1 / 47

Central Coast Water Authority

Central Coast Water Authority. FY 2010/11 Preliminary Budget. FY 2010/11 Preliminary Budget Components. Budget Overview in total. Preliminary FY 2010/11 Budget totals $ 59.5 million (excluding CCWA credits ) Final FY 2009/10 Budget: $ 53.5 million (excluding CCWA credits )

keenan
Download Presentation

Central Coast Water Authority

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FY 2010/11 Preliminary Budget Central Coast Water Authority FY 2010/11 Preliminary Budget

  2. FY 2010/11 Preliminary Budget Components FY 2010/11 Preliminary Budget

  3. Budget Overview in total • Preliminary FY 2010/11 Budget totals $59.5 million (excluding CCWA credits) • Final FY 2009/10 Budget: $53.5 million (excluding CCWA credits) • Gross budget increase of $6.0 million FY 2010/11 Preliminary Budget

  4. “Big picture” Budget-to-budget changes FY 2010/11 Preliminary Budget

  5. Water Deliveries • FY 2010/11 requested water deliveries: 35,883acre feet – no adjustment for lower DWR delivery allocation percentage (i.e., represents estimated actual demand). • FY 2009/10 requested water deliveries: 40,408acre feet • Decrease of 4,525 acre feet • Estimated actual deliveries for FY 2009/10: 17,581 acre feet FY 2010/11 Preliminary Budget

  6. FY 2010/11 CCWA operating expense components FY 2010/11 Preliminary Budget

  7. CcWA operating expense history FY 2010/11 Preliminary Budget

  8. CCWA Operating Expenses • Preliminary FY 2010/11 Operating Expense budget: $6.9 million, or $0.5 million decrease over FY 2009/10 budget (excluding NARES deposits). FY 2010/11 Preliminary Budget

  9. Increase of about $210,000: Includes $111,816 proposed salary pool for FY 2010/11 (4.83% pool percentage) to be considered by the Personnel Committee at its March 22nd meeting. Higher PERS retirement expenses of about $28,000 for higher salaries and contribution amounts. Health insurance expense increase of about $35,000 based on an estimated 10% increase in January 2011. Workers’ compensation insurance expense increase of about $14,000 for an estimated 5% increase. FY 2010/11 Preliminary Budget Personnel Expenses

  10. Supplies and equipment expenses decreasing by about $471,000 for a decrease in chemical costs from $40.16/AF to $31.72/AF. Decrease in requested water deliveries of 4,525 AF. Refined chemical cost calculations. FY 2010/11 Preliminary Budget Other O&M Expenses

  11. In FY 2009/10 chemical budget was $40.16/AF. Staff negotiated cost reductions with chemical venders by approximately 12.5% ($35.14). Staff continuously refine dosage requirements to reduce chemical use. Actual 2009 cost is $31.16/AF Proposed FY 2010/11 chemical budget is $31.72/AF. FY 2010/11 Preliminary Budget REFINEMENT OF CHEMICAL COSTS

  12. Professional services decrease of $53,000 for a $50,000 decrease in legal expenses for completion of the Hyatt Thermalito litigation partially offset by a $25,000 increase for general legal expenses. Decrease of $23,000 due to proposed elimination of Ernst & Young DWR Statement of Charges (SOC) audit. Recommended that CCWA staff perform this audit instead of utilizing the services of Ernst Young as was done for the 2009 and 2010 SOC. FY 2010/11 Preliminary Budget Other O&M Expenses Continued

  13. Utility expense decrease of about $213,000 attributed to a 4,010 acre-foot decrease in South Coast project participant requested water deliveries into Lake Cachuma (electrical costs). FY 2010/11 Preliminary Budget Other O&M Expenses Continued

  14. Full scale monitoring of filters indicates all filters can produce water meeting all required treatment objectives (TOC and turbidity removal). • Dual column pilot filter testing indicates that Filters 1,3 and 5 have sorption capacity remaining, while the older filters do not have sorption capacity remaining. • Due to lack of sorption in filters 2, 4, 6, 7 and 8, the ability to remove MIB is compromised. • Staff recommends a MIB Response Plan to handle MIB events because: • MIB events are very infrequent. • MIB events are of short duration (6 to 8 weeks) • From the MWQI Water Quality Reports, staff can have advanced warning of MIB issues in the main canal. • MIB is a taste and odor issue as opposed to health and safety issue (MIB can be tasted a 5-10 ng/l for sensitive individuals) FY 2010/11 Preliminary Budget Gac replacement postponement

  15. Utilize Powered Activated Carbon (PAC) Treatment to remove MIB. • Lease a PAC Dosing System. • Cost is $5,000/month lease or $65,000 purchase . • Transport of unit $3,000 each way • Purchase PAC at $1.00/pound. • For 10 mg/l dose, we need 150 pound/hour unit for 43 MGD flows. Dosage completely depending on inlet MIB concentration and desired level of control. • Total cost for one MIB event is approximately $250,000. • Assumes 8 week event. • Assumes 10 mg/l dose required (25% removal). FY 2010/11 Preliminary Budget Mib response plan

  16. FY 2010/11 Preliminary Budget

  17. FY 2010/11 Preliminary Budget Mib response plan continued

  18. Postpone replacement of granular activated carbon at the WTP indefinitely (approximate $1 million savings this year) Set aside funds of $250K each year for four years beginning in FY 2010/11 up to $1 million in the non-annual recurring expense account (NARES) for potential taste and odor actions in the future Allocate the $250K per year as a fixed O&M cost with the regional WTP allocation and exchange agreement modifications and in the year the funds are used for taste and odor episodes FY 2010/11 Preliminary Budget Non-Annual Recurring expense deposits for taste and odor episodes

  19. Total CIP expenditures of $117,000 funded from fixed operating assessments • Administration: $18,270 (replace mid-size sedan for Operations Manager) • Water Treatment Plant: $22,084 for equipment purchases; $15,500 for SCADA consultant and $18,270 to replace mid-size sedan • Distribution: $37,682 for Tank 5 chemical equipment and SCADA consultant FY 2010/11 Preliminary Budget Capital Improvements

  20. FY 2010/11 regional WTP allocation charge: • Fixed and capital: $1,490,716 or $38.15/AF • Variable: $147,319 or $4.63/AF • Fixed, capital and variable regional WTP allocation credit to the South Coast: $165.38/AF. FY 2010/11 Preliminary Budget Regional WTP Allocation

  21. FY 2010/11 Santa Ynez Exchange Agreement Modifications based on 2,260 AF of exchange water: • Fixed and Capital: $293,213 or $130.00/AF • Variable: $80,557 or $35.64/AF FY 2010/11 Preliminary Budget Exchange Agreement Modifications

  22. Debt service payments for FY 2010/11 total: $11.5 million, an increase of $0.1 million Warren Act and Trust Fund payments total $239,691 based on 4,133 AF of water delivered into Lake Cachuma at $58/AF. FY 2010/11 Preliminary Budget 2006A Revenue Bond Debt Service Payments & Warren act/trust fund charges

  23. CCWA Credits Total CCWA credits for FY 2010/11 are $234,864 comprised of the following: FY 2010/11 Preliminary Budget

  24. FY 2010/11 Preliminary Budget DWR fixed and variable Charges

  25. FY 2010/11 Preliminary Budget FY 2010/11 DWR fixed Charge components

  26. FY 2010/11 Preliminary Budget DWR fixed Charges

  27. Estimated actual costs for FY 2009/10 of $31.2 million, a $1 million increase over FY 2009/10 budget. FY 2010/11 Preliminary Budget DWR Fixed Charges

  28. FY 2010/11 Preliminary Budget Transportation capital charges

  29. Transportation capital charges • $1.1 million decrease in rate management credits • Excess reserve fund credit decrease of $0.8 million • Over-collection credit increase of $0.6 million every year until 2035 (audit finding in 2009). Total credit is $8 million. Will be repaid with interest in the future at the project interest rate of 4.608% (currently) FY 2010/11 Preliminary Budget

  30. RATE MANAGEMENT CREDITS (RMC) FY 2010/11 Preliminary Budget

  31. Rate management credits (RMC) continued • Actual RMC for 2009 were $0.8 million lower than the amount included in the FY 2009/10 Budget due to revised estimates by DWR subsequent to budget adoption by CCWA. • The only reason DWR was able to provide RMC in 2010 was because of CCWA’s request to revise the Delta Water Charge minimum cost projections each year to 2035, which DWR did implement. Otherwise, RMC for 2010 would have been zero. FY 2010/11 Preliminary Budget

  32. FY 2010/11 Preliminary Budget Coastal branch extension debt service payments

  33. $2.6 million increase in bond principal payments. Prior year DWR revenue bond reserve fund credits of $552,000 and FY 2008/09 yearend credits of $658,000 credited against the FY 2009/10 budget. FY 2010/11 Preliminary Budget Coastal branch extension debt service payments

  34. DWR refinanced some of the bonds used to finance Coastal Branch facilities but failed to revise the invoices to CCWA. Total adjustment is about $400,000. DWR to provide a revised invoice for the September 2010 payment in the near future (potential reduction in the FINAL FY 2010/11 Budget). FY 2010/11 Preliminary Budget Coastal branch extension debt service payments-audit findings and adjustments

  35. CCWA staff submitted a protest item on the Coastal Branch extension debt service because DWR has allocated about $10 million more in debt service payments than the actual construction costs for the facilities. Last week, DWR stated their initial review shows that the $10 million amount is an error and has agreed to correct it. Staff will be working with DWR to correct the allocated bonds to CCWA for the $10 million reduction. FY 2010/11 Preliminary Budget Coastal branch extension debt service payments-audit findings and adjustments

  36. Estimated calculated component $0.9 million higher than the prior year amount, based on CCWA staff estimates. Out year estimates include a 5% inflation factor each year. FY 2010/11 Preliminary Budget Transportation minimum omp&r

  37. FY 2010/11 Preliminary Budget Transportation minimum omp&r

  38. Audit Finding: DWR was charging overhead to Reaches 33B, 34 and 35 even though CCWA operates those reaches for DWR. DWR agreed this was incorrect and reversed the charges from 2000 to 2009 totaling $4.7 million. We have requested that DWR reverse the overhead charges for years prior to 2000. Potential adjustment to the calendar year 2011 statement of charges. FY 2010/11 Preliminary Budget Transportation minimum omp&rAudit findings

  39. Delta water charge is about $460,000 higher than the FY 2009/10 budget due to: DWR’s inclusion of an inflation factor on the projections each year to 2035 at CCWA’s request, which increased revenues for rate management credits. CCWA staff estimated increase in the delta water rate of $5/AF in calendar year 2011 for potential other projects in the delta. FY 2010/11 Preliminary Budget delta water charge

  40. FY 2010/11 Preliminary Budget FY 2010/11 DWR variable cost components

  41. FY 2010/11 Preliminary Budget DWR variable cost history

  42. Total FY 2010/11 DWR variable charges of $5.3 million, $1.3 million increase over the prior year budget amount. Variable OMP&R increases of $1 million due to FY 2009/10 credits and a slight increase in the cost per acre-foot of $4.32/AF to a total of $129.32/AF for FY 2010/11. Off-aqueduct charges are about $.3 million higher than the prior year budget. FY 2010/11 Preliminary Budget DWR Variable Charges

  43. Table A Water: • North County: $207.736/AF • South Coast: $288.12/AF • Santa Ynez Exchange Water: • Santa Ynez ID#1: $165.38/AF • South Coast Exchange Participants: $167.46/AF FY 2010/11 Preliminary Budget Variable cost per acre foot

  44. The FY 2010/11 budget would be about $4.7 million higher except for reductions as follows: Indefinite postponement of the GAC replacement - $1 million savings, partially offset by $250,000 in NARES deposits Reductions in training and travel $16,500 Postponement of asphalt sealing and painting facilities for second year $72,140 Discontinue use of Ernst & Young to audit the DWR statement of charges $23,000 FY 2010/11 Preliminary Budget COST REDUCTION MEASURES TAKEN

  45. Refined budget estimation protocol for the electrical and chemical budgets. • DWR cost reductions: • $4.7 million savings for 2010 ($2.35 for FY 2010/11 for the error in Transportation Minimum OMP&R) • $7.9 million error in Transportation Capital to be credited as $713,000 each year through 2035 at the project interest rate (4.608% currently) • $1.8 million in rate management credits only available because DWR agreed to CCWA’s request to revise the out year projections for the delta water charge. FY 2010/11 Preliminary Budget COST REDUCTION MEASURES CONTINUED

  46. DWR Costs: • Approximate $400,000 reduction for the Coastal Branch Extension debt service adjustments from prior years. • Adjustment for the $10 million difference in Coastal Branch construction costs vs allocated debt service. • Unsure how this adjustment will be credited to CCWA, but will be working with DWR to determine the adjustments to CCWA. FY 2010/11 Preliminary Budget Potential further adjustments to the preliminary FY 2010/11 budget

  47. Preliminary Budget presentation to CCWA Board on March 25, 2010 Work with DWR to include the corrections from the audit to include in the Final Budget. Final adoption of the budget at the April 22, 2010 Board meeting. FY 2010/11 Preliminary Budget Next steps

More Related