Regional Sewerage Program Policy Committee Meeting … · Regional Sewerage Program Policy Committee Meeting AGENDA Thursday, February 6, 2014 4:30 p.m. Location Inland Empire Utilities

Regional Sewerage Program Policy Committee Meeting

AGENDA Thursday, February 6, 2014

4:30 p.m.

Location Inland Empire Utilities Agency 6075 Kimball Avenue Chino, CA 91708

Thursday, February 6, 2014

Call to Order and Roll Call Pledge of Allegiance Public Comment 1. Technical Committee Report – Jim Hill (Oral)

2. Approval of Minutes

A. Minutes of November 7, 2013 Meeting

3. Action Item A. Approval of the FY 2014/15 Ten Year Capital Improvement Program

4. Information Items

A. Financial Update (Written) B. Regional Contract Audit (Written) C. Self-Regenerating Water Softener Update (Written)

5. Receive and File

A. Building Activity Report (YTD) B. Recycled Water Operations Summary

6. Other Business

A. IEUA General Manager’s Update B. Committee Member Requested Agenda Items for Next Meeting C. Committee Member Comments D. Next Meeting – March 6, 2014

7. Adjournment

Regional Sewerage Program Policy Committee Meeting Agenda February 6, 2014 Page 2 of 2

DECLARATION OF POSTING I, Cheyanne Reseck-Francis, Administrative Assistant of the Inland Empire Utilities Agency, A Municipal Water District, hereby certify that a copy of this agenda has been posted by 5:30 p.m. in the foyer at the Agency's main office, 6075 Kimball Avenue, Building A, Chino, CA on Thursday, January 30, 2014.

Cheyanne Reseck-Francis

APPROVAL OF MINUTES

2A

1

Regional Sewerage Program Policy Committee Meeting

MINUTES OF November 7, 2013 MEETING

CALL TO ORDER A regular meeting of the IEUA/Regional Sewerage Program – Policy Committee was held on Thursday, November 7, 2013, at the Inland Empire Utilities Agency located at 6075 Kimball Avenue, Chino, California. Earl Elrod, City of Chino, called the meeting to order at 5:00 p.m. ATTENDANCE

Committee Members:

Earl Elrod City of Chino

Acquanetta Warren City of Fontana

Carolyn Raft City of Montclair

Jim Bowman City of Ontario

Debbie Stone City of Upland

Kathy Tiegs Cucamonga Valley Water District

Terry Catlin Inland Empire Utilities Agency

Absent Committee Members:

Paul Eaton City of Montclair

Peter Rogers City of Chino Hills

Others Present:

Braden Yu Cucamonga Valley Water District

Cheyanne Reseck-Francis Inland Empire Utilities Agency

Chris Berch Inland Empire Utilities Agency

Christina Valencia Inland Empire Utilities Agency

Craig Parker Inland Empire Utilities Agency

Jasmin A. Hall Inland Empire Utilities Agency

Javier Chagoyen-Lazaro Inland Empire Utilities Agency

Jesus Plasencia City of Chino

Jim Hill City of Chino

P. Joseph Grindstaff Inland Empire Utilities Agency

Rebecca Long Inland Empire Utilities Agency

Rosemary Hoerning City of Upland

Teresa Velarde Inland Empire Utilities Agency

IEUA/RSP –Policy Committee Meeting Minutes of November 7, 2013

2

PLEDGE OF ALLEGIANCE Committee Member Kathy Tiegs/CVWD led those present in the Pledge of Allegiance. PUBLIC COMMENTS There were no public comments.

(Committee Member Acquanetta Warren entered at 5:05 p.m.) Committee Member Terry Catlin/IEUA introduced IEUA’s newest Board member, and alternate on the Regional Policy Committee, Jasmin A. Hall.

1. TECHNICAL COMMITTEE REPORT Jim Hill/City of Chino reported that at the October 3, 2013 Regional Technical Committee meeting, the Montclair Lift Station Construction Contract Award item, which is on the Regional Policy Committee agenda tonight, was approved as long as bids submitted are not any higher than $3.3 million. He stated that the informational items received at the November 7, 2013 Regional Technical Committee meeting, are the same as those on the Regional Policy agenda tonight.

2. APPROVAL OF MINUTES A. Minutes of June 6, 2013 Meeting

Motion: By Kathy Tiegs/CVWD and seconded by Jim Bowman/City of Ontario to approve the minutes of the June 6, 2013 Policy Committee meeting. Motion carried: Unanimously, with Earl Elrod/City of Chino abstaining.

3. ACTION ITEM

A. Montclair Lift Station Construction Contract Award Craig Parker/IEUA gave a presentation outlining that this construction award is for a 4 MGD sewage lift station that moves sewage from the Cities of Ontario, Montclair, and Upland. He stated that it is in currently in poor condition and the equipment and controls are now obsolete, considering all the changes in technology which have occurred since it was built in 1976. Mr. Parker explained another issue which is called “ragging” in the industry, which is the result of baby wipes and other such products that are not biodegradable becoming lodged in the pumps and screens. He stated that the current process for clearing the system includes two maintenance personnel and operations personnel going three times a week, doing a diversion of flow through the Montclair Diverter, breaking down the pumps, and physically “de-ragging” the pumps, but the new pumps will be able to push the “rags” through and pump them into a gravity main which goes to RP-1. Mr. Parker stated that the old system currently just goes on and off, but the new system will include variable frequency drives which are able to ramp up and down based on the flow coming in. He outlined the project schedule for this project: bids should be advertised by the end of November, bids should be submitted in December, the contract should be awarded sometime in January, and the project should take about a year to complete. He noted that, as an existing facility, the funding for this project will come from the RO fund, which is funded by EDU fees, and will not come from the RC fund,


3

which is funded by connection fees, as it would if it were a new facility. He also noted that the Pretreatment & Source Control group is working with each of the member agencies to educate the public about not flushing baby wipes, etc., and that the Orange County Sanitation District has sent out a public announcement in an attempt to make this industry-wide issue known to the public.

4. INFORMATION ITEMS

A. 4th Quarter Budget Variance Christina Valencia/IEUA gave a presentation reviewing the 4th quarter budget total revenues, expenses, and fund balances. She stated that the higher revenues are mainly due to a one-time receipt of RDA money received as a result of the dissolution of the RDAs back in February 2012, the higher number of new EDU connection fees than budgeted, and recycled water sales. Ms. Valencia reviewed non-operational and operational expenditures, the estimated ending fund balance, and the fund balance historical trend. She stated that the debt coverage ratio is improving and that the unfunded liability from PERS is currently not being recorded on the books, as the Agency is not required to do so until FY 2015/16, but the Agency is setting aside about $8 million between PERS and OPEB, which is currently on a pay-go basis.

B. Self-Regenerating Water Softener Local Ordinance Implementation

Rebecca Long/IEUA gave an oral update on the status of the ordinance adoption by member agencies. She stated that the Cities of Upland, Montclair, and Fontana have all adopted the ordinance, CVWD will adopt the ordinance within the next few months, and MVWD and the Cities of Chino, Chino Hills, and Ontario have not yet adopted the ordinance. Ms. Long mentioned that IEUA is in the process of marketing and publicizing the effects of using water softeners by working with local real estate agents, home developers, the “big box” stores, placing adds, and including information in constituents’ monthly water bills.

C. Tech/Policy Meeting Scheduling

Chris Berch reviewed some options for changing the current schedules the Technical and Policy Committee meetings. It was agreed upon that the Technical Committee will move to the last Thursday of the month at 4:00 p.m., and Policy will remain on the first Thursday of every month, but will move up to 4:30 p.m. from the currently scheduled time of 5:00 p.m.

5. RECEIVE AND FILE

A. Building Activity Report (YTD) The Building Activity Report (YTD) was received and filed by the Committee.

B. Recycled Water Operations Summary

The Recycled Water Operations Summary was received and filed by the Committee.

Motion: By Jim Bowman/City of Ontario and seconded by Debbie Stone/City of Upland to approve the award of the construction contract for the Montclair Lift Station Upgrades, Project No. EN13054, for a not-to-exceed amount of $3.3 million. Motion carried: Unanimously.


4

C. 2013 IEUA Business Goals

The 2013 IEUA Business Goals item was received and filed by the Committee.

D. Ten Year Growth Forecast The Ten Year Growth Forecast was received and filed by the Committee.

E. IEUA Agency Wide Organizational Chart The IEUA Agency Wide Organizational Chart was received and filed by the Committee.

F. San Onofre Nuclear Generating Station Status and Economic Impacts The San Onofre Nuclear Generating Station Status and Economic Impacts item was received and filed by the Committee.

6. OTHER BUSINESS A. IEUA General Manager’s Update

P. Joseph Grindstaff/IEUA reported the following:

Business Goals – everyone’s participation and feedback is appreciated. The Business Goals were adopted by IEUA Board (as amended from Workshop) on 10/16/13, and are the basis for upcoming Mission, Vision, Values; and Strategic Planning effort.

Organizational Update – Four Manager positions have not been filled (Finance, Pretreatment & Source Control, Contracts & Procurement, and Safety) resulting in a consolidation of departments: Accounting and Finance; Pretreatment & Source Control and Compliance; Safety and Human Resources; and Risk and Contracts. There will be a new position soon, titled Executive of Engineering/Planning. Also, Sylvie Lee (Recycled Water) and Craig Proctor (Pretreatment & Source Control) are now in the Planning department.

Grant Update – A handout was passed out displaying a summary developed by Christina Valencia and Jason Gu, which shows ~$250M in grants and ~$150M in State Revolving Funds since 2000.

Operational Updates – Recycled Water had another outstanding delivery month (September 2013 = 86% recycled water utilization). Groundwater Recharge had best recycled water groundwater recharge month in history of program (1,400 AF in September even with competing peak demands).

Building Activity – Lower than planned by Agencies/IEUA to date. FY13/14 projected at 3,230 EDU, actual (through August) is 323, and planned to date is 600 (i.e. ~50% of target)

Energy Update – San Onofre is down and will stay that way. It produced ~2,200MW (equivalent power needed for 1.4M homes). Recap of meetings with Governor’s Office (Senior Advisor Rechtschaffen) from May 15, 2013 and November 20, 2013, stating that net energy metering and food waste were major topics, and there is another meeting scheduled with the Governor’s office in the next few weeks.

Upcoming Tech/Water Workshop (3rd Thursday) topics will include:

Integrated Water Resource Plan (including conservation)

Facilities Master Plan

Asset Management


5

Long Range Plan of Finance

SAR Action Team

Local Limits

EDU Audit – will start before negotiating the new regional sewerage contract. Beginning in December, the Internal Audit department will be auditing one member agency per month to complete this task.

Committee Member Terry Catlin/IEUA stated that he appreciates the support from member agencies in completing these EDU audits. B. Committee Member Requested Agenda Items for Next Meeting

None.

C. Committee Member Comments Committee Member Kathy Tiegs/CVWD thanked IEUA for its efficiencies and significant changes over the past 6 months. Committee Member Earl Elrod/City of Chino mentioned a meeting with Mr. Grindstaff and Mr. Berch in which he learned that IEUA’s solar panels are turned off when they produce more electricity than the Agency needs because SCE is not willing to pay the Agency for any electricity that IEUA would be able to put back into the grid. He stated that he found this interesting.

D. Next Meeting – February 7, 2014

7. ADJOURNMENT - Meeting was adjourned at 5:40 p.m. Transcribed by:

Cheyanne R. Reseck-Francis Administrative Assistant, IEUA

ACTION ITEM

3A

Date: January 30/February 6, 2014

To: Regional Committees

From: Inland Empire Utilities Agency

Subject: Fiscal Year 2014 through 2024 Ten-Year Capital Improvement Plan

RECOMMENDATION

It is recommended that the Regional Committees approve and make recommendation to the

IEUA Board of Directors (Board) to approve the proposed Fiscal Year (FY) 2014/15-2023/24

Ten Year Capital Improvement Plan (TYCIP).

BACKGROUND

Each year, pursuant to the terms of the Regional Sewage Service Contract, the Inland Empire

Utilities Agency submits a ten-year forecast of capacity demands and capital projects or Ten-

Year Capital Improvement Plan (TYCIP) to the Regional Technical and Policy Committees. The

current TYCIP identifies projects for the FY 2014/15 through FY 2023/24 that are needed for the

rehabilitation, replacement, or expansion of the facilities owned or operated by the Agency.

In the past, the Budget and TYCIP have been written in tandem, with the TYCIP functioning as

the supporting, second volume of the budget. This year the timeline for the TYCIP has been

accelerated in an effort to streamline the project identification and prioritization phase of the

financial planning process. The financial planning and budget for FY 14/15 will be discussed in detail in the FY 14/15 Operating and Capital Program Budget which will be published in June, 2014.

A new feature of this TYCIP was the development of a project ranking system based on the

timing and criticality of projects. Drivers used to determine the timeframe and criticality during

which a project would be undertaken include the regulatory and permitting requirements,

wastewater flow projections, asset age, performance, efficiency, and grant or funding

availability.

Two major themes that have carried over from the FY 2013/14 TYCIP to the FY 2014/15 TYCIP

are the continuing need for maintenance, repair, and replacement of aging equipment and

facilities and the need for expansion of the Regional System to meet future growth. Maintaining

the Agency’s facilities and infrastructure is critical to ensure the long-term reliability and quality

of services that the Agency is committed to provide.

FY 14/15 Ten-Year Capital Improvement Plan

January 30/February 6, 2014

Page 2 of 2

G:\PP\Technical and Policy Committee\2014\01-30-14 Tech and 02-06-14 Policy\TYCIP Policy Committee Ltr 2-6-

14.docx

A major project that has been carried over from the FY13/14 TYCIP is the expansion of the

RP-5 solids processing. Expansion of RP-5 liquids processing has been delayed due to projects

currently under consideration, such as local lift stations that could be operated as part of the

regional program. Flow forecasts and expansion options will be further explored in the

Wastewater Facilities Master Plan which is currently underway.

In addition to the Wastewater Facilities Master Plan, IEUA is in the midst of updating several

key planning documents, including the Long-Range Plan of Finance, Asset Management Plan,

Recycled Water Program Strategy, Recharge Master Plan, Water Use Efficiency Business Plan,

2015 Urban Water Management Plan, and EIR. It is anticipated that these planning efforts will

result in new priorities for the region and will be completed by fall 2014. Projects identified in

these documents will be further refined and included in next year’s TYCIP to meet the region’s

future needs.

ATTACHMENTS

The TYCIP was posted on the Agency website on January 16, 2014 under the News & Reports,

financial reports. http://www.ieua.org/news_reports/financial.html

http://www.ieua.org/news_reports/financial.html

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INFORMATION ITEM

4A

G:\PP\Technical and Policy Committee\2014\01-30-14 Tech and 02-06-14 Policy\Financial Update - Budget

Workshop No. 1 1-30-14.docx




Subject: Financial Update

RECOMMENDATION

This is an informational item for the Regional Committees to receive and file.

BACKGROUND

This item was presented at the IEUA Board of Directors meeting on January 22, 2014.

Date: January 22, 2014

To: The Honorable Board of Directors

From: P. Joseph Grindstaff

General Manager

Submitted by: Christina Valencia

Chief Financial Officer/Assistant General Manager

Javier Chagoyen-Lazaro

Manager of Finance and Accounting

Subject: FY 2014/15 Budget Workshop #1: Financial Position and Business Goals

RECOMMENDATION

This is an informational item for the Board to review.

BACKGROUND

In October 2013, the Board of Directors approved the IEUA Business Goals integrating the Agency-

wide policies and level of service to better communicate the Agency’s commitment to provide

reliable, affordable, and high quality service to our customers. These Business Goals set up the

framework for the Agency’s strategic long, intermediate and immediate term planning initiatives

currently underway, including; the Strategic Plan, Asset Management Master Plan, Ten Year Capital

Improvement Plan, Wastewater Facilities Master Plan, Recycled Water Program Strategy, Integrated

Resources Plan, Energy Plan, Long Range Plan of Finance, and the FY 2014/15 Budget.

Over the next several months, Agency management will be facilitating a series of budget workshops

for the Board of Directors (Board), as outlined in Appendix A. These workshops will provide the

Board an assessment of the Agency’s current financial position, an overview of foreseen major

challenges and opportunities, and proposed key strategies needed to meet the Agency’s Business

Goals, with an emphasis on Fiscal Responsibility. Additionally, through discussion and analysis of

multiple scenarios, these workshops are intended to facilitate consensus on financial policy decisions

to support the long term vision of the Agency.

The goal of the first workshop is to review management’s proposed long, intermediate and immediate

term goals, and obtain guidance from the Board on the proposed goals for the preparation of the FY

2014/15 budget and the ensuing four year forecasts.

FY 2014/15 Budget Workshop #1

January 22, 2014

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Workshop No. 1_Final 1-22-14.docx

Financial Position

Total fund reserve balances at the end of FY 2012/13 of $145 million was one of the highest levels in

the last 10 fiscal years, exclusive of debt proceeds, and reflected an increase of nearly $30 million

compared to FY 2011/12.

A combination of factors attributed to the recovery in total fund reserves; higher revenues primarily

due to an economic recovery throughout 2013, ongoing cost containment efforts, and continued

deferral of significant “noncritical” capital projects.

Sources of funds:

Connection fees: These fees are highly correlated to the economic environment, making it

the most volatile source of funds. For FY 2012/13 member agencies reported close to

3,000 new EDU connections, nearly twice the number of units reported in the prior fiscal

year. However, the beginning of the FY 2013/14 has seen a slow start with only 645 new

EDU connections reported through the end of November 2013. This rate of volatility

requires a more conservative and prudent approach when forecasting this source of

revenue.

Property taxes: The slow and steady recovery of the housing market and improvement

of assessed property values has stabilized property tax receipts and, to some degree,

facilitates our ability to better forecast future trends. The only uncertainty relates to the

ongoing distribution of “unobligated funds” as a result of the dissolution of the

Redevelopment Agencies (RDAs). In FY 2012/13 the Agency received an additional $10

million in property taxes related to the dissolution of RDAs. Although we anticipate these

types of distributions to continue as RDA Oversight Agencies wind down business affairs,

it is highly unlikely future distributions will be of a similar magnitude.

Regional Wastewater multiyear rates: FY 2012/13 was the first fiscal year for

implementation of multiyear rates adopted by the Board on February 2012, (Appendix B).

In addition to providing rate stability to our member agencies, as one of the primary

sources of funds, these multiyear rates have also helped to strengthen the Agency’s

financial position. Agency management supports the use of multiyear rates in the future

to achieve its goal of having rates that fully recover the program’s cost of service.

Recycled Water multiyear rates: Similar to the Regional Wastewater multiyear rates,

the Recycled Water Program implemented multiyear rates in FY2012/13 with the main

goal to achieve full cost of service rates and minimize its dependence on other Agency

programs.

Uses of funds:

Operating & Maintenance (O&M) Costs: Successful cost containment efforts over the

past several years have maintained overall operating expenses at the level of FY 2007/08,

while at the same time sustaining the Agency’s committed level of service.

Debt Service: After refinancing 1994 bonds in 2010, the only new debt incurred by the

Agency has been low interest State Revolving Fund (SRF) loans to support the expansion


January 22, 2014

Page 3 of 9



of the Recycled Water Distribution System and replacement of the RP1 Dewatering

Facility. Future indebtedness will be associated with the priorities identified in the Ten

Year Capital Improvement Plan (TYCIP).

Capital Improvement Program (CIP): Primarily due to the economic recession, the

Agency’s Capital Improvement Program has been dramatically contained over the past 5

years, beginning with the deferral of over $200 million of major capital projects in 2008.

However, management recognize the continual need to invest in the maintenance, repair

and rehabilitation of existing equipment and facilities, as well as the need to stay ahead of

future growth through timely expansion of its Regional system. These themes are the basis

for multiple initiatives currently in process to revamp the Agency’s CIP.

Agency Business Goals

The Agency Business Goals, adopted by the Board in October 2013, will serve as the basis for the

Agency’s Strategic Plan and the departmental goals and objectives that will drive the FY 2014/15

Operating Budget. The six Agency Business Goals are comprised of: Fiscal Responsibility,

Workplace Environment, Business Practices, Water Reliability, Wastewater Management, and

Environmental Stewardship. For Fiscal Responsibility, the key objectives include:

Fiscal Responsibility

Long term

> 5 years

Intermediate Term

2-5 years

Immediate

1 year

Sustain Full Cost of Service Rates Transition to biennial budget and

adopt multi-year rates

Achieve full cost of services

Implement adopted Regional

Wastewater and Recycled Water

rates

Tighten budget request and

forecast

Implement new NRW North

System rate structure

Instill Lean management

principles

Reduce staffing level and

maintain 5% vacancy factor

Maintain AAA credit rating and a

minimum Debt Coverage Ratio

(DCR) of 2.90x

Achieve AAA credit rating by

FY 2017/18

Refine fund reserve policy

Fully fund retirement Unfunded

Accrued Liabilities (UALs)

Establish a funding plan for

retirement Unfunded Accrued

Liabilities (UAL)


Fully fund annual PAYGO Establish a PAYGO policy for

R&R projects

Fund R&R requirements per

Asset Management Plan

Maintain minimum total fund

reserves of $200- $250 million

Allocate $5-10 million of

property tax receipts to enhance

regional water resources

Increase reserves by $15 million

per fiscal year



January 22, 2014

Page 4 of 9



PRIOR BOARD ACTION

None.

IMPACT ON BUDGET

None.


January 22, 2014

Page 5 of 9



Appendix A – FY 2014/15 Budget Workshop Outline

WORKSHOP 1: FINANCIAL POSITION AND PROPOSED GOALS

January 22, 2014

1. Financial position overview

a. Key drivers

b. Trend in in total funding sources and uses of funds

c. Trend in total fund reserve balances and debt coverage ratio

2. Agency Business Goals: Fiscal Responsibility

a. Long term goals: > 5 years

b. Intermediate term goals: 2 to 5 years

c. Immediate goals: FY 2014/15 Budget

WORKSHOP 2: Challenges, Opportunities & Strategies

February 5, 2014

1. Challenges & opportunities related to funding sources

a. Economic recovery

b. Stable and reliable funding sources

c. New borrowings to support capital investment

2. Challenges and opportunities related to uses of funds

a. Cost containment – “doing more with less”

b. Succession planning and investment in employee development

c. Long term planning to support operational and capital requirements

3. Strategies

a. Adoption of multi-year budgets and rates

b. Sustainment of full cost of service for all programs

c. Reallocation of property taxes

d. Funding of CIP through combination of PAYGO and new debt

e. Prudent long term planning for financial, capital, employees, and regional water

resources

f. Establishment of financial policies and fund reserve thresholds

g. Improvement of the Agency’s financial condition

h. Renew Regional Sewage Service Contract

i. Predefinition of budget scenarios

WORKSHOP 3: FINANCIAL POLICIES AND BUDGET SCENARIOS

March 5, 2014

1. Financial policies consensus and threshold definitions


January 22, 2014

Page 6 of 9



2. Long Range Plan of Finance Model: Budget Scenarios analysis

3. Other key areas identified in prior workshop

WORKSHOP 4: COMPILE AND SUMMARIZE POLICY DECISIONS

April 2, 2014

1. Funding plans for long term obligations and key initiatives

2. Financial policies and reserve threshold targets

3. FY 2014/15 Preliminary budget overview


January 22, 2014

Page 7 of 9



Appendix B – Agency Program Rates

*Rates adopted on February 1, 2012

** Imported water rates effective per calendar year


January 22, 2014

Page 8 of 9



Appendix C – Total Sources and Uses of Funds

$0

$50

$100

$150

$200

$250

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

(Mill

ion

s)

Total Revenues and Other Funding Sources

User Charges EDU Connection Fees

Recycled Water Sales Grant and Loans

Property Tax Receipts All Other

Comm Paper & Bond Proceeds

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Total Expense and Other Uses of Funds

Operating Expenses Debt Service Capital


January 22, 2014

Page 9 of 9



Appendix D – Acronyms

AF – Acre Foot

CIP - Capital Improvement Program/Projects

Comm. Paper – Commercial Paper

DCR - Debt Coverage Ratio

EDU - Equivalent Dwelling Unit

FY – Fiscal Year

HQ - Headquarters (buildings A and B)

IRP – Integrated Resources Plan

LRPF – Long Range Plan of Finance

O&M - Operation and Maintenance

R&R - Repair and Rehabilitation

RDA - Redevelopment Agencies

RP-1 - Regional Water Recycling Plant #1



SRF – State Revolving Fund (loans)

TYCIP – Ten Year Capital Improvement Plan

UAL - Unfunded Accrued Liabilities

FY

2

01

4/1

5

Bu

dg

et W

ork

sh

op

#1

Boa

rd

o

f D

ire

ctors

Ja

nu

ary 2

2, 2

01

4

F

ina

ncia

l P

ositio

n O

ve

rvie

w

B

usin

ess G

oals

: F

isca

l R

esp

on

sib

ility

2

Age

nd

a

3

Fin

an

cia

l P

ositio

n O

ve

rvie

w

Te

n Y

ear H

istoric

T

re

nd

Ke

y D

rive

rs

Cau

se

Eff

ect

Min

imal ra

te in

cre

ases

Unab

le to a

chie

ve f

ull

cost of

se

rvic

e r

ate

s

Pro

pe

rty t

axe

s u

se

d t

o

su

pple

ment

O&

M

Re

du

ce

d R

&R

an

d C

IP f

un

din

g

Constr

uctio

n o

f ne

w f

acili

ties

(RP

-5,

HQ

& e

xpan

sio

n o

f R

P-4

)

Incre

asin

g d

eb

t serv

ice c

osts

and

red

uctio

n o

f d

ebt

covera

ge

ratio (

DC

R)

Expan

sio

n o

f th

e r

ecycle

d w

ate

r

pro

gra

m

Cu

rre

nt F

in

an

cia

l P

ositio

n

FY

2012/13- 2014/15

Ke

y D

rive

rs

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se

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ec

t

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ted

multi-

year

rate

incre

ases

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d t

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ort

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in c

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gen

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ations

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ased

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of F

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UR

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U

SE

S O

F

FU

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S T

RE

ND

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$15

0

$20

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$25

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20

03/0

4 2

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5 2

00

5/0

6 2

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?

28

INFORMATION ITEM

4B




Subject: Chino Basin Regional Service Contract Review

RECOMMENDATION

This is an informational item for the Regional Committees to receive and file.

BACKGROUND

The Chino Basin Regional Sewage Contract (Regional Contract or Contract) provides that Inland

Empire Utilities Agency (IEUA) owns and operates the Regional Sewerage System and is obligated to

receive and treat all of the sewage delivered to its facilities by the seven member Regional Contract

Agencies (RCAs or member agencies). The term of the Regional Contract is 50 years and will expire

in 2023.

Pursuant to the Regional Contract, IEUA charges a fee to connect to the Regional Sewerage System.

A connection fee is defined as one Equivalent Dwelling Unit (EDU). Exhibit “J” of the Contract sets

forth the provisions for EDU computations. Per the Contract, the member agency is required to collect

and hold, on behalf of Inland Empire Utility Agency (IEUA), certain Capital Capacity Reimbursement

Payments “connection fees”.

On June 6, 2013, the Regional Policy Committee and on June 19, 2013, the IEUA Board of Directors

approved to amend Exhibit “J” as recommended by the Building Activity Reporting (BAR)

Subcommittee formed to standardize monthly reporting, create a centralized data depository,

implement GIS tracking of all BAR activity, and clarify language in Exhibit “J” to ensure consistent

application.

Continuing in this path to achieve consistency and equity amongst the member agencies and the

approaching expiration of the Contract in 2023, the IEUA Board has requested the Agency’s Internal

Audit Department conduct a comprehensive study to determine how the Contract is administered

within each member agency. The intent of the study is to gain a better understanding of how each of

the member agencies administer the Contract, including how EDU’s are forecasted, calculated,

recorded and reported. The audit period will cover July 1, 2012 through December 31, 2013, and

where necessary the review period will be expanded.

The areas for review will encompass; evaluating processes to identify new building activity,

improvements, additions or changes to existing building, calculation and reporting of EDU’s for the

different types of customers, including:

Chino Basin Regional Service Contract Review


Page 2

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FEB 2014.docx

Residential Buildings

Public Service Facilities

Industrial Customers

Commercial Businesses

Extra-Territorial Areas

The benefits to conducting this comprehensive study are to understand the various processes employed

to carry out, administer, and enforce the Contract by each of the seven member agencies. Additionally,

the Contract review will evaluate the different methodologies applied in administrating the contract

with the goal of gathering best practices and establishing uniformity in procedures. This

comprehensive study will also provide the Agency with information to better serve the member

agencies and more effectively address inquiries and concerns. Most importantly, results and

information gathered through this study, will provide facts and information so that all parties may work

together to define clear contract language in future contracts.

IEUA appreciates the member agencies and their staffs’ support and cooperation in assisting the

Agency’s Internal Audit staff through this process. Any questions can be submitted to the Manager of

Internal Audit.

Timeline

It is anticipated the review of each member agency will last approximately 6 to 8 weeks, with the goal

of completing the entire review by the Fall of 2014. The audit staff will begin with the Contract

Review of the City of Upland. Auditors have already initiated communication and will begin field

work in February.

An update on the progress of the Contract Review will be provided at subsequent meetings.

INFORMATION ITEM

4C




Subject: Status Report on Self-Regenerating Water Softener Regional Ordinance and

Rebate Program

RECOMMENDATION

This is an informational item for the Regional Committees to review.

BACKGROUND

In 2009, Governor Schwarzenegger signed the IEUA-sponsored AB 1366, which provides local

governments with expanded authority to regulate residential self-regenerating water softeners,

especially in areas of the state with identified salt problems (e.g., water bodies that are adversely

impacted by salinity and high use groundwater basins that are hydro-geologically vulnerable to salinity

pollution). The bill applies only to cities and local and regional agencies that own and operate a

community sewer or water recycling facility.

In January 2011, the Water Softener Task Force recommended that IEUA adopt an amendment to

Ordinance No. 87 to prohibit the future installation in homes of one type of water softener – the

self-regenerating salt-based devices (exchange tank services for water softeners are explicitly

permitted). The Task Force further recommended that IEUA adopt the regional ordinance

amendment first, and that the contracting agencies follow, adopting their individual ordinances at

their earliest convenience. This recommendation was unanimously approved by both the Technical

and Policy Committees in February 2011.

Consistent with AB 1366 (2009, Feuer) IEUA properly noticed and held a public hearing on June

15, 2011 to discuss amendments to IEUA Ordinance No. 87, to prohibit the future installation of

residential self-regenerating water softeners. IEUA received unanimous public support for the

ordinance. On July 20, 2011, the IEUA Board adopted the amendment to IEUA Ordinance No. 87

prohibiting the future installation of self-regenerating water softeners. Thirty days later on August

20, 2011, the ordinance took effect.

Status Report on Self-Regenerating Water Softener Regional Ordinance and Rebate Program


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Policy\Policy_Report_on_Water_Softener_Regional_Ordinances_2-6-14.docx

IEUA staff plan to promote the removal of self-regenerating water softeners in the region through

the marketing of the rebate program, which provides a rebate to residents up to $2,000 for the

removal of their self-regenerating water softeners. This will be accomplished through ads, bill

inserts and articles.

Additionally, staff will work with local realtors, developers and big box stores to educate them on

the use of traditional water softeners and promote alternative options for their customers. Following

is a list of tactics and strategies staff will use to implement this program:

IEUA will continue to advertise the rebate program through local newspapers, bill inserts,

city newsletters and articles.

IEUA will offer water softener displays and display boards addressing water softener facts

about the rebate program to contracting agencies for use in public spaces.

IEUA will work with big box retailers (Lowe’s, Home Depot, etc.) asking that they remove

self-regenerating water softeners from their shelves as part of implementing the regional

ordinance.

IEUA will work with local realtors and developers to promote public education about the

water softener ordinance and the availability of the rebate program.

As shown in the table below, currently four contracting cities/agencies have adopted a water softener

ordinance including the city of Upland, city of Montclair, City of Fontana and Monte Vista Water

District. Cucamonga Valley Water District is currently in the process of adopting the ordinance; the

ordinance is expected to be adopted in the spring of 2014. Three of IEUA’s contracting cities;

including City of Chino, City of Chino Hills and City of Ontario do not currently have ordinances

adopted.

Table 1 – Ordinance Status

Ordinance Adopted Adoption of Ordinance in Process Ordinance Not Adopted

City of Upland

Cucamonga Valley Water District

(CVWD) – Set to hold Public

Hearing in Spring 2014

City of Chino

City of Montclair City of Chino Hills

City of Fontana City of Ontario

Monte Vista Water District

Status Report on Self-Regenerating Water Softener Regional Ordinance and Rebate Program


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Policy\Policy_Report_on_Water_Softener_Regional_Ordinances_2-6-14.docx

Chino Chino Hills Fontana Montclair OntarioRancho

CucamongaUpland

2013 2,772 3,696 9,702 462 2,772 4,620 5,082

2012 6,468 6,006 11,550 462 6,006 11,088 6,930

2011 8,316 12,474 9,240 1,386 11,088 26,796 8,316

2010 10,164 17,094 8,316 5,544 8,316 8,316 18,942

2009 6,930 12,474 1,386 1,848 2,772 11,088 14,784

2008 1,386 3,696 462 - 462 924 1,386

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

By

Ye

ar

Table 2 shown below, illustrates the quantities of inquiries, approved applications and water softeners

removed based on the period from 7/1/2008 through 12/16/2013.

Table 2 – Water Softener Applications

City Inquired % of

Total Approved

% of

Total

SRWS

Removed

% of

Total

Chino 89 12% 80 11% 78 12%

Chino Hills 150 20% 137 20% 120 19%

Fontana 105 14% 97 14% 88 14%

Montclair 27 3% 26 4% 21 3%

Ontario 80 10% 75 11% 68 11%

Rancho Cucamonga 163 21% 153 22% 136 22%

Upland 150 20% 132 19% 120 19%

Total: 764 700 91.6% 631 82.6%

Table 3 shown below, illustrates the quantities of salt that has been avoided as a direct result of the

water softener removals from 7/1/2008 to 12/16/2013.

Table 3 – Salt Avoided (lbs.)

RECEIVE AND FILE

5A

! (

! (! (

! (

Chi

no H

ills

(Nov

201

3)C

hino

(Nov

201

3)O

ntar

io(N

ov 2

013)

Mon

tcla

ir(N

ov 2

013)

Upl

and

(Nov

201

3)

Cuc

amon

ga V

alle

y W

ater

Dis

tric

t (N

ov 2

013)

Font

ana

(Nov

201

3)

°0

510

2.5

Mile

s

TOTA

L ED

U B

Y C

ON

NEC

TIO

N T

YPE

(YTD

)

Bui

ldin

g A

ctiv

ity R

epor

t - Y

TD F

isca

l Yea

r 201

3/14

Lege

nd

EDU

(YTD

)R

esid

entia

l

>10.

01.0

- 10.

0

<=1.

0

Com

mer

cial

>10.

01.0

- 10.

0

<=1.

0

Indu

stria

l

>10.

01.0

- 10.

0

<=1.

0

HA

LF M

ILE

GR

ID: T

OTA

L ED

U's

(YTD

)

00.

51

1530

4575

+

Proj

ecte

d

Resi

dent

ial

(EDU

s)Co

mm

erci

al/I

ndus

tria

l (E

DUs)

Tota

l (ED

Us)

Tota

l (ED

Us)

Chin

o19

029

219

665

Chin

o Hi

lls1

67

553

CVW

D40

4282

364

Font

ana

4842

9051

0

Mon

tcla

ir6

713

200

Ont

ario

136

6119

713

00

Upla

nd8

2937

223

Tota

l42

921

664

538

15

Cont

ract

ing

Agen

cy

YTD

Actu

al

Serv

ice

Are

aU

ninc

orpo

rate

d

RECEIVE AND FILE

5B

IEUA RE

CYCLED

WAT

ER DISTR

IBUTION ‐DECEM

BER 20

13

TOTA

L AL

L PLAN

TSInflu

ent: 52.7 M

GD

Delivered

: 25.9 M

GD

Percen

t Delivered

: 49%

Creek Discharges

RP‐1 (0

02): 8.7 MGD

RP‐5 (0

03): 4.3 MGD

CCWRF

(004): 6.1 MGD

Total: 19.1 M

GD

Other Surface Discharge

Prado Park (0

01): 3.0 MGD

Groun

dwater Recha

rge

Stormwater/Local Run

off: 4.2 MGD

Impo

rted

Water (M

WD): 0.0 M

GD

Recycled

Water: 14.4 MGD

Total: 18.6 M

GD

1299

Zon

e13.4 M

GD

1158

Zon

e1.3 MGD

1050

Zon

e3.0 MGD

930 Zone

2.9 MGD

RP‐4

Influ

ent: 9.4 M

GD

Delivered

: 8.6 MGD

Percen

t Delivered

: 91%

RP‐1

Influ

ent: 27.9 M

GD

Delivered

: 12.9 M

GD

Percen

t Delivered

: 46%

CCWRF

Influ

ent: 7.3 M

GD

Delivered

: 0.0 M

GD

Percen

t Delivered

: 0.0%

RP‐5

Influ

ent: 8.1 M

GD

Delivered

: 4.4 M

GD

Percen

t Delivered

: 54%

1630

Zon

e1.5 MGD

800 Zone

3.8 MGD

Rec

ycle

d W

ater

Rec

harg

e D

eliv

erie

s / P

lan

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r 201

3 (A

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12/5

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tual

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thPl

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o D

ate

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atus

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2/19

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until

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ctua

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d W

ater

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201

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as

final

.

Bas

in1/

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81/

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151/

16-1

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1/23

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1M

onth

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tual

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thPl

anYe

ar T

o D

ate

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al

Ely

86.6

0.0

0.0

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80.0

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bas

in fu

llBa

nana

0.0

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ng T

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duct

ion

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kory

25.2

21.0

0.0

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070

63

cfs

Turn

er 1

& 2

46.2

0.0

0.0

0.0

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0.0

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CFS

, alte

rnat

e w

ith T

urne

r 4Tu

rner

3 &

426

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00.

00.

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ltern

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with

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ner 1

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ll, in

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itten

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as

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ws

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011

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z0.

00.

00.

00.

00.

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00

No

RW

del

iver

y m

echa

nism

Vict

oria

35.0

31.0

0.0

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66.0

50.0

346

4 C

FSSa

n Se

vain

e0.

03.

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00.

03.

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flow

thru

to V

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riaTo

tal

298.

593

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00.

039

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4,74

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ast F

Y En

d of

Mon

th A

ctua

l

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ycle

d W

ater

Rec

harg

e D

eliv

erie

s / P

lan

- Feb

ruar

y 20

14 (A

cre-

Feet

)D

eliv

erie

s ar

e dr

aft u

ntil

repo

rted

as

final

.

Bas

in2/

1-2/

52/

6-2/

122/

13-2

/19

2/20

-2/2

8M

onth

Ac

tual

Mon

thPl

anYe

ar T

o D

ate

Actu

al

Ely

0.0

0.0

0.0

0.0

0.0

022

27Ba

nana

0.0

0.0

0.0

0.0

0.0

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4H

icko

ry0.

00.

00.

00.

00.

010

070

6Tu

rner

1 &

20.

00.

00.

00.

00.

025

Turn

er 3

& 4

0.0

0.0

0.0

0.0

0.0

08t

h St

reet

0.0

0.0

0.0

0.0

0.0

7511

03Br

ooks

0.0

0.0

0.0

0.0

0.0

120

880

RP3

0.0

0.0

0.0

0.0

0.0

240

1113

Dec

lez

0.0

0.0

0.0

0.0

0.0

00

Vict

oria

0.0

0.0

0.0

0.0

0.0

034

6Sa

n Se

vain

e0.

00.

00.

00.

00.

020

023

5To

tal

0.0

0.0

0.0

0.0

0.0

760

7,76

85,

853

AF,

pas

t FY

End

of M

onth

Act

ual

Stat

us a

s of

1/9

/14

Stat

us a

s of

572

644

644

July

August

Septem

ber

Octob

erNovem

ber

Decembe

rJanu

ary

Februa

ryMarch

April

May

June

0

200

400

600

800

1000

1200

1400

1600

Acre‐feet per Month

FY 201

1/12

FY 201

2/13

FY 201

3/14

030

6191

122

152

183

213

243

274

304

335

365

0

1,00

0

2,00

0

3,00

0

4,00

0

5,00

0

6,00

0

7,00

0

8,00

0

9,00

0

10,000

11,000

Days Into Fiscal Year

Acre‐feet

FY 201

1/12

FY 201

2/13

FY 201

3/14

Documents

Regional Sewerage Program Policy Committee Meeting … · Regional Sewerage Program Policy Committee Meeting AGENDA Thursday, February 6, 2014 4:30 p.m. Location Inland Empire Utilities