BOARD OF DIRECTORS EBMUD EAST BAY MUNICIPAL UTILITY · PDF fileEBMUD EAST BAY MUNICIPAL UTILITY DISTRICT ... customer service, ... the upcoming FY 14-15 budget and rate proposal can

BOARD OF DIRECTORSEBMUD EAST BAY MUNICIPAL UTILITY DISTRICT

375 -1 lth Street, Oakland, CA 94607 Office of the Secretary: (510) 287-0440

Notice of Special Meeting

Strategic Plan Update

FY14-15 Budget Workshop

Wednesday, February 13, 20138:30 a.m.

Training Resource Center375 Eleventh StreetOakland, California

At the call of President Andy Katz, the Board of Directors has scheduled a StrategicPlan Update and FY14-15 Budget Workshop for 8:30 a.m. on Wednesday, February 13,2013, at 375 Eleventh Street, Training Resource Center, Oakland, California.

The Board will meet in workshop session to receive an update on the District's keystrategic plan priorities and planning assumptions for the FY14-15 budget. Key planpriorities covered will include operations and maintenance, customer service,infrastructure, and long-term financial stability.

Dated: February 7, 2013

Lynflle M. LewisSecretary of the District

W:\Notices\Notices 2013X021313 FY14J5 Budget_Strategic Plan Workshop.doc

BOARD OF DIRECTORSEAST BAY MUNICIPAL UTILITY DISTRICT

EBMUD

375 -1 lth Street, Oakland, CA 94607 Office of the Secretary: (510)287-0440

AGENDAWednesday, February 13, 2013

Special Meeting

Strategic Plan Updateand

FY14-15 Budget Workshop8:30 a.m.

Training Resource Center

ROLL CALL:

P U B L I C C O M M E N T : The Board of Directors is limited by State law to providing a brief response, asking questions forclarification, or referring a matter to staff when responding to items that are not listed on the agenda.

DISCUSSION:

1. Strategic Plan Priorities Update

2. Planning for the FY14-15 Budget

ADJOURNMENT:

Disability NoticeIf you require a disability-related modification or accommodation to participate in an EBMUD public meeting pleasecall the Office of the Secretary (510) 287-0404. We will make reasonable arrangements to ensure accessibility. Somespecial equipment arrangements may require 48 hours advance notice.

Document AvailabilityMaterials related to an item on this Agenda that have been submitted to the EBMUD Board of Directors within 72hours prior to this meeting are available for public inspection in EBMUD's Office of the Secretary at 37511th Street,Oakland, California, during normal business hours.

W:\Agendas\Agendas 2013\021313_FY14_15 Budget Workshop_agenda.doc

EAST BAY MUNICIPAL UTILITY DISTRICT

DATE: February 7, 2013

MEMO TO: Board of Directors

FROM: Alexander R. Coate, General Manager W"

SUBJECT: Strategic Plan Update and FY14-15 Budget

INTRODUCTION

Preparation of the proposed FY14-15 Budget is underway. The purpose of the February 13th

workshop is to share with the Board the key strategic priorities and planning assumptions that aredriving the development of both the proposed budget and rates and charges for the next twofiscal years.

FY14-15 STRATEGIC PLAN PRIORITIES

The District's Strategic Plan was last updated and adopted by the Board in June 2012. It specifiesgoals, strategies and objectives that further the District's mission. The District has madesignificant progress in executing plan priorities while addressing ongoing fiscal challenges. Indeveloping the upcoming budget, we propose to focus on four key strategies: effectiveinfrastructure maintenance, appropriate infrastructure investments, improved customer serviceand long-term financial stability. Staff will present information on these areas at the Boardworkshop.

FY14-15 BUDGET AND RATES

Over the past several budget periods, the District made concerted efforts to enhance revenuesand contain costs in order to mitigate the high rate increases that would otherwise have beennecessary due to reductions in key revenue streams and growth in costs to provide water andwastewater services in a highly regulated environment. The typical District customer now paysless for water service than they would at almost any peer agency.

Many of the rate mitigation strategies were one-time (e.g. debt refinancing and usingaccumulated capacity charges) or not sustainable (e.g. capital project deferrals, preventivemaintenance reductions, and reduced staffing). In addition, key revenue assumptions from priorbudgets—water sales, customer account growth and interest rates/earnings—have proven to beoptimistic about the local economy. The end result is that, despite its significantaccomplishments, the District is experiencing a growing backlog of deferred maintenance, a needto accelerate rehabilitation of aging infrastructure, customer service deficiencies, and decliningfinancial performance.

Board of DirectorsFebruary 7, 2013Page 2

Confirming this declining financial performance, Standard & Poor's recently placed the WaterEnterprise's AAA credit rating on negative watch, citing the need to meet the Board's debtservice policy target without the use of one-time measures. Though not reflected in their ratingoutlooks, the two other rating agencies expressed the same concern and the need for rateadjustments to meet the Board's debt service coverage policy target.

The District's historic commitment to excellence in water service has built a reservoir of trustwith customers. Strong credit ratings have provided tangible value to ratepayers over the years inthe form of reduced debt service costs, the District's largest single operating expenditure. Thevalue has been estimated to be approximately $6 million annually.

Though still being developed, the upcoming FY 14-15 budget and rate proposal can be bestdescribed as a course correction. Through the redeployment of existing resources and the modestaddition of new resources, it will reflect investment in key areas including effective preventivemaintenance, infrastructure investments, and improved customer service. It will incorporateknowledge gained over the past five years and make realistic assumptions of growth in salesvolumes, new connections and interest rates and address the need to meet the financial policygoals established by the Board. This transitional budget will require rate increases above thelevels contemplated in the previous budgets to set the District back on the road to long-termorganizational and fiscal sustainability.

ARC-ELS :JC

I:SEC\02-13-13 Board Workshop\FIN - Strategic Plan Update and FY14-15 Budget 021313.doc

3/14/2013

Strategic Plan and

the FY14-15 Budget Development

Strategic Plan and

the FY14-15 Budget Development

Board Presentation

February 13, 2013

2222

Workshop Agenda

• Introduction

• Strategic Plan Update

• FY 2014 - 2015 Budget Development

• Board Discussion

2

3/14/2013

333333

IntroductionIntroduction

444444

Strategic Plan UpdateStrategic Plan Update

3/14/2013

555

Strategic Plan Highlights

Goals HighlightsLong-Term Water Supply

• Improved reliability

Water Quality & Environmental Protection

• Additional renewable energy

Long-Term Infrastructure Investment

• Completed master plans

Long-Term Financial Stability • Minimized customer impacts during recession

Customer Service • Implemented new Customer Information system

Workforce Planning & Development

• Partnerships for future workforce

666

Long-Term Water Supply—Accomplishments

• Certified WSMP 2040 revised EIR

• Completing Camanche permit extension ADEIR

• Mokelumne river partnerships yielding tangible benefits—$3.4 million in grants

• Greatly exceeding conservation projections

• Obtained $33 million in grants, upgrading 80% levees protecting aqueducts

3/14/2013

777

Water Quality & Environmental Protection—Accomplishments

• 2012 & 2013 fish returns some of best on record

• WWTP first net producer of renewable energy in North America

• Completed thorough evaluation of Community Choice Aggregation

• Protecting SF Bay with 160-month perfect compliance record and PSL program

888

Workforce Development—Accomplishments

• Continue workforce planning discussions to address pending retirements

• Implemented 2nd plumber training program at Laney College

• Laney College Partnership: Five Machine/Mechanic Maintenance internships

• Solano College/Tri-Valley ROP Partnerships: Three Operator internships

• Lead role in BAYWORKS regional utility training program

• Exceeded District-wide training KPI to support employees (34 v 30 hours/FTE)

• Launched Engineering Rotation Program

3/14/2013

999

Strategic Plan Focus AreasFYs 2014 & 2015

Goals Focus Area

Long-Term Infrastructure Investment

• Effective maintenance practices• Implement Infrastructure master plans

Customer Service • 24x7 customer access to information &

services

Long-Term Financial Stability

• Ensure sufficient revenues to cover the District’s needs

1010101010

Infrastructure Investment

3/14/2013

11111111

Topics

• FY12 Accomplishments

• Review of Infrastructure Management

• FY14-18 CIP Development Process

12121212

FY12 Highlight Accomplishments

• $10 M Grant for Improvements to Mokelumne Aqueducts

• Completed Walnut Creek PP Fire and Flood Damage Restoration

• 4 Contract Awards on Steel Tanks

3/14/2013

13131313

FY12 Highlight Accomplishments (cont.)

• 9.1 miles of pipe replaced – up from 8.1 in FY11, and 6.5 in FY10

• 4 Master Plans completed

• Comprehensive Condition Assessment of Wastewater Interceptor System is 75% complete

1414

Mokelumne Aqueduct Intertie

3/14/2013

1515


1616


3/14/2013

1717

Walnut Creek Pumping Plant Restoration

Switchgear after the fire

New transformer placement

1818

Walnut Creek Pumping Plant Restoration

Walnut Creek No. 1 & 2 Flooded

Pump Motors Repaired and Installed

3/14/2013

1919

Steel Tank Reservoirs

2020


3/14/2013

2121

Pipeline Installation

Installing a 6” Main

2222


Installing a 16” Main

3/14/2013

2323


Installing a 12” HDPE

2424

Wood Street Wastewater Interceptor

Corrosion problems in street interceptor

After Rehab

3/14/2013

25252525

Summary of Infrastructure

• 4,200 miles of water distribution pipeline

• 274 miles of untreated water pipeline, 30 miles of sewer interceptor

• 167 reservoirs

• 136 pumping plants

• 73 regulators

• 30 rate control stations

• Treatment plants: 5 water, 1 wastewater, 3 satellite wet-weather, 3 recycled

26262626

0

50

100

150

200

250

300

350

400

450

<1920 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s

Decade Installed

Mile

s o

f P

ipe

PVC Pipe Steel Pipe

AC Pipe CI Pipe

Infrastructure Demographics

• Infrastructure dates to the year 1875

• Much of infrastructure built post-WW II

• Excellent maintenance has extended its life

• Nonetheless, aging infrastructure requires future investment

Miles of Pipe

8%

29%

28%

35%

PVCSteelACCI

1372

333

1182

1150

3/14/2013

2727


Alamo Reservoir with recoating half-way complete

Castenada No. 1 center vent Round Hill roof interior

2828

Pipeline Infrastructure – Cast Iron Break

24” Corroded Cast Iron Pipe

Site of Corroded Pipe Break

3/14/2013

2929

Other Pipe Types

1957-vintage AC in Lafayette Riveted pipe failure, Lincoln Ave.

Chabot Road 24” Dingee steel pipeline

3030

Pumping Plants

Pit Piping at a Pumping Plant

3/14/2013

31313131

Infrastructure Management

• Infrastructure is managed based on:1. Preserving safety2. Maximizing reliability3. Minimizing overall cost

• Condition assessments and repair history provide data for cost analysis, master planning

• As infrastructure ages, either repair and-or rehabilitation rates will increase

Time

$

100% reactive option

100% proactive option

Optimal investment

32323232

Development Process for Draft FY14-18 CIP

• FY12-16 Five-year plan focused on maintaining and improving the infrastructure, compliance with existing and proposed regulations, and providing service to new customers

• Same focus continues in development of FY14-18 Five-year plan reflecting careful project prioritization

3/14/2013

33333333

Priorities Shaping the Draft Budget

Priority Example

1. Safety Deteriorated electrical gear for which safety hazard exists and cannot be mitigated operationally.

2. Regulatory Private Sewer Lateral Program

3. Critical Reliability Reliability issue that could affect a large number of customers, e.g., seismically vulnerable backwash supply tank for Orinda WTP.

4. Work in Progress Construction contracts already awarded.

5. Cost Effectiveness Replacements or rehabilitations that are cost-effective, such as replacement of pipes with major leak history, recoating of steel tanks.

Defunded and Deferred Work linked primarily to higher future demands.

FY10 FY12 FY14Freeport Regional Water Project

Pumping Plant Rehabilitation

Pumping Plant Rehabilitation

Folsom South Canal Connection

New Service Installations Large Diameter Pipelines

Pipeline Infrastructure Renewals



Service Lateral Replacements Polybutylene



RARE Water ProjectReservoir Rehabilitation/ Maintenance

Treatment Plant Upgrades

San Pablo Dam Seismic Modifications

WTTIP WTP ImprovementsRaw Water Studies & Improvements

343434

Draft CIP Top Six Projects FY10/FY12/FY14 - Cashflow

FY10 FY12 FY14Freeport Regional Water Project

Pumping Plant Rehabilitation3 Contract Awards (FY13)

Pumping Plant Rehabilitation5 Contract Awards

Folsom South Canal Connection

New Service Installations Large Diameter PipelinesDingee & Lincoln Ave

Pipeline Infrastructure Renewals Goal = 8






RARE Water ProjectReservoir Rehabilitation/ Maintenance Shawn, Proctor #2, Rilea, Alamo

Treatment Plant UpgradesOrinda, Sobrante, Lafayette

San Pablo Dam Seismic Modifications

WTTIP WTP ImprovementsWalnut Creek WTP

Raw Water Studies & Improvements Temp Anchor Retrofit, BrionesElectrical Upgrade

3/14/2013

3535

CIP Direct Costs by Major ProgramsNo Inflation

36363636

CIP DevelopmentSummary

• Includes vital work to address top priorities such as safety

• Increases investment in infrastructure to address long-term needs

3/14/2013

3737373737

Effective MaintenanceEffective Maintenance

38

FY12 Accomplishments

• Met Strategic Plan goals

• Responded to major pipe breaks

– 60” El Portal

– 24” Rodeo

• Met Critical Performance Measures

3/14/2013

39

Key Performance Measures Indicators

Performance Measure Goal Actual

Number of water quality and/or water treatment violations, actual and

reporting.

Meet 100% of water quality goals - 100% of regulations

99% / 100%

Pipeline Infrastructure Renewals Replace 8 miles of pipe per year 7.9 mi.

Number of environmental violations (water and air quality, disposal)

0 reportable violations per month 0

Environmental/Emergency Prep/WHS facility audit findings

No outstanding items 90 days after due date 17

Miles of distribution pipe surveyed for leaks & number of leaks found

400 miles surveyed per year 227 miles

Corrective maintenance (Pri 5,4) performed on schedule

90% on schedule 75.20%

Polybutylene Lateral Replacements Replace 800 polybutylene laterals per year 942

40

60-inch Main Break on El Portal

3/14/2013

41


42


3/14/2013

43

Operations and Maintenance Gaps

•Gaps

– Facility performance

– Deferred maintenance

– Workforce planning

44

Effective Maintenance

Facility performance impacts operation and maintenance

• Facilities out of service

• Structural, electrical, control system issues

• Emergency pipe and service failures

3/14/2013

45

Safety Impacts to Maintenance

46

Safety Impacts to Maintenance

3/14/2013

47

Large Complex Maintenance Projects

48

Deferred Maintenance

Excess Above Normal Backlog

Total Hours Estimated Costs

97,000 $4.8 million

3/14/2013

49

Deferred Maintenance

Reduced or Discontinued Programs

Hours Estimated Labor Cost

Flushing

• Water quality 4,000 hrs/yr $200,000Valve Maintenance

• System operation

• Minimize shut-downs

20,000 hrs/yr $1,000,000

Corrosion Control

• Extend use of assets

• Avoid catastrophic failures

20,000 hrs/yr $1,000,000

50505050

Operations & Maintenance Workforce Planning

• Retirements – 50% of staff in 5 years• Keeping current staffing level requires hiring

in advance of retirements– Technicians:

• Instrument• Mechanical• Electrical

– Plumbers – Operators

• Hydropower• Water Treatment

• Considering funding 30-40 additional positions in FY14

3/14/2013

515151515151

Customer ServiceCustomer Service

52

Customer Service Accomplishments

• New CIS Implemented – September 2011

– Obsolete technology replaced

– Risk of system outages reduced

– Flexibility in place to meet future needs (e.g. rate changes)

– Interfaces with other District systems improved

3/14/2013

53

FY14-15 Challenges

– Increase in Contact Center Call Volume

– Greater customer expectations regarding use of technology

54

Call Volume 2002-2012 & FTE phone coverage

22,16821,021

25,869 26,19823,993

22,766

27,942 28,729 28,52530,616 30,409

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cal

l Vo

lum

e

15

17

19

21

23

25

27

29

31

33

35

Call Volume CSR FTEs

CSIP and Business Office closuresDrought

Average Monthly Call Volume & Available Phone Coverage

23 22

2021202020

Av

ailable C

SR

s

3/14/2013

55

Contact Types for December 2012

• 6,788 Billing related calls

• 5,079 On order/Off order calls

• 6,591 Delinquent bill calls

• 1,527 General inquiry calls

• 1,022 High bill complaints

• 1,378 Letters, faxes and email responses

• 122 Delayed billed or canceled/re-billed calls

56

Average Daily Call Volume

Average Daily Call Volume January - December 2012

1,825

1,582

1,342 1,3511,294

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Monday Tuesday Wednesday Thursday Friday

Cal

l Vo

lum

e

3/14/2013

57

Average Monthly Call Volume 2002-2012

25,648

22,189

24,28025,510 25,903

27,821 28,285

30,747

26,47227,702

24,29325,592

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ave

rag

e M

on

thly

Cal

l V

olu

me

58

Call Statistics Trend

DroughtDrought

Drought

Drought

Average Speed of Answer 2008 - 2012

88

31

66

187

222

0

30

60

90

120

150

180

210

240

Sec

on

ds

2008 2009 2010 2011 2012

3/14/2013

59

Call Statistics Trend (cont’d)

Call Abandonment Rate2008 - 2012

5%6%

14%

7%

16%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2008 2009 2010 2011 2012

Cal

l Han

dle

Tim

e(m

inut

es:s

econ

ds)

60

Call Statistics Trend (cont’d)

Call Handle Time 2008 - 2012

4:43 4:41

5:31

4:29

5:10

0:00

1:12

2:24

3:36

4:48

6:00

2008 2009 2010 2011 2012

Cal

l Han

dle

Tim

e(m

inut

es:s

econ

ds)

3/14/2013

61

• Heightened customer awareness / concern due to drought and economy

• New CIS – more complex; learning curve

• Reduced functionality from IVR

• Hiring freeze

• Long lead time for training new staff

Factors Affecting Service Levels

62

Action Plan

• People – fill vacant positions; fund additional staff in anticipation of peak summer workload

• Process – reduce project work; eliminate work-arounds

• Technology – continue to improve new CIS; evaluate IVR; improve web self-service

3/14/2013

63

Web Self-Service Options www.ebmud.com

64

2012 Customer Payments

PAYMENT OPTIONSTOTAL

COLLECTION NO. OF

PAYMENTS

PERCENT OF TOTAL PAYMENTS

DISTRICT COST TO PROCESS

(BILL* + PAYMENT)

Mail $240,000,000 973,000 44% $0.94

Online Payment Portals $84,000,000 437,000 20% $0.53

Automatic Bill Pay $54,000,000 290,000 13% $0.63

EBPP Website (CheckFree) $31,000,000 200,000 9% $0.33

Credit/Debit Card/e-Check $34,000,000 170,000 8% $0.53

Automated Pay Stations $16,000,000 106,000 5% $1.00

Drop Boxes $6,000,000 30,000 1% $0.94

Field Service $760,000 3,500 0% $30.50

TOTALS $465,760,000 2,209,500 100%

*e-Bill @ $0.30 each; Paper Bill @ $0.50 eachElectronic Payments

3/14/2013

65

EBPP Program By CheckFree

• Log in at www.mycheckfree.com

66

Paying EBPP Bills

• View and pay for current and or past bills delivered

3/14/2013

67

Benefits To Improving WebSelf-Service

• Meets customers’ expectation of convenience when paying bills on the web

• Increases customer use of cost-effective billing and payment services

– Customer enrollment in paperless billing reduces bill printing and mailing costs

– Water bill payments on the web reduces payment processing costs

68

FY14-15 Budget Needs

• Capital -

– Replacement of phone system & IVR

• Operating -

– Fund additional 3.5 FTEs in Contact Center

– Implement improvements to web self-service

3/14/2013

6969696969



7070


• Fiscal challenges

• Mitigation Measures

• Long-term financial stability

3/14/2013

7171

Fiscal Challenges

• Revenues below budgeted levels

– Water sales revenues (sales volumes)

– Capacity charge revenues (new meters)

– Interest earnings (interest rates)

• Cost pressures

– Non-labor costs (i.e. chemicals/energy)

– Labor costs (healthcare and retirement)

– Debt service (paying for prior investments)71

7272

Mitigation Measures

Multi-year effort to enhance revenues, contain costs, and mitigate rate increases

• Enhanced revenues

• Contained operating costs– Non-labor

– Labor

• Deferred capital investments

• Refinanced/re-structured debt

• Maintained strong credit ratings7272

3/14/2013

7373

Enhanced Revenues

• Sell excess capacity

– Resource Recovery (R2) program—digester capacity

– Power Generation Station (PGS)—waste streams

– Richmond WWTP project—dry-weather wastewater treatment capacity

– Freeport Facility—wet-year conveyance capacity

• Maximize existing revenue streams

– Billboard revenues

– Charge for field services inspection upon customer request

– Pro-rate water bill

• Sell surplus property

– Redwood Filter Plant

– Former Oakland Business Office

74747474

Contained Non-Labor Spending

74

*Discounted to FY03 dollars

• FY 2012 Non-Labor Expenditures vs. FY 2003• Water System 2% lower• Wastewater 10% higher due to new waste streams

3/14/2013

7575

Reduced Staffing Levels

• FY13 staffing is 10% less than in FY03

* As of 1/13/13

767676

Reduced Overtime Hours

Overtime Hours

97,633101,300

020406080

100120140160180200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*

Fiscal Year

(00

0’s

)

• FY12 overtime hours are 3.6% less than in FY03

* As of 1/27/13

3/14/2013

777777

Capital Expenditures—FY 08-12

*Excludes Adm of Capital

78787878

Refinanced Outstanding Debt

78

• Take advantage of low interest rates in order to

– Reduce future debt service (ongoing benefit)

– Release reserve funds (one-time benefit)

– Provide up-front cash for capital projects (one-time benefit)

– Significantly reduce derivative exposure (ongoing benefit)

– Push principal out to avoid rate shock (deferral)

• Water– 2009 $15 million

– 2011 $17 million

– 2012A $15 million

– 2012B 46% derivative reduction

– 2013A $7.2 million

• Wastewater– 2010 $0.4 million

– 2012A $1.2 million

3/14/2013

79797979

Impact of Refundings and Restructuring

on Water System Debt Service

79

808080

Maintained High Credit Ratings

Water Wastewater

Moody’s Aa1 Aa2

S&P AAA AAA

Fitch AA+ AA+

Outstanding Debt $2.6 billion $476.7 million

80

• Moody’s and Fitch both affirmed the District’s ratings with a stable outlook

• S&P affirmed the District’s Water Enterprise rating with a negative outlook

3/14/2013

8181

Value of High Credit Ratings

• Only select few municipal issuers are rated Aaa

• Investors consider EBMUD one of the “top five” issuers in the state

• This status means easy market access, command attractive pricing, ability to innovate

• Has saved estimated $6 million annually in debt service costs

• Fiscal Impact of a downgrade

– Immediate impact on cost of variable rate debt

– Fixed-rate debt going forward

82

Credit Considerations

Water Wastewater

Credit Strengths

•Water supplies—core, supplemental, future

•service area demographics

•strong management

•independent Board with rate-setting authority

•Strong liquidity, de-risking of debt portfolio, low rates and charges

•Limited future CIP & borrowing

•service area demographics

•strong management

•independent Board with rate-setting authority

•Strong liquidity

Credit Concerns

•Multiple years of missing the board-adopted policy target for debt service coverage of 1.6x

•Use of one-time, unsustainable strategies to address fiscal imbalance

•Potential capital requirements resulting from consent decree negotiations

• Upcoming biennial budget and rate package will be key to long-term fiscal stability and the maintenance of strong ratings

3/14/2013

8383

$364

$521

$540

$594

$595

$596

$604

$616

$623

$642

$691

$774

$915

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

Pleasanton

EBMUD

Livermore**

San Jose

ACWD

DSRSD*

Los Altos

North Marin**

Marin MWD

Contra Costa

Hayward

San Francisco**

Palo Alto

*Proposed FY14 rates**Adopted FY14 rates

Comparative Residential Water Charges

Annual Charges for 11CCF/Mo –Feb 2013

8484

$603

$853

$878

$928

$936

$967

$973

$991

$992

$1,344

$1,374

$1,397

$1,678

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800

Pleasanton

Livermore**

EBMUD

San Jose

ACWD

DSRSD*

North Marin**

Contra Costa

Los Altos

Hayward

San Francisco**

Marin MWD

Palo Alto

Comparative Residential Water Charges

Annual Charges for 20CCF/Mo –Feb 2013

*Proposed FY14 rates**Adopted FY14 rates

3/14/2013

858585858585

Comparative Residential Wastewater

Charges* Annual Charges—Feb 2013

$195

$320

$330

$350

$355

$371

$383

$388

$406

$489

$512

$593

$633

$633

$638

$752

$0 $100 $200 $300 $400 $500 $600 $700 $800

Oro Loma**

Union Sanitary

West Contra Costa**

Delta Diablo

DSRSD

Central Contra Costa

San Leandro**

Pleasanton

San Jose

Livermore

Vallejo

EBMUD***

Richmond**

Pinole

Central Marin

San Francisco**

* Includes collection and treatment** Adopted FY14 Rates*** EBMUD rate based on adopted FY13 Treatment rate, SF Bay Residential Pollution Prevention Fee, and Wet Weather Fee, $279/year plus average community collection charge of $314/year.

868686868686

FY 2014 and FY 2015 Budget DevelopmentFY 2014 and FY 2015 Budget Development

3/14/2013

87878787

Budget Themes

• Organizational Sustainability

– Add resources in priority areas

– Invest in aging infrastructure

– Improve customer service levels

• Long-Term Financial Stability

– Adjust assumptions to reflect “New Normal”

– Address structural deficit

– Meet Board’s financial policy goals

888888

Comprehensive Budget Planning

• Establish priorities (Strategic Plan)

• Budget development & review

– Operating budget (Senior Management Team)

– Capital budget (Capital Steering Committee)

• Develop rates and charges

3/14/2013

898989

Consider Adding Resources in Priority Areas

• Effective maintenance

• Infrastructure investment

• Customer service

90909090

Reduce Projected Sales Volumes

3/14/2013

91919191

Reduce Projected New Connections

91

92929292

Prior Budget Rate Projections

FY12 FY13 FY14 FY15 FY16

Water 6% 6% 5% 5% 5%

Wastewater 6% 6% 5% 5% 5%

3/14/2013

939393

Water System Revenue Shortfall

Revenue Estimates$ Millions

2013 2014 2015 2016

Water SalesOldNew

342.0323.5-18.5

367.0341.6-25.4

392.8362.4-30.4

420.3385.6-34.7

System Capacity Charges

OldNew

40.140.10.0

38.223.7

-14.5

35.023.3-11.7

30.024.6-5.4

Interest Earnings

OldNew

12.41.5

-10.9

10.33.0

-7.3

9.34.7

-4.6

9.24.7

-4.5

Total Shortfall -29.4 -47.2 -46.7 -44.6

949494

Wastewater System Revenue Shortfall

Revenue Estimates$ Millions

2013 2014 2015 2016

Resource Recovery

OldNew

7.38.81.5

8.07.1

-1.0

8.06.5

-1.5

8.06.0

-2.0

Power/OtherOldNew

6.14.5

-1.6

6.14.7

-1.4

6.14.7

-1.4

6.14.7

-1.4

Interest Earnings

OldNew

2.50.4

-2.1

2.50.9

-1.6

2.11.0

-1.1

1.70.8

-0.9

Total Shortfall -2.2 -4.0 -4.0 -4.3

3/14/2013

95959595

Drivers of Rates & Charges

• Revenue shortfall

• Labor and benefit cost increases

• Strategic Plan priorities

– Effective maintenance

– Infrastructure investment

– Customer service

– Long-term financial stability

• Debt service cost

96969696

Budget Workshops April 9 & 16

Prop 218 Notices mailed April 26

Public Hearing on Rates & Charges June 11

Adoption of Budget & Rates June 11

Water and WW Rates take effect July 1

FY 14 and FY 15 Budget Schedule

3/14/2013

97979797979797

Board Discussion

Documents

BOARD OF DIRECTORS EBMUD EAST BAY MUNICIPAL UTILITY · PDF fileEBMUD EAST BAY MUNICIPAL UTILITY DISTRICT ... customer service, ... the upcoming FY 14-15 budget and rate proposal can