budget workshop proposed biennial budget for fys 2019/20 ...€¦ · fys 2030-2039. millions. $538....
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Budget WorkshopProposed Biennial Budget for
FYs 2019/20 and 2020/21
Finance and AccountingApril 3, 2019
Proposed Biennial Budget FYs 2019/20 – 2020/21Supports Board-Adopted Business Goals
FISCAL RESPONSIBILITY
Rate Study to ensure full
recovery of costs
Financing capital projects
Cost containment
WORK ENVIRONMENT
Training & development
Succession planning
WATER RELIABILITY
Water use efficiency programs
Chino Basin Program
WASTEWATER MANAGEMENT
RP-5 expansion construction
Asset Management
Program
2
Biennial Budget FY 2019/20 and 2020/21
Adoption of two “single-year” budgets and TYCIP
Appropriation limited to a single year
Mid-cycle review for the second budget year
3
IEUA Fund Structure
4
IEUA Service Area
Admin Services
Groundwater Recharge
Recycled Water
Water Resources
Non-Reclaimable Wastewater
Regional Wastewater
Capital Operations
Key Drivers Funding Sources
• Stable and distinct revenue components• FY 2019/20 last year of the multi-year rates adopted in 2015.
– Rate Study Update for fiscal years beginning 2020/21. • Conservative projection on new connections;
– 4,000 new wastewater equivalent dwelling units (EDUs)– 4,000 new water meter equivalent units (MEUs)
• 3.5% average growth on property tax receipts
5
Current multiyear rates
(AF) acre foot(EDU) Equivalent Dwelling Unit(RTS TYRA) – Readiness to Serve Ten Year Rolling Average
Five year rates adopted June 2015 for Fiscal Years 2015/16 – 2019/20.
FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20
Effective Date 10/01/15 7/01/16 7/01/17 7/01/18 7/01/19
Wastewater Connection Fee/EDU $5,415 $6,009 $6,309 $6,624 $6,955Monthly EDU Rate $15.89 $17.14 $18.39 $19.59 $20.00
Recycled Water Direct Delivery/AF $350 $410 $470 $480 $490Groundwater Recharge/AF $410 $470 $530 $540 $550
Water Connection Fee /MEU $693 $693 $1,455 $1,527 $1,604RTS TYRA 7YR Phase In n/a 15% 30% 45% 60%Meter Equivalent Unit n/a $0.90 $0.95 $0.99 $1.04
6
Total Funding Sources($ Millions)
7
$0
$50
$100
$150
$200
$250
$300
$350
$400
Amended Proposed Proposed
2018/19 2019/20 2020/21
Mill
ions
Operating Revenues Non Operating Revenues Debt Proceeds
User ChargesRecycled Water Sales
MWD Water Sales
Property Taxes / Connection Fees
RP-5 Expansion ConstructionRecycled Water Interties
$276 $290 $370
Current
Key Drivers Uses of Funds
• No significant changes in total operating expenses – Increase in employment costs offset by lower O&M projects
• Significant higher capital expenditures– RP-5 Expansion construction– Pomona/JCSD Recycled Water Interties– Asset Management Program– Chino Basin Program (CBP)
8
Total Uses of Funds($ Millions)
9
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$400
Amended Proposed Proposed
2018/19 2019/20 2020/21
Mill
ions
Operating Expenses Debt Service Capital
$275 $284 $371
EmploymentOperating Costs
MWD Water Purchases
Bonds / State Revolving Fund Loans
RP-5 Expansion ConstructionRecycled Water Interties
Asset Management Program
Current
Employment Costs($ Millions)
FY 2018/19 Current
FY 2019/20 Proposed
%Change
FY 2020/21 Proposed
%Change
Total Employment Cost $55.0 $59.3 7.8% $62.6 5.6%
FY 2019/20 Proposed
% Change
FY 2020/21 Proposed
% Change
COLA (3%) + Merit Increase (2%) $1.1 1.9% $1.6 2.8%
Benefits (pension & health costs) 1.1 1.9% 1.6 2.8%
Increase 11 budgeted positions 2.1 4% - -
Total Change $4.3 7.8% $3.2 5.6%
Support to RP-5 Expansion ConstructionAsset Management ProgramChino Basin Program
FTE + LTE 293 304 304% TOTAL BUDGET 20% 21% 18%
10
Labor allocation by program
FY 2018/19 Current
FY 2019/20Proposed
FY 2020/21Proposed
Wastewater 81% 80% 80%Water 16% 17% 17%Administration 3% 3% 3%Grand Total 100% 100% 100%
11
Succession Planning
• ~30%(77 FTEs) of proposed staffing eligible to retire in the next 5 years– 12 identified critical positions may retire within the next 2 years
• $800,000 per year to support succession planning– Timely recruitment and transition of critical positions– Adequate overlap for knowledge transfer and training – Minimize impact to productivity
12
Proposed TYCIP $924M
13
$92
$185 $160
$103 $95 $41 $39 $43 $50
$117
$0
$50
$100
$150
$200
$400
$500
$550
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FYs 2030-2039
Mill
ions
$538
RP-5 Expansion ConstructionRecycled Water Interties
Asset Management Program
RP-1 Capacity Recovery
RP-2 Decommission RP-4 Expansion
$277 M planned over the next two years
Debt Service and Outstanding Principal($ Millions)
$0
$10
$20
$30
FY 2018/19Amended
FY 2019/20Proposed
FY 2020/21Proposed
Interest Expense Principal Payment Financing Expense $0
$100
$200
$300
$400
$500
$600
2018/19 2020/21 2022/23 2024/25 2026/27 2028/29
Outstanding PrincipalRP-5 Expansion Construction$282
RP-1 Capacity Recovery$51
Recycled Water Interties$83
$24.5$26.5 $28.1
14
Total Reserves($ Millions)
15
$187 $231 $232 $238 $236 $237 $258 $281
$338 $381
$421 $455 $427
$-
$50
$100
$150
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$250
$300
$350
$400
$450
$500
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Mill
ions
RESERVES TOTAL MINIMUM TOTAL TARGET
Fiscal Year Ending
Future reserves potential use• RP-1 Capacity Recovery• RP-2 Decommission• RP-4 Expansion• Pay down debt
Key take-aways
Balanced Budget.
FY 2019/20 last year of multiyear rates. Rate study underway for FY 2020/21.
RP-5 Expansion construction phase begins evaluation of financing options.
Asset Management Program.
Chino Basin Program.
16
Review and Approval Timeline
17
Month IEUA Committee IEUA Board
Regional Technical
Committee
RegionalPolicy
Committee
March 03/13 03/20 03/28
April 04/10 04/0304/17
04/25 04/04
May 05/08 05/15 05/30 05/02
June 06/12 06/19 06/06
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