In their own words The Southern California News Group asked each special district with cash and investments exceeding $250 million to tell us more about why they need that cash (see detailed table of cash and investments below). Several got back to us with that detail; most did not. Here are their responses, lightly edited. From the Metropolitan Water District of Southern California: For FY 2016-17, about 70 percent of the reported $1.3 billion Metropolitan held in Cash and Investments were restricted or designated due to contractual or legislative constraints. These include bond covenants, bond funds for construction, as well as the minimum level of funding required in our reserves under the district s Administrative Code. Metropolitan s unrestricted reserves were $400 million as of June 30, 2017. With an annual budget of about $1.7 billion, Metropolitan maintains adequate unrestricted reserves to ensure stable and predictable water rates and charges as revenues and expenditures can vary significantly from one year to the next as water sales fluctuate based on hydrology and supply availability. If expected water revenues are lower or there are unanticipated costs, unrestricted reserves provide a financial buffer to fund capital improvement projects and other expenses as needed. Metropolitan is committed to prudent fiscal practices that help us maintain high credit ratings, which translate into savings for ratepayers because of lower interest rates. In addition, public agencies may carry larger cash balances on June 30 the fiscal year end as many make debt service payments on July 1 of each year. From the Orange County Transportation Authority: The Orange County Transportation Authority is a multi-modal transportation agency that has a $1.1 billion annual budget and oversees planning and funding for the many ways that people get around Orange County. That includes bus and rail transit, freeway and street improvements, and express lanes. OCTA has a cash balance of approximately $1.68 billion, nearly all of it designated for transportation improvements in each of those areas of focus. That also includes nearly $300 million of a federal TIFIA loan that is going toward the under construction $1.9 billion I-405 Improvement project, the largest freeway improvement project in OCTA history. The cash balance is reflective of the significant amount of work being done by OCTA to improve transportation through transit, freeways and streets. For more details on the funding, you can review
our independently audited 2018 Comprehensive Annual Financial Report that can be found here: http://octa.net/pdf/cafr2018.pdf In addition to being governed by a 17-member board of directors, spending from Measure M the halfcent sales tax for transportation improvements is monitored by an independent Taxpayer Oversight Committee. The committee, chosen by the Orange County Grand Jurors Association, for the past 27 years has determined that OCTA is delivering transportation improvements as promised. Orange County s half-cent sales tax for transportation is expected to generate $13.1 billion over the next 22 years. From the Southern California Public Power Authority SCPPA is a joint powers authority, created in 1980, for the purpose of providing joint financing, construction, and operation of transmission and generation projects. SCPPA's members include the Cities of Anaheim, Azusa, Banning, Burbank, Cerritos, Colton, Glendale, Los Angeles, Pasadena, Riverside, and Vernon. The lmperial lrrigation District is also a member. SCPPA members serve more than 5 million Californians (2 million customers) across a service area of 7,000 square miles. SCPPA either owns, operates, or contracts for power and transmission from 36 different projects across 9 western states in order to achieve economies of scale that result in lower power supply costs for its not-for-profit member utilities. State mandates have accelerated the procurement of renewable power projects. Most recently, Senate Bill (SB) 100 (De León- D) increased the Renewables Portfolio Standard (RPS) to 60% by 2030 (previously 50%), and established a state planning policy that renewable energy and zero-carbon resources supply 100o/o of electricity to all end-use customers by 2045. SCPPA member utilities have the following projects in its portfolio:. Solar. Geothermal. Hydropower. Landfill gas. Wind. Biomass. Natural Gas-Turbines. Natural Gas-Supply. Nuclear. Transmission As of SCPPA's fiscal year end (June 30, 2018), cash and investments totaled $926,461,000. Of this, approximately $760,000,000 (or 82%) are contained in restricted cash and investment accounts. These account balances are required by individual project bond covenants for the sizeable amounts of debt
issued ($2.7 billion outstanding) to finance the various projects, and for legally required decommissioning funds. ln the case of the bond reserves it is customary in the industry to retain at least one year's principal and interest in a reserve account for the safety and security of bond holders. These funds are typically used to make the last installment of principal and interest on the debt. The balance of the cash and investments, approximately $166,461,000 is for normal operations and working capital for the various projects. SCPPA needs to have sufficient working capital to cover project expenses between the time that cost is incurred and is reimbursed by its member agencies. SCPPA's annual budget is approximately $950,000,000, which means that SCPPA keeps only 64 days worth of operating expenses on hand - below the typical 120-180 days that is typical for Public Power agencies. These competitive joint projects have resulted in affordable rates to southern California customers. ln 2018, SCPPA member residential rates on average were 24 percent below those of a local investorowned utility. From the San Francisco Bay Area Rapid Transit District (BART): This is in response to your email regarding our cash and investment balance as of June 30th, 2017 in the amount of $1,556,676,387. Of these funds, $896,744,682 or 58% represents Restricted Cash and Investments which includes general obligation bond proceeds to be used for capital projects, funds for bond debt service, cash advances received from various grant funds, capital project reserves, and cash restricted for payment of Restricted Liabilities. The balance of $659,901,705 or 42% represent operating reserves, working capital, Unspent Operating allocations earmarked for capital projects, insurance reserves, and money for payment of various liabilities. BART is in the process of acquiring new 775 trains to replace our aging 40-year-old fleet and a significant portion of the cash and investments balance is earmarked to pay for our portion of the $2.6 B Project. BART is also in the midst of rebuilding our system infrastructure and therefore require a significant amount of funds. From the Coachella Valley Water District: Coachella Valley Water District is a special district which serves 1,000 square miles with domestic water, groundwater replenishment, agricultural irrigation, agricultural drainage, regional stormwater protection, sanitation, recycled water, and conservation services. Our 2018-2019 operating budget can be found here. Detailed information on our reserve accounts can be found on Page 32, however here are some highlights: The reserves are broken into several types and most of the money is designated.
The majority of the reserves are for capital improvement. We do the majority of our projects on a pay as you go basis, therefore the funds here are committed to the capital improvement projects outlined in our five-year Capital Improvement Plan (CIP). Further, the majority of those funds are set aside for stormwater protection projects as we have many stormwater projects within the CIP. There is funding for emergency response for each service, as you mentioned below. Our rate stabilization reserve exists so that in the event of a major revenue shortfall (for instance, an emergency drought) we would not need an immediate rate increase to keep operating. We have a vehicle replacement reserve which helps us to manage our fleet of over 500 vehicles. Our debt service reserve is required by lenders the requirement is that we must have the largest debt payment over the life of the loan on hand. Operating reserves account for 90 days of cash on hand. Our State Water Project (SWP) reserves exists to stabilize the fluctuation in SWP delivery. We budget for 60% delivery every year. When the allocation is less, we put the funds into reserves. When the allocation is more, we draw funds from the reserves. Entity Name Cash and Investments Metropolitan Transportation Commission $ 3,785,324,059 San Francisco Bay Area Rapid Transit District $ 1,556,676,387 Metropolitan Water District of Southern California $ 1,375,456,129 Los Angeles County Metropolitan Transportation Authority $ 1,197,101,251 Orange County Transportation Authority $ 1,142,034,817 Santa Clara Valley Transportation Authority $ 1,064,759,000 Southern California Public Power Authority $ 965,308,000 Inland Empire Health Plan $ 949,343,778 Sacramento Municipal Utility District $ 821,497,603 San Diego Association of Governments $ 791,668,735 Riverside County Transportation Commission $ 699,540,636 South Coast Air Quality Management District $ 677,717,290 East Bay Municipal Utility District $ 667,816,000 Foothill/Eastern Transportation Corridor Agency $ 652,534,000 San Diego County Regional Airport Authority $ 632,842,858 Eastern Municipal Water District $ 558,927,312 Santa Clara Valley Water District $ 542,131,376 CSAC Excess Insurance Authority $ 533,026,204 Imperial Irrigation District $ 531,772,837 San Francisco Community Health Authority $ 529,015,693 Coachella Valley Water District $ 523,004,864
Los Angeles County Flood Control District $ 516,350,814 San Bernardino County Transportation Authority $ 512,549,009 Orange County Sanitation District $ 511,042,962 San Mateo County Transportation Authority $ 484,323,737 Sacramento Regional County Sanitary (Sacramento) $ 469,863,906 San Joaquin Hills Transportation Corridor Agency $ 462,021,000 Alameda County Transportation Commission $ 460,124,540 Orange County Flood Control District $ 460,015,560 Modesto Irrigation District $ 414,329,719 Alliance of Schools For Cooperative Insurance Programs $ 413,854,621 San Bernardino Valley Municipal Water District $ 407,618,339 BETA Healthcare Group Risk Management Authority $ 406,298,582 Los Angeles County Metropolitan Transportation Authority $ 402,915,438 M-S-R Energy Authority $ 397,684,305 Kaweah Delta Health Care District $ 373,526,634 Self-Insured Schools of California SISC III - Health and Welfare Benefits $ 371,145,160 San Diego County Water Authority $ 364,452,079 Irvine Ranch Water District $ 356,789,000 Orange County Transportation Authority $ 338,461,289 Turlock Irrigation District $ 332,320,000 Palomar Health District $ 312,754,540 PTSC-MTA Risk Management Authority $ 311,107,490 Northern California Power Agency $ 292,387,287 East Bay Regional Park District $ 289,159,574 Contra Costa Transportation Authority $ 288,257,688 Rancho California Water District $ 279,840,402 Castaic Lake Water Agency $ 279,607,341 County Sanitation District No. 15 (Los Angeles) $ 276,461,191 California Joint Powers Insurance Authority $ 271,625,667 Golden Gate Bridge Highway and Transportation District $ 270,489,064 Burbank - Glendale - Pasadena Airport Authority $ 255,570,700 County Sanitation District No. 2 (Los Angeles) $ 251,783,028 Salinas Valley Memorial Healthcare District $ 251,630,976