during times of surface water shortage was prepared, and referenced in the signed 2008 Wholesale Water Supply Agreements, but was never executed. Nevertheless, the District, in its capacity as the wholesale supplier, determined that there was a potential need for groundwater pumping between 2009 and 2013, and asked both the Citrus Heights Water District (CHWD) and Fair Oaks Water District (FOWD) to maintain their readiness to supply groundwater. In 2014, due to a shortage in surface water supplies caused by a third year of drought, San Juan Water District requested groundwater to be pumped. Both CHWD and FOWD failed to provide the District with annual bills for both their incremental costs to maintain active wells and for the pumping which occurred in In 2014, the District was provided with bills in the approximate amount of $4 million. The District disputed the amount, and the cost was settled in FY at $1,981,440 to be repaid over a 4 year period ending in FY This budget includes a payment of $495,400 for this reimbursement. The light blue bar on the graph above shows water supply costs for fiscal year without the payment towards the groundwater reimbursement. 29

51 Even after removing the effect of the groundwater reimbursement, water supply costs still appear higher than in prior years. This is due in part to an assumed increase in water use, but is also due to an overall increase in the cost of raw water. The District pays a nominal amount to the State Water Resources Control Board, under protest, as a water rights fee for the Pre 1914 water. The cost of the CVP water is set by the United States Department of the Interior, Bureau of Reclamation. It is also a primary driver for the cost of the PCWA water. Both the CVP and PCWA water costs increased dramatically for this budget year. The CVP water rate increased 10%, following a 57% in the prior year. However, the District does not anticipate purchasing CVP water for this budget year. For PCWA water, the District pays the average of the District s CVP rate and the CVP rate for the City of Roseville and PCWA. In addition, the District has to pay a wheeling charge to the Bureau of Reclamation for the use of federal facilities (Folsom Lake) to convey the water from PCWA to the District. The wheeling rate has increased 13%, going from $30.68 per acre foot to $30.68 per acre foot. This follows a 69% in the prior year. Reserve Summary Wholesale and Retail Operating and Capital Reserves Combined $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $ est Budget Wholesale Retail The combination of the Great Recession, followed by the drought, resulted in the need to defer maintenance and capital projects and utilize reserves to augment operations and critical capital projects. This is illustrated above by the sharp decline in District reserve balances. In May 2017 the Board approved and made a $4,112,000 payment to CalPERS to help pay down the existing unfunded pension liability. This District was paying 7.5% interest on this liability, but only earning approximately 1.5% on its reserves. By drawing down reserves to pay down this debt, the District will save in excess of $4 million over the 30

52 next 15 to 20 years, with annual savings of approximately $300,000. These savings can be used to fund critical infrastructure needs or to reduce the need for future rate increases. The District recently completed a Five Year Financial Plan and implemented a five year rate structure that is intended to replenish reserves and ensure that the District can continue in its mission to deliver a reliable water supply of the highest quality at reasonable and equitable costs. 31

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54 OPERATING FUNDS 33 S I N C E

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56 OPERATING FUNDS The Wholesale and Retail Operating Funds account for the operations of the District. Department operating costs are shared and split between Wholesale and Retail based upon the proportionate benefit received by each, which can differ from person to person, department to department and expense to expense. The District is comprised of the following functional areas, or departments: Administration and General The functional area of Administration and General is a combination of the following departments: Board of Directors, Executive, Finance, Administration, Human Resources, and Information Technology. Overall District costs related to general operations, legal, insurance and office expenses are recorded in this category. Major initiatives/projects for the Fiscal Year include: Updating District Ordinances and Policies Water Fix - ensuring our customers are not negatively impacted by the construction and operation of the new Delta tunnels which are designed to provide reliable water transmission from north to south of the Delta Evaluating existing water supply contracts and rights for best combination of dry year reliability and cost Improving District website for look, feel and functionality Establishing Strategic Goals and Performance Metrics Conservation The Conservation Department is responsible for creating and implementing programs and services that reduce water use to meet federal, state and local commitments. Major initiatives/projects for the Fiscal Year include: Rehabilitate outdated sections of the demonstration WEL (Water Efficient Landscape) Garden (wholesale) Provide educational customer workshops and an annual mulch give-a-way event (wholesale) Implement rebate incentive programs and provide on-site customer assistance to support State mandated water use reductions requirements Develop and coordinate a student art calendar contest to be distributed to all wholesale agencies 35

57 Customer Service The Customer Service Department is responsible for the billing and collection of water service revenue from San Juan Water District Retail customers and is the initial point of contact for customer inquiries. This includes the establishment of new water service, modifications to existing service, payments, delinquency cutoffs, and meter reading. Major initiatives/projects for the Fiscal Year include: Purchase utility billing module of newly implemented Tyler Accounting System and migrate from existing utility billing software Work with Field Service staff to update manually read meters with radio or touch read meters to improve reading efficiency Work with Field Service staff to diagnose customer meter problems and repair promptly Engineering Services This Department is responsible for planning, designing and managing capital improvement projects, assisting with operational improvements, and assisting with maintenance activities which contain an engineering component. See pages 38 and 41 for a complete listing of planned projects. Water Treatment This Department maintains and operates the Sidney N. Peterson Water Treatment Plant (the Plant). The Plant is staffed and operated continuously, 24 hours per day, 7 days per week and 365 days per year. The Department also maintains the Hinkle Reservoir, a 62 million gallon floating covered reservoir, where treated water is stored prior to distribution. The plant supplies potable water to the Citrus Heights Water District, Fair Oaks Water District, Orange Vale Water Company, City of Folsom s northern area (Ashland), Sacramento Suburban Water District, as well as San Juan Water District s retail service area. Major initiatives/projects for the Fiscal Year include: Completion of the Flocculation/Sedimentation Improvement Project a construction project replacing existing flocculation and sedimentation equipment and constructing a new redundant settled water channel for increased reliability Alum feed pump and controls replacement SCADA integration of in-plant pumps and Hinkle underdrain system Equalization Basin pump rehabilitation Backwash pump rehabilitation Electrical rehabilitation of lime feeder electrical panel and conduits Finalize study of utilization of UV254 for effectively reading Total Organic Levels 36

58 Distribution (Field Services) This Department operates and maintains Wholesale and Retail water transmission and distribution pipelines ranging in size from 6 to 96 in diameter and totaling over 217 miles in length, including water meters, air release values and other appurtenances. The Department also maintains and operates six pump stations and three reservoirs ranging from 4.56 to 0.05 million gallons within the Retail system. The Department responds to emergency repairs, works directly with customers, and monitors and maintains water quality standards in the system to meet all federal and state drinking standards. Major initiatives/projects for the Fiscal Year include: Replace main distribution lines in 8 locations within the retail service area. Improve and/or install pressure reducing stations at 5 locations. Continue backflow testing program Complete an evaluation of the District s Comprehensive Safety Program Complete significant maintenance work at pump stations and the main District campus. 37

59 Wholesale Operating Fund The Wholesale Operating Fund is used to account for the operating revenues and expenses of the Wholesale division. This includes the acquisition of raw water, the water treatment plant, and the related administrative support to conduct wholesale water activities. This fund holds and is used to report on all wholesale operating reserves. ADOPTED FISCAL YEAR BUDGET Wholesale Operations Est. Beginning Available Reserves July 1, 2016 $ 1,887,212 Sources Water Sales 10,385,100 Other Revenues 150,500 Total Sources $ 10,535,600 Uses Salaries & Benefits 3,440,900 Water Supply 1,617,100 Other Expenses 2,232,200 Debt Service - Interest 939,800 Debt Service - Principal 906,300 Total Uses $ 9,136,300 Net Sources and Uses $ 1,399,300 Transfer In/(Out) (1,342,600) Est. Ending Available Reserves June 30, 2017 $ 1,943,912 38

60 WHOLESALE OPERATING FUND SUMMARY San Juan Water District FY FY FY Estimated FY Proposed Est. Beginning Available Reserves $ 13,826,746 $ 14,474,812 $ 3,859,913 $ 1,887,213 Sources Water Sales 6,379,836 7,067,960 9,166,900 10,385,100 Capital Contributions 370, Connection Fees 112, Taxes & Assessments 899, Rebates 399, Other Revenues 338, , , ,500 Total Revenues $ 8,499,858 $ 7,303,702 $ 9,358,600 $ 10,535,600 Uses Administration and General: Salaries & Benefits 852,026 1,143,708 1,404,600 1,385,600 Professional Services 382, , , ,700 Maintenance and Repair 14,657 67, ,200 89,600 Materials and Supplies 23,058 11,157 27,400 13,000 Public Outreach 160, , , ,800 Other Expenses 186, , , ,700 Total Administration and General 1,619,662 2,085,806 2,709,400 2,390,400 Water Treatment Plant Salaries & Benefits 1,386,438 1,271,105 1,450,500 1,729,000 Professional Services 14,055 47,790 44,000 39,900 Maintenance and Repair 234, , , ,600 Materials and Supplies 423, , , ,100 Other Expenses 205,659 73, , ,900 Total Water Treatment Plant 2,264,064 2,007,425 2,405,400 2,868,500 Water Supply Placer County Water Agency 550, , , ,800 Purchase of Treated Water (Groundwater) , ,400 Pumping to Treatment Plant 108,540 76, , ,700 Pre Water Rights Water 17,892 19,420 20,400 21,400 Central Valley Project Water 150,152 59,704 3,500 - Other 84,960 74,850 21,100 23,800 Total Water Supply 911, ,830 1,575,400 1,617,100 Engineering Salaries & Benefits 203, , , ,300 Professional Services (32,797) 3,353 29,800 7,900 Maintenance and Repair 5,786 1,901 2,900 2,200 Materials and Supplies 656 6,911 3,100 5,300 Other Expenses (40,009) 6,598 10,300 13,700 Total Engineering 137, , , ,400 Conservation Salaries & Benefits 157,444 83,214 7,600 - Professional Services 574-3,500 8,000 Maintenance and Repair 7,484 8,899 10,300 23,500 Materials and Supplies 14 14,521 10,100 10,100 Other Expenses 8,346 3,583 13,800 14,400 Total Conservation 173, ,217 45,300 56,000 Non-Departmental Debt Service - Principal 563, , , ,300 Debt Service - Interest 1,435,587 1,352,680 1,389, ,800 Capital Improvement Projects 78, Addl. Pymt. Towards Unfunded Pension Liability - 1,725,000 - Other 666,315 2,344 4,700 2,800 Total Non-Departmental 2,744,633 1,942,724 3,726,600 1,848,900 Total Uses $ 7,851,791 $ 6,847,963 $ 10,810,600 $ 9,136,301 Transfers (To)/From: Establish Capital Reserve Fund - (11,203,318) Partial Funding for Unfunded Pension Liability Payment 1,311,100 Year End Transfer (To)/From Capital Outlay Fund - 132,679 (1,831,800) (1,342,600) Est. Ending Available Reserves $ 14,474,812 $ 3,859,913 $ 1,887,213 $ 1,943,912 39

61 San Juan Water District Retail Operating Fund The Retail Operating Fund is used to account for the operating revenues and expenses of the retail service area. This includes the payment to the Wholesale fund for the cost of treated water, as well as the distribution of the treated water to all customers in the District s retail service area, including related administrative support. This fund holds and is used to report on all retail operating reserves. ADOPTED FISCAL YEAR BUDGET Retail Operations Est. Beginning Available Reserves July 1, 2017 $ 2,342,317 $ 10,716, ,400 11,256,200 Uses Salaries & Benefits Treated Water Other Expenses Debt Service - Interest Debt Service - Principal Total Expenses $ 4,382,800 3,080,600 2,219, , ,800 10,709,100 Net Sources and Uses $ 547,100 Sources Water Sales Other Revenues Total Revenues Transfer In/(Out) Est. Ending Available Reserves June 30, (437,200) $ 2,452,217

62 RETAIL OPERATING FUND SUMMARY San Juan Water District FY FY FY Estimated FY Proposed Est. Beginning Available Reserves $ 16,053,582 $ 12,926,038 $ 2,678,017 $ 2,342,318 Sources Water Sales 7,846,601 8,255,437 9,248,800 10,716,800 Capital Contributions 589, Connection Fees 908, Taxes & Assessments 899, Rebates 8, Other Revenues 246, , , ,400 Total Revenues $ 10,498,867 $ 8,745,665 $ 9,656,200 $ 11,256,200 Uses Administration and General: Salaries & Benefits 1,094,090 1,112,490 1,105,600 1,065,900 Professional Services 237, , , ,900 Maintenance and Repair 12,454 7,367 15,700 11,000 Materials and Supplies 20,362 11,198 15,200 12,100 Public Outreach 92,484 65,173 70, ,700 Other Expenses 270, , , ,100 Total Administration and General $ 1,727,367 $ 1,693,109 $ 1,775,000 $ 1,713,700 Distribution System Salaries & Benefits 1,957,512 1,944, ,700 2,224,200 Professional Services 173, , , ,900 Maintenance and Repair 69, , , ,200 Materials and Supplies 205, , , ,500 Other Expenses 433, ,814 1,992, ,400 Total Distribution System $ 2,838,600 $ 2,661,485 $ 3,033,700 $ 3,328,200 Water Supply Purchase Water from Wholesale 2,217,448 2,531,576 2,738,500 3,080,600 Other 25,246 20, Total Water Supply $ 2,242,694 $ 2,551,742 $ 2,738,500 $ 3,080,600 Engineering Salaries & Benefits 324, , , ,200 Professional Services 7,289 4,143 33,200 15,900 Maintenance and Repair 3,201 2,028 3,500 2,200 Materials and Supplies 2,983 7,451 3,300 7,500 Other Expenses 19,514 10,649 10, ,900 Total Engineering $ 356,988 $ 324,339 $ 360,200 $ 443,700 Conservation Salaries & Benefits 422, , , ,200 Professional Services 35,202 70,063 65,000 14,000 Maintenance and Repair 2,820 4,811 4,000 2,500 Materials and Supplies 8,815 3,952 8,200 12,100 Other Expenses 109, ,139 63,900 55,800 Total Conservation $ 578,279 $ 654,449 $ 544,300 $ 503,600 Customer Service Salaries & Benefits 394, , , ,300 Professional Services 126, , , ,100 Maintenance and Repair 33,086 4,215 2,600 5,600 Materials and Supplies 26,903 29,118 36,500 36,300 Other Expenses 13,867 41,208 56,300 60,500 Total Customer Service $ 595,471 $ 600,655 $ 613,500 $ 609,800 Non-Departmental Debt Service - Principal 297, , , ,800 Debt Service - Interest 798, , , ,300 Capital Improvement Projects 4,222, Addl. Pymt Towards Unfunded Pension Liability - - 2,387,000 - Other (30,983) (31,043) 3,300 3,400 Total Non-Departmental $ 5,287,011 $ 1,065,564 $ 3,484,900 $ 1,029,500 Total Uses $ 13,626,411 $ 9,551,343 $ 12,550,100 $ 10,709,100 Transfers (To)/From: Establish Capital Reserve Fund - (10,331,774) - - Partial Funding for Unfunded Pension Liability Payment 1,976,800 Year End Transfer (To)/From Capital Outlay Fund - 889, ,400 (437,200) Est. Ending Available Reserves $ 12,926,038 $ 2,678,017 $ 2,342,318 $ 2,452,217 41

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64 CAPITAL FUNDS 43 S I N C E

65 San Juan Water District Wholesale Capital Outlay Fund This fund was created in Fiscal Year to receive and separately account for revenues that are designated by the Board of Directors to be utilized solely for wholesale capital expenditures and to account for the acquisition of wholesale capital assets, including large scale maintenance of capital assets and improvements made to such assets. Capital reserves were transferred out of operating into this new fund upon fund creation. This fund now holds and is used to report on all wholesale capital reserves. ADOPTED FISCAL YEAR BUDGET Est. Beginning Available Reserves July 1, 2017 Sources Capital Contributions Taxes & Assessments Connection Fees Other Revenues Total Sources Wholesale Capital Outlay $ 5,465,972 $ 2,172,400 1,090,000 35,000 60,000 3,357,400 Uses Maintenance - Facility Capital Improvement Projects Total Uses $ 2,253,500 1,018,600 3,272,100 Net Sources and Uses $ 85,300 Transfer In/(Out) Est. Ending Available Reserves June 30, ,342,600 $ 6,893,872

66 WHOLESALE CAPITAL OUTLAY FUND SUMMARY San Juan Water District FY FY Estimated FY Proposed Est. Beginning Available Reserves $ - $ 9,162,739 $ 5,465,972 Sources Taxes & Assessments 954,068 1,045, Capital Contributions 959, , Rebates 391, ,900 0 Connection Fees 91,566 40, Other Revenues 93,969 73, Total Sources $ 2,490,040 $ 1,957,100 $ 3,357,400 Uses Contributions to Others $ 2,178,540 $ - $ - Capital Outlay - Water Treatment Plant & Improvements 1,295,334 5,927, ,800 Capital Outlay - Mains/Pipelines & Improvements 686,109 60,000 30,000 Capital Outlay - Equipment and Furniture 114, ,700 6,000 Capital Outlay - Vehicles 33,745 15,100 - Capital Outlay - Buildings & Improvements 7,378 8,800 8,800 Capital Outlay - Reservoirs & Improvements ,000 Capital Outlay - Software 4,159-78,000 Facility Maintenance 77,731 5,000 2,253,500 Total Uses $ 4,397,940 $ 6,174,600 $ 3,272,100 Net Sources and Uses $ (1,907,900) $ (4,217,500) $ 85,300 Transfer In 11,203,318 1,831,800 1,342,600 Transfer Out (132,679) (1,311,067) - Est. Ending Available Reserves $ 9,162,739 $ 5,465,972 $ 6,893,872 45

67 The Wholesale Capital Outlay Budget includes spending on the following projects in Fiscal Year : Facility Maintenance: Fair Oaks 40 Transmission Pipeline Re-Lining $ 2,180,000 Hinkle Reservoir Cleaning and Repairs 50,000 AMAG Panel Upgrades 19,000 Variable Frequency Drives for Alum Feed Pumps 4,500 Water Treatment Plant Improvements: Flocculation/Sedimentation Basin & Settle Water Channel Improvements 510,000 Lime System Control & Feeder System Improvements 68,000 Alum Feed Pumps Replacement 55,500 Miscellaneous Plant Improvements 27,300 Backwash Hood Pumps 18,000 Flocculator Mix Motor Disconnect 11,000 Lime Grit Containment (Curbing & Cover) 8,000 Reservoir Improvements: Hinkle Reservoir Overflow Channel Lining (East of AFR) 109,000 Hinkle Reservoir Monitoring Wells Level Probes 59,000 Baldwin Reservoir Outlet Trashrack 30,000 Software: GIS Implementation 41,000 SCADA Expansion (Hinkle Underdrain, Alum & In Plant Pumps) 30,000 Server Upgrades 7,000 Pipelines: Baldwin Reservoir Raw Water Pipeline Project 30,000 Building Improvements: Administration Building Fire System Upgrades 8,800 Equipment: Fortinet Firewall Replacement 6,000 $ 3,272,100 46

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69 San Juan Water District Retail Capital Outlay Fund This fund was created in Fiscal Year to receive and separately account for revenues that are designated by the Board of Directors to be utilized solely for retail capital expenditures and to account for the acquisition of retail capital assets, including large scale maintenance of capital assets and improvements made to such assets. Capital reserves were transferred out of operating into this new fund upon fund creation. This fund now holds and is used to report on all retail capital reserves. ADOPTED FISCAL YEAR BUDGET Retail Capital Outlay Est. Beginning Available Reserves July 1, 2017 $ 6,368,622 $ 1,090, ,000 60,000 1,600,000 Uses Capital Improvement Projects Facility Maintenance & Professional Services Total Uses $ 5,428, ,000 5,649,000 Net Sources and Uses $ (4,049,000) Sources Taxes & Assessments Connection Fees Other Revenues Total Sources Transfer In/(Out) Est. Ending Available Reserves June 30, ,200 $ 2,756,822

70 San Juan Water District RETAIL CAPITAL FUND SUMMARY - FY Estimated $ 8,618,422 FY Proposed $ 6,368, , , ,299 93,502 2,319,493 1,050, ,000 98,600 1,515,600 1,090, ,000 60,000 $ 1,600,000 1,431, ,500 3,683,600 $ 62,200 50, , ,400 17, ,207,200 1,250, , ,600 55,000 15,000 10, ,000 $ 5,649,000 $ 308,400 $ (4,049,000) (2,558,200) 437,200-6,368,622 $ 2,756,822 FY Est. Beginning Available Reserves Sources Taxes & Assessments Grant Revenue Connection Fees Other Revenues Total Sources $ $ Uses Capital Outlay - Mains/Pipelines & Improvements Capital Outlay - Pump Stations & Improvements Capital Outlay - Software Capital Outlay - Buildings & Improvements Capital Outlay - Equipment and Furniture Capital Outlay - Land Improvements Capital Outlay - Reservoirs & Improvements Capital Outlay - Vehicles Contributions to Others Maintenance & Professional Services Total Uses $ 1,391,403 4,159 18,323 3,184 95, ,575 3,143,414 Net Sources and Uses $ (823,921) Transfer In Transfer Out Est. Ending Available Reserves $ 10,331,774 (889,431) $ 8,618,422 $ 49

71 The Retail Capital Outlay Budget includes spending on the following projects in Fiscal Year : Main Distribution Line Replacements: Douglas Boulevard & Associated Small Mains $ 1,488,000 Spahn Ranch Road Main Extension 1,041, & Main Avenue 327, Dambacher Drive 193,300 Sierra College & Douglas 12" (Easterly Crossing) 164,000 Lou Place 8" Troy Wat to Crown Point Vista 141, Oak Avenue 12" Main (Casa Robles H.S.) 115,900 Unidentified or Emergency Projects 90,500 North Glenn Bridge Crossing 70,000 Bacon 33" and Sierra 30" Access Point Installations 52,000 Pump Station/Pressure Reducing Station Improvements: Bacon Generator Replacements (2) 303,100 Bacon Pump Station/Sierra Control Valve Intertie 200,000 Upper & Lower Granite Bay Pump Station Low Flow Pumps 169,500 Canyon Falls Village Pressure Reducing Station Replacement 150,000 Olive Ranch Pressure Reducing Station 124,000 Cavitt Stallman Pressure Reducing Station 123,300 Oak Avenue - American River Canyon Pressure Reducing Station 114,900 Lower Granite Bay - Crown Point Emergency Intertie 44,000 Bacon Pump Station HVAC Improvements 22,000 Software: Utility Billing Software Replacement 148,000 GIS Implementation 123,000 Server Upgrades 7,000 Building Improvements: Containment Area for Vacuum & Materials 65,000 Field Services & Engineering Building HVAC Replacement 44,000 Field Services & Administration Building Fire System Upgrades 26,200 Equipment: Replace Survey Equipment 21,000 Transport (Trailer) Replacement 21,000 Mud Trailer Replacement (Vehicle #E125) 7,000 Fortinet Firewall Replacement 6,000 Land Improvements: Bacon Pump Station Perimeter Fencing 15,000 Reservoir Improvements: Los Lagos Tank Overflow Air Gap and Catch Basin 10,000 Facility Maintenance & Professional Services: Field Services & Engineering Building Roof Replacement 55,000 Kokila Reservoir Cover Cleaning, Vents & Sand Tubes 48,000 Mooney Tank Building Roof Replacement 33,000 AMAG Panel Upgrades 19,000 AMR Feasibility Study 66,000 Total Capital Improvement Projects $ 5,648,600 50

72 SUPPLEMENTAL INFORMATION 51 S I N C E

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74 Transfers In and Transfers Out Transfers In and Transfers Out represent accounting methods to move resources (usually cash) from one fund to another. Transfers in represent resources being brought into that fund. Whereas, transfers out represent resources being taken from that fund. Transfer In To: Transfer Out From: Wholesale Capital Fund $ 1,342,600 Wholesale Operating Fund $ 1,342,600 Retail Capital Fund $ 437,200 Retail Capital Fund $ 437,200 Total Transfers In $ 1,779,800 Total Transfers Out $ 1,779,800 53

75 Debt Service Schedules Refunding Revenue Bonds, Series 2012A Debt Service Schedule - Fiscal Year Basis Principal Interest Total Fiscal Year Wholesale Retail Wholesale Retail Wholesale Retail Combined Debt Service 2018 $ 301,367 $ 163,634 $ 323,584 $ 175,697 $ 624,951 $ 339,331 $ 964, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,220 97, , , , , , ,587 85, , , , , , ,692 71, , , , , , ,507 57, , , , , ,837 77,989 42, , , , , ,672 48,940 26, , , , , ,508 18,359 9, , , ,328 Outstanding 6,860,139 3,724,862 3,102,452 1,684,544 9,962,591 5,409,405 15,371,996 Paid ,970,224 1,069,776 1,805, ,421 3,775,882 2,050,197 5,826,079 Total $ 8,830,363 $ 4,794,638 $ 4,908,110 $ 2,664,965 $ 13,738,473 $ 7,459,602 $ 21,198,075 combined $ 13,625,000 combined $ 7,573,075 54

76 Refunding Revenue Bonds, Series 2017 Debt Service Schedule - Fiscal Year Basis Principal Interest Total Fiscal Year Wholesale Retail Wholesale Retail Wholesale Retail Combined Debt Service 2018 $ 604,800 $ 340,200 $ 616,244 $ 346,637 $ 1,221,044 $ 686,837 $ 1,907, , , , ,799 1,004, ,199 1,569, , , , ,543 1,002, ,143 1,567, , , , ,998 1,000, ,798 1,563, , , , ,137 1,000, ,937 1,563, , , , ,406 1,001, ,206 1,564, , , , , , ,292 1,561, , , , , , ,627 1,557, , , , , , ,184 1,556, , , , , , ,874 1,557, , , , , , ,844 1,557, , , , , , ,094 1,555, , , , , , ,149 1,561, , , , , , ,779 1,554, , , , , , ,214 1,556, , , , ,114 1,000, ,914 1,563, ,318, , , ,107 1,610, ,707 2,515, ,369, , , ,964 1,607, ,364 2,512, ,424, , , ,637 1,606, ,637 2,510, ,481, , ,177 72,662 1,610, ,062 2,516, ,529, ,400 80,375 45,211 1,609, ,611 2,515, ,580, ,200 29,969 16,858 1,610, ,058 2,516,827 Outstanding 16,720,000 9,405,000 9,140,494 5,141,528 25,860,494 14,546,528 40,407,021 Paid ,249 33,890 60,249 33,890 94,138 Total $ 16,720,000 $ 9,405,000 $ 9,200,742 $ 5,175,417 $ 25,920,742 $ 14,580,417 $ 40,501,160 combined $ 26,125,000 combined $ 14,376,160 55

77 Labor Allocation As mentioned previously, many employees are shared by Wholesale and Retail to maximize efficiency and eliminate the need for redundant positions. The table on the next page shows all District positions and their respective cost sharing between Wholesale and Retail based on their assigned duties. 56

78 Dept. Position Title # Budgeted Wholesale Allocation Retail Allocation Wholesale FTE Retail FTE Executive General Manager 1 90% 10% Assistant General Manager 1 70% 30% Water Resources Specialist 1 90% 10% Board Secretary/Administrative Assistant 1 50% 50% Total Executive Finance and Administrative Services Director of Finance 1 50% 50% Information Technology Administrator 1 50% 50% Finance and Administrative Services Analyst 1 50% 50% Accountant 1 50% 50% Purchasing Agent 1 50% 50% Accounting Technician III 1 50% 50% Total Finance and Administrative Services Conservation Customer Service Manager 0.5 0% 100% Conservation Lead 1 0% 100% Conservation Technician I 1 0% 100% Conservation Technician II 1 0% 100% Total Conservation Customer Service Customer Service Manager 0.5 0% 100% Meter Technician 1 0% 100% Customer Service Technician III 2 0% 100% Total Customer Service Engineering Service Engineering Services Manager 1 50% 50% Associate/Senior Engineer 1 50% 50% Engineering Technician III 1 50% 50% Construction Inspector II 1 50% 50% Total Engineering Service Field Services (Distribution System) Operations Manager 0.6 0% 100% Field Services Manager 1 0% 100% Pump Station Lead 1 0% 100% Distribution Lead Worker 2 0% 100% Distribution Operator II 2 0% 100% Distribution Operator III 1 0% 100% Distribution Operator IV 5 0% 100% Pump Station Technician/Mechanic 1 0% 100% Utilities Coordinator 1 0% 100% Total Field Services (Distribution System) Water Treatment Plant Operations Manager % 0% Water Treatment Plant Superintendent 1 100% 0% Maintenance Chief 1 100% 0% Chief Operator 1 100% 0% Water Treatment Plant Operator IV 2 100% 0% Water Treatment Plant Operator III 2 100% 0% Water Treatment Plant Operator II 1 100% 0% Instrumentation Technician 1 100% 0% Maintenance Technician I 1 100% 0% Facilities Maintenance Help 1 70% 30% Total Water Treatment Plant Total Funded FTE's * FTE = Full Time Equivalent 57

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80 INSERT RESOLUTION HERE 59 S:\Finance\Budget\FY 2018\Budget Document and Schedules\FY Draft Wholesale and Retail Budget.docx

81 AGENDA ITEM III-2 STAFF REPORT To: Board of Directors From: Lisa Brown, Customer Service Manager Date: June 14, 2017 Subject: Tyler Technologies Agreement for Customer Relationship Management Software implementation RECOMMENDED ACTION Consideration of a motion authorizing staff to enter into an agreement with Tyler Technologies to add a Customer Relationship Management Software module to the current financial software system, replacing the District s current Customer Information System. BACKGROUND The District began use of its current Customer Information System program in The software has aged to the point where it is no longer supported by Harris (vendor). The District pays $43,477 in annual maintenance fees for the current program and receives little support. The District is separately invoiced for each support request that falls outside of Harris support package for our version of software. For example, the District paid $2,100 to update the general ledger accounts in Harris and $2,100 for a report that staff should have been able to generate themselves but couldn t due to system limitations. In addition, the Harris program does not communicate with the Finance Department s newly implemented financial software program through Tyler Technologies. This lack of communication between software programs delays entry of pertinent data into the financial software system causing delayed reporting, auditing, and requires routine manual manipulations through journal entries. In addition to the financial software program the District currently uses, Tyler Technologies offers a Customer Relationship Management (CRM) software module that surpasses the District s current system. This includes all utility billing, accounts receivable and cashiering functions. Converting to Tyler s CRM software program would greatly increase efficiency both in data sharing and in daily use. Staff supports adding this CRM module to the current financial software package. Financial staff is familiar with the functionality of Tyler software and their customer support and are happy with both. Operating within one software program would ensure effective electronic communication between customer service and financial operations. Once the agreement is signed, the District will be assigned a project manager and an implementation schedule will be developed. It is expected the process will begin late fall 2017 and the conversion will take 6-8 months.

82 STAFF REPORT Tyler Technologies Utility Billing Software Agreement FINANCIAL CONSIDERATIONS Funding for the software conversion was included in the current fiscal year s capital reserves but will be carried over into FY17/18 as Customer Service desired implementation to begin in the fall, when customer support demands decrease. One time fees for the software, conversion services and project management total $126,845. Annual maintenance fees total $17,659, which is $25,818 lower than our current system. Page 2 of 2

83 AGENDA ITEM III-3 STAFF REPORT To: Board of Directors From: Rob Watson, Engineering Services Manager Date: May 25, 2017 Subject: 524 Fort Rock Court Easement Encroachment Request RECOMMENDED ACTION Staff recommends approval of a motion to approve an easement encroachment request for 524 Fort Rock Court and direct staff to execute the necessary agreement with the property owner. BACKGROUND San Juan Water District s (District) has two existing transmission pipelines within easements transecting a portion of the property owner s parcel at 524 Fort Rock Court. The property owner desires to build improvements within their parcel, and therefore is requesting an encroachment into the District s easement area within their parcel. Attached are photographs and figures depicting the easement and proposed property improvements. STATUS AND JUSTIFICATION Staff has reviewed the requested easement encroachment and has considered the extent of the improvements and the potential impact on the District s ability to operate, maintain, repair, or replace the affected pipelines. Staff has concluded that the owner s requested encroachment, with the appropriate engineering of the improvements and cautions implemented to protect the pipelines during construction, will not have a detrimental effect on the District s short-term or long-term requirements to operate, maintain, repair, or replace the pipelines. BUDGET IMPACT No impact. Encroachment Agreement Staff Report Page 1 of 2 May 25, 2017

84 EXHIBIT A 524 FORT ROCK COURT ENCROACHMENT AGREEMENT Encroachment Agreement Page 2 of 2 May 25, 2017 Staff Report

85 AGENDA ITEM III-4 STAFF REPORT To: Board of Directors From: George Machado, Field Services Manager Date: June 14, 2017 Subject: Annual Paving Services Contract FY RECOMMENDED ACTION Staff recommends a motion to award the annual paving services contract to Sierra National Asphalt for the amount of $114,120 and authorize a 10% contingency for a total budget of $125,532. BACKGROUND The paving services agreement consists of removing temporary paving generated by service and maintenance installations across the District and replacing with permanent asphalt. Sierra National Asphalt is the Districts incumbent paving services vendor and the contract will expire on June 30, The new contract will be a one year agreement with two; one year options for renewal. Per Appendix B of Ordinance 4000, purchases in excess $15,000 require bidding. The District has received and evaluated 5 responses for this effort. Sierra National Asphalt bid price is $12.68/ SQFT, 22% lower than the next closest bidder. Summarized bids: Bidder Name Sierra National Asphalt Simpson and Simpson Central Valley Engineering & Asphalt Biondi Paving Arrow Construction Cost per SQFT $12.68 Total SQFT 9,000 $114, % - $15.50 $16.40 $19.50 $21.00 $139, $147, $175, $189, % 29% 54% 66% Sierra National Asphalt (SNA) is the lowest responsive, responsible bidder. SNA s bid documents were reviewed and found to be complete and acceptable including license, insurance and bond. When confirming the initial bid price; SNA split-out the seal coat price from their initial bid submission of $9.99/ SQFT while populating bid schedule. SNA requested relief from the District and to correct the bid price to $12.68/SQFT (seal coat $2.69/SQFT). A formal written notification of this omission was received from SNA 4 days after the bid opening. Staff is recommending this correction and award to SNA. FINANCIAL CONSIDERATIONS Staff is requesting authorization and approval by the Board in the amount of $125,532 to Sierra National Asphalt for paving services for FY

86 AGENDA ITEM III-5 STAFF REPORT To: Board of Directors From: George Machado Field Service Manager Date: June 14, 2017 Subject: Authorization and Approval to Exercise Second Year Contract Renewal with GM Construction, Contract #15-53 RECOMMENDED ACTION Authorization and approval to exercise the second year contract renewal with GM Construction (Contract #15-53). Staff is recommending renewing the construction services agreement in the amount of $147,089 with a 10% contingency for a total budget of $162,000. BACKGROUND On June 30, 2015 the Board approved a contract with GM Construction for fiscal year in the amount of $135,138. The contract contains provisions for three one year extensions. Currently the contract is valid through June 30, The following table displays the approved contract amendments to date: Contract/ Amendment Original Contract Amendment 1 Amendment 2 Amendment 3 Proposed Amendment 4 Proposed Revised Contract Date June 30, 2015 July 1, 2016 July 16, 2016 March 8, 2017 July 1, 2017 Dollar Adjustment $135,138 $0 $99,555 $120,000 $147,089 $501,782 Duration Adjustment 357 Calendar Days 15 Calendar Days 350 Calendar Days 0 Calendar Days 365 Calendar Days Completion Date June 30, 2016 July 15, 2016 June 30, 2017 June 30, 2017 June 30, 2018 June 30, 2018 Staff has evaluated GM Constructions proposed 15% increase for FY Two consecutive years of prevailing wage rate increases, overhead costs and increases in materials were identified as significant cost drivers. Staff successfully negotiated this increase down to 10% after meeting with GM Construction, prevailing wage increases were reviewed and material increases were reduced. Staff is requesting a proposed increase of $147,089 to the contract for FY Note: existing contract balances will roll into next FY; including $30,000 as designated for the Raw Water Pipeline Improvements Project at the Sidney N. Peterson Water Treatment Plant. The District anticipates improved staffing levels with minimal limitations for next FY and will continue to utilize GM Construction services at the normal rate. FINANCIAL CONSIDERATIONS Staff is recommending the Board approve a second year contract renewal & amendment with a total budget of $162,000, valid through June 30, ATTACHMENT Construction Contract Change Order

87 9935 Auburn Folsom Road Granite Bay, CA Change Order No. 4 Contractor: GM Construction nd Street North Highlands, CA Date: July 1, 2017 Project Name: Annual T&M Contract #15-53 Project Manager: George Machado Upon mutual acceptance and execution of this document by San Juan Water District, hereinafter referred to as District, and GM Construction Inc. hereinafter referred to as Contractor, Contractor is hereby directed to make the following described changes from the plans and specifications or do the following described work not included in the plans and specifications of this contract. All new work shall be done in accordance with the applicable provisions of the plans and specifications, except as specifically modified bythis contract change order. NOTE: This change will be in effect after approved by the District. DESCRIPTION OF THE CHANGES: ITEM # DESCRIPTION CREDIT/COST Contract change order 4 is as follows : Authorizes a contract increase of $147,089, the revised contract total is $501, The contract available balance for FY is $179, ($32, $147, $147,089). Revised price tables below FY17-18 GM Construction Service Installation Description Pricing FY / Install Fire Hydrant Installation (FHI) Service Lateral Tap & Connect 1 (SLTC) Additional 1 Service Same Trench Service Lateral Tap & Connect 1½ Additional 1½ Service Same Trench Blow-off Valve Replacement $ 12, $ 5, $ $ 5, $ 1, $ 5, NET CHANGE ORDER ADJUSTMENT $147, Change 4 GM Construction of 2 6/8/2017

88 CONTRACT TIME SUMMARY: Original Contract: Current Contract: This Change Order (365 Calendar Days): Revised Contract Total Days: Days Completion Date 372 June 30, June 30, June 30, ORIGINAL CONTRACT AMOUNT $ 135, Net change by previous change orders $ 219, Contract sum prior to this change order $ 354, Contract adjustment by this change order $ 147, NEW CONTRACT AMOUNT (including all change orders) $ 501, Acceptance of this Change Order 4 constitutes acceptance of the Change Order as full and complete satisfaction of any direct or indirect additional costs incurred to you in connection with performance of the changed work. The time for performance of the contract will be extended by 365 calendar days by reason of the performance of the work required by this Change Order. Except as hereinabove expressly provided, Contractor further agrees that the performance of the work specified in this Change Order or the rescheduling of other project work made necessary by this Change Order, shall not constitute a delay which will extend the time limit for completion of the work as said term is used in the Contract between the District and Contractor for the project. We, the undersigned contractor, have given careful consideration to the change proposed and hereby agree. If this change order is approved, we will provide all equipment, furnish all materials, except as may otherwise be noted above, and perform all services necessary for the work above specified, and will accept as full payment therefor the prices shown above. SJWD: Approved By: Date: Paul Helliker, General Manager Contractor: Approved By: Date: Kathryn Medley /GM Construction Change 4 GM Construction of 2 6/8/2017

89 AGENDA ITEM VI-1 DRAFT Public Information Committee Meeting Minutes San Juan Water District June 2, :00 a.m. Committee Members: Pam Tobin (Chair) Ken Miller, Member District Staff & Consultants: Paul Helliker, General Manager Lisa Brown, Customer Service Manager Donna Silva, Finance Director Chris von Collenberg, IT Administrator Teri Grant, Board Secretary/Administrative Assistant Lucy Eidam-Crocker, Crocker & Crocker Topics: Communications Issues for Fiscal Year (W & R) Website Software Modifications (W & R) Other Public Information Matters Public Comment 1. Communications Issues for Fiscal Year (W & R) Mr. Helliker provided the committee with a list of major topics and issues that the District might face in fiscal year A copy of the list will be attached to the meeting minutes. The committee discussed the need for consulting support for the Customer Satisfaction Survey for the retail service area. Mr. Helliker explained that the survey will be tied into the District s strategic plan and he expects the survey to take place in early Director Miller would like to see the last survey that was completed approximately ten years ago. Mr. Helliker will bring that back to the committee along with more information on the survey. Mr. Helliker explained that the other items on the list will require little to no consulting support for public outreach. The committee discussed re-engaging the Speakers Bureau, including video clips on the website and Facebook page, and including the CIP in the WaterGram. Ms. Eidam-Crocker provided the committee with a Retail and Wholesale Action Plan for A copy of the plan will be attached to the meeting minutes. She informed the committee that she will provide a recap of at a later date. In addition, she reviewed three activities that Crocker & Crocker worked on this year: Transparency Hub E-blast System Staff photos featured on public outreach items

90 Public Information Committee Meeting Minutes June 2, 2017 Page 2 Director Miller voiced concern that wholesale and retail items are kept together and he would like to see more separation between them. Ms. Brown commented that she could work on separating the retail addresses from the e-blast distribution list so that the eblasts could be retail and wholesale specific. The committee discussed public outreach for the Hinkle Reservoir and the Kokila Reservoir. Mr. Helliker explained that there are no press releases anticipated in the immediate future. Ms. Brown explained that these projects will be highlighted in the CIP section of the WaterGram. Director Miller suggested that only the retail cost be included in the information so as not to unintentionally misinform the readers. Ms. Brown commented that the intent would be to list just the retail cost and direct the readers to the website for more information. For information only, no action required. 2. Website Software Modifications (W & R) Mr. Helliker informed the committee that he requested Mr. Chris von Collenberg to research software for websites. Mr. von Collenberg provided the committee with a staff report which will be attached to the meeting minutes. Mr. von Collenberg explained that the current website is difficult to update and is not ADA compliant. He recommends that the District move to the Streamline software for the District website which will allow staff to maintain the website. He explained that the content would remain the same but the template would change. In response to Director Tobin s question, Mr. von Collenberg explained that he would be in charge of the website and other staff would have access to post and update. Ms. Brown informed the committee that on a quarterly basis, staff would meet to review and update the website. In response to Ms. Eidam-Crocker s comment, Mr. von Collenberg informed the committee that he has been working on content strategy and, at Director Tobin s request, will provide Ms. Eidam-Crocker with a copy of it once it s complete. For information only, no action required. 3. Other Public Information Matters Ms. Brown provided the committee with a draft graphic on water conservation which was created by Placer County Water Agency (PCWA). PCWA is partnering with the City of Roseville and would like the District to partner as well on this outreach project. The committee discussed the project and Ms. Brown will bring more information regarding cost and commitment to the committee. 4. Public Comment There was no public comment. The meeting adjourned at 11:17 am.

91 Major Topics/Issues for SJWD in FY / Potential Communications Needs Customer Satisfaction Survey will need communications consulting support on designing and conducting the survey WaterFix - ongoing work with American River water agencies/water Forum and SWRCB deliberations - mostly regulatory deliberations Bay/Delta Water Quality Control Plan - mostly legal and regulatory activities Conservation Legislation - work with the RWA team on lobbying and stakeholder outreach, supported by HASTRAT communications activities managed and conducted by RWA team Water supply reliability studies - technical work with RWA; potential further technical/contractual analysis with SJWD WCAs CIP projects property owner outreach for the Fair Oaks 40 relining project may need some communications consulting support Lead regulations monitoring schools may need some communications consulting support if issue gets controversial, but no activity currently expected Value of Water/San Juan Infrastructure Investments wholesale mailer in October 2016 and Prop. 218 notice in February 2017 addressed these topics probably won t have much activity in FY No activity on the following former major issues: rates, drought, water supply, conservation mandates

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93 Introduction For the past several years, Crocker & Crocker has prepared strategic public outreach plans for San Juan Water District. The plans were based on the board s strategic planning sessions, an analysis of state and federal legislative activities that would affect customers and stakeholders, upcoming projects, events and/or customer calls-to-action anticipated for the year. Each plan also included a communication SWOT and stakeholder analysis, goals and objectives along with strategies and tasks to guide San Juan s public outreach in a consistent, proactive and forward-fashion way. For fiscal year 2017/18, San Juan staff is taking on more activities in-house like updating and uploading information to the website, working with regional partners and managing public affairs activities. The district does not anticipate as many wholesale outreach activities as in past years that will require support from Crocker & Crocker so the scope of work is scaled back accordingly, especially to San Juan Wholesale customers. To guide efforts, Crocker & Crocker prepared the following scope of work and estimated budget. As with past programs, efforts will continue to: Position San Juan Water District as a leading, customer service-oriented water provider, delivering high-quality water supplies at fair rates. Provide information in a transparent manner to sustain and/or build trust among customers and stakeholders. Educate and inform customers about their water supply and water quality. Raise awareness about capital improvement projects, why they are necessary and why it is important to invest in them. Promote customer service and events in a timely manner to extend these opportunities to customers and encourage their participation. Working in partnership with staff, public outreach activities will support San Juan s efforts and share information about other specific initiatives and topics such as the following: Ongoing work with regional water agencies to provide input on the Bay Delta Water Quality Control Plan and California WaterFix. Collaboration with the Regional Water Authority to evaluate and study water supply reliability projects. Anticipated construction impacts for the Fair Oaks 40 relining project with direct nearby property outreach support. Ongoing water supply education with reminders about San Juan s water supply source, water rights, water supply management as well as who manages Folsom Lake and its water releases. 2 P a g e

94 Customer satisfaction survey San Juan Retail Task Activities Frequency Obtain and provide up to two estimates One-time project for survey for client consideration including objectives, desired outcomes, instrument type and length; provide recommendation on research consultant partner Newsletter/WaterGram Three trifold, fulllength newsletter inserts Three 1/3-page inserts Electronic media (social media and e-blasts) Provide strategic recommendations about survey questions, distribution and analysis Work with selected research partner to develop, coordinate, distribute and interpret findings of research survey Provide high-level strategic recommendations about findings Create and maintain production calendars Develop content outlines Write and edit copy Produce new staff photos for integration into inserts in one half-day photo shoot Facilitate design and design edits Provide final delivery of files for production Provide editorial content for Facebook and Twitter Develop content for paid Facebook boosts to help amplify events, timely news and calls to action Develop content outlines for monthly e- blasts Provide copy for e-blasts to share retail news (includes one to two topics; one major news announcement and/or event updates) Track metrics and provide update to client in annual report Media relations Write and/or edit three news releases Distribute news releases to television, print, radio and online media outlets Conduct media follow-up and tracking Maintain media databases Coordinate interviews as appropriate Two to three months to complete, depending on rounds of changes and required time for approvals, etc. Year-round with monthly activities Bi-monthly for social media and monthly e- blasts Three times per year 3 P a g e

95 Website Develop and edit new retail-focused copy for the home page and sub-pages with timely calls to action, updates, events and/or other news Provide design and design edits for retail-focused headers, graphics and/or charts Obtain images as necessary for San Juan s use to display on site Project management Project forecasting and reporting Monthly Assumes up to six content updates and six design updates San Juan Wholesale Task Activities Frequency Website Develop and edit new wholesale-focused copy for home page and sub-pages with timely calls to action, updates, events and/or other news Provide design and design edits for wholesale-focused headers, graphics and/or charts Obtain images as necessary for San Juan s use to display on site Events Develop promotions approach to support wholesale events (assumes six events) Assumes up to six content updates and six design updates Six times per year Write, edit, format and distribute up to six event e-blasts Promote events across Facebook and Twitter channels for like-minded organizations and organizations in wholesale area Promote and add events to 10 local media outlets and/or online event calendars CCR Work with client and consultant to One-time project finalize design, printing, production and delivery Proof and edit report for quality control Design report and facilitate design edits Coordinate delivery and reporting of delivery for compliance Project Management Project forecasting and reporting Monthly 4 P a g e

96 Retail Budget Estimate Fees: $56,445 Direct Costs: $3,280 Total Budget Estimate: $59,725 Wholesale Budget Estimate Fees: $21,300 Direct Costs: $760 Total Budget Estimate: $22,060 5 Page