M A St l t G l M Maureen A. Stapleton, General Manager May 23, 2013
Two-Year Budget First time Water Authority Implemented a twoyear budget: Fiscal Years 2004 and 2005 2
Increasing San Diego County's Water Supply Reliability through Supply Diversification 1991 2012 2020 26 TAF (5%) 552 TAF (95%) Total = 578 TAF 85 TAF (14%) 80 TAF (13%) 70 TAF (11%) 274 TAF (45%) 24 TAF (4%) 18 TAF (3%) 61 TAF (10%) 190 TAF (24%) 80 TAF (10%) 103 TAF (13%) 231 TAF (30%) 44 TAF (6%) 56 TAF (7%) 27 TAF (4%) 48 TAF (6%) Total = 612 TAF Total = 779 TAF Metropolitan Water District Imperial Irrigation District Transfer Recycled Water Seawater Desalination All American & Coachella Canal Lining i Groundwater Conservation (existing and additional) Local Surface Water TAF=Thousand Acre-Feet 3
Historical Spending $800 Total Water Authority Expenses $700 $600 Millions $) Expenses (in $500 $400 $300 $200 $100 $- FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Cost of Water Sales Capital Improvement Program Debt Service Operating Depts Other 4
Historical Spending 350 Capital Improvement Program 300 (in Millions $) Expenses 250 200 150 100 50 - FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 5
Historical Spending $160 Debt Service $140 $120 $100 lions $) Expenses (in Mill $80 $60 $40 $20 $- FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 6
Historical Water Sales 700,000 600,000 eet) Volumes (Acre-f Water Sales 500,000 400,000 300,000 200,000 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Allocation: July 2009 April 2011 7
Historical Staffing Budgeted FTEs 300.00 250.00 200.00 150.0000 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 8
Significant Milestones Acquired over 1,000,000 total acre feet (TAF) additional imported supplies Acquired 43,000 acre feet (AF) in spot transfers Acquired 70,000 acre feet (AF) of Central Valley Storage Lowered gallons consumed per day (GCPD) from 211 to 144 Developed and implemented the Drought Management Plan 9
Significant Milestones Built 2 dams and reservoir A state-of-the-art treatment plan 40MW Pumped Storage Facility 23 miles of large diameter pipeline 29 miles of pipe relined Approved the largest desalinated plant on west coast and in the western hemisphere $35 million Integrated Regional Water Management Plan 10
Continued Focus on Improvement and Efficiencies Fiscal Years 2010 and 2011 $2.4 million operating budget cut in FY 2010 $3.6 million operating budget cut in FY 2011 Reduction in spot water purchases Sold stored water Rate stabilization draw Debt service coverage below target Consistent with 2010 Bonds Official Statement Planned phase-out of Limited Duration Employees (17.22 FTEs) Challenged MWD s rate structure 11
Continued Focus on Improvement and Efficiencies Fiscal Years 2012 and 2013 Budget Development Deferral of 14 CIP projects ($150 million) Reorganization & consolidation for enhanced efficiency Managed personnel costs - significant staffing reductions Reduction in positions Increased PERS & health benefit employee cost sharing Programmatic changes to enhance internal efficiencies and effectiveness Provided discreet services to Member Agencies Litigation with MWD on fairness of rate charging methodology and process Process Improvements and program refinements during off- budget year 12
FYs 2014 & 2015 Environment Gradually improving economy Slight increase in water sales Continued ratepayer fatigue Challenging water supply conditions Emphasis on water efficiency and the true value of water Effort to supplement Water Authority programs with outside funding Ensure the full benefit of QSA to regional water supply reliability Continued focus on MWD rate litigation Effort to identify Bay Delta solution Continued focus of cost containment Transition continuing to operating organization 13
Navigating g the Budget Document Objectives Communicate vital information easily Simplify and streamline format Sections General Manager s Budget Message High-level summary Financial Summaries Summary data of major components of the budget (Water Sales & Purchases, CIP, Debt Service, Operating Depts) Sources and Uses Comprehensive overview of the sources (revenues) and uses (expenditures) of Water Authority funds Operating Departments Detail by focus area of each department, including significant changes Capital Improvement Program Summary information and project details 14
Sources of Funds Water Sales $1,106,664 74% Net Fund Withdraws 176,703 12% Infrastructure access charges Capacity Charges Water Standby availability charges Property Taxes and in-lieu charges 59,054 4% 29,784 2% 22,549 2% 22,320 1% All Other Revenue Sources 77,521 5% $1,494,595 100% 15
FYs 14&15 Recommended Budget Water Purchases & Treatment* Debt Service CIP Expenditures Operating Departments Hodges Pumped Storage Equipment Replacement Other $832,756 56% 281,531 19% 259,602 17% 92,570 6% 4,133 <1% 3,103 <1% 20,900 1% $1,494,595 100% Water Purchases/ Treatment 56% Debt CIP 92% of Service Expenditures = TOTAL 19% 17% BUDGET 16
Upcoming CIP Spending (in comparison to peak) 300 250 in millions) CIP Expenditures ( 200 150 100 50 - FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 17
Debt Service Coverage Ratio Senior Debt Service Coverage 1.6 1.5 1.4 1.3 1.2 1.1 1.50 1.47 1.36 1.49 1.50 1.50 1.0 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 Required Bond Covenant Ratio Senior Lien Debt Service Coverage Ratio Board Policy Target 18
Key Focus Areas Carlsbad Desalination Project Asset Management Fiscal Sustainability Task Force Cost of Service Study Phase II Water Demand Forecasting Urban Water Management Plan Ongoing QSA and MWD Litigation 19
Continuous Improvement Department Restructuring Allocation of resources Transfer of positions Downgrading classification Position elimination Performance Improvement Projects Evaluate Energy Program Fleet Assessment Succession Planning Program Expansion 20
Continuous Improvement Performance Improvement Projects (cont.) Computer Purchase Assessment Right-of-Way y( (ROW) Management Assessment Accounts Payable Assessment Grant Management and Administration Assessment 21
Budget Hearings June 11 th and 13 th 1:30 4pm Cost of Water Debt Service Capital Improvement Program (CIP) Operating Departments Operations and Maintenance Administrative Services General Counsel Engineering Operating Departments (cont.) Public Outreach and Conservation Water Resources General Manager and Board of Directors Finance MWD Program Colorado River Program 22