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
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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
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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
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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
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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
Mokelumne Aqueduct Intertie
1616
Mokelumne Aqueduct Intertie
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
Steel Tank Reservoirs
3/14/2013
2121
Pipeline Installation
Installing a 6” Main
2222
Pipeline Installation
Installing a 16” Main
3/14/2013
2323
Pipeline Installation
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
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2727
Steel Tank Reservoirs
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
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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
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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
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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
Pipeline Infrastructure Renewals
Pipeline Infrastructure Renewals
Service Lateral Replacements Polybutylene
Service Lateral Replacements Polybutylene
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
Pipeline Infrastructure Renewals Goal = 8
Pipeline Infrastructure Renewals Goal = 10
Service Lateral Replacements Polybutylene
Service Lateral Replacements Polybutylene
Service Lateral Replacements Polybutylene
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
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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
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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
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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
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41
60-inch Main Break on El Portal
42
60-inch Main Break on El Portal
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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
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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
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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
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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
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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
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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)
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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
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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
Long-Term Financial Stability
Long-Term Financial Stability
7070
Long-Term Financial Stability
• 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
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