Upper District budget fiscal year 2014-2015 where solutions flow
Upper District budget fiscal year 2014-2015  where solutions  flow
    Upper District Budget Fiscal Year 2014/15 June 24, 2014 
       Upper District   Budget  Fiscal Year 2014 15   June  24,  2014
       
  Staff Report
            Staff Report
Uses of Funds    Uses  of  funds  for  the  proposed  2014/15  budget  total  $31.87  million,  about  $0.21  million  lower  than  current  year’s  budget  of  $32.08  million.    Figure  1  illustrates  the  total  uses  of  funds.    Figure 1.  Uses of Funds          1     
Uses  of  Funds      Uses   of   funds   for   the   proposed   2014 15   budget   total    31.87   million,   about    0....
Purchased Water Costs  Imported Supplies  Purchased water costs for imported supplies similar to the current year continued into fiscal  year 2014/15 mainly due to anticipated pre‐purchases by the producers of untreated water  for cyclic storage.  Fiscal year 2014/15 sales consist of 3,000 acre‐feet of Tier 1 treated water  and 29,000 acre‐feet of Tier 1 full service untreated water for groundwater replenishment  operations.  An increase in Metropolitan’s Tier 1 treated water rate from $890 to $923 per  acre‐foot and an increase in Readiness‐to‐Serve Charge (RTS) from $1.57 million to $1.61  million increased imported water costs by $0.16 million from the current year budget.   A  decrease in Metropolitan’s untreated water rate from $593 per acre‐foot to $582 per acre‐ foot  effective  January  2015,  is  not  expected  to  significantly  impact  the  2014/15  cost  of  imported water due to deliveries for pre‐purchases of cyclic storage being made in the fall  of 2015, outside of the 2014/15 fiscal year.    The cost of imported supplies also includes Metropolitan’s Capacity Charge ($0.21 million)  which currently pays for 22.9 cubic feet per second (CFS) of capacity used during the May 1  through September 30 peak demand period.    Since 2007, the marginal cost of imported water from Metropolitan needed to meet Upper  District’s replacement water obligation increased from $238 to $593 in FY 2013/14 (or 149%)  but will go down to $582 per acre‐foot effective January 1, 2015.       Recycled Supplies  Purchased  water  costs  for  recycled  water  increased  by  $0.19  million  from  current  year’s  budget of $0.54 million due to adjustments necessary to reflect actual per acre‐foot cost of  reclaimed water for the City of Industry Phase IIB Project.  Recycled water demand also is  also expected to increase from 3,300 acre‐feet in 2013/14 to about 3,500 in 2014/15.    Capital Costs  Capital costs account for $2.33 million or 7 percent of the total uses of funds mainly for the  continued development of the indirect reuse project ($1.50 million).   Other capital projects  budgeted for 2014/15 include the Miller Coors Reuse and Recharge Project as well as the  Miller Pit and Neighborhood Stormwater Recharge Projects.  $0.40 million of the total capital  costs  are  funded  through  grants  ($0.20M  for  Miller  Coors  and  Miller  Pit,  $0.05M  for  Neighborhood Stormwater and $0.15M for IRRP).      2     
Purchased  Water  Costs   Imported  Supplies   Purchased  water  costs  for  imported  supplies  similar  to  the  current...
  Recycled Water Programs  Direct Reuse  The Direct Reuse Program includes the phased construction of a recycled water distribution  system  used  to  provide  water  for  irrigation  purposes.    Once  completed,  the  system  will  include over 20 miles of 4” to 24” pipelines, several pump stations and a 2‐million gallon  reservoir.  This system will serve about three million gallons per day or 3,500 acre‐feet per  year,  directly  offsetting  the  need  to  import  increasingly  expensive  imported  water.      The  current construction effort is expected to be complete in 2014.   Additional opportunities to  develop additional direct reuse facilities are being carefully studied.        Indirect Reuse Action Plan  On December 6, 2011, the Board adopted an Indirect Reuse Action Plan (IRAP) which set  forth specific tasks to complete the Upper District’s Indirect Reuse Replenishment Project  (IRRP).  Staff initiated the first seven tasks to advance the project during 2012/13 and expects  to complete them in 2014.  The IRAP total program budget for these first seven tasks is about  $1.38  million.    Due  to  extreme  drought  conditions,  every  effort  is  being  considered  to  accelerate  delivery  of  this  project.  The  2014/15  budget  includes  $1.50  million  for  the  succeeding tasks including: environmental documentation and regulatory approval ($0.50  million), right of way acquisition ($0.20 million) and final design ($0.50 million).  Another  $0.30 million is allocated for Metropolitan’s Foundational Actions Funding (FAF) Research  Project for further pilot testing of the ozone‐BAC‐SAT treatment train to produce additional  data that can be used in the permit process as needed and to refine cost estimates for the  potential use of ozone‐BAC‐SAT for the IRRP.    Upper  District  has  been  awarded  four  grants:  two  grants  from  the  WateReuse  Research  Foundation totaling $490,000 toward Task 3 and 4, a USBR Title XVI grant for $150,000 which  will partially offset the costs of the feasibility analysis required to qualify for Federal funding  under Title XVI, and $150,000 from Metropolitan’s FAF Program.  In total, Upper District has  successfully secured $790,000 in grant funding toward further project development.   This  funding offsets the need to raise water rates and reduces the use of reserves.      3     
   Recycled  Water  Programs   Direct  Reuse   The  Direct  Reuse  Program  includes  the  phased  construction  of  a  re...
Storm Water Capture Program  In  2011/12  Upper  District  initiated  a  storm  water  capture  program  focused  on  three  objectives: 1) engage in a collaborative discussion with all stakeholders to develop flexible  MS4 permit conditions that preserve the multi‐benefit features of storm water capture and  TMDL remediation in large scale projects; 2) engage partner agencies including Los Angeles  County Department of Public Works and Army Corps of Engineers on strategies to improve  maintenance and integrated operations of Santa Fe Dam; and 3) work with Watermaster to  identify specific benefits of additional capacity for storm water capture in LACDPW system  in the San Gabriel Valley.      Objectives 1 was completed in 2012/13 with the adoption of a regional stormwater permit  by the Regional Water Quality Control Board.  Objective 2 will carry over into 2014/15 with  the continued development of a specific strategy and timeline for improving maintenance,  specifically sediment removal, and integrated operations of Santa Fe Dam.   Working closely  with  Watermaster,  Objective  3  was  also  completed  in  2012/13  and  five  specific  projects  selected by Watermaster were incorporated in the IRP (Peck Pit, Walnut Spreading Basin,  Buena Vista Spreading Basin, Miller Pit, and Olive Pit).  Upper District will continue to work  closely with Watermaster, LA County Flood Control District and the Army Corps and other  private  parties  to  continue  the  development  of  these  five  specific  projects.    Fiscal  year  2014/15 storm water capture expenditures are $0.21 million.  Developing Miller Pit as an  additional storm water capture facility within LA County Flood Control’s system continue to  be one of the main goals for 2014/15.  This specific effort is in part funded by a grant from  the California Water Foundation.    Recycling Operations  Recycled  water  program  expenses,  excluding  cost  of  purchased  water,  amount  to  about  $1.67 million.  This amount consists of State Revolving Loan Fund (SRLF) debt service of $0.77  million.  The remaining amount consists of operation and maintenance expenses.    To keep overall service costs low and not unnecessarily duplicate resources, Upper District  contracts  with  the  producers  to  operate  and  maintain  the  recycled  water  system  that  provides irrigation water in their respective services areas.    Upper District‘s existing SRLF debt of about $15.81 million has a twenty‐year term at zero  percent nominal interest.      4     
Storm  Water  Capture  Program   In   2011 12   Upper   District   initiated   a   storm   water   capture   program   foc...
Water Use Efficiency  Since its inception, the Water Use Efficiency Program (WUE) has been heavily focused on  indoor  residential  water  use,  principally  through  Ultra‐Low  Flush/High  Efficiency  Toilet  (ULFT/HET) giveaways.  Over 30,000 ULFTs/HETs have been distributed.   The WUE Master  Plan shows that Upper District’s service area is well saturated with HETs (over 80%) and that  a shift in the program emphasis towards outdoor water use efficiency is warranted.      The  2014/15  proposed  WUE  budget,  while  still  focusing  on  outdoor  water  use  efficiency  programs,  decreased  by  $0.23  million  from  prior  year’s  $0.99  million  program  budget  as  Upper District begins reallocating resources and focusing more on education and outreach  efforts to promote water conservation.  Of the 2014/15 WUE budget of $0.76 million, $0.29  million will be funded through Metropolitan’s  member agency allocation funds.    Table 1  summarizes  the  proposed  budget  and  sources  of  funding  for  the  2014/15  Water  Use  Efficiency Program.  Depending on further input from the producers, and consideration by  the  Board,  the  emphasis  on  how  the  budget  allocates  resources  among  the  different  programs identified in the Water Use Efficiency Master Plan may change.     Table 1.  Water Use Efficiency Program    FY 2014/15 Budget Total USGVMWD Other Program Cost (UDC) Agencies Costs (TPC) Portion Costs (OAC) CATEGORY Residential Programs Residential Retrofit/Rebate Program $ 150,000 $ - $ 150,000 Commercial/Industrial/Institutional (CII) Rebate Programs Other CII Programs - - - Large Landscape Retrofis/Water Surveys 400,000 264,000 136,000 Other Landscape Programs 100,000 100,000 - Salaries and Overhead 110,250 110,250 - Landscape Programs Total $        5      760,250 $ 474,250 $ 286,000  
Water  Use  Efficiency   Since  its  inception,  the  Water  Use  Efficiency  Program   WUE   has  been  heavily  focused ...
Education and Outreach  The  Education  and  Outreach  Program  provides  resources  to  schools,  cities,  community  groups  and  organizations  interested  in  learning  about  water  use  efficiency,  sustainable  watershed management and storm water capture and water treatment.      The Education and Outreach budget increased by $0.36 million from $0.44 million in 2013/14  to  $0.80  million  in  2014/15  and  reflects  the  shift  in  Upper  District’s  focus  from  a  mostly  device‐based WUE program to education and outreach.  New projects for 2014/15 includes  the  Water  Smart  City  Challenge,  h2o  Score,  and  a  “Where  Solutions  Flow”  video.    It  also  includes a series of workshops to promote public awareness of the IRRP.    The  Education  and  Outreach  Program  also  includes:  water  use  efficiency,  watershed  and  storm water education for 4th, 5th and 6th grade students; watershed restoration program;  distribution  of  water  efficient  devices;  public  workshops  and  seminars;  and  public  information.     The water education program, successfully used by several other water agencies, include  assembly‐style  lessons  and  classroom  instruction  for  about  12,500  4th,  5th  and  6th  grade  students on water use efficiency, sustainable watershed management practices and storm  water.   The cost of this program is about $124,000.  This program will be offered each year  to school districts in each of Upper District’s five divisions.      The advertising budget reflects print media presence outlined in the 2014 Communications  Plan which also meets the minimum requirements of the California Urban Water Council’s  Best Management Practices MOU.    Table 2 summarizes the proposed 2014/15 Education and Outreach Program.            6     
Education  and  Outreach   The   Education   and   Outreach   Program   provides   resources   to   schools,   cities,   c...
Table 2.  Education and Outreach Program    FY 2014/15 Total Program Costs (TPC) CATEGORY Watershed Programs Watershed Restoration Program $ 20,000 Educational Programs Water Awareness Art Contests 10,000 4th - 6th Grade Water Education Program 123,500 Solar Cup Competition and Other Sponsorships 52,500 Educational Materials/Grant Program 20,000 Educational Outreach Programs/Events 195,000 Outreach and Information Programs Public Workshops & Seminars 125,000 Conservation Devices/Items 10,000 Bottled Water Program 35,000 Displays/Fairs/Presentations 10,000 Conferences/Meetings 4,500 Public Information 50,000 Legal Costs 3,000 Technical Assistance 30,000 110,250 Salaries and Overhead Total $        7      798,750  
Table  2.    Education  and  Outreach  Program      FY 2014 15 Total Program Costs  TPC   CATEGORY  Watershed Programs Wat...
Water Quality and Supply  The proposed Water Quality and Supply Program budget is $0.11 million lower than current  year’s budget.  It includes imported water operations, planning and administration; water  supply  planning;  and  general  engineering  services  for  water  quality  and  supply.  It  also  includes  advocacy  costs  for  legislative  initiatives  in  Sacramento  ($0.12  million),  costs  associated  with  emergency  preparedness  ($0.10  million),  and  an  integrated  groundwater  surface water model ($0.30 million).  The modeling effort is partially funded by a $0.13M  grant from the California Water Foundation (CWF)  Administration  Administrative  costs  total  $2.77  million  and  include  the  labor,  materials,  supplies  and  services  to  provide  general  administrative  support  for  the  various  programs.    General  administrative  support  includes:  day‐to‐day  management;  accounting  operations;  human  resources;  information  technology;  office  administration;  and  board  of  directors  support.   The 2014/15 budget also includes election costs amounting to $0.25 million.  Labor cost is  budgeted  at  $2.16  million,  a  decrease  of  $0.04  million  or  two  percent  from  the  current  budget.  No additional positions are included in the proposed budget.  The decrease in labor  costs  is  primarily  driven  by  the  prepayment  of  the  Side  Fund  obligation  with  CalPERS  in  March  2014,  reducing  the  District‘s  PERS  contributions  rate  for  FY  2014/15  by  about  10  percent.  Outside Services Costs  Upper District relies heavily on outside services or consultants to move projects forward in  order  to  avoid  increasing  full  time  staff  to  meet  the  variable  labor  demands  of  projects.   Consulting costs peaked in 2010 during major construction activities for the City of Industry  Recycled Water Project, partially funded by State Revolving Fund and American Recovery  and Reinvestment Act monies.  Total consulting expenses for 2014/15 of about $3.89 million  include: engineering support services for the IRRP, Neighborhood Stormwater, MillerCoors  and  Miller  Pit  Projects;  advocacy  support  services;  and  costs  associated  with  emergency  preparedness,  and  an  integrated  groundwater  surface  water  model.  Table  3  shows  the  current year and proposed outside services costs.  Total outside services costs increase $0.38  million from the current budget driven by a $0.50M increase in engineering services for the  right‐of‐way,  environmental,  and  design  work  that  will  move  forward  for  the  IRRP.    An  additional  $0.14M  is  budgeted  for  the  development  of  a  benefit  analysis  and  engineer’s  report for a new standby charge.  All other categories are down budget to budget.    8     
Water  Quality  and  Supply   The  proposed  Water  Quality  and  Supply  Program  budget  is   0.11  million  lower  than...
Table 3.  Outside Services Costs     FY 2013/14 Forecasted Administrative and Finance Long Range Finance Plan Legal General IT Support Actuarial and Audit Services Temporary Staffing Services Standby Charge Design/Administration Administrative Support Recruitment/HR Services Staff Development and Training Water Rate Analysis FY 2013/14 Budget FY 2014/15 Budget $ CATEGORY $ $ Subtotal $ Engineering and Planning IRRP Water Resources Planning and Engineering Water Supply Reliability Plan/Emergency Preparedness Basinwide Integrated Groundwater/Surface Water Model Direct Reuse Engineering and Construction Management MillerCoors Reuse Project Miller Pit Neighborhood Stormwater Project Stormwater Initiatives/Technical Advisory Services Others Subtotal Conservation Large Landscape Water Surveys /Turf Removal Other Landscape Programs Others Subtotal Education and Outreach 4th - 6th Grade Water Education Program Where Solutions Flow IRRP Workshops Website/Annual Reports/Brochures Lobbying Services Subtotal Total 9      50,000 122,000 37,159 35,280 100,000 19,000 17,000 38,679 7,500 4,000 430,618 $ $ 75,000 120,000 48,000 40,000 10,000 19,000 35,000 30,000 12,500 389,500 999,000 187,500 10,000 20,000 160,000 100,000 50,000 45,000 70,000 $ 1,641,500 999,000 255,000 100,000 200,000 120,000 100,000 200,000 100,000 50,000 70,000 $ 2,194,000 $ $ $ $ $ $ 330,000 26,000 10,000 366,000 93,500 $ 25,000 295,000 $ 413,500 $ 2,851,618 $ $ $ $ 400,000 204,000 10,000 614,000 123,500 $ 35,000 290,000 $ 448,500 $ 3,646,000 $ $ $ $ $ $ 30,000 140,000 33,800 50,000 33,000 154,000 7,000 12,500 460,300 1,500,000 285,000 100,000 300,000 300,000 100,000 50,000 25,000 2,660,000 400,000 100,000 30,000 530,000 123,500 20,000 30,000 10,000 195,000 378,500 4,028,800  
Table  3.    Outside  Services  Costs        FY 2013 14 Forecasted  Administrative and Finance Long Range Finance Plan Leg...
Sources of Funds    Total sources of funds amount to $31.87 million and are presented in Figure 2.    Figure 2.  Sources of Funds    10     
Sources  of  Funds      Total  sources  of  funds  amount  to   31.87  million  and  are  presented  in  Figure  2.      F...
Water Sales  The Upper District delivers both imported water purchased from Metropolitan and recycled  water purchased from Los Angeles County Sanitation Districts.    Imported Sales  Imported water sales account for the majority of Upper District’s deliveries with an expected  sales volume of 32,000 acre‐feet in 2014/15.  Of this amount, 3,000 acre‐feet is treated and  provided to the City of Alhambra.  It is estimated that 29,000 acre‐feet will be purchased by  Watermaster and the producers to store future replacement water obligations. Imported  water sales will generate a total of $22.53 million, of which $2.62 million is generated from  Upper  District’s  surcharge.    The  balance  is  generated  from  the  pass  through  of  Metropolitan’s rates.    The 2014/15 budget does not anticipate an increase in surcharge revenue.  While the Board  may  act  to  increase  the  surcharge  in  the  fall  of  2014,  any  revenue  from  a  change  in  the  surcharge would likely not be generated until water is delivered for pre‐purchases of cyclic  storage in the fall of 2015.  Any change in the current surcharge of $80 per acre‐foot will be  effective  January  1,  of  2015.    Any  change  in  the  current  surcharge  will  take  into  consideration: sales levels; status of key milestones for the IRRP (e.g. permit from Regional  Board,  etc.);  discussion  regarding  other  project  financing  options  such  as  a  contract  with  Watermaster or producer(s) or the levy of an additional standby charge.    Upper District’s sales volumes have historically been highly variable as a result of how the  Main San Gabriel Basin was managed to take advantage of plentiful local precipitation and  an imported water system that was commonly in surplus.  Watermaster’s routine annual  average  pre‐purchase  of  about  29,000  acre‐feet  of  imported  water  to  meet  future  replacement  water  obligations  and  build  storage  has  greatly  stabilized  Upper  District’s  financial position.        Recycled Sales  Recycled sales are expected to total 3,500 acre‐feet in 2014/15.  With the completion of the  current direct reuse program, the recycled water distribution system will include over 20  miles of 4” to 24” pipelines, several pump stations, a 2‐million gallon reservoir and over 40  connections.    Recycled  water  sales  will  generate  about  $1.96  million  through  uniform  contract rates paid by Upper District’s retail water provider customers.      11     
Water  Sales   The  Upper  District  delivers  both  imported  water  purchased  from  Metropolitan  and  recycled   water...
  Upper District Standby Charge  To recover a portion of the costs for the recycled water program and water use efficiency  program, a standby charge of $8 per acre or parcel thereof is levied on all parcels within  Upper District’s service area.  The standby charge currently generates about $1.65 million  and  it  is  recommended that  the  charge  remain  the  same  in  2014/15.    The  Upper  District  Board may consider levying an additional charge in the future depending on how successful  the project development efforts (e.g. permitting) are for the indirect reuse project.    MWD Standby Charge  Metropolitan  levies  a  separate  standby  charge  on  behalf  of  Upper  District  to  recover  a  portion  of  Metropolitan’s  costs  for  ensuring  a  reliable  water  supply,  including  capital  infrastructure  for  emergency  and  drought  water  storage,  and  imported  water  system  conveyance capacity.  The Metropolitan standby charge is credited against Metropolitan’s  Readiness‐to‐Serve Charge (RTS).  The Metropolitan standby charge is currently $9.27 per  parcel and generates $1.96 million per year, exceeding the RTS of $1.61 million by about  $0.35 million.  This favorable difference reduces Upper District’s cost of purchased water  and is currently used to offset costs that would otherwise have to be recovered through the  surcharge.    The  RTS  has  been  increasing  significantly  resulting  in  a  declining  favorable  difference up until next fiscal year.  In 2015, the total RTS will decrease by about 6 percent  per  Metropolitan’s  adopted  budget.    However,  if  the  RTS  starts  increasing  again  in  subsequent years, Upper District may have to charge the producers and Watermaster for  Metropolitan’s RTS within the next five years.      Water Use Efficiency  About $0.29 million of WUE program revenues consist of member agency allocation from  Metropolitan’s  Conservation  Credits  program.    The  proposed  budget  relies  heavily  on  increasing the outreach effort to promote water conservation.  This effort will not only raise  public awareness about the importance of water conservation but is also intended to bring  a  significant  amount  of  direct  rebate  dollars  back  to  the  San  Gabriel  Valley  through  the  socalwatersmart.com website, a regional water conservation rebate program.        12     
    Upper  District  Standby  Charge   To  recover  a  portion  of  the  costs  for  the  recycled  water  program  and  w...
Interest and Other Revenues  Interest and other revenues total $0.78 million and include: interest ($0.09 million), property  tax allocations ($0.30 million), RTS charge for USG‐3 ($0.08 million), reimbursement from  Main  San  Gabriel  Basin  Watermaster  of  Upper  District’s  share  in  San  Gabriel  River  Watermaster’s  budget  ($0.08  million),  and  credits  received  from  Metropolitan’s  Local  Resources Program ($0.23 million) for delivery of recycled water.     Reserves  Use of reserves accounts for $2.17 million or 7 percent of the total sources of funds.  Of this  amount,  $1.35  million  is  going  toward  the  continued  development  of  the  indirect  reuse  program while $0.25 million will cover anticipated net loss from operations.    Fund Balances    Figure 3 illustrates the recent trend in total fund balances.  From 2009 to June 30, 2013 total  fund balances dropped by about $11.31 million.  During this period, about $13.01 million in  capital outlays were financed with cash.   This number is greater than the reduction in total  funds  during  this  period  due  to  net  positive  operating  revenues  of  $1.70  million.    During  2013/14, additional federal and state loan funds totaling $2.01 million were received as a  result of the final financial reviews conducted by the Bureau of Reclamation and the State  Water Resources Control Board, increasing anticipated fund balances to $17.55 million by  the end of 2013/14.    Upper District is no longer in the position  of generating significant net positive operating  revenue at the current water rate and sales volume to sustain this level of cash financing of  capital.  In addition, there are very limited and highly competitive opportunities to secure  outside  funding  for  further  development  of  capital  projects  identified  by  the  IRP.    To  continue development of these projects, it is necessary to preserve existing fund balances  for  capital  financing.      Once  rates  and  charges  that  provide  revenue  sources  sufficient  to  meet debt service coverage requirements are approved, Upper District can begin to issue  debt to fund a portion of the capital program.     The proposed budget includes the use of $2.17 million in reserves primarily to fund the IRRP  and other capital projects amounting to about $1.93 million, net of grant funding.       13     
Interest  and  Other  Revenues   Interest  and  other  revenues  total   0.78  million  and  include   interest    0.09  m...
Figure 3.  Total Fund Balances        Potential Future Capital Outlays    The IRP identifies two balanced water supply resource alternatives that ensure water supply  reliability through 2035.  The construction cost of recycled water and storm water capture  projects  identified  in  these  alternatives  is  estimated  to  be  between  $50  million  and  $75  million.    The  difference  is  due  to  whether  or  not  additional  advanced  treatment  will  be  required  to  use  recycled  water  supplies  for  groundwater  recharge.  Figure  4  illustrates  a  preliminary  estimate  of  future  capital  outlays  by  major  category  for  the  next  ten  years.   Figure 5 does not include the additional costs to construct full advanced treatment (FAT)  recycled water treatment facilities for groundwater recharge.  Figure 4 assumes that indirect  reuse  for  recharge  can  be  accomplished  with  less  expensive  treatment  technology.   Depending  on  the  overall  rate  impacts  driven  by  the  rising  cost  of  imported  water,  the  availability of state and federal grants, and the cost of financing this aggressive program, it  may be necessary to stage out the construction costs of the indirect reuse program if the  Board  approves  moving  forward  with  the  project  once  critical  path  milestones  like  permitting, environmental, right‐of‐way and preliminary design are complete.        14     
Figure  3.   Total  Fund  Balances              Potential  Future  Capital  Outlays      The  IRP  identifies  two  balanc...
Figure 4.  Potential Future Capital Outlays        Debt Service Coverage Ratio  A  critical  financial  ratio  that  Upper  District  must  consistently  maintain,  demonstrating  an  ability to meet payment obligations in order to establish credit, is a debt service coverage  ratio.    Upper  District  is  required  per  the  loan  agreements  with  the  State  to  set  rates  and  charges to generate sufficient net operating revenue in order to maintain a minimum debt  service coverage ratio of 120 percent.  However in the financial market, a debt coverage of  at least 150 percent is necessary to obtain an “AA” credit rating.  The  current  year  budget  assumed  total  sales  of  32,000  acre‐feet  resulting  in  net  positive  operating revenues of $1.24 million.  This amount is 171 percent of estimated debt service  costs of about $0.72 million.   For 2014/15 and at the same level of imported water sales, net  operating  revenues  will  not  be  sufficient  to  cover  debt  service  payments  mainly  due  to  election costs ($0.25 million) and costs associated with the development of a benefits analysis  and engineer’s report for a new standby charge.      15     
Figure  4.   Potential  Future  Capital  Outlays              Debt  Service  Coverage  Ratio   A   critical   financial   ...
Table 4.  Debt Service Coverage Ratios  Forecasted 2013-14 $Millions Operating costs not including debt service $ 28.77 Budget 2013-14 $Millions $ 27.71 Budget 2014-15 $Millions $ 28.77 Less revenue offsets (non water sales) (4.46) (4.48) (4.63) Net operating costs funded from water sales 24.31 23.23 24.14 Operating revenues (water sales) 25.81 24.47 24.67 1.50 1.24 0.53 0.77 0.72 0.77 Operating revenues in excess/(short) of operating costs funded from water sales Debt Service SRLF Other Total Debt Service $   Debt Service Coverage Ratio       16      0.77 194% $ 0.72 171% $ 0.77 68%  
Table  4.    Debt  Service  Coverage  Ratios   Forecasted 2013-14  Millions Operating costs not including debt service    ...
2014 Water Rates     Metropolitan has already adopted rates that will increase Upper District’s total rate by the  amounts shown in Table 5 below.    Table 5.   2014 Upper District Rates      Effective  01/01/13   Effective  01/01/14   Proposed  01/01/15  Full Service Treated Tier 1 MWD Upper District Surcharge Upper District Rate            847              80            927            890              80            970            923            125         1,048 Full Service Treated Tier 2 MWD Upper District Surcharge Upper District Rate            997              80         1,077         1,032              80         1,112         1,055            125         1,180 Full Service Untreated Tier 1 MWD Upper District Surcharge Upper District Rate            593              80            673            593              80            673            582            125            707 Full Service Untreated Tier 2 MWD Upper District Surcharge Upper District Rate            743              80            823            735              80            815            714            125            839 Replenishment Untreated MWD Upper District Surcharge Upper District Rate             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐             ‐     17     
2014  Water  Rates        Metropolitan  has  already  adopted  rates  that  will  increase  Upper  District   s  total  ra...
            Budget Tables                        
                      Budget Tables
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT EXPENSE SUMMARY FISCAL YEAR 2011-12 THROUGH FISCAL YEAR 2014-15 FY 2011-12 ACTUAL FY 2012-13 ACTUAL FY 2013-14 FORECASTED FY 2013-14 BUDGET FY 2014-15 BUDGET Administrative Expenses Personnel Expenses Employee Salaries Employee Benefits Retired Employee Benefits Employee Travel/Conference Sub Total 1,127,290 284,524 63,115 39,540 1,514,469 975,903 224,350 65,206 29,665 1,295,124 1,160,000 265,000 70,000 45,000 1,540,000 1,258,000 340,000 89,000 45,000 1,732,000 1,306,000 325,000 75,000 55,000 1,761,000 Sub Total 148,828 76,704 72,664 15,847 28,745 342,788 152,929 73,399 64,538 20,808 25,028 336,702 172,500 85,000 70,000 25,000 40,000 392,500 172,500 110,000 98,000 25,000 40,000 445,500 173,500 97,000 80,000 25,000 45,000 420,500 361,930 361,930 410,085 410,085 903,000 903,000 470,000 470,000 398,000 398,000 Sub Total 69,880 31,183 50,027 113,431 20,098 284,619 77,942 32,230 38,458 133,428 25,689 307,747 115,300 35,000 60,000 154,000 30,000 394,300 57,500 31,827 56,400 150,000 33,000 328,727 45,000 35,000 46,000 160,000 35,000 321,000 Sub Total 17,701 38,049 178,453 18,819 253,022 3,529 39,942 200,520 6,180 250,171 3,000 42,000 207,048 7,000 259,048 5,000 38,192 207,048 7,200 257,440 5,000 43,260 213,259 7,210 268,729 Sub Total 83,406 97,525 38,079 93,620 96,447 409,077 77,043 77,295 61,084 131,421 16,827 363,670 120,000 52,500 36,000 151,000 50,000 409,500 136,000 52,500 40,000 45,000 50,000 323,500 136,000 57,500 40,000 60,000 10,000 303,500 Sub Total 0 0 0 0 370,700 370,700 0 0 0 0 0 0 0 250,000 250,000 Director Expenses Director Compensation Director Benefits Retired Director Benefits Director Public Outreach Director Travel/Conference Pension/OPEB Expense CalPERS-Employees, Directors, Retirees Sub Total Office Expenses Office Supplies/Equipment Equipment Operations & Maintenance Computer Systems Dues/Memberships/Assessments Meetings Expense Facility Expenses Building Maintenance Liability/Property Insurance Office Lease Telephone/Utilities Professional Services Legal/Financial Engineering Auditor Recruitment/Others/Temp Services Public Information/Outreach Other Expenses Computer Loans Election Costs Allocation to Projects and Programs Administrative/Overhead Allocation Sub Total (1,112,812) (1,112,812) (969,936) (969,936) (880,000) (880,000) (1,227,780) (1,227,780) (949,000) (949,000) 2,053,093 2,364,263 3,018,348 2,329,387 2,773,729 16,584,353 11,435,328 22,810,006 21,624,006 21,802,145 Program Expenses Water Use Efficiency Program Education and Community Outreach Program Water Quality & Supply Program Recycled Water Program Stormwater Program Sub Total 1,284,909 615,227 716,605 911,068 27,415 3,555,224 391,568 381,944 471,822 1,492,698 113,136 2,851,168 705,000 411,000 651,000 1,916,000 30,000 3,713,000 990,000 442,000 1,047,490 1,912,290 89,400 4,481,180 760,250 798,750 932,600 2,408,500 64,400 4,964,500 Total Administrative/Operating/Program Expenses 22,192,670 16,650,759 29,541,354 28,434,573 29,540,374 8,193,815 13,024,520 3,314,000 3,634,100 2,327,500 30,386,485 29,675,279 32,855,354 32,068,673 31,867,874 Total Administrative Expenses Water Purchases/Revolving Expense Total Capital Outlays TOTAL   18       
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT EXPENSE SUMMARY FISCAL YEAR 2011-12 THROUGH FISCAL YEAR 2014-15 FY 2011-...
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT ADMINISTRATIVE BUDGET-EXPENSES FY 2013-14 FORECASTED FY 2013-14 BUDGET FY 2014-15 BUDGET ADMINISTRATIVE EXPENSES Personnel Expenses Employee Salaries Employee Benefits Retired Employee Benefits Employee Travel/Conference Sub Total Director Expenses Director Compensation Director Benefits Retired Director Benefits Director Public Outreach Director Travel/Conference Sub Total Pension/OPEB Expense CalPERS-Employees, Directors, Retirees Sub Total Office Expenses Office Supplies/Equipment Equipment Operations & Maintenance Computer Systems Dues/Memberships/Assessments Meetings Expense Sub Total Facility Expenses Building Maintenance Liability/Property Insurance Office Lease Telephone/Utilities Sub Total Professional Services Legal/Financial Engineering Auditor Recruitment/Others/Temp Services Public Information/Outreach Sub Total Other Expenses Election Costs Sub Total Allocation to Projects and Programs Administrative/Overhead Allocation Sub Total 1,160,000 265,000 70,000 45,000 1,540,000 1,258,000 340,000 89,000 45,000 1,732,000 1,306,000 325,000 75,000 55,000 1,761,000 172,500 85,000 70,000 25,000 40,000 392,500 172,500 110,000 98,000 25,000 40,000 445,500 173,500 97,000 80,000 25,000 45,000 420,500 903,000 903,000 470,000 470,000 398,000 398,000 115,300 35,000 60,000 154,000 30,000 394,300 57,500 31,827 56,400 150,000 33,000 328,727 45,000 35,000 46,000 160,000 35,000 321,000 3,000 42,000 207,048 7,000 259,048 5,000 38,192 207,048 7,200 257,440 5,000 43,260 213,259 7,210 268,729 120,000 52,500 36,000 151,000 50,000 409,500 136,000 52,500 40,000 45,000 50,000 323,500 136,000 57,500 40,000 60,000 10,000 303,500 0 0 0 0 250,000 250,000 (880,000) (880,000) (1,227,780) (1,227,780) (949,000) (949,000) 3,018,348 2,329,387 2,773,729 2,200 2,200 49,497 49,497 49,497 49,497 Other Administrative Revenues Taxes Other Income Sub Total 300,000 5,000 305,000 300,000 5,000 305,000 300,000 5,000 305,000 TOTAL ADMINISTRATIVE AND OPERATING REVENUES 307,200 354,497 354,497 TOTAL ADMINISTRATIVE EXPENSES ADMINISTRATIVE AND OPERATING REVENUES Interest Sub Total ADMINISTRATIVE AND OPERATING EXPENSES (3,018,348) (2,329,387) (2,773,729) NET (2,711,148) (1,974,890) (2,419,232) 19       
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT ADMINISTRATIVE BUDGET-EXPENSES FY 2013-14 FORECASTED  FY 2013-14 BUDGET ...
  UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT WATER PURCHASES & REVOLVING FUND-REVENUES FY 2013-14 FORECASTED WATER PURCHASE EXPENSE Tier 1 Treated Tier 1 Untreated MWD Capacity Charge MWD Ready-to-Serve Charge Sub Total FY 2014-15 BUDGET TOTAL WATER PURCHASES/REVOLVING FUND EXPENSES IMPORTED WATER PURCHASE REVENUES Water Rate Revenues Tier 1 Treated Tier 1 Untreated Upper Surcharge Tier 1 Treated Upper Surcharge Tier 1 Untreated Gross MWD Stand-by Charge - Revenue Reconciliation MSGB Watermaster-Ready-to-Serve TOTAL WATER PURCHASE REVENUES Revolving/Other Revenue Interest MSGB Watermaster-SG River Watermaster TOTAL REVOLVING FUND REVENUES TOTAL WATER PURCHASE & REVOLVING FUND REVENUES WATER PURCHASE EXPENSES NET 20    2,596,727 18,383,000 186,790 1,567,489 22,734,006 2,596,727 17,197,000 186,790 1,567,489 21,548,006 2,712,767 17,197,000 207,610 1,606,488 21,723,865 76,000 76,000 76,000 76,000 78,280 78,280 22,810,006 21,624,006 21,802,145 2,596,727 18,383,000 240,000 2,480,000 1,961,005 75,600 25,736,332 2,596,727 17,197,000 240,000 2,320,000 1,961,005 75,600 24,390,332 2,712,767 17,197,000 298,319 2,320,000 1,961,005 75,600 24,564,692 0 76,000 76,000 0 76,000 76,000 24,496 78,280 102,776 25,812,332 24,466,332 24,667,468 (22,810,006) (21,624,006) (21,802,145) 3,002,326 REVOLVING EXPENSE San Gabriel River Watermaster Sub Total   FY 2013-14 BUDGET 2,842,326 2,865,323
   UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT WATER PURCHASES   REVOLVING FUND-REVENUES FY 2013-14 FORECASTED WATER...
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT WATER USE EFFICIENCY FY 2013-14 FORECASTED FY 2013-14 BUDGET FY 2014-15 BUDGET WATER USE EFFICIENCY PROGRAM EXPENSES Residential Programs Residential Retrofit Program Residential Water Efficient Rebate Program Sub Total 150,000 5,000 155,000 150,000 0 150,000 150,000 0 150,000 Commercial/Industrial/Institution Programs Other CII Programs Sub Total 100,000 100,000 100,000 100,000 0 0 Landscape Programs Landscape Retrofit/Water Surveys Program Other Landscape Programs Sub Total 330,000 15,000 345,000 400,000 235,000 635,000 400,000 100,000 500,000 Allocation to Conservation Programs Salaries & Overhead Sub Total 105,000 105,000 105,000 105,000 110,250 110,250 705,000 990,000 760,250 311,000 311,000 311,000 311,000 286,000 286,000 311,000 311,000 286,000 WATER USE EFFICIENCY EXPENSES (705,000) (990,000) (760,250) NET (394,000) (679,000) (474,250) TOTAL WATER USE EFFICIENCY EXPENSES WATER USE EFFICIENCY REVENUES Other Sub Total TOTAL WATER USE EFFICIENCY REVENUES 21     
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT WATER USE EFFICIENCY FY 2013-14 FORECASTED  FY 2013-14 BUDGET  FY 2014-1...
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT EDUCATION & COMMUNITY OUTREACH FY 2013-14 FORECASTED EDUCATION & COMMUNITY OUTREACH EXPENSES Watershed Programs Natural Vegetation Restoration Program Sub Total FY 2013-14 BUDGET FY 2014-15 BUDGET 10,000 10,000 20,000 20,000 20,000 20,000 10,000 156,000 10,000 0 176,000 10,000 146,000 20,000 0 176,000 10,000 176,000 20,000 195,000 401,000 25,000 10,000 33,000 5,000 2,000 30,000 10,000 5,000 120,000 45,000 10,000 33,000 5,000 4,500 30,500 10,000 3,000 141,000 125,000 10,000 35,000 10,000 4,500 50,000 30,000 3,000 267,500 105,000 105,000 105,000 105,000 110,250 110,250 TOTAL EDUCATION & COMMUNITY OUTREACH EXPENSES 411,000 442,000 798,750 EDUCATION & COMMUNITY OUTREACH REVENUES Interest TOTAL EDUCATION & COMMUNITY OUTREACH REVENUES 0 0 0 0 0 0 Educational Programs Water Awareness Youth Art Contests Educational Activities/Sponsorships Educational Materials/Grant Program Educational Outreach Programs/Events Sub Total Outreach and Information Programs Public Workshops/Seminars Conservation Devices/Items Bottled Water Program Displays/Fairs/Presentations Conferences/Meetings Public Information Technical Assistance Legal/Financial Sub Total Allocation to Conservation Programs Salaries & Overhead Sub Total EDUCATION & COMMUNITY OUTREACH EXPENSES (411,000) (442,000) (798,750) NET (411,000) (442,000) (798,750) 22     
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT EDUCATION   COMMUNITY OUTREACH  FY 2013-14 FORECASTED EDUCATION   COMMUN...
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT WATER QUALITY AND SUPPLY PROGRAM FY 2013-14 FORECASTED FY 2013-14 BUDGET FY 2014-15 BUDGET WATER QUALITY AND SUPPLY PROGRAM EXPENSES Engineering for Water Supply Projects Legislative Consultant Salaries/Outside Services Sub Total 40,000 265,000 25,000 330,000 60,000 265,000 25,000 350,000 50,000 170,000 25,000 245,000 Other Expenses Urban Water Management Plan/Related Studies Integrated Resource Management Plan Water Supply Reliability Plan/Emergency Preparedness Integrated Groundwater/Surface Water Model Long Range Finance Plan/Others Legal and Financial Salaries & Overhead Allocation Sub Total 0 15,000 10,000 20,000 50,000 6,000 220,000 321,000 0 25,000 100,000 200,000 75,000 6,000 291,490 697,490 20,000 5,000 100,000 300,000 30,000 6,000 226,600 687,600 TOTAL WATER QUALITY AND SUPPLY EXPENSES 651,000 1,047,490 932,600 WATER QUALITY AND SUPPLY PROGRAM REVENUES Grants - Other Interest TOTAL WATER QUALITY AND SUPPLY REVENUES 0 40,000 40,000 0 11,000 11,000 125,000 6,000 131,000 WATER QUALITY AND SUPPLY PROGRAM EXPENSES (651,000) (1,047,490) (932,600) NET (611,000) (1,036,490) (801,600) 23     
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT WATER QUALITY AND SUPPLY PROGRAM FY 2013-14 FORECASTED  FY 2013-14 BUDGE...
   UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT RECYCLED WATER REVENUES & EXPENSES FY 2013-14 FORECASTED RECYCLED WATER EXPENSES Water Purchases-Recycled Water SWRCB - Loan Repayment Salaries & Overhead Allocation Standby Charge Design/Implementation Engineering - General Lobbyist Operation and Maintenance Phase IIA Operation and Maintenance Phase IIB TOTAL RECYCLED WATER EXPENSES FY 2013-14 BUDGET FY 2014-15 BUDGET 540,000 773,000 100,000 19,000 0 30,000 220,000 234,000 1,916,000 540,000 722,000 264,290 19,000 0 25,000 234,000 108,000 1,912,290 734,000 773,000 105,000 154,000 142,500 25,000 241,000 234,000 2,408,500 540,000 1,393,000 215,000 1,650,000 0 3,798,000 540,000 1,393,000 215,000 1,650,000 4,000 3,802,000 734,000 1,229,000 235,000 1,650,000 3,000 3,851,000 (1,916,000) (1,912,290) (2,408,500) 1,882,000 1,889,710 1,442,500 RECYCLED WATER REVENUES Recycled Water Sales Upper Recycled Water Surcharge Revenue MWD LRP Credit Parcel/Standby Charge Interest TOTAL RECYCLED WATER REVENUES RECYCLED WATER EXPENSES NET 24     
     UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT RECYCLED WATER REVENUES   EXPENSES FY 2013-14 FORECASTED RECYCLED W...
  UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT STORMWATER REVENUE & EXPENSE FY 2013-14 FORECASTED FY 2013-14 BUDGET FY 2014-15 BUDGET STORMWATER EXPENSES Professional Services Salaries & Overhead Allocation TOTAL STORMWATER EXPENSES 30,000 0 30,000 60,000 29,400 89,400 35,000 29,400 64,400 0 0 0 0 0 0 STORMWATER REVENUES Interest TOTAL STORMWATER REVENUES STORMWATER EXPENSES (30,000) (89,400) (64,400) NET (30,000) (89,400) (64,400) 25     
   UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT STORMWATER REVENUE   EXPENSE FY 2013-14 FORECASTED  FY 2013-14 BUDGET...
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT RATE STABILIZATION FUND BUDGET FY 2013-14 FORECASTED FY 2013-14 BUDGET FY 2014-15 BUDGET RATE STABILIZATION FUND EXPENSES Miscellaneous TOTAL RATE STABILIZATION FUND EXPENSES 0 0 0 0 0 0 Interest TOTAL RATE STABILIZATION FUND REVENUES 2,000 2,000 4,000 4,000 4,000 4,000 TOTAL RATE STABILIZATION FUND EXPENSES 0 0 0 2,000 4,000 4,000 RATE STABILIZATION FUND REVENUES NET 26     
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT RATE STABILIZATION FUND BUDGET FY 2013-14 FORECASTED  FY 2013-14 BUDGET ...
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT CAPITAL PROGRAM BUDGET FY 2013-14 FORECASTED San Gabriel Valley Water Recycling Project Construction Phase IIB Engineering - General Miller Coors Reuse Project Project/Construction Management IIB Indirect Reuse Replenishment Project Permits/Right of Way Legal and Financial Salaries & Overhead Allocation Sub Total FY 2013-14 BUDGET FY 2014-15 BUDGET 1,565,000 70,000 100,000 160,000 999,000 10,000 10,000 350,000 3,264,000 1,565,000 107,500 100,000 120,000 999,000 0 10,000 432,600 3,334,100 0 0 300,000 0 1,500,000 0 10,000 367,500 2,177,500 50,000 50,000 300,000 300,000 150,000 150,000 3,314,000 3,634,100 2,327,500 0 0 0 0 0 0 Grants Federal - US Bureau of Reclamation State - State Water Resources Control Board Other 1,870,000 1,383,505 615,000 150,000 0 615,000 0 0 400,000 Loans State - State Water Resources Control Board Sub Total 289,112 4,157,617 0 765,000 0 400,000 4,157,617 765,000 400,000 Other Capital Outflows Miller Pit & Neighborhood SW Projects Sub Total TOTAL CAPITAL OUTLAYS CAPITAL PROGRAM INFLOWS Interest Sub Total TOTAL CAPITAL INFLOWS CAPITAL OUTFLOWS 843,617 NET 27    (3,314,000)   (3,634,100) (2,327,500) (2,869,100) (1,927,500)  
UPPER SAN GABRIEL VALLEY MUNICIPAL WATER DISTRICT CAPITAL PROGRAM BUDGET FY 2013-14 FORECASTED San Gabriel Valley Water Re...
   
budget fiscal year 2014-2015 www.upperdistrict.org where solutions flow 602 E. Huntington Drive, Suite B - Monrovia, CA 91016 - Tel (626) 443-2297 - Fax (626) 443-0617
budget fiscal year 2014-2015  www.upperdistrict.org  where solutions  flow  602 E. Huntington Drive, Suite B - Monrovia, C...