FY 2017-18 & 2018-19San Dieguito Water District
Fiscal Years 2017/18 and 2018/19
Operating and Capital Budget
San Dieguito Water District
A Subsidiary District of the City of Encinitas
San Dieguito Water District
Fiscal Years 2017/18 and 2018/19
Operating and Capital Budget
Board of Directors
Tony Kranz, President
Catherine Blakespear, Vice President
Mark Muir, Director
Tasha Boerner Horvath, Director
Joe Mosca, Director
District Manaaement
Karen Brust, City Manager
Vacant, Director of Public Works
Bill O'Donnell, General Manager
Joe Aurora, Operations Superintendent
Blair Knoll, Senior Engineer
Jeff Umbrasas, Administrative Services Manager
Document prepared by San Dieguito Water District Staff
with support of the City of Encinitas Finance Department
San Dieguito Water District
160 Calle Magdalena
Encinitas, CA 92024
Tel: 760- 633 -2650
www.sdwd.ora
K
Transmittal Letter
Introduction
5
7
District Overview
7
History
Service Area and Customer Base
Governance
Facilities
Budget Development
10
Overview
Basis of Accounting
Basis of Budgeting
Process and Schedule
Assumptions
Strategic Plan
14
Overview
Mission, Vision & Value
Focus Areas & Objectives
Water Portfolio
17
Potable Water Supply
Potable Water Demand
Future Potable Water Supply and Demand Projections
Future Potable Water Purchase and Treatment Cost Projections
Recycled Water
Potential Future Water Supplies
Budget Summary
23
Sources of Funds
Uses of Funds
Fund Budget Summaries
Detail of Internal Fund Transfers
Personnel & Organization
Overview
Staffing
Organization
Salary and Benefits
Personnel Summaries
Classifications and Pay Ranges
31
3
Revenue 38
Overview
Summary
Detail
Operating Program 41
Overview
Summary
Administration
Customer Services
Water Purchases and Treatment
Recycled Water Program
Field Operations
Engineering and Planning
ram
Overview
Program Summaries
Project Detail Sheets
56
Term Debt (Debt Service) 71
Overview
Schedules
Fleet Replacement
Overview
Summary
Schedules
73
Reserves and Long -Term Planning 77
Overview
Reserves
Long -Term Planning
Five -Year Cash Flow
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I am pleased to submit the proposed Fiscal Years 2017/18 and 2018/19 budget for the period of July 1, 2017 through
June 30, 2019. The District's two -year budget is a detailed document that outlines proposed revenue and
expenditure plans over the next two years, provides a seven year view at the District's capital program, and forecasts
the overall financial plan over the next five years. This budget document is a comprehensive management and
financial plan, which will guide the District in its mission of delivering safe, reliable water in a cost - effective and
environmentally sustainable manner.
For the first time, this budget was developed utilizing a new Strategic Plan (Plan). The Plan serves as a guide fro the
District as we strive to continuously meet the District's Mission, Vision, and Values, which were adopted by the Board
of Directors in February 2017. Specific objectives have been established for each of the District's five Strategic
Focus Areas. The objectives are to be completed over the next two fiscal years, a timeframe that corresponds with
the District's budget. The full Plan can be found on the District's website, and portions relevant to the budget are
included later in this document.
District staff continuously looks for ways to reduce costs, control expenditures, and enhance revenues, all with the
intention of improving the financial stability of the District and minimizing rate impacts on customers, when possible.
Staffing has been reduced in recent years due to strategic reorganizations, lessening salary and benefit costs. The
District has reduced the number of vehicles in its fleet, reducing fuel, maintenance, and replacement costs. In 2014,
the District refunded its existing 2004 Water Revenue Refunding Bonds to take advantage of lower interest rates and
improved bond covenant terms, saving approximately $250,000 annually through the remainder of the loan. The
District has always valued cooperation and collaboration with neighboring agencies, and recently the District has
partnered with neighboring agencies on several maintenance and construction contracts to take advantage of
economies of scale in lowering contract costs.
The District, like many other water agencies, faces numerous challenges during this upcoming two -year budget
cycle. Continued commitments to capital improvements, including both District and Joint Facilities projects, require
sizeable short and long -term investments to ensure the reliability, safety, and health of the District's infrastructure and
the water served to our customers. Required payments towards the District's CalPERS Unfunded Accrued Liability,
which began in FY 2015/16 and are projected to increase annually, continue to add pressure to the budget.
Wholesale water costs, including both increasing volume -based commodity rates and fixed costs, are projected to
continue to increase, both now and in the future. These costs directly affect the water purchase budget, which is the
single largest category of expenses for the District. While the District benefits from having a local water source, large
and mostly unpredictable swings in its availability create significant challenges and potentially large variances from
year -to -year.
A significant issue currently facing the District is the impact the most recent drought has had on customer water
demands. Customers had a strong response to State and local requests to reduce water use during the drought.
Water demand has been reduced by approximately 20 percent since 2013. Even though the drought is over,
customers continue to conserve. While we are grateful that the District has a customer base that is very
conservation - minded, when water sales go down, it creates budgeting challenges for the District. When revenues
decrease due to lower water sales, the District typically does not see a matching decline in expenditures, as most
major expenditure categories are fixed.
The District is currently working on an update to its water rate study, utilizing information from this budget. A study is
performed every two years to ensure that water rates and service charges are sufficient to meet the financial needs of
the District, including operating and capital costs, as well as fund balance targets and reserve requirements. It is
anticipated that the update to the study will be completed in Fall 2017, with a rate plan that is vetted through the
public and approved by the Board of Directors. The results of the study may require adjustments to this adopted
budget, which would be made during a subsequent Board meeting in FY 2017/18.
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Overall, the proposed FY 2017/18 and FY 2018/19 budget will allow the District to maintain its strong financial
position, while continuing a commitment to investment in its infrastructure. This document communicates to the
Board of Directors, District staff, ratepayers, and other stakeholders the financial resources associated with the
delivery of services and programs in the coming years. San Dieguito Water District staff is proud to present the
recommended FY 2017/18 and FY 2018/19 operating and capital budget.
Respectfully Submitted,
William O'Donnell
General Manager
(District Overview
History
In 1922, the San Dieguito Irrigation District (SDID) was formed by the South Coast Land Company to obtain water for
about 1,000 acres of land in Leucadia. Shortly afterwards, SDID merged with the Cardiff Irrigation District. At that
time, a contract was drawn up to provide water from Lake Hodges to the land owned by the South Coast Land
Company via the newly constructed Hodges Flume and
San Dieguito Reservoir. The first water meters in the
District were installed in 1923. A few years later in 1925,
with Lake Hodges Dam in need of repairs, Lake Hodges
and its supporting conveyances were sold to the City of
San Diego; however, SDID maintained water rights for
3,200 acre -feet of water annually from Lake Hodges.
SDID overcame several financial difficulties in the 1930's.
. ,. ,4$ The 1940's brought many improvements to the District,
including the installation of a new pumping plant and
storage tank. A chlorine ammonia treatment facility was
also installed at San Dieguito Reservoir to increase water
quality in the District. Following World War II, the area
became a highly successful agricultural center, with flowers, avocados, and citrus being grown here and distributed
all over the United States. With the District no longer able to solely rely on its local water source to accommodate
agriculture and growth, SDID became a member of the San Diego County Water Authority and obtained the right to
purchase and distribute imported water via the Metropolitan Water District.
The 1960's and 1970's brought several more improvements to the District. The District's original redwood lines were
replaced with new pipelines, and several new storage facilities were built to increase the District's storage capacity.
In 1969, SDID and the Santa Fe Irrigation District (SFID) jointly purchased the San Dieguito Reservoir and Hodges
flume. In 1970, the R.E. Badger Water Filtration Plant was
completed to ensure both Districts had the means to safely
treat both local and imported water for their customers. - _Wn� -- - _
Although the District was originally established to provide
irrigation water to surrounding farms, ranches, and fruit
groves, the area eventually developed into a suburban
residential community. In 1975, the San Dieguito Irrigation
District became the San Dieguito Water District (SDWD) to
recognize this change in operations. The District now
provides the majority of its water to residential and
commercial customers. When the City of Encinitas
incorporated in 1986, SDWD became a subsidiary District of the City of Encinitas, while maintaining its same service
boundaries. SDWD further expanded its storage capacity in 1998 with the completion of a new reservoir at Encinitas
Ranch Golf Course. In 2000, recycled water became available in the District via the San Elijo Joint Powers Authority
(SEJPA), further diversifying the District's water supply. The District proudly celebrated its 90th Anniversary in 2012.
After several years of negotiations, 2014 brought an amendment to the water rights agreement for Lake Hodges,
between the District, SFID and City of San Diego. This amendment reaffirmed the District's right to local water from
Lake Hodges and clarified many issues between the agencies as the use of the lake has evolved over time.
The District has changed over time but maintains its main focus of providing District customers with a safe and
reliable water supply in a fiscally responsible manner.
Service Area and Customer Base
The San Dieguito Water District is located in northern
San Diego County and services the coastal portion of
the City of Encinitas, including the communities of
Cardiff, Leucadia, Old Encinitas, and portions of New
Encinitas. Bordered by the Batiquitos Lagoon to the
north, the San Elijo Lagoon to the south, the Pacific
Ocean to the west and the Olivenhain Municipal Water
District (OMWD) to the east, the District covers roughly
5,655 acres or about 8.8 square miles and provides
water to a population of over 37,500 residents via
approximately 11,740 potable water meters and 87
recycled water meters.
Rolling hills and valleys characterize the District, with
elevations ranging from sea -level at the coast to
approximately 400 feet above sea level. The District,
which is over 90% built -out, is a mix of low- density
urban development characterized by the following
breakdown of customer account classes:
- 92%
Residential
- 4%
Commercial
- 2%
Landscaping /Construction
- 1%
Public /Government
- 1 %
Agricultural
Of the District's residential accounts, approximately 84% of these properties are single family, with the remaining 16%
being multi - family units. Residential properties average approximately 2.6 persons per household. As the District is
primarily "built- out," mainly infill growth is anticipated, which will keep population and customer account growth at
minimum levels into the future.
The District's service area for potable water customers is broken up into 8 individual meter reading cycles for meter
reading and billing purposes. The District bills its potable customers on a bi- monthly basis (every two months) with
one cycle being read and billed per week over a two -month period. All recycled water customers are on a separate
cycle, with their meters being read and billed on a single monthly cycle.
Governance
The San Dieguito Water District is a subsidiary District of the City of Encinitas, and has operated as such since the
City's incorporation in 1986. As a subsidiary District to the City, the Encinitas City Council also serves as the Board
of Directors to the District, however the Council members hold different positions on the District Board. The Board
President is appointed on an annual basis, with the City of Encinitas Mayor holding the position of Board Vice
President.
In addition, District Board members represent the District's interests by serving on other District - related and regional
water - related committees, including the Joint Facilities Advisory Committee, the R.E. Badger Water Facilities
Financing Authority, the San Elijo Joint Powers Authority, and the San Diego County Water Authority Board of
Directors.
Board members may also hold positions on other ad -hoc committees, such as the Tri- Agency Partnership Committee
(with representatives from OMWD and SFID), the Water Rate Subcommittee, the Strategic Plan Subcommittee, and
the Drought Subcommittee.
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Facilities
District Office
- 160 Calle Magdalena, Encinitas, CA 92024 (Shared with City of Encinitas Public Works Department)
District Facilities
- 175 miles of distribution pipeline
- 12 miles of transmission pipeline
- 3,850 distribution system valves
- 1,470 hydrant valves
- 7.5 million gallon underground reservoir
- 2.5 million gallon underground reservoir
- 11 inter - connections with other water agencies
- Over 11.800 water services and water meters
- 19 pressure reducing stations
- 1 emergency pump station
Jointly Owned Facilities (with Santa Fe Irrigation District)
- R.E. Badger Water Filtration Plant (40 mgd)
- 8 miles of transmission pipeline
- 2 pump stations
- 1.4 megawatt hydroelectric power plant
- 13 million gallon reservoir
- 800 AF San Diegiuto Reservoir
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Overview
The San Dieguito Water District utilizes fund accounting and operates as an Enterprise Fund. As an Enterprise Fund,
the District operates similar to a private business enterprise where the cost of providing goods and services is either
partially or fully recovered by user charges.
The District maintains four distinct funds to further distinguish between types of expenditures and revenues:
- Operating Fund: Captures the District's day -to -day expenditures and revenues. The Operating Fund also
houses the District's Rate Stabilization Reserve.
- Capital Replacement Fund: Accounts for costs related to capital improvement projects benefitting District
and jointly -owned facilities. Also captures capacity fee revenue when new customers are added to the water
system.
- Debt Service Fund: Provides for the annual and semi - annual principal and interests payments on District
debt.
Fleet Replacement Fund: Maintains funding for the replacement of District vehicles and large equipment
Basis of Accounting
The District uses the full accrual basis of accounting, where revenues are recognized when they are earned and
expenses are recognized when the liability is incurred.
Basis of Budgeting
Primarily, the basis of budgeting is consistent with the basis of accounting, described above. Any budgeted funds
that are not expensed by the end of the first year of the two -year budget can be "carried over" to the second year of
the two -year budget by Board of Directors approval of a Continuing Appropriation Request. All other unexpended
appropriations lapse at the end of the fiscal year and do not "carry over." Any variations between budgeted and
actual expenditures and revenues are reported at year end, following the District's annual audit, and are reported to
the Board of Directors. Variances may affect the District's on -going fund balance positively or negatively.
Process and Schedule
Budaet Document
This is the third iteration of the San Dieguito Water District's independent two -year budget document. In Fiscal Year
2013/14, it was decided that a separate District budget document would be developed to allow for a more detailed
look at the District's budget and finances. Prior to this, the San Dieguito Water District budget was developed and
produced in conjunction with the City of Encinitas' budget, and the two agencies shared a single budget document.
Due to the success of the independent budget document, the District is continuing to present its budget in this
independent manner.
Two -Year Budaet
Similar to the City of Encinitas, the District utilizes a two -year budget cycle, where two separate 12 -month budgets
are prepared and submitted to the Board of Directors every other year. The Board appropriates operating and capital
improvement funds for the first year only as required by State of California statute. Then, a more condensed,
summary document is developed in the second year to disclose any substantive changes and to provide an updated
forecast, referred to as the "Second Year Revise." The benefits of the two -year budget process include:
im
- Increased efficiency and reduced production time by not reproducing a comprehensive document in the
second year of the two -year process.
More efficient financial management, including reduced staff time dedicated to budget development.
- Better long -range planning by more effectively linking operating and capital activities.
Improved program monitoring and evaluation by allowing more time for operational oversight.
However, unlike with the City budget, due to the volatility and nature of the water industry, producing a two -year
budget also presents certain challenges for the District. Several of the largest components of the District's budget,
including water sales, water purchases, and wholesale water costs are largely out of the District's control and are
subject to sometimes significant changes on a year -to -year basis. Furthermore, external pressures related to the
weather, drought, availability of water supplies, and water politics can severely impact the District's ability to forecast
information. Therefore, in response to this ever - changing environment, the Second -Year Revise of the two -year
budget commonly sees significant modifications from the original budget document, and budget adjustments are
made throughout the year in response to changing conditions.
Budget Schedule
District staff began developing preliminary information for the upcoming two -year budget process in November and
December 2016. This preliminary information included projecting staffing levels and personnel expense account
information. In January and February 2017, District staff further worked with City of Encinitas Finance staff to
develop salary and benefit numbers for the budget, based upon those staffing levels, and also to develop projected
Debt Service Fund figures for the next two years. District staff then developed non - personnel account budget
information in March and April 2017 as updated information became available about current year spending and future
year needs. During this time, staff also refined its budgetary needs for the Fleet Replacement Fund and developed
its proposed Capital Improvement Program over a series of work group meetings. In conjunction with internal water
demand projections, preliminary water rate and charge guidance from the San Diego County Water Authority
( SDCWA) became available to the District in late -April 2017, which was utilized to develop preliminary water
purchase and treatment expenditure projections. Final SDCWA wholesale rates and charges were made available in
late -May 2017 for updating and incorporation in the final proposed budget.
The draft budget was developed for preliminary review and feedback by District management in April 2017. A draft of
the Fiscal Years 2017/18 and 2018/19 Operating and Capital Budget document was introduced to the public and the
Board of Directors on May 17, 2017, where the budget was deliberated and staff received input and direction.
Incorporating feedback from the May 17, 2017 Board meeting, and including any other final revisions deemed
necessary by staff, a final proposed version of the District budget was brought back to the Board of Directors on June
28, 2017 for adoption. As approved by the Board on June 28, 2017, the budget was implemented on July 1, 2017.
The District's fiscal year runs from July 1 through June 30.
Zero -Based Budgeting
The District uses the Zero -Based Budgeting (ZBB) methodology as a tool for developing budget information. With
ZBB, while historical information is taken into consideration for assessing trends, it does not provide justification for
future expenditures. Instead, budgets are built "from the ground up" and future expenditures are justified on their
individual merit every year. While more time consuming than incremental budgeting, this approach shifts budget
attention from simply adding to prior -year budgets and focuses consideration on maintaining the minimum level of
operational support. The ZBB approach ensures that resources are directed towards the most necessary and
productive accounts and is also helpful in educating the Board and District management on the nature and details of
programs and /or services.
Budget Monitoring and Adjustments
On a quarterly basis, the District reviews its actual expenditures and revenues in comparison to original budget
projections. The City Manager and City of Encinitas Finance staff are also provided this information for review.
District staff updates the Board of Directors of the District's current financial situation on a quarterly basis as these
III
reviews are performed. During these quarterly updates, or during any District Board meeting, staff may request that
the Board approve adjustments to the budget, as necessary, in order to address budget variances or changes. The
status of the District's various Capital Improvement Projects are also reviewed on a quarterly basis.
Additionally, staff internally monitors the District's financial situation on a monthly basis to stay aware of trends and
current conditions. These various monitoring processes ensure that candid and frequent discussions are had on the
use of resources and also allow for the timely redirection of resources when necessary.
Budget Controls
The District maintains a variety of budget controls to ensure accountability and oversight of expenditures. The District
follows the City of Encinitas Purchasing Policy, which includes a number of provisions to ensure fiscal control,
including multi -level approval of purchases, spending limits, and specific vendor selection procedures. Major budget
changes must be approved by the District Board of Directors. As discussed above, regular budget monitoring occurs
to ensure resources are being properly utilized as directed by this document. Finally, the District undergoes an
annual audit, which reports on the District's fiscal and budgetary controls.
Assumptions
While many items in this budget may be predictable due to existing contract, rate, and cost information, other items
do not have information readily available at the time of budget development, and must be assumed with reasonable
justifications.
District staff utilized various assumptions when developing this budget, many of which have been discussed
throughout the document. The following is a summary of various meaningful assumptions:
- Under the July 1, 2015 Memorandum of Understanding with SEIU Local 221, across - the -board 2.0% salary
increases are projected each July 1 through 2018.
- Under the July 1, 2015 Memorandum of Understanding with SEIU Local 221, no major changes to employee
benefit levels are projected during this two -year budget.
- Updated CalPERS estimates reflect no major changes to the District's CalPERS normal employer
contribution rate in FY 2017/18 or FY 2018/19.
- Based upon updated valuations and payment calculations, CalPERS unfunded accrued liability payments
are budgeted as $338,455 in FY 2017/18 and $423,491 in FY 2018/19.
- SDCWA commodity rates are projected to increase by 4.3% for treated water and 4.6% for untreated water
in CY 2018 and estimated to increase by 5.0% for both treated and untreated water in CY 2019.
- SDCWA fixed charges are projected to see a net increase of 13.9% in CY 2018 and then are estimated to
increase by 4.8% in CY 2019.
- Customer account growth is projected at 0.5% each of the two years.
- Water demand is projected to increase 5% in FY 2017/18 and 2% in FY 2018/19, as the District exits a
multi -year period of drought conditions.
- Due to recent local rainfall, the District is projected to be able to meet total water demand with 65% local
water in FY 2017/18. However, based upon conservative estimates, only 25% of demand will be met with
local water in FY 2018/19.
- Water sales and meter service charge revenue projections in this budget assume current water rates are in
effect through the entire two -year budget.
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- As reflected in the Fund Budget Summaries and the Cash Flow, the District has an "additional revenue
requirement" of $1,370,593 in FY 2017/18 and $2,392,592 in FY 2018/19 in order to meet minimum target
reserve levels. The District will be updating its water rate study in late 2017 to set water rates for FY
2017/18 and FY 2018/19 in order to meet these requirements.
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Overview
District staff utilizes a variety of studies and plans to guide work and decisions. The District utilizes both the 2010
Water System Master Plan and the 2012 Joint Facilities Master Plan to help plan and create the Capital Improvement
Program. The District's 2015 Urban Water Management Plan and 1999 Recycled Water Master Plan are both
utilized to plan the District's long -term water supply strategy. A Water Supply Shortage Response Program helps the
District strategically navigate drought and other water shortage situations. Staff also maintains a financial risk
analysis to assist in projecting the fiscal impacts of potential adverse conditions which the District may face.
The Fiscal Years 2017/18 and 2018/19 Operating and Capital Budget is the first District budget to incorporate a
formal Strategic Plan (Plan). District management began work on the development of the Plan in 2015. In order to
obtain buy -in from staff, a Strategic Business Plan Team (Team) was created, which included a cross - section of
employees from all levels and areas of the District. A Strategic Plan Subcommittee (Subcommittee) was also
established, which included two District Board members, who would provide feedback and guide the development of
the Plan.
In order to better understand the current state of the District, a Strengths, Weaknesses, Opportunities and Threats
Analysis (SWOT) was performed. The SWOT helped management, the Team, and the Subcommittee focus their
planning efforts towards reinforcing areas of strength, embracing opportunities, working to improve on areas of
weakness, and mitigating threats. Once these various areas were evaluated, the Team and Subcommittee worked to
develop formal Mission, Vision, and Value statements for the District, which would serve to provide overall guidance
to District decision - making. From there, the Team and Subcommittee developed individual Focus Areas with goals,
objectives, and performance indicators, as a way to evaluate the District's success in meeting its core Mission.
The final draft Plan was brought to the full Board of Directors for approval in May 2017. Although approved as a
stand -alone document, elements from the Plan are included in the District's budget as a way to align the short-term
(two - years) goals of the District and the resources that are required to meet these goals.
Our Mission
To deliver safe, reliable water in a cost - effective and environmentally sustainable manner.
Our Vision
To anticipate and plan for evolving regulatory requirements, varying water supplies and demands, and increasing
customer expectations by effectively and responsibly managing our organization and water resources.
Our Value — Our Customers
Our customers are the foundation of the San Dieguito Water District, and we place great value in providing them with
such a vital resource. Knowing that, we commit to providing exceptional service, performed by a dedicated and
knowledgeable workforce, and making responsible, transparent decisions with the best interests of our customers in
mind.
Strategic Plan Focus Areas
Fiscal Responsibility
Customer Service, Education, and Outreach
Organizational Effectiveness
Asset Management
Water Quality and Sustainability
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Fiscal Responsibility: Develop and maintain financial plans and policies that ensure that the District is always
working in a fiscally responsible, transparent, and sustainable manner.
FY18 & FY19 Objectives
Additional Focus
Areas
FY18
FY19
Conduct Update to Water Rate Study
Areas
✓
Update Asset Valuation Study
Organizational
Effectiveness
✓
Update Long -Term CIP Plan
Asset Management
✓
✓
Complete Budget Development
Water Quality and
✓
✓
Complete Fee and Charge Study
Sustainability
✓
Update Reserve Policy
Water Quality and
✓
✓
Update Actuarial Study for Unfunded Pension Liability
Sustainability
✓
✓
Complete Capacity Fee Study
Water Quality and
✓
✓
Customer Service, Education, and Outreach: Provide quality service to our customers by being responsive to
their needs and communicating with them through active education and outreach programs.
FY18 & FY19 Objectives
Additional Focus
FY18
FY19
Complete SDWD's Administrative Code Update
Areas
✓
Initiate new water billing system
Organizational
Effectiveness
✓
Implement new customer service portal
✓
Implement new backflow software system
Water Quality and
✓
Send 2 employees to the Public Management Academy
Sustainability
✓
Sponsor 2 landscape workshops
Water Quality and
✓
✓
Continue working with OMWD and SFID on potential areas for
collaboration
Sustainability
✓
✓
Attend 2 water conservation events
Water Quality and
✓
✓
Sustainability
Produce 6 Constant Contact newsletters
✓
✓
Participate in the North County Water Agencies 4 1h Grade Poster
✓
✓
Contest
Complete demonstration videos for the District website
✓
✓
Transition from bi- monthly to monthly billing
✓
Complete Public Works Yard demonstration landscape project
Water Quality and
Sustainability
✓
Organizational Effectiveness: Develop and retain a knowledgeable and well trained workforce and continuously
review and update the District's policies, procedures, and work methods in order to find opportunities to increase
efficiencies.
FY18 & FY19 Objectives
Additional Focus Areas
FY18
FY19
Complete SDWD's Administrative Code Update
✓
Complete Water Rights Agreement with the Santa Fe Irrigation
District
Water Quality and
Sustainability
✓
Conduct a SDWD staffing analysis
✓
Complete a cross training program (Maintenance to Systems)
✓
Send 2 employees to the Public Management Academy
✓
Update SDWD's Standard Operating Procedures Manual
✓
Continue working with OMWD and SFID on potential areas for
collaboration
Fiscal Responsibility
✓
✓
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Asset Management: Plan, prioritize, and adequately fund the maintenance and replacement of the District's
infrastructure, equipment, and facilities in order to maximize useful life of the assets in a cost effective manner.
FYI & FY19 Objectives
Additional Focus Areas
FYI
FY19
Complete GPS of all backflow devices
Organizational
Effectiveness
✓
✓
Complete Homeland Security SCADA System Audit
✓
✓
Implement small meter testing program
Fiscal Responsibility
✓
Implement water quality sample station replacement program
Water Quality and
Sustainabilit
✓
✓
Complete 30" transmission main coupling repair project
✓
Complete Cardiff distribution valve replacement project
✓
Complete N. Coast Highway 101 10" water main replacement project
✓
Complete the transmission main air release and blow -off
replacement project
✓
Complete transmission main anode bed replacement project
✓
Complete 12" valve replacement on Santa Fe Drive
✓
Water Quality and Sustainability: Provide District customers with high quality water from a diverse, reliable, and
sustainable water supply portfolio.
FYI & FY19 Objectives
Additional Focus Areas
FYI
FY19
Complete Annual Consumer Confidence Report
Customer Service,
Education, and Outreach
✓
✓
Comply with SB7X -7 (20% by 2020) or any new State - mandated
water use reduction requirements
✓
✓
Complete Local Water Sales Agreement with the City of San Diego
Fiscal Responsibility
✓
Complete Potable Reuse Implementation Study
✓
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(Water Portfolio
Potable Water Supply
The District maintains a diverse potable water supply of three water sources to serve its customers; local water from
Lake Hodges, imported treated water, and imported untreated water.
Local and regional climate conditions can have a significant effect on
the District's water supply balance between local and imported
supplies. The District resides in a semi -arid region with an average
precipitation of approximately 10 inches annually; however, local
rainfall amounts can vary greatly from year -to -year, which heavily
impacts the availability of local water from Lake Hodges. Owned
and operated by the City of San Diego, the District maintains water
rights to Lake Hodges water through a series of agreements with the
City of San Diego.
■ ` �, "' Lake Hodges resides in the San Dieguito River Watershed, the
largest watershed in San Diego Countv with an area of
approximately 345 square miles. Currently, the District has rights to approximately 21% of the annual inflow into
Lake Hodges. Prior to 2014, the District had the ability to regularly utilize more water than it had rights to due to the
fact that the City of San Diego did not have the ability to withdraw their share of water from Lake Hodges. However,
in 2014, the City of San Diego obtained the ability to withdraw their share of water from the lake as part of the San
Diego County Water Authority's (SDCWA) Emergency Storage Project. As such, the City of San Diego, Santa Fe
Irrigation District, and San Dieguito Water District negotiated an
amendment to the existing Lake Hodges agreement to reflect these Potable Water Supply
new changes to the operations of the lake. This amendment was 5 -Year Average
finalized in 2014 and redefined how the District could utilize water
from Lake Hodges. _
Typically, utilizing local water is significantly less expensive to the
District than purchasing imported untreated water. Therefore, when AV
available, the District aims to maximize its use of local water in order Local
to realize that cost benefit. However, given that the availability of Water
local water is greatly impacted by local weather and rainfall 34%
conditions, it is not always possible to substantially meet demand with Total
local water, and the ratio of local to imported water can vary greatly Imported
from year -to -year. For example, in FY 2010/11, local water '6fi%
accounted for about 69% of the District's potable water supply;
however, in FY 2014/15, local water only accounted for 10% of the
supply. Over the past five years (FY 2011/12 through FY 2015/16),
local water has accounted for an average of 34% of the District's
potable water supply.
Both imported treated and untreated water are purchased from SDCWA, which receives water from a variety of
sources. The Metropolitan Water District of Southern California (MWD) accounts for nearly 41% of SDCWA's water
supply and receives water from Northern California through the State Water Project and from the Colorado River
through the Colorado River Aqueduct. 22% of SDCWA's supply is received from a transfer agreement with the
Imperial Irrigation District, and another 17% is received from the All- American and Coachella canal lining agreements.
Approximately 6% of supply is produced by the newly active Carlsbad Desalination Plant, and the remaining 14% is
supplied from other minor sources including groundwater, surface water, and recycled water. In reaction to the
major drought that occurred in the early 1990's, SDCWA has been actively diversifying its water supply, going from
only two sources and 95% reliance on MWD in 1991, to a projected 8 sources and 21% reliance on MWD by 2020.
17
The District became a member of SDCWA in 1948,
obtaining the right to purchase and distribute imported
water from the wholesaler. As the District jointly owns
and operates a water treatment plant with the Santa Fe
Irrigation District (SFID), the District primarily purchases
untreated water from SDCWA and treats the water at
the plant. However, in the event that the water
treatment plant is unavailable, the District has the ability
to purchase and distribute treated water directly from
SDCWA. Utilizing imported treated water from SDCWA
is the most expensive option to the District and is only
used when absolutely necessary.
Potable Water Demand
IM
state water Pro)eet
(Bay - Delta)
Local SU
and Con&ervakiGn
Cdorado i
Water use (demand) in the District is affected by many factors, including weather, population growth, the local
economy, and conservation actions. Cycles of drought and recovery are common. The 1980's brought a steady
increase in water use which peaked in Calendar Year (CY) 1990 when the District's demand was 8,650 acre -feet
(AF) of water. However, a major drought in the early 1990's resulted in water rationing and increased water
conservation measures, leading to a 24% drop in demand by CY 1992. As these drought conditions eased and the
local economy grew in the late 1990's, demand again
2014 -2016 State -Wide Drought increased to an all -time high of 8,935 AF in 1997.
In January 2014, Governor Brown announced a State of Emergency
in California due to state -wide drought conditions. In response to this
declaration, the District moved into a Level 1 voluntary Water Supply
Shortage Condition in February 2014. In April 2014, Governor Brown
directed the State Water Resources Control Board ( SWRCB) to
adopt emergency regulations to conserve water state -wide in
response to drought conditions. These emergency regulations began
with certain mandatory water -use restrictions across the state, which
triggered the District's Level 2 mandatory Water Supply Shortage
Condition in August 2014. In April 2015, as drought conditions
worsened in the state, the SWRCB approved further regulations
which would achieve a 25% reduction in state -wide water demand.
These regulations assigned each water agency with a specific
demand reduction target, with the District's target being set at a 28%
reduction from 2013 demand levels. In response, the District
declared a Level 3 Mandatory Water Supply Shortage Condition in
May 2015, which enacted further water -use restrictions. Although
much of the state was still in significant drought conditions, in
response to feedback and lobbying from water agencies and industry
leaders, the State revised its regulations in March 2016, which
reduced the District's demand reduction target from 28% to 20 %.
Due to the revised regulations, the District lowered its response back
to a Level 2 Water Supply Shortage Condition. The SWRCB again
revised its emergency regulations in May 2016, this time to allow
agencies to self- certify their availability of water supplies, with
agencies that were able to show sufficient water supplies no longer
being subject to a specific demand reduction target. In June 2016,
the District self - certified its supplies and in July 2016 the District was
able to move back to a Level 1 Voluntary Water Supply Shortage
Condition, relaxing many of the mandatory water -use restrictions that
were in place. After years of drought, the winter of 2016/17 brought
substantial rain and snowfall to most areas of the state, finally
offering much needed drought relief and replenishing source water
reservoirs. Due to the positive change in conditions, the District's
water wholesaler declared an end to drought conditions in San Diego
County in January 2017. Following that lead, and as rainfall filled the
District's local water source at Lake Hodges, the District declared an
end to its voluntary Water Supply Shortage Condition in March 2017.
Finally, the State declared an end to the drought in April 2017.
From 1998 to 2007, demand stayed relatively consistent,
although on a slight downward trend as more of a focus
was placed on water conservation. In CY 2007, demand
was at 7,753 AF. During the 2008 through 2011 drought,
District customers again responded by significantly
reducing their demand. By CY 2012, demand was 6,307
AF, which is 19% lower than demand in 2007. However,
as the District came out of drought conditions due to
several rainy years, demand again crept upwards,
reaching 6,727 AF in CY 2014.
2014 also brought the beginning to another period of
drought conditions (see sidebar). In response to State -
mandated water demand reductions, District enforced
mandatory water -use restrictions, and increased water
conservation efforts, a drastic decline in water demand
occurred in CY 2015 and CY 2016. Demand in these
years dropped to 5,690 AF and 5,367 AF respectively.
CY 2016 demand was down 40% from the all -time high
demand in CY 1997 and down 20% from as recently as
CY 2014.
Future Potable Water Supply and
Demand Projections
While demand has been decreasing in recent years due
to the drought and water -use restrictions, recent storms
throughout the state have significantly improved
conditions in the Sierra snowpack and reservoir levels.
As a result, the District declared an end to drought
conditions in March 2017, and the State followed by
18
declaring an end to the drought in April 2017. With the District no longer in drought conditions, it is anticipated that
customer demand will begin to gradually increase, due to the fact that customers are no longer being subject to
mandatory water -use restrictions. Although District customers have always shown a commitment to water
conservation, history shows that a rise in demand typically occurs when drought conditions end.
Potable water purchases are projected to increase 5% in FY 2017/18 and another 2% in FY 2018/19. On top of this,
annual account growth of 0.5% is factored in. With these assumptions, total potable water purchases are projected to
be 5,802 AF in FY 2017/18 and 5,947 AF in FY 2018/19. These projections represent an increase in demand from
the recent low in FY 2015/16, but are still well below the recent pre- drought high of FY 2013/14.
As a result of the before - mentioned storms and heavy local rainfall in Spring 2017, water levels in Lake Hodges are
high. As of May 21, 2017, Lake Hodges is shown to be at 70% of capacity. This is a significant improvement from
prior years when the lake was at minimum capacity and a minimal volume of local water was available to the District.
The District is projecting to have
approximately 2,850 AF of local water Water Supply Sources (Acre -Feet)
available to utilize from Lake Hodges
as of July 1, 2017. In addition to this, 8,000
it is projected that an additional 1,000 7,000
AF of local water may become 6,000
available from local rainfall and inflow 5,000
into the lake during FY 2017/18.
4,000 -
Given this information, the District is
projecting to be able to satisfy 3,000 -
approximately 65% of its demand 2,000
from local water in FY 2017/18, or 1,000
3,731 AF. As the District anticipates 0
using most of its surplus of local water IN a`� a� a`� N a`� a`� a� a�
in FY 2017/18, it is projected that only `�J `�J G�� �° ��� G�J ��J a�� e�`e z``�
1,486 AF of local water will be ytio�P eyti�4 `�ti `1�P ,�* !yh`P ,�� lti�\� �� °' �� °,
available to satisfy demand in FY F��� ��y� <k �1ti^ ���ti��1ti�
2018/19, or 25% of demand. This AN
amount in FY 2018/19 is based upon
conservative rainfall projections and ■ Local water Imported untreated ■ Imported Treated
lake inflow
Imported treated water is projected to comprise approximately 5% of total demand each year. Imported treated water
is only utilized when the treatment plant is unavailable, either due to planned maintenance or capital project work. As
such, imported treated water is projected to be 290 AF in FY 2017/18 and 297 AF in FY 2018/19.
After local water and imported treated water is calculated, the remaining demand is satisfied by purchases of
imported untreated water from SDCWA. Imported untreated water is projected to account for only 30% of water
purchases (1,781 AF) in FY 2017/18 and then 70% (4,163 AF) in FY 2018/19 as less local water is available.
It should be noted that these projections may change, as future water supply conditions are highly variable depending
on weather, customer demand, and local water availability. If supply conditions change drastically from estimates,
the District will update its projections and adjust the budget accordingly during future updates.
Future Potable Water Purchase and Treatment Cost Projections
The District purchases local water from the City of San Diego and imported water from the San Diego County Water
Authority (SDCWA). Potable water purchase and treatment costs typically comprise about 50% to 60% of the
District's O &M budget.
Since FY 2015/16, by agreement, the District has been paying a fixed monthly charge to the City of San Diego for
access to local water. The District is responsible for paying approximately 11 % of the operations and maintenance
19
costs for Lake Hodges, based upon local water rights. This fixed charge is set regardless of the amount of local
water that the District utilizes and provides the District with greater stability when budgeting for local water purchases.
Local water costs are predicted to be stable during the two -year budget at $6,250 monthly, or $75,000 annually, for
both FY 2017/18 and FY 2018/19.
Imported water, both treated and untreated, is purchased from SDCWA. The District pays a per acre -foot amount to
SDCWA based on the volume of imported water purchased each month, referred to as the commodity cost. The
District also pays various fixed charges to SDCWA each month for access to imported water as a member agency.
Over the years, both commodity
SDCWA Imported Untreated Water costs and fixed charges from
SDCWA have seen steady
$1,20o
$1,000
$800
$600
$400
$200
$1,060
$965 $1,009
$2,SOO,000
$829 $865 $885
greater amount of local water
$2,000,000
projected to be available in FY
2017/18 compared to FY
$1,5oo,o00
2018/19.
The District pays six distinct
$1,000,000
fixed charges to SDCWA for
14/
increases, with this two -year
12% budget being no exception.
These rising costs have been a
10% consequence of increasing costs
8%
from MWD, capital
improvements on SDCWA
6% regional infrastructure, the
addition of the Carlsbad
4% Desalination Plan to the regional
water system, and a reduction in
2i regional water demand levels.
$o o%
CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019 Commodity costs are adjusted
(Actual) (Actual) (Actual) (Actual) (Actual) (Actual) (Estimated) (Projected) on a calendar year basis, every
% Change Per Year _SDCWA untreated water Rate (per acre -foot) January 1. The cost for
imported untreated water is
comprised of a supply component and a transportation component. Imported treated water is also comprised of
these supply and transportation components, in addition to a water treatment component. The imported treated
water rate is projected to increase 4.3% in CY 2018 and then estimated to increase another 5% in CY 2019. The
imported untreated water rate is projected to increase 4.6% in CY 2018 and then estimated to increase another 5% in
CY 2019. From these rates and the above discussed water purchase projections, imported treated water costs are
projected to be $371,909 in FY 2017/18 and $398,962 in FY 2018/19. Imported untreated water costs are projected
to be $1,755,325 in FY 2017/18
and $4,298,621 in FY 2018/19. SDCWA Fixed Charges
The large shift in imported
untreated water costs between
$2,SOO,000
the two years is due to the
greater amount of local water
$2,000,000
projected to be available in FY
2017/18 compared to FY
$1,5oo,o00
2018/19.
The District pays six distinct
$1,000,000
fixed charges to SDCWA for
access to imported water. Four
$500,000
of these fixed charges are paid
directly to SDCWA, while two
$o
21.8%
18.3%
12.3%
-3.0%
-6.2%
25A
20%
15%
10%
5%
o%
-5%
-10%
are pass - through charges to FY 12/13 FY 13114 FY 14/15 FY 15116 FY 16/17 FY 17118 FY 18/19
MWD. Five of the six fixed (Actual) (Actual) (Actual) (Actual) (Budget) (Proposed) (Proposed)
charges are adjusted on a % Change Per Year _SDCWA Fixed Charges (Total Dollars)
calendar year basis, every
January 1, while the remaining charge is updated on a fiscal year basis, every July 1. Fixed Charges are generally
based upon each agency's historical average of purchases of imported water from SDCWA (either 3 -year, 5 -year or
10 -year averages) with that average amount being charged on a per acre -foot rate. On a calendar year basis,
20
SDCWA fixed charges are projected to see a net increase of 13.9% in CY 2018 and then are estimated to increase
by 4.8% in CY 2019. As has been the trend recently, overall the District's fixed charge costs are increasing due to
several factors; SDCWA per acre -foot rates for fixed charges are increasing, new fixed charges have been added in
recent years, and the District's average purchases used to calculate the charges are increasing (due to some lower
imported water use years rolling off the average and some higher imported water use years rolling on). Overall,
SDCWA fixed charges are estimated to increase 12.3% in FY 2017/18 and increase 9.2% in FY 2018/19. Fixed
charges are projected to be $1,902,324 in FY 2017/18 and $2,077,954 in FY 2018/19.
Water treatment costs are another large and variable budget item which are dependent upon total demand and the
composition of water utilized (local versus imported). Water treatment costs are generally more expensive when the
District utilizes more local water and less expensive when more imported water is used. Local water requires
additional chemicals and energy to treat and therefore sees higher costs in those areas. With a projected 65% local
water to 35% imported water split in FY 2017/18, water treatment costs are projected to increase to an average rate
of $400 /AF. However, they are expected to decrease to $350 /AF in FY 2018/19, when a 25% local water to 75%
imported water split is projected. As discussed above, total volume treated is expected to increase slightly each year.
Overall, the water treatment projection shows a 16.7% increase in FY 2017/18 and a 10.4% decrease in FY 2018/19.
Water treatment costs are projected to be $2,323,770 in FY 2017/18 and $2,081,450 in FY 2018/19.
Recycled Water
Recycled water, which is provided by the San Elijo Joint Powers Authority ( SEJPA), is available to customers in a
limited area of the District. Recycled water is used primarily for landscaping purposes at parks, on roadway medians,
and for commercial properties, as well as for use at the Encinitas Ranch Golf Course. The District purchases
recycled water that has been treated at the San Elijo Water Reclamation Facility and sells it to customers within the
District. SEJPA owns and maintains the recycled water distribution system within the District, while the District owns
and maintains the recycled water meters and bills customers for consumption. Recycled water makes up
approximately 9% to 11 % of the District's water supply on an annual basis.
Currently, the District has a take -or -pay commitment for a minimum
of 400 AF of recycled water per year with SEJPA, excluding sales to
the Encinitas Ranch Golf Course. While the District met this
minimum commitment in FY 2014/15, recycled water customers
reduced their demand in recent years, even though recycled water
is a drought -proof water supply. As such, the District did not meet
its commitment in FY 2015/16 and may fall just short of 400 AF in
FY 2016/17.
The District is projecting to purchase 410 AF of recycled water in FY
2017/18 and 420 AF in FY 2018/19, due to the addition of some
new customers and from small increases in demand now that the
District is removed from drought conditions. Recycled water is
purchased from SEJPA on a commodity basis with rates typically
being adjusted every July 1. SEJPA has informed the District that
4% increases are planned for July 1, 2017 ($1,466 / AF) and July 1,
2018 ($1,525 / AF). At those rates and purchase levels, recycled
water purchase expenditures are proposed at $601,600 in FY
2017/18 and $640,500 in FY 2018/19.
Potential Future Water Supplies
Potable vs. Recycled Water
5 -Year Average
Recycled
Water
10%
Potable
Water
90%
The District is also exploring the potential for other local potable water supplies which are economically viable. The
most promising potential project is potable water reuse. Potable water reuse is defined as the reclamation and
treatment of wastewater and the eventual returning of that water to the potable water treatment plant for further
treatment, either directly or through surface water augmentation. Several agencies are exploring potable water reuse
projects and some regional agencies currently have demonstration projects underway, including the City of San
PAI
Diego and the Padre Dam Municipal Water District. The State of California is currently working with industry groups
and agencies to further develop regulations which would pave the way for the safe implementation of future potable
reuse projects.
The District, in partnership with the Santa Fe Irrigation District (SFID) and the San Elijo Joint Powers Authority
( SEJPA), has begun exploring the potential for a joint potable reuse project. Due to the fact that much of the
infrastructure is already in place to treat wastewater at the San Elijo Water Reclamation Facility and transport that
water up to San Dieguito Reservoir and ultimately to the R.E. Badger Water Filtration Plant, a viable potable reuse
project may have long -term potential.
In 2016, the three agencies hired Trussell Technologies to perform a Potable Reuse Feasibility Study which delivered
three technical memorandums outlining the potential opportunities and challenges of a potable reuse project. The
primary conclusion of the Study is that a potable reuse project utilizing surface water augmentation could be
permitted with the Division of Drinking Water. A near -term project could produce enough drought -proof water to
satisfy approximately 9% of the District's potable water demands, while the ultimate project could satisfy
approximately 35% of the District's demands. The cost of potable reuse water is estimated to range between $1,500
and $2,000 per acre -foot, which is not excessive considering the current cost of fully treated water and potential
future cost increases for imported water. Should grant funding be received for this project, the cost per acre -foot
would be lower.
The next step in the development of this project will be the conducting of a Potable Reuse Implementation Study and
the formation of a Project Management Team (PMT). The PMT will consist of District, SFID, and SEJPA staff along
with engineering, finance /grant, operations, public outreach, and water resource consultants that have experience in
potable reuse and /or water supply development projects.
While it is still very early in the process, and significant operational and regulatory challenges remain with
implementing such a project, the District feels that the potential benefits of developing an additional local, drought -
proof water source make pursuing a potable reuse project worthy. Staff will keep the Board and public informed of
future developments in this area as the project progresses.
NA,
Sources of Funds
The District has three main sources of
operating and non - operating revenue:
$20,000,000
potable and recycled water sales, potable
and recycled meter service charges and
X18,000,000
property taxes. Together, these three
sources comprise over 92% of the District's
$16,000,aoo
annual revenue. The remaining 8% of
�14,000,000
District revenues are comprised of billing
and engineering fees, pass- through charges,
$12,000,000
capacity buy -in fees, investment and
property earnings, and other miscellaneous
$10,000,000
revenue. Total District revenues under the
$8,000,000
current water rates and charges are
projected to be $17,451,692 in FY 2017/18
$6,000,000
and $17,825,962 in FY 2018/19.
$4,000,000
Potable Water Sales
$2,000,000
Sources of Funds
Potable water sales are the single largest $o _I -
source of revenue for the District, projected FY 2011/18 Proposed FY2018/19 Proposed
to make up approximately 61% of total
District revenue. However, water sales are ■ Water sales ■ water Meter service charges
highly variable, depending upon customer Property Taxes ■Other Revenues
demand, weather, and legislative mandates
(drought), making budgeting for water sales revenues a challenge. Recent potable water sales trends have seen a
recent high of 6,734 AF in FY 2013/14 to a recent low of 5,239 AF in FY 2015/16. As discussed in the "Water
Portfolio" section of this document, recent state -wide drought conditions led the State to call for mandated reductions
in water demand from every water supplier beginning in April 2015. District efforts to comply with these mandates
resulted in significant decreases in water sales over the last few years. While the District, per its Water Supply
Shortage Response Plan, was able to implement drought rates during a portion of this period to help mitigate losses
in revenue, the District still realized substantial declines in revenue due to the reduced sales.
Major storms throughout the state in Winter /Spring 2017 resulted in significant snowfall and rainfall, which have
drastically improved the Sierra snowpack and filled local and State reservoirs. As a result of these improved
conditions, the District declared an end to drought conditions in March 2017, and the State declared an end to the
drought in April 2017. As a result of drought conditions ending and water -use restrictions being rescinded, the District
is projecting gradual increases in customer demand in upcoming years. Potable water sales are projected to
increase 5% in FY 2017/18 and 2% in FY 2018/19. Additionally, account growth is anticipated at 0.5% annually,
which further increases sales projections. Under currently approved water rates, with these projected sales levels,
potable water sales revenue is projected to be $10,648,431 in FY 2017/18 and $10,914,549 in FY 2018/19.
Recycled Water Sales
Recycled water sales comprise roughly 5% of total District revenue. While recycled water is a drought -proof water
supply, recycled water customers also decreased their demand during the drought. With the drought now over, the
District is projecting a small increase in recycled water sales each of the next two years. Recycled water sales are
projected at 410 AF in FY 2017/18 and 420 AF in FY 2018/19. Based upon currently approved water rates, with
these projected sales levels, recycled water sales revenue is projected to be $828,609 in FY 2017/18 and $848,819
in FY 2018/19.
23
Total Water Sales Revenues
Together, potable and recycled water sales revenues are projected to comprise approximately 66% of total District
revenue.
The District received approval by the Board of Directors in April 2017 to conduct an update to its water rate study in
order to evaluate the District's revenue requirements and to determine if water rate and charge adjustments are
necessary. The study is expected to be completed in the late -Fall 2017, with any necessary water rate adjustments
being implemented in early 2018. Any such adjustments would increase potable and recycled water sales revenues.
Potable Water Meter Service Charges
The second largest source of revenue for the District is from potable water meter service charges, which make up
roughly 22% of total District revenue. Water meter service charges are the fixed portion of a customer's water bill,
based upon the size of the water meter serving the property. Calculated upon the District's current base of
approximately 11,740 connections, the District is projecting to receive $3,760,753 in revenue from potable water
meter service charges in FY 2017/18 and $3,778,497 in FY 2018/19. The small increase is based upon projected
0.5% annual account growth.
Recycled Water Meter Service Charges
Similar to potable water meter service charges, recycled water meter service charges are a fixed charge based upon
the size of the recycled water meter serving a property. Calculated upon the District's current base of 87
connections, the District projects to receive recycled water meter service charge revenue in the amount of $84,440 in
both FY 2017/18 and FY 2018/19. Due to the more infrequent installation of recycled water meters, no account
growth is projected over this period. Projected recycled water meter service charge revenue equates to less than 1 %
of total District revenue.
Total Water Meter Service Charges
Together, potable and recycled water meter service charges project to comprise approximately 22% of total District
revenue.
The District received approval by the Board of Directors in April 2017 to conduct an update to its water rate study in
order to evaluate the District's revenue requirements and to determine if water rate and charge adjustments are
necessary. The study is expected to be completed in the late -Fall 2017, with any necessary water rate adjustments
being implemented in early 2018. Any such adjustments would increase potable and recycled water meter service
charge revenues.
Property Taxes
Property taxes are the final major category of District revenue, making up approximately 5% of total District revenue.
Originally operating as an irrigation district, the San Dieguito Water District has maintained its rightful share of
property tax revenue, even after becoming a subsidiary district of the City of Encinitas. The District has seen property
tax revenues increase each of the last five years due to the continued strength of the local real estate market and
increasing valuations. Property tax revenues are projected to be $900,000 in FY 2017/18 and $940,000 in FY
2018/19.
Other District Revenues
Other District revenues include a wide range of smaller and sometimes less predictable revenue sources, including
billing charges, engineering fees, capacity buy -in fees, interest earnings, property earnings and other miscellaneous
revenue such as cost recovery, refunds, and Infrastructure Access Charge (IAC) revenue, which is collected by the
District and passed- through to the San Diego County Water Authority (SDCWA).
24
The District's billing charges and engineering fees are dictated by its Miscellaneous Fee and Charge Study, which
was last conducted in 2013 and approved by the Board in 2014. In the current budget, existing fees and charges are
being utilized to calculate revenues in these areas. However, engineering fees are projected to increase and billing
charges are projected to decrease due to revised volume estimates. An update to the District's Miscellaneous Fee
and Charge Study is projected to occur during this two -year budget.
Interest and property earnings have been trending upwards in recent years and are projected to increase in the two -
year budget. Interest rates on invested funds have improved slightly, resulting in better returns. Furthermore,
improved rental terms with users of District property and renegotiated terms on several cellular site leases have
resulted in increased revenues from property usage.
Capacity fee revenue is derived from the District's Capacity Fee Study, which sets an amount that customers must
pay to "buy -in" to the water system when a new water meter is purchased. Based upon current development
projections, capacity fee revenue is projected to remain flat each of the next two years.
IAC revenue is received from customer billings. Updated every January 1, with customers being billed based upon
the size of the water meter serving their property, SDCWA sets the IAC amount, which is for access to the regional
water system, and bills the District as a fixed charge. The District then collects this revenue from its customers and
passes the amount received to SDCWA in -kind, essentially making this a revenue - neutral item with a corresponding
amount on the expenditure side of the budget.
Combined, these other revenues comprise approximately 7% of total District revenue, projected to total $1,229,459 in
FY 2017/18 and $1,259,657 in FY 2018/19.
Uses of Funds
Estimated total District expenditures are $16,867,979 for FY 2017/18 and $19,852,408 for FY 2018/19. Funds are
used for a variety of purposes including operating expenses, capital projects, debt service, and fleet purchases.
$22,000,000
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
Uses of Funds
FY 2017/18 Proposed FY 2018/19 Proposed
■ water Purchases &Treatment ■Capital Improvement Program
Salaries & Benefits ■ Debt Service
■ Internal Cost Allocation ■ Other Department Expenditures
Potable Water Purchases
Potable water purchases are the largest
component of the District's budget and are
projected to range from 25% to 35% of total
annual expenses and from 32% to 45% of
the District's operating budget. As discussed
in detail in the "Water Portfolio" section of
this document, budgeting for water
purchases is a highly variable and complex
process, with many assumptions being made
based upon historical and projected data.
The District has two sources of potable
water, local water from its share of rights to
water from Lake Hodges, and imported water
purchased from SDCWA. The District's
budget for potable water purchases can vary
greatly depending upon the ratio of local
water used compared to imported water.
As discussed in previous sections, with the
District currently out of drought conditions,
gradual increases in potable water
purchases are projected each of the next two
years. Potable water purchases are
projected at 5,802 AF in FY 2017/18 and
25
5,947 AF in FY 2018/19, which represent 5% and 2% increases in demand respectively with 0.5% annual account
growth projections factored in.
Due to significant local rainfall, which has filled Lake Hodges, the District currently has a large volume of local water
available. Therefore it is estimated that 65% of demand in FY 2017/18 will be met with local water, potentially
offering sizeable relief to the budget in that year. However, based upon conservative projections, it is projected that
only 25% of demand will be met with local water in FY 2018/19. The District pays a fixed monthly amount by
agreement to the City of San Diego for access to local water from Lake Hodges. For each of the two years, this
amount is estimated to be $6,250 per month, or $75,000 annually, regardless of the amount of local water utilized.
Imported water is purchased from SDCWA. The District pays a per acre -foot amount based upon the volume of
water purchased each month (commodity) and also pays various fixed charges to SDCWA as a member agency for
access to imported water.
It is estimated that 5% of total potable water demand will be satisfied from imported treated water each year. Treated
water is used during times when the District's water treatment plant is unavailable, either due to planned maintenance
or capital project work. The SDCWA imported treated water rate is estimated to increase 4.3% in CY 2018 and then
projected to increase another 5% in CY 2019. Overall imported treated water costs are estimated to increase 6.3%
in FY 2017/18 and 7.2% in FY 2018/19.
SDCWA imported untreated water is estimated to account for 30% of total potable demand in FY 2017/18 and 70% of
demand in FY 2018/19. Untreated water is utilized when local water is not available. The SDCWA imported
untreated water rate is estimated to increase 4.6% in CY 2018 and then projected to increase another 5% in CY
2019. Due to the sizeable changes in estimated local water availability each of the next two years, reliance on more
expensive imported untreated water will also vary greatly and thus reflect large swings in estimated expenditures.
Overall, imported untreated water costs are estimated to decrease 46.2% in FY 2017/18 (based upon increased local
water availability) but then increase 144.9% in FY 2018/19 (as local water availability is estimated to be reduced).
Fixed costs from SDCWA are also estimated to increase each of the next two years. The District currently pays six
distinct fixed charges (four directly to SDCWA and two pass- through charges to the Metropolitan Water District) for
access to imported water. Fixed Charges are generally based upon each agency's historical average of purchases of
imported water from SDCWA with that average amount being charged on a per acre -foot rate. As has been the trend
recently, overall the District's fixed charges are increasing as generally fixed charge costs from SDCWA have been
increasing and the District's average purchases used to calculate the charges have increased (due to some lower
imported water use years rolling off the average and some higher imported water use years rolling on). Overall,
SDCWA fixed charges are estimated to increase 12.3% in FY 2017/18 and increase 9.2% in FY 2018/19.
Overall, the Potable Water Purchases expenditures are projected to be $4,104,558 in FY 2017/18 and $6,850,537 in
FY 2018/19.
Water Treatment
All local and imported untreated water is treated at the R.E. Badger Water Filtration Plant, which is jointly owned with
the Santa Fe Irrigation District. Water treatment costs are generally more expensive when the District utilizes more
local water and less expensive when more imported water is used. Local water requires additional treatment
processes to treat the water and therefore sees higher costs in this area. With a projected 65% local water to 35%
imported water split in FY 2017/18, water treatment costs are projected to increase to an average rate of $400 /AF.
However, they are expected to decrease to $350 /AF in FY 2018/19, when a 25% local water to 75% imported water
split is projected. As discussed above, total volume treated is expected to increase slightly each year. Overall, water
treatment expenditures are projected to be $2,323,770 in FY 2017/18 and $2,081,450 in FY 2018/19.
Recvcled Water Purchases
Recycled water is purchased from the San Elijo Joint Powers Authority ( SEJPA) to serve to District customers.
Recycled water purchases are projected to be 410 AF in FY 2017/18 and 420 AF in FY 2018/19 as small increases in
demand are projected as the District comes out of drought conditions. In addition, SEJPA is scheduled to implement
26
a 4% increase on wholesale recycled water costs on both July 1, 2017 and July 1, 2018. Overall, recycled water
purchases expenditures are projected to be $601,060 in FY 2017/18 and $640,500 in FY 2018/19.
Salaries
The proposed two -year budget provides salary and benefit costs for a staff of 24.0 Full Time Equivalents (FTE),
including Administrative, Customer Service, Field Operations and Engineering staff. This level of staffing has been
consistent since FY 2013/14. The District, like the City, is currently operating under the July 1, 2015 Memorandum of
Understanding (MOU) with SEIU Local 221. As set forth in the MOU, cost of living salary increases are scheduled at
2% on July 1, 2017 and 2% on July 1, 2018. These negotiated increases are calculated into the District's proposed
salary budgets in the two -year budget. Other proposed adjustments to salaries include standard employee step
increases, advancements within multi -level classifications, and updates to the District's overtime and vacation buyout
budgets. Overall, salary expenditures are projected to be $2,046,069 in FY 2017/18 and $2,136,528 in FY 2018/19.
Benefits
Employee benefits, including health coverage and other insurance costs, are projected to remain stable during FY
2017/18 and FY 2018/19 under the terms in the MOU. CalPERS "normal" retirement contribution rates for active
employees are also remaining relatively stable over the course of the two -year budget. However, the District's
payments towards its CalPERS Unfunded Accrued Liability (UAL) are projected to increase each of the next two
years. The District's UAL payment is discussed further in the "District Personnel and Organization" section of this
document. Overall, benefit expenditures are projected to be $1,012,558 in FY 2017/18 and $1,111,575 in FY
2018/19.
Capital Imorovement Proaram (CIP
The District annually appropriates funding for capital improvement projects. Major capital project categories include
District infrastructure projects, District work projects and studies, and Joint Facilities projects with the Santa Fe
Irrigation District (SFID). Projects are guided and scheduled by various needs and studies, including the District's
Urban Water Management Plan, Water Master Plan, Joint Facilities Master Plan, Strategic Plan, and field
observation.
The Capital Improvement Program is proposed to make up approximately 16% to 17% of the total District budget.
New appropriations to the CIP are projected to be $2,905,000 in FY 2017/18 and $3,125,000 in FY 2018/19. These
appropriations are consistent with appropriation levels in recent years, as the District is jointly funding major
improvement to various Joint Facilities and performing several major District projects and studies. Carry -over
appropriations from prior years are projected to be $5,482,359 as of the 3rd Quarter of FY 2016/17, with about 45% of
this funding appropriated to Joint Facilities projects and 55% to District projects. See the "Capital Program" section of
this document for more information on the CIP and its various individual projects.
Debt Service
The District's total debt obligation is $1,401,848 in FY 2017/18 and $1,404,698 in FY 2018/19, including principal and
interest payments for the District's 2014 Water Revenue Refunding Bonds and 2007 R.E. Badger Water Refunding
Bonds. The 2014 Water Revenue Refunding Bonds were a recent refunding of the District's 2004 Water Revenue
Refunding Bonds, in order to take advantage of lower interest rates. The refunding saved the District about $250,000
annually through the remainder of the loan. In addition to this, the District budgets $3,004 annually for administration
costs on the debt. Debt service payments comprise approximately 8% of the total District budget. For further
information on the District's outstanding debt, refer to the "Long -Term Debt" section of this document.
Internal Cost Allocation
The District pays an Internal Cost Allocation to the City for services provided in the areas of Finance, Fleet
Maintenance, Human Resources, Information Technology, Records Management, Risk Management, and other
support services. The City recently updated its Cost Allocation Plan (CAP) in early 2017 in anticipation of the two -
year budget to ensure the allocations for these services provided are current. As the CAP is typically updated every
27
two years in conjunction with the budget, the District usually sees a larger increase in the first year of the budget and
a much smaller increase in the second year. As a result of the updated CAP, the District's Internal Cost Allocation
expenditure is projected to be $1,210,730 in FY 2017/18 and $1,212,084 in FY 2018/19. This amount is
approximately 7% of the total District budget and 10% of the operating budget.
Other Department Budget Costs (Materials & Supplies / Contracts & Services / Debt & Finance)
Other District expenditures include costs for general operating needs in the form of materials, supplies, contracts and
services. Such costs include, but are not limited to, insurance costs, utilities, legal fees, billing supplies, banking
costs, computer software and hardware expenses, safety and training costs, postage, parts and materials for system
maintenance and repair, water conservation and outreach funding, as well as professional, maintenance and
technical services contract costs. The District is budgeting $1,202,386 for these costs in FY 2017/18 and $1,190,036
in FY 2018/19, or approximately 10% of the District's operating budget. For additional details related to these costs,
refer to the individual Division pages in the "Operating Program" section of this document.
Fleet Purchases
The District budget includes appropriations for the replacement of existing vehicles that are past their useful lifespan
and for the purchase of new vehicles which are deemed necessary to improve District operations. The District is
appropriating $60,000 from its Fleet Replacement Fund for the purchase of a used 2009 Vacuum Truck in FY
2017/18. This will be a new addition to the District's fleet and is being purchased used from the City of Encinitas
Wastewater Division with monies already available in the Fleet Replacement Fund balance. In FY 2018/19, the
District is proposing to replace an existing Heavy Duty Service Truck, which is 10 -years old and has passed its useful
life, with a new model. This purchase has been previously funded via contributions to the Fleet Replacement Fund.
Fund Budget Summaries
The following summaries provide a look at the District's budget by fund. This is a useful tool in examining how all of
the District's funds relate to each other in terms of transfers between funds and fund balances. Each table is a look
at transactions within a single fiscal year and includes the beginning fund balance, revenues, expenditures, transfers
between funds, the current year balance, and the projected ending fund balance. Projected changes in fund
balances indicate corresponding changes in projected reserve levels, consistent with long -term planning by the
District.
It should be noted that planning documents such as the Fund Budget Summaries and the Cash Flow documents in
the "Long -Term Planning" section of the document reflect an "additional revenue requirement" in order to meet target
ending fund balances which will satisfy reserve requirements. These "additional revenue requirements" are not
otherwise reflected in the District's proposed two -year revenue projections, which projects revenues under the
District's current water rates.
The District received Board approval in April 2017 to conduct an update to its Water Rate Study in late 2017 to
determine potential water rates plans for FY 2017/18 and FY 2018/19. The District aims to perform an update to its
Water Rate Study every two years to ensure that revenues are sufficient to meet the operating and capital needs of
the District, as well as meeting reserve requirements. Taking information from the approved two -year budget and
final audited FY 2016/17 financial results, District staff and the rate consultant will develop short and long -term
financial plans and model potential revenue adjustments required from water rates and service charges to potentially
satisfy this "additional revenue requirement." Scenarios will be vetted through the public Water Rate Subcommittee
and the full Board of Directors who will have options available to them on how to meet these requirements, including
potentially modifying the information presented in this budget at a later time.
28
District Fund Budget Summaries
Fiscal Year 2016/17 District Fund Budget Summary (Approved)
Beginning FY 2016/17 Additional
Fund Balance Projected Revenue
Fund Name Fund # 07/01/16 Revenues Requirement
FY 2016/17 Interfund Interfund Interfund Projected Ending
Projected Transfers (Rate Transfers Transfers (Debt Interfund Current Year Fund Balance
Expenses Stabilization) (Capital) Service) Transfers (Fleet) Summary 06/30/17
Operations
531
$2,169,237
$16,911,640
$0
($13,146,890)
$536,999
($2,878,629)
($1,405,042)
($124,628)
($106,550)
$2,062,687
Rate Stabilization
531
$1,713,820
$0
$0
$0
($536,999)
$0
$0
$0
($536,999)
$1,176,820
Capital Replacement
532
$6,274,371
$100,000
$0
($3,175,000)
$0
$2,878,629
$0
$0
($196,371)
$6,078,000
Debt Service
534
$0
$0
$0
($1,405,042)
$0
$0
$1,405,042
$0
$0
$0
Fleet Replacement
535
$492,538
$0
$0
($80,000)
$0
$0
$0
$124,628
$44,628
$537,166
Total District Funds
$6,078,000
$10,649,966
$17,011,640
$0
($17,806,932)
$0
$0
$0
$0
($795,292)
$9,854,674
Fiscal Year 2017/18 District Fund Budget Summary (Proposed)
Fiscal Year 2018/19 District Fund Budget Summary (Proposed)
Beginning
FY 2017/18
Additional
FY 2017/18
Interfund
Interfund
Interfund
Projected Ending
Fund Balance
Projected
Revenue
Projected
Transfers (Rate
Transfers
Transfers (Debt
Interfund
Current Year
Fund Balance
Fund Name
Fund #
07/01117
Revenues
Requirement
I Expenses
Stabilization)
(Capital)
Service) Transfers (Fleet)
Summary
06130/18
Operations
531
$2,062,687
$17,351,692
$1,370,593
($12,501,131)
($1,250,520)
($3,015,000)
($1,401,848)
($104,726)
$449,060
$2,511,747
Rate Stabilization
531
$1,176,820
$0
$0
$0
$1,250,520
$0
$0
$0
$1,250,520
$2,427,340
Capital Replacement
532
$6,078,000
$100,000
$0
($2,905,000)
$0
$3,015,000
$0
$0
$210,000
$6,288,000
Debt Service
534
$0
$0
$0
($1,401,848)
$0
$0
$1,401,848
$0
$0
$0
Fleet Replacement
535
$537,166
$0
$0
($60,000)
$0
$0
$0
$104,726
$44,726
$581,892
Total District Funds
$9,854,674
$17,451,692
$1,370,593
($16,867,979)
$0
$0
$0
$0
$1,954,306
$11,808,980
Fiscal Year 2018/19 District Fund Budget Summary (Proposed)
29
Beginning
FY 2018/19
Additional
FY 2018/19
Interfund
Interfund
Interfund
Projected Ending
Fund Balance
Projected
Revenue
Projected
Transfers (Rate
Transfers
Transfers (Debt
Interfund
Current Year
Fund Balance
Fund Name
Fund #
07/01118
Revenues
Requirement
Expenses
Stabilization)
(Capital)
Service) Transfers (Fleet)
Summary
06/30/19
Operations
531
$2,511,747
$17,725,962
$2,392,592
($15,222,710)
($48,546)
($3,207,000)
($1,404,698)
($110,012)
$125,588
$2,637,335
Rate Stabilization
531
$2,427,340
$0
$0
$0
$48,546
$0
$0
$0
$48,546
$2,475,886
Capital Replacement
532
$6,288,000
$100,000
$0
($3,125,000)
$0
$3,207,000
$0
$0
$182,000
$6,470,000
Debt Service
534
$0
$0
$0
($1,404,698)
$0
$0
$1,404,698
$0
$0
$0
Fleet Replacement
535
$581,892
$0
$0
($100,000)
$0
$0
$0
$110,012
$10,012
$591,904
Total District Funds
$11,808,980
$17,825,962
$2,392,592
($19,852,408)
$0
$0
$0
$0
$366,146
$12,175,126
29
Detail of Internal Fund Transfers
FY 2017/18 FY 2018/19
Proposed Proposed
From To Purpose
$3,015,000
$3,207,000
Operating
$1,401,848
$1,404,698
Operating
$104,726
$110,012
Operating
$1,250,520
$48,546
Operating
Capital Replacement Transfer from Operating Fund to Capital Replacement Fund to maintain
Capital Replacement reserve level
Debt Service Transfer from Operating Fund to Debt Service Fund to facilitate principal and
interest payments on District debt.
Fleet Replacement Transfer from Operating Fund to Fleet Replacement Fund to facilitate on-
going vehicle and equipment replacements
Rate Stabilization Transfer from Operating Fund to Rate Stabilization Fund to maintain Rate
Stabilization Reserve level
Fund
FY 2017/18
Proposed
FY 2018/19
Proposed
Capital Replacement Fund
$
3,015,000
$
3,207,000
Debt Service Fund
$
1,401,848
$
1,404,698
Fleet Replacement Fund
$
104,726
$
110,012
Rate Stabilization Fund
$
1,250,520
$
48,546
Total
$
5,772,094
$
4,770,256
Summary of • s Providi
Fund
FY 2017118
Proposed
FY 2018/19
Proposed
Operating Fund
$
5,772,094
$
4,770,256
Total
$
5,772,094
$
4,770,256
30
Overview
The District is proposing a staffing level of 24.0 Full -Time Equivalents (FTE) in both FY 2017/18 and FY 2018/19, with
a total Personnel Budget of $3,058,627 for FY 2017/18 and $3,248,103 for FY 2018/19, including salary and benefits.
Staffing
District staffing has remained consistent at 24.0 FTE's since FY 2012/13, after a District reorganization reduced
staffing from 25.4 FTE's to the current level of 24.0 FTE's. The District is not proposing any restructuring or
reclassifications in the current FY 2017/18 and FY 2018/19 budget.
While not considered permanent staffing, the District also budgets for 250 hours per year of temporary, on -call
staffing in support of customer service functions to ensure that the needs of our customers are met when regular
customer service employees are out of the office or at meetings or trainings for long periods of time. Including salary
and benefits, this temporary staffing is budgeted at $5,488 in FY 2017/18 and $5,600 in FY 2018/19.
Organization
Staffing is primarily divided between three Divisions; the Customer Services Division (includes Administration
functions), the Field Operations Division, and the Engineering & Planning Division. Additionally, portions of certain
positions are administratively charged to the District's Recycled Water Program in order to separate the costs
between serving potable and recycled water customers. Staffing is organized as follows:
Administrative
Superintendent
Ratepayers
Board of Directors
City
Manager (City)
Public Works
Director (City)
General Manager
Operations Program
Superintendent Assistant
Finance
Analyst
Finance
Conservation Utility &
Specialist Field Supervisor
Utility & Maint.
Maint.
Utility & Maint.
Specialist
Utility & Maint.
Technician
Technician
Specialist
Finance
Utility & Maint.
Utility & Maint.
Technician
Technician
Technician
Utility & Maint.
Utility & Maint.
Technician
Technician
Utility & Maint
Technician
Warehouse Utility & Maint.
Coordinator Specialist
Utility & Maint.
Specialist
Utility & Maint.
Specialist
Senior
Engineer
Engineer Utility & Maint.
Specialist
31
Salary and Benefits
The San Dieguito Water District is currently operating under the July 1, 2015 Memorandum of Understanding (MOU)
between the City of Encinitas / San Dieguito Water District and Service Employees International Union — Local 221
(SEIU). The MOU has a four -year term and is scheduled to expire on June 30, 2019, which is the end of the current
two -year budget. Management and non - represented staff typically see their salary and benefits mirror what was
negotiated under the MOU.
Salaries
As negotiated in the MOU, the following across - the -board salary increases shall occur during the current two -year
budget:
July 1, 2017: 2.0% increase
July 1, 2018: 2.0% increase
Aside from these negotiated increases, the District also projects and budgets for standard merit step increases for
employees and advancements within multi -level classifications. As of July 1, 2017, 14 of the District's 24 employees
are "topped -out" in their current classifications, meaning they have no ability for further step increases or level
advancements. The other 10 employees still have room to either advance in their classification or earn additional
merit increases.
Allowances
The District is making minor modifications to other employee allowances, such as overtime, vacation buy -out, and
auto allowance costs, which make up a small portion of the District's entire budget for Salaries.
The District's overtime budget is increasing from $54,000 to $66,500 each of the two years. The overtime budget has
not increased substantially since FY 2013/14, even though wages and salaries have increased annually since July 1,
2015 due to negotiated increases in the MOU. Overtime is also increasing due to proposed night work in support of
the District's valve maintenance program. Overall, overtime comprises approximately 3.2% of the District's salary
budget and only 2.2% of the District's total personnel budget.
Vacation buy -out, which accounts for payments when employees decide to cash -out earned vacation credits as
allowed by the MOU, is decreasing slightly in the two -year budget based upon historical averages and projected
usage.
This District's General Manager earns an auto allowance of $1,800 per year. This amount is unchanged in the two -
year budget from prior years.
Total Salaries
Overall, with these changes noted above, the District is budgeting for a 1.4% increase in salary costs in FY 2017/18
and a 4.4% increase in salary costs in FY 2018/19.
Benefits
Under the MOU, the Flexible Benefit allowance provided by the San Dieguito Water District to employees is
scheduled to remain flat during the two -year budget at an amount of $13,300 per year per employee.
32
Retirement Contributions and Other Insurance
Other employee benefit costs include CalPERS
Employee Contributions (for currently active employees)
and various insurance costs, such as for Medicare,
workers' compensation, unemployment, and life
insurance. Overall, costs for currently active employees
in these areas are decreasing slightly in FY 2017/18 and
increasing minimally in FY 2018/19.
CalPERS Unfunded Accrued Liability (UAL)
Beginning in FY 2015/16, in response to new
Government Account Standards Board (GASB) and
CalPERS regulations, the District began budgeting for
and making payments towards its UAL. Starting with the
District's June 30, 2013 valuation report, and annually
thereafter, CalPERS began providing agencies that
participated in their shared risk pool (agencies with less
than 100 employees) with individual accounting of their
share of the liabilities in the pool. With this information
now available, CalPERS is now able to assign valuations
to each agency's share of normal costs, funded accrued
liabilities, and unfunded accrued liabilities.
City / District Pension Reform
In recent years, the District, like many agencies, has undergone
pension reform as a way to control long -term pension costs. The
District currently has three tiers of retirement plans, with differing
levels of benefits, depending on when the employee was hired:
TIER ONE (Classic Plan)
Employees hired on or before October 12, 2012
2.7% for each year of service at age 55
Final compensation based upon single highest year of pay
TIER TWO (City Plan)
Employees hired between October 13, 2012 and December 31, 2013
2.0% for each year of service at age 60
Final compensation based upon highest three -year average pay
TIER THREE (PEPRA Plan)
Employees hired on or after January 1, 2013
2.0% for each year of service at age 62
Final compensation based upon highest three -year average pay
Of the District's current employees, 63% fall under Tier One benefits,
12% are in Tier Two and 25% will receive Tier Three benefits. Over
time, as existing employees retire or leave their employment with the
District, and new employees are hired, a greater percentage of
employees will fall under Tier Three benefits instead of Tier One,
which will ultimately reduce the District's pension costs.
For the most current valuation period, ending on June 30, 2015, the Districts total UAL is stated as $5,431,524. The
District's total UAL is funded at a level of 74.2 %, with a market value of $15,673,384 in funded assets. The liability is
charged with 7.5% interest annually. CalPERS is expecting that agencies pay down their UAL, using a minimum
recommended 30 -year amortization schedule. In order to ease the burden on agencies in terms of budgeting for
these new payments, the CaIPERS recommended amortization has payment amounts that ramp up over the first 21
years and then ramp back down until the liability is paid off in the 301h year.
The District made initial payments of $242,181 in FY 2015/16 and $277,184 in FY 2016/17. In the two -year budget,
payments are scheduled to be $338,455 in FY 2017/18 and $423,491 in FY 2018/19. It should be noted that future
payment amounts may change due to changes to CalPERS assumptions and returns on CalPERS investments.
Given the amount of the unfunded liability, the payment structure of the recommended repayment plan, and the high
interest rate on the outstanding balance, the District hired an independent actuarial in 2015 to evaluate the benefits
and risks of potential alternative repayment options for the District. Potential alternative repayment options evaluated
included shorter amortization
Current Projected CaIPERS UAL Payments schedules (20 -year or 25- year),
level installments instead of
$s000rto increasing installments, and
$7aa,x> evaluating the benefit of making
$600, strategic lump sum payments to
$500," pay down the balance. While it
$400,000 was shown that many of the
$300.00a various alternatives would reduce
$200.000 interest costs to the District and
$10VOO therefore reduce the overall
$0 repayment cost over the long -
0 ti p Pp �� e �� term, they all required greater
V -V n' - - ti initial investment over the short
■ Annual Installment Am aunt term.
33
Currently the District is continuing to budget for the recommended 30 -year amortization schedule in the two -year
budget. While over the long -term, a more aggressive payment strategy may be optimal, the short -term impacts of
such a strategy need to be weighed against other financial factors and the potential impacts to District customers in
terms of water rates. The District plans to perform an update to the UAL Actuarial Study in 2017 to evaluate
changing conditions related to the UAL and update potential strategies. The results of this study will be brought
before the Board for consideration and will be incorporated in the District's next water rate study to better evaluate
how potential alternative strategies may be funded, if desired.
Total Benefits
Overall, with the above - stated benefit changes, the District is proposing a 5.3% increase in benefit costs for FY
2017/18 and another 9.8% increase in benefit costs for FY 2018/19. As discussed above, this increase is primarily
due to the budgeting of payments related to the District's CalPERS UAL.
34
District Personnel and Organization
Classification Title
FY 14115 FY 15116 FY 16117 FY 17/18 FY 18/19
Actual Actual Approved Proposed Proposed
General Manager
1.00
1.00
1.00
1.00
1.00
Senior Engineer
1.00
1.00
1.00
1.00
1.00
Superintendent
2.00
2.00
2.00
2.00
2.00
Engineer I / II
1.00
1.00
1.00
1.00
1.00
Utility & Maintenance Field Supervisor
1.00
1.00
1.00
1.00
1.00
Utility & Maintenance Specialist I / II
6.00
6.00
6.00
6.00
6.00
Finance Analyst I / 11 / III
1.00
1.00
1.00
1.00
1.00
Water Conservation Specialist I / 11
1.00
1.00
1.00
1.00
1.00
Program Coordinator
1.00
1.00
1.00
1.00
1.00
Utility & Maintenance Technician I / II / III / IV
6.00
6.00
6.00
6.00
6.00
Finance Technician I / II / 111
2.00
2.00
2.00
2.00
2.00
Program Assistant I / 11 / I11
1.00
1.00
1.00
1.00
1.00
District Total
24.00
24.00
24.00
24.00
24.00
FY 14115 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Division FTE's Actual Actual Approved Proposed Proposed
Administration
0.00
0.00
0.00
0.00
0.00
Customer Services
5.25
5.25
5.25
5.25
5.25
Water Purchases and Treatment
0.00
0.00
0.00
0.00
0.00
Recycled Water
1.00
1.00
1.00
1.00
1.00
Field Operations
14.75
14.75
14.75
14.75
14.75
Engineering and Planning
3.00
3.00
3.00
3.00
3.00
District Total
24.00
24.00
24.00
24.00
24.00
FY 2017/18 Proposed FTE's by Division
0
Field Operations Customer Services
14.75 5.25
Engineering and
Planning
3.00
Recycled Water
1.00
35
District Personnel and Organization
nel Expenses
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Salaries / Benefits Actual
Actual
Approved
Proposed
Proposed
Salaries $ 1,878,408
$ 1,857,495
$ 2,017,244
$ 2,046,069
$ 2,136,528
Benefits $ 696,413
$ 830,806
$ 961,991
$ 1,012,558
$ 1,111,575
District Total $ 2,574,821 $ 2,688,301 $ 2,979,235 $ 3,058,627 $ 3,248,103
PUMUTMonnel e a e Expenses (Non - egr` ar a ary . eRe s
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Division Salaries & Benefits
Actual
Actual
Approved
Proposed
Proposed
Administration
$
36,492
$
276,137
$
349,764
$
399,746
$
485,848
Customer Services
$
552,251
$
537,682
$
568,222
$
571,628
$
593,375
Water Purchases and Treatment
$
-
$
-
$
-
$
-
$
-
Recycled Water
$
111,297
$
113,621
$
122,793
$
125,642
$
130,029
Field Operations
$
1,442,779
$
1,418,714
$
1,517,313
$
1,539,456
$
1,590,337
Engineering and Planning
$
432,002
$
342,148
$
421,143
$
422,155
$
448,514
District Total
$
2,574,821
$
2,688,301
$
2,979,235
$
3,058,627
$
3,248,103
PUMUTMonnel e a e Expenses (Non - egr` ar a ary . eRe s
District Total $ 128,571 $ 347,057 $ 448,264 $ 509,284 $ 595,498
FY 17/18 Salary to Benefit FY 17/18 Salary and Benefit
Ratio Costs by Division
Benefits
Salaries $1,012,558
$2,046,069
Field
Operations
$1,539,456
Engineering
Viand Planning
$422,155
Administration
$287,893
ed Water
> a25,642
36
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Other Personnel Related Expenses
Actual
Actual
Approved
Proposed
Proposed
Board Member Meeting Stipends
$
7,800
$
5,100
$
8,000
$
8,000
$
8,000
Temporary Salaries & Benefits
$
-
$
1,461
$
5,700
$
5,488
$
5,600
Retiree Health OPEB Contribution
$
28,597
$
28,794
$
52,780
$
53,291
$
54,357
CalPERS Shared Risk Pool Unfunded Liability
$
-
$
242,181
$
288,984
$
338,455
$
423,491
Overtime
$
61,820
$
35,580
$
54,000
$
66,500
$
66,500
Vacation Buy -Out
$
19,327
$
18,882
$
37,000
$
35,750
$
35,750
Compensated Absences
$
7,399
$
13,246
$
-
$
-
$
-
Uniforms /Clothing
$
2,625
$
-
$
-
$
-
$
-
Auto Allowance
$
1,003
$
1,813
$
1,800
$
1,800
$
1,800
District Total $ 128,571 $ 347,057 $ 448,264 $ 509,284 $ 595,498
FY 17/18 Salary to Benefit FY 17/18 Salary and Benefit
Ratio Costs by Division
Benefits
Salaries $1,012,558
$2,046,069
Field
Operations
$1,539,456
Engineering
Viand Planning
$422,155
Administration
$287,893
ed Water
> a25,642
36
District Personnel and Organization
District Position Titles and Pay Ranges
Monthly Pay Rate Monthly Pay Rate
Classification Title Pay Grade (Low) (High)
Program Assistant 1
11
$
2,935
$
3,746
Finance Technician 1
13
$
3,596
$
4,589
Program Assistant II
13
$
3,596
$
4,589
Utility & Maintenance Technician 1
13
$
3,596
$
4,589
Finance Technician 11
21
$
3,740
$
5,012
Program Assistant 111
21
$
3,740
$
5,012
Utility & Maintenance Technician 11
21
$
3,740
$
5,012
Finance Technician 111
22
$
4,055
$
5,434
Utility & Maintenance Technician 111
22
$
4,055
$
5,434
Program Coordinator
22
$
4,055
$
5,434
Utility & Maintenance Technician IV
23
$
4,370
$
5,856
Water Conservation Specialist 1
23
$
4,370
$
5,856
Finance Analyst 1
24
$
4,764
$
6,384
Utility & Maintenance Specialist 1
24
$
4,764
$
6,384
Water Conservation Specialist II
24
$
4,764
$
6,384
Finance Analyst 11
25
$
5,237
$
7,018
Utility & Maintenance Field Supervisor
25
$
5,237
$
7,018
Utility & Maintenance Specialist 11
25
$
5,237
$
7,018
Finance Analyst III
42
$
5,662
$
7,968
Engineer 1
44
$
6,338
$
8,918
Engineer 11
45
$
6,788
$
9,551
Superintendent
45
$
6,788
$
9,551
Senior Engineer
63
$
7,393
$
10,923
General Manager
65
$
8,588
$
12,689
Note: Effective July 1, 2017
37
Overview
As discussed in the "Sources of Funds" section of this document, the District has three main sources of operating and
non - operating revenue, which comprise of over 92% of the District's total annual revenue. These three main sources
are water sales, meter service charges, and property taxes. In addition to these primary revenue sources, the District
receives minor revenue from a variety of other sources, including billing and engineering fees, capacity buy -in
charges, investment and property earnings, and other miscellaneous revenue.
Water sales, both potable and recycled, are proposed to comprise roughly 66% of total District revenue, however this
category is the most volatile source of District revenue, highly dependent upon customer demand, weather, and
regulatory factors. Meter service charges from both potable and recycled customers are proposed to make up
approximately 22% of total District revenue and are a more reliable source of fixed revenue based upon the number
of meters in the District's system.
Both water sales and service charge revenue are based upon the District's schedule of water rates and charges,
which are developed during regular water rate studies conducted by the District. The proposed revenue shown for
these categories is based upon the District's current water rates and charges from its most recent 2015 water rate
study. The District will be performing an update to its water rate study in late 2017 which may result in adjustments to
the schedule of water rates and charges. Any water rate and charge adjustments approved by the Board would
increase District revenue, and the District would make adjustments to these numbers at a future quarterly budget
update to the Board.
The District receives a share of property tax revenue, which comprises roughly 5% of total District revenue and has
remained relatively stable on a year -to -year basis. A slight increase is proposed during each of the upcoming two
years due to increasing property valuations.
Pass - through charges are from the SDCWA Infrastructure Access Charge (IAC) which is collected from District
customers and paid to the District's water wholesaler. This is a budget - neutral transaction, with equal amounts being
budgeted on both the expenditure and revenue sides of the budget.
Interest & property earnings reflect various types of income that the District receives, such as returns on District
investments, property rental, and electricity generation.
Other District revenues include billing charges, engineering fees, capacity fees, and other miscellaneous proceeds.
Billing charges and engineering fees are based upon the District's Miscellaneous Fee and Charge Study and are
developed to be cost recoverable for services provided by the District. Capacity fees are charged to new users to
"buy -in" to the District's water system.
The following pages further summarize and detail the District's revenue.
38
Revenue
FY 2017/18 Proposed Revenue by Category
61%
5%
5%
■ Potable Water Sales ■ Potable Meter Service Charges ri Recycled Water Program
■ Property Taxes ■ Pass - Through Charges it Engineering Fees
Interest & Property Earnings - Other Sources
39
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18119
Revenue Source
Actual
Actual
Approved
Proposed
Proposed
Property Taxes
$
834,994
$ 906,106
$ 825,000
$ 900,000
$ 940,000
Engineering Fees
$
350,564
$ 309,247
$ 250,700
$ 296,200
$ 296,200
Potable Meter Service Charges
$
3,415,227
$ 3,503,933
$ 3,574,195
$ 3,760,753
$ 3,778,497
Potable Water Sales
$
9,728,435
$ 9,503,108
$ 10,641,664
$ 10,648,431
$ 10,914,549
Recycled Meter Service Charges
$
80,585
$ 85,149
$ 75,000
$ 84,440
$ 84,440
Recycled Water Sales
$
648,398
$ 702,301
$ 780,121
$ 828,609
$ 848,819
Pass Through Charges
$
502,169
$ 516,206
$ 509,460
$ 532,536
$ 560,634
Billing Charges
$
41,140
$ 44,880
$ 49,600
$ 42,600
$ 42,600
Interest & Property Earnings
$
172,312
$ 206,767
$ 175,900
$ 228,123
$ 230,223
Other District Revenue
$
19,340
$ 103,412
$ 30,000
$ 30,000
$ 30,000
Capital Replacement (Fund 532)
$
268,620
$ 59,400
$ 100,000
$ 100,000
$ 100,000
Debt Service (Fund 534)
$
89
$ 4
$ -
$ -
$ -
Fleet Replacement (Fund 535)
$
18,085
$ -
$ -
$ -
$ -
Total
$
16,079,958
$ 15,940,513
$ 17,011,640
$ 17,451,692
$ 17,825,962
FY 2017/18 Proposed Revenue by Category
61%
5%
5%
■ Potable Water Sales ■ Potable Meter Service Charges ri Recycled Water Program
■ Property Taxes ■ Pass - Through Charges it Engineering Fees
Interest & Property Earnings - Other Sources
39
Revenue
40
FY 14/15
FY 15116
FY 16/17
FY 17118
FY 18/19
Account
Revenue Source
Actual
Actual
Approved
Proposed
Proposed
Property Taxes
53100000 -311.1
Property Taxes- Secured
$
834,994
$ 906,106
$ 825,000
$ 900,000
$ 940,000
Engineering Fees
53100000 -344.1
New Meter Installation Fees
$
240,387
$ 188,275
$ 135,000
$ 190,000
$ 190,000
53100000 -344.1
Hydrant Rental Fees
$
275
$ -
$ -
$ -
53100000 -344.1
Sales of Maps & Specifications
$
-
$ 50
$ 500
$ -
$ -
53100000 -344.1
Water Availability Letters
$
-
$ 200
$ 200
$ 200
53100000 -344.1
Plan Check Fees
$
-
$ 6,000
$ 40,000
$ 6,000
$ 6,000
53100000 -344.1
Inspection Fees
$
66,180
$ 59,240
$ 35,000
$ 50,000
$ 50,000
53100000 -344.1
Encroachment/Easement/Quitclaim Fees
$
1,200
$ -
$ -
$ -
$ -
53100000 -391
Interfund Revenue (Services provided to City)
$
42,522
$ 55,681
$ 40,000
$ 50,000
$ 50,000
Potable Meter Service Charges
53100000 -348.1
Water Meter Service Charges - Potable
$
3,405,627
$ 3,432,022
$ 3,358,347
$ 3,477,764
$ 3,495,063
53100000 -348.2
Water Meter Service Charges - Construction
$
9,600
$ 11,418
$ 10,000
$ 12,000
$ 12,000
53100000 - 348.21
Water Meter Service Charges - Fire Line / Fire Meter
$
-
$ 60,493
$ 205,848
$ 270,989
$ 271,434
Potable Water Sales
53100000 -348.6
Potable Water Sales - Single - Family Residential
$
5,394,412
$ 5,161,542
$ 5,838,620
$ 5,726,140
$ 5,869,244
53100000 -348.7
Potable Water Sales- Multi - Family Residential
$
1,836,180
$ 1,826,633
$ 1,931,727
$ 1,906,493
$ 1,954,139
53100000 -348.8
Potable Water Sales - Commercial
$
1,175,801
$ 1,253,819
$ 1,047,610
$ 1,091,825
$ 1,119,111
53100000 -348.9
Potable Water Sales - Agriculture
$
348,489
$ 427,743
$ 395,744
$ 507,949
$ 520,644
53100000- 348.10
Potable Water Sales - Landscaping
$
910,459
$ 783,631
$ 1,012,926
$ 993,584
$ 1,018,415
53100000 - 348.11
Potable Water Sales - Construction
$
63,094
$ 22,287
$ 49,898
$ 65,814
$ 67,458
53100000- 348.13
Potable Water Sales - Public
$
-
$ 18,432
$ 300,156
$ 297,876
$ 305,320
53100000 - 348.14
Potable Water Sales - Government
$
-
$ 9,021
$ 64,983
$ 58,750
$ 60,218
Recycled Water Program
53100000 -348.4
Water Meter Service Charges - Recycled
$
80,585
$ 85,149
$ 75,000
$ 84,440
$ 84,440
53100000 - 348.31
Recycled Water Sales - Landscaping
$
-
$ 136,410
$ 629,494
$ 695,025
$ 711,977
53100000- 348.32
Recycled Water Sales- Government
$
-
$ 19,420
$ 134,595
$ 133,584
$ 136,842
53100000 - 348.33
Recycled Water Sales - Construction
$
-
$ -
$ 16,032
$ -
$ -
53100000 -348.3
Recycled Water Sales
$
648,398
$ 546,471
$ -
$ -
$ -
Pass Through Charges
53100000 -348.5
SDCWA Infrastructure Access Charge (Pass- Through)
$
502,169
$ 516,206
$ 509,460
$ 532,536
$ 560,634
Billing Charges
53100000 -351.7
Delinquent Charges
$
23,800
$ 27,080
$ 32,000
$ 26,000
$ 26,000
53100000 -351.7
Tum -Off Charges
$
1,360
$ 1,160
$ 1,800
$ 1,200
$ 1,200
53100000 -351.7
Tum -On Charges
$
1,200
$ 1,200
$ 1,800
$ 1,200
$ 1,200
53100000 -351.7
New Account Set -Up Fees
$
13,660
$ 14,000
$ 12,000
$ 13,000
$ 13,000
53100000 -351.7
Returned Check Charges
$
1,120
$ 1,440
$ 2,000
$ 1,200
$ 1,200
Interest & Property Earnings
53100000 -361.1
Pooled Investment Earnings
$
75,991
$ 105,341
$ 75,000
$ 85,000
$ 85,000
53100000- 361.12
Pooled Investment - Contractual
$
(1,633)
$ (1,755)
$ -
$ -
$ -
53100000 -362
Property Rental Income
$
71,868
$ 99,563
$ 75,900
$ 119,443
$ 121,543
53100000 -362
Electricity Generation Income
$
26,087
$ 3,618
$ 25,000
$ 23,680
$ 23,680
Other District Revenue
53100000 -336
Local Revenues- Other
$
-
$ (782)
$ -
$ -
$ -
53100000 -341.2
Administration - Other Charges
$
11,840
$ 19,514
$ 20,000
$ 20,000
$ 20,000
53100000 -392
Proceeds of Fixed Asset Disposal
$
-
$ 4,010
$ -
$ -
$ -
53100000 -393.4
Accretion of Bond Premium (Deferred)
$
-
$ 74,372
$ -
$ -
$ -
53100000 -394
Cost Recovery
$
16,317
$ 8,712
$ 10,000
$ 10,000
$ 10,000
53100000 -399
Other Revenues
$
(8,817)
$ (3,196)
$ -
$ -
$ -
Capital Replacement (Fund 532)
53200000 -395
Capacity Fees
$
268,620
$ 59,400
$ 100,000
$ 100,000
$ 100,000
Debt Service (Fund 534)
53400000 -361.3
Other Investment Earnings
$
89
$ 4
$ -
$ -
$ -
Fleet Replacement (Fund 535)
53500000 -392
Proceeds of Fixed Asset Disposal
$
18,085
$ -
$ -
$ -
$ -
District Total
$
16,079,958
$ 15,939,730
$ 17,011,640
$ 17,451,692
$ 17,825,962
40
Operating • • ,
Overview
The District maintains an Operating Program of six distinct Divisions, each designed to detail and track the
expenditures of the programs and services that it provides. These Divisions are:
- Administration: Houses the budget for expenses not otherwise attributable to a specific Division.
- Customer Services: Includes staffing and expense costs related to customer service, water conservation,
budget administration, and other general administration.
- Water Purchases and Treatment: Houses the budget for costs related to potable water purchases and
treatment.
- Recycled Water Program: Includes staffing and expense costs related to the District's service of recycled
water.
- Field Operations: Includes staffing and expense costs for the day -to -day maintenance and operations of the
District's water distribution system.
- Engineering and Planning: Includes staffing and expense costs for the District's engineering and planning
duties, such as capital project management, inspections, studies, and other related functions.
Each of these operating divisions fund the day -to -day activities of the District, which may include salaries and benefits
for staff, the purchasing of materials and supplies, funding for contracts and services, and other miscellaneous
expenditures. These day -to -day activities represent the District's short -term objectives, or initiatives, to be
accomplished within a single fiscal year.
The pages to follow include summaries of Operating Program expenditures, as well as detail pages for each
individual division, which include:
- Division Function
- Division Programs and Activities
- FY 2015/16 and FY 2016/17 Division Accomplishments
- FY 2017/18 and FY 2018/19 Key Division Objectives
- Division Staffing
- Division Expenditure Summary
- Division Expenditure Detail
Cfl
Operating Program
OperaUffq Budget by Division EMN
Division
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Actual Actual Approved Proposed Proposed
Administration
$
1,198,738
$ 1,575,515
$ 1,685,712
$ 1,947,322
$ 2,022,428
Customer Services
$
736,294
$ 730,589
$ 830,022
$ 843,008
$ 864,755
Water Purchases & Treatment
$
7,973,013
$ 6,688,077
$ 7,387,361
$ 6,428,328
$ 8,931,987
Recycled Water Program
$
642,615
$ 664,188
$ 702,793
$ 739,502
$ 783,329
Field Operations
$
1,868,295
$ 1,817,671
$ 2,058,559
$ 2,063,216
$ 2,114,097
Engineering & Planning
$
465,989
$ 360,647
$ 482,443
$ 479,755
$ 506,114
Operating Budget Total
$
12,884,944
$ 11,836,688
$ 13,146,890
$ 12,501,131
$ 15,222,710
FY 17/18 Proposed Budget by
Division
51%
• Administration ■ Customer Services
• Water Purchases & Treatment ■ Recycled Water Program
• Field Operations Engineering & Planning
FY 17/18 Proposed Budget by
Category
6%
3%
10%
5%
r'
19%
■ Salaries
Potable Water Purchases
■ Recycled Water Purchases
Contracts & Services
Capital Outlay (Fixed Assets)
33%
• Benefits
• Water Treatment
Material & Supplies
Internal Cost Allocation
Debt & Finance
EPA,
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18119
Category
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
1,878,408
$ 1,857,495
$ 2,017,244
$ 2,046,069
$ 2,136,528
Benefits
$
696,413
$ 830,806
$ 961,991
$ 1,012,558
$ 1,111,575
Potable Water Purchases
$
6,244,615
$ 4,899,237
$ 5,395,379
$ 4,104,558
$ 6,850,537
Water Treatment
$
1,728,398
$ 1,788,841
$ 1,991,982
$ 2,323,770
$ 2,081,450
Recycled Water Purchases
$
527,789
$ 542,403
$ 569,600
$ 601,060
$ 640,500
Material & Supplies
$
300,074
$ 293,456
$ 379,800
$ 437,470
$ 431,170
Contracts & Services
$
535,999
$ 544,561
$ 754,596
$ 761,916
$ 755,866
Internal Cost Allocation
$
931,926
$ 1,053,855
$ 1,053,798
$ 1,210,730
$ 1,212,084
Capital Outlay (Fixed Assets)
$
41,205
$ 23,287
$ 20,000
$ -
$ -
Debt & Finance
$
117
$ 2,748
$ 2,500
$ 3,000
$ 3,000
Operating Budget Total
$
12,884,944
$ 11,836,688
$ 13,146,890
$ 12,501,131
$ 15,222,710
FY 17/18 Proposed Budget by
Division
51%
• Administration ■ Customer Services
• Water Purchases & Treatment ■ Recycled Water Program
• Field Operations Engineering & Planning
FY 17/18 Proposed Budget by
Category
6%
3%
10%
5%
r'
19%
■ Salaries
Potable Water Purchases
■ Recycled Water Purchases
Contracts & Services
Capital Outlay (Fixed Assets)
33%
• Benefits
• Water Treatment
Material & Supplies
Internal Cost Allocation
Debt & Finance
EPA,
Operating Program
operaUffq Budget by Division and Category
53192690 - Administration
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Actual Actual Approved Proposed Proposed
Salaries
$
7,800
$ 5,100
$ 8,000
$ 8,000
$ 8,000
Benefits
$
28,692
$ 271,037
$ 341,764
$ 391,746
$ 477,848
Materials & Supplies
$
18,070
$ 25,420
$ 32,600
$ 41,950
$ 35,650
Contracts & Services
$
212,132
$ 217,355
$ 247,050
$ 291,896
$ 285,846
Internal Cost Allocation
$
931,926
$ 1,053,855
$ 1,053,798
$ 1,210,730
$ 1,212,084
Debt & Finance
$
117
$ 2,748
$ 2,500
$ 3,000
$ 3,000
Administration Total
$
1,198,738
$ 1,575,515
$ 1,685,712
$ 1,947,322
$ 2,022,428
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
53192691 - Customer Services Actual Actual Approved Proposed Proposed
Salaries
$
405,290
$ 413,121
$ 435,475
$ 439,977
$ 459,251
Benefits
$
146,961
$ 124,562
$ 132,747
$ 131,651
$ 134,124
Materials & Supplies
$
46,144
$ 40,081
$ 62,500
$ 67,500
$ 67,500
Contracts & Services
$
137,900
$ 152,826
$ 199,300
$ 203,880
$ 203,880
Customer Services Total
$
736,294
$ 730,589
$ 830,022
$ 843,008
$ 864,755
FY 14115 FY 15/16 FY 16117 FY 17118 FY 18/19
53192692 - Water Purchases & Treatment Actual Actual Approved Proposed Proposed
Potable Water Purchases $ 6,244,615 $ 4,899,237 $ 5,395,379 $ 4,104,558 $ 6,850,537
Water Treatment $ 1,728,398 $ 1,788,841 $ 1,991,982 $ 2,323,770 $ 2,081,450
Water Purchases & Treatment Total $ 7,973,013 $ 6,688,077 $ 7,387,361 $ 6,428,328 $ 8,931,987
53192693 - Recycled Water Program
$
FY 14/15
Actual
$ 1,077,035
FY 15/16
Actual
$ 1,164,564
FY 16/17
Approved
FY 17/18
Proposed
$
FY 18/19
Proposed
Salaries
$
84,431
$
90,673
$
95,502
$ 98,096
$
101,912
Benefits
$
26,866
$
22,948
$
27,291
$ 27,546
$
28,117
Recycled Water Purchases
$
527,789
$
542,403
$
569,600
$ 601,060
$
640,500
Contracts & Services
$
3,529
$
8,165
$
10,400
$ 12,800
$
12,800
Recycled Water Program Total
$
642,615
$
664,188
$
702,793
$ 739,502
$
783,329
FY 14/15 FY 15/16 FY 16/17 FY 17118 FY 18/19
53192694 - Field Operations Actual Actual Approved Proposed Proposed
Salaries
$
1,054,080
$ 1,077,035
$ 1,143,505
$ 1,164,564
$ 1,208,850
Benefits
$
388,699
$ 341,679
$ 373,808
$ 374,892
$ 381,487
Materials & Supplies
$
232,289
$ 226,001
$ 273,400
$ 320,420
$ 320,420
Contracts & Services
$
152,022
$ 149,670
$ 247,846
$ 203,340
$ 203,340
Capital Outlay (Fixed Assets)
$
41,205
$ 23,287
$ 20,000
$ -
$ -
Field Operations Total
$
1,868,295
$ 1,817,671
$ 2,058,559
$ 2,063,216
$ 2,114,097
43
FY 14115
FY 15/16
FY 16/17
FY 17/18
FY 18119
53192695 - Planning & Engineering
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
326,807
$ 271,567
$ 334,762
$ 335,432
$ 358,515
Benefits
$
105,195
$ 70,581
$ 86,381
$ 86,723
$ 89,999
Materials & Supplies
$
3,571
$ 1,954
$ 11,300
$ 7,600
$ 7,600
Contracts & Services
$
30,417
$ 16,545
$ 50,000
$ 50,000
$ 50,000
Planning & Engineering Total
$
465,989
$ 360,647
$ 482,443
$ 479,755
$ 506,114
Operating Budget Total
$
12,884,944
$ 11,836,688
$ 13,146,890
$ 12,501,131
$ 15,222,710
43
Administration Division
Fund: 531 Org: 53192690
The Administration Division is utilized to capture District -wide costs and general administrative costs that benefit multiple
divisions of the District. Such costs may include insurance premiums, retirement program costs, legal fees, memberships,
training costs, office supplies, utilities, and other minor District -wide costs.
The District's Internal Cost Allocation to the City of Encinitas for finance, fleet maintenance, human resources, information
technology, records management, and risk management support is also captured in this Division.
Division Programs and Activities
Coordinate internal support services with the City of Encinitas
Secure District membership in local, state, and federal industry organizations
Promote the professional development of District employees through education and training
Provide for District communications, including 800 mhz radios, landlines, and cellular phones
Fund professional services contracts for the District's annual audit and controller's report
Maintain utilities for all District facilities
Renew maintenance contracts for District software systems
Budget for District Board Member meeting stipends
Consolidate District office supply, book, subscription, and furniture purchases
Ensured all District employees maintained current certifications and received required trainings
Updated the District's Internal Cost Allocation study with City
Began making annual payments towards the District's CalPERS unfunded accrued liability
Initiated updating of the District's Administrative Code
Complete District Administrative Code Update
Conduct District staffing analysis
Update reserve policy
Complete Fee & Charge and Capacity Fee studies
44
Administration Division
Fund: 531 Org: 53192690
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Classification (FTE) Actual Actual Approved Proposed Proposed
No personnel are directly assigned to this Division
Division Total 0.00 0.00 0.00 0.00 0.00
xt pe-n-aiture Summary ---'I
Division Total $ 1,198,738 $ 1,575,515 $ 1,685,712 $ 1,947,322 $ 2,022,428
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Group
Account
Actual
Actual
Approved
Proposed
Proposed
Salaries
Proposed
$
7,800
$ 5,100
$ 8,000
$ 8,000
$ 8,000
Benefits
$ 10,400
$
28,692
$ 271,037
$ 341,764
$ 391,746
$ 477,848
Materials & Supplies
MS
$
18,070
$ 25,420
$ 32,600
$ 41,950
$ 35,650
Contracts & Services
CS
$
212,132
$ 217,355
$ 247,050
$ 291,896
$ 285,846
Internal Cost Allocation
ICA
$
931,926
$ 1,053,855
$ 1,053,798
$ 1,210,730
$ 1,212,084
Debt & Finance
DF
$
117
$ 2,748
$ 2,500
$ 3,000
$ 3,000
Division Total $ 1,198,738 $ 1,575,515 $ 1,685,712 $ 1,947,322 $ 2,022,428
45
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account
Description
Actual
Actual
Approved
Proposed
Proposed
431.1
CS
Professional Services Contracts
$
13,288
$ 18,219
$ 10,000
$ 10,400
$ 10,650
431.21
CS
Legal Contracts - City
$
16,105
$ 7,449
$ 15,000
$ 15,000
$ 10,000
431.23
CS
Legal Contracts - Outside
$
972
$ -
$ 5,000
$ 5,000
$ 5,000
432.2
CS
Maintenance Contracts
$
7,314
$ 13,391
$ 12,000
$ 8,550
$ 8,550
435.1
CS
Interagency Agreements
$
11,489
$ 11,909
$ 11,450
$ 12,200
$ 12,200
441.1
CS
Utilities - Gas & Electricity
$
9,597
$ 9,369
$ 14,600
$ 14,450
$ 14,450
444
CS
Permits
$
10,652
$ 8,723
$ 9,450
$ 10,700
$ 10,700
451
CS
Insurance
$
91,947
$ 99,275
$ 93,000
$ 94,000
$ 94,000
452
CS
Communications
$
10,429
$ 10,824
$ 12,000
$ 15,700
$ 15,700
454
CS
Printing & Binding
$
178
$ 149
$ -
$ 1,500
$ 200
455
CS
Travel & Mileage
$
2,061
$ 1,590
$ 7,900
$ 8,150
$ 8,150
456.1
CS
Training & Development
$
36,291
$ 33,824
$ 46,650
$ 50,300
$ 50,300
458.1
ICA
Internal Cost Allocation
$
931,926
$ 1,053,855
$ 1,053,798
$ 1,210,730
$ 1,212,084
458.2
CS
Other Interfund Transactions
$
-
$ -
$ -
$ 35,946
$ 35,946
461.1
MS
Office Supplies
$
2,002
$ 1,615
$ 2,500
$ 2,500
$ 2,500
461.2
MS
Books and Subscriptions
$
476
$ 418
$ 1,250
$ 1,250
$ 1,250
468.1
MS
Furniture & Fixtures (less than $5k)
$
6,399
$ 1,161
$ 10,000
$ 15,000
$ 10,000
468.5
MS
Computer Software & Hardware
$
9,192
$ 22,227
$ 18,850
$ 23,200
$ 21,900
486
CS
Claims Expense
$
1,811
$ 2,634
$ 10,000
$ 10,000
$ 10,000
493
DF
Adjustments
$
47
$ -
$ -
$ -
$ -
493.1
DF
Bad Debt Expense
$
70
$ 2,748
$ 2,500
$ 3,000
$ 3,000
45
Customer Services Division
Fund: 531
Org: 53192691
T-t a n � mitttsr
RNgIat40 r
i
5/8", 3/4"
7 Cub4c; F4atat
0 3 aw— 6 5 INWA
r I
The Customer Services Division is primarily responsible for the customer - related services in the District, including utility
billing and water conservation. The utility billing section is responsible for the accurate and timely billing of over 11,740
customers in the District and for providing general customer service and cashiering. The water conservation section is
responsible for ensuring the District meets drought response and region -wide goals for water conservation by creating
conservation programs and leading public outreach efforts. This Division is also responsible for budget development and
administration, water rate study management, and accounts payable /receivable.
Division Programs and Activities
Accurate and timely billing for potable and recycled water customers
Customer service and cashiering for over 11,740 customers
Delinquency processing and collections management
Budget development and administration
Water rate study development and implementation
Accounts payable and receivable
Water conservation program administration including public education and outreach
Drought and water supply shortage response
Completed annual budget development and financial reporting
Completed the 2015 update to the District's Water Rate Study
Upgraded the District's water meter reading software and hardware
Initiated the replacement project for the District's utility billing system
Responded to State - mandated water -use restrictions and water demand reductions
Go live with new water billing system and customer service portal
Complete Public Works Yard Landscape Improvements Project
Transition from bi- monthly to monthly billing
Conduct update to Water Rate Study
46
Customer Services Division
Fund: 531 Org: 53192691
Classification (FTE)
FY 14/15
Actual
FY 15/16
Actual
FY 16/17
Approved
FY 17/18
Proposed
FY 18/19
Proposed
General Manager
0.30
0.30
0.30
0.30
0.30
Superintendent (Administrative Services Manager)
1.00
1.00
1.00
1.00
1.00
Finance Analyst I / II / III
1.00
1.00
1.00
1.00
1.00
Water Conservation Specialist I / II
1.00
1.00
1.00
1.00
1.00
Finance Technician I / II / III
1.95
1.95
1.95
1.95
1.95
Division Total
5.25
5.25
5.25
5.25
5.25
47
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Group
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
405,290
$ 413,121
$ 435,475
$ 439,977
$ 459,251
Benefits
$
146,961
$ 124,562
$ 132,747
$ 131,651
$ 134,124
Materials & Supplies MS
$
46,144
$ 40,081
$ 62,500
$ 67,500
$ 67,500
Contracts & Services CS
$
137,900
$ 152,826
$ 199,300
$ 203,880
$ 203,880
Division Total
$
736,294
$ 730,589
$ 830,022
$ 843,008
$ 864,755
�.
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Description
Actual
Actual
Approved
Proposed
Proposed
431.1 CS Professional Service Contracts
$
69,425
$ 75,785
$ 72,900
$ 90,560
$ 90,560
434 CS Information Technology Contracts
$
19,012
$ 17,937
$ 20,000
$ 26,420
$ 26,420
459 CS Other Purchased Services
$
5,830
$ 6,077
$ 6,400
$ 6,900
$ 6,900
461.1 MS Office Supplies
$
11,921
$ 11,148
$ 15,000
$ 15,000
$ 15,000
461.3 MS Postage
$
33,631
$ 27,448
$ 45,000
$ 50,000
$ 50,000
464.1 MS Repair & Maintenance Supplies
$
592
$ 1,484
$ 2,500
$ 2,500
$ 2,500
491 CS Public Education / Outreach
$
22,813
$ 21,644
$ 50,000
$ 40,000
$ 40,000
491.1 CS Water Conservation
$
20,819
$ 31,383
$ 50,000
$ 40,000
$ 40,000
47
Water Purchases & Treatment Division
Fund: 531 Org: 53192692
`Division Function A
_.� _," -
J
The Water Purchases & Treatment Division is utilized to capture the cost of potable water purchased by the District to be
sold to District customers, as well as the cost of water treatment. The District has two sources of water; local water from
Lake Hodges, which it maintains rights to, and imported water purchased from the San Diego County Water Authority
( SDCWA). Water treatment is provided at the R.E. Badger Water Filtration Plant which is jointly owned with the Santa Fe
Irrigation District (SFID).
Purchase potable water to supply District customers
Untreated local water from Lake Hodges
Untreated imported water from SDCWA
Treated imported water from SDCWA
Optimize water purchases to achieve long -term supply goals at the lowest cost to our customers
Treat raw (untreated) water at the R.E. Badger Water Filtration Plant
Ensure the safety and reliability of the District's water supply
FY 15/16 a d FY 16/17 Div 1i!9
Optimized the filling of District reservoirs to maximize efficiency at the R.E. Badger Water Filtration Plant
Produced the District's annual Water Quality Report
Completed negotiations to amend the Lake Hodges agreement between SDWD, SFID and City of San Diego
Completed Chlorine Dioxide Generation and PACL Feed Improvements at R.E. Badger Water Filtration Plant
Completed Electrical Distribution and Substation improvements at R.E. Badger Water Filtration Plant
Complete Water Rights Agreement with the Santa Fe Irrigation District
Complete Local Water Sales Agreement with the City of San Diego
Complete Annual Consumer Confidence (Water Quality) Reports
Complete Potable Reuse Implementation Study
48
Water Purchases & Treatment Division
Fund: 531 Org: 53192692
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Classification (FTE) Actual Actual Approved Proposed Proposed
No personnel are directly assigned to this Division
Division Total 0.00 0.00 0.00 0.00 0.00
49
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Group
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
$
$
$
$
Benefits
$
$
$
$
$ -
Water Purchases
WP
$
6,244,615
$ 4,899,237
$ 5,395,379
$ 4,104,558
$ 6,850,537
Water Treatment WT
$
1,728,398
$ 1,788,841
$ 1,991,982
$ 2,323,770
$ 2,081,450
Division
Total
$
7,973,013
$ 6,688,077
$ 7,387,361
$ 6,428,328
$ 8,931,987
Z•
.
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account
Description
Actual
Actual
Approved
Proposed
Proposed
435.2
WT
Treatment Costs
$
1,728,398
$ 1,788,841
$ 1,991,982
$ 2,323,770
$ 2,081,450
436.1
WP
Imported Treated Water
$
335,509
$ 268,819
$ 349,595
$ 371,909
$ 398,962
436.2
WP
Imported Untreated Water
$
4,605,661
$ 3,146,247
$ 3,260,340
$ 1,755,325
$ 4,298,621
436.3
WP
Local Untreated Water
$
127,143
$ 92,866
$ 90,996
$ 75,000
$ 75,000
436.4
WP
MWD Readiness to Serve
$
144,169
$ 119,540
$ 96,000
$ 65,964
$ 69,263
436.5
WP
CWA Infrastructure Access
$
489,894
$ 499,566
$ 509,460
$ 532,536
$ 560,634
436.6
WP
CWA Emergency Storage Fee
$
351,317
$ 435,444
$ 583,343
$ 707,508
$ 779,255
436.7
WP
MWD Capacity Reservation
$
57,226
$ 82,275
$ 93,143
$ 93,762
$ 102,177
436.8
WP
CWA Customer Service Fee
$
133,697
$ 165,348
$ 217,991
$ 262,050
$ 289,383
436.81
WP
CWA Supply Reliability Charge
$
-
$ 89,133
$ 194,511
$ 240,504
$ 277,242
49
Recycled Water Division
Fund: 531 O rg : 53192693
The Recycled Water Division promotes the use of recycled water in the District. The District sells recycled water to
customers which is provided by the San Elijo Joint Powers Authority ( SEJPA). The District is responsible for customer
service and billing, site inspections, plan approvals, and meter maintenance, while SEJPA is responsible for the production
and distribution of recycled water.
Division Programs and Activitie&..J
Review projects to determine the use of recycled water where economically and financially possible
Plan checks for site developments to ensure consistency with the District's Rules and Regulations
Construction inspection of new developments where recycled water is utilized
Cross- connection testing and inspection at new and existing recycled water sites
Achieved 100% compliance with annual and 4 -year auditing and shutdown testing
Updated procedures for recycled water use on grading and dust control operations
Added four new recycled water sites to the system
Installed infrastructure for a Recycled Water Fire Protection System at SEJPA
Complete Phase II of Encinitas Ranch HOA recycled water conversion
Complete future phase of San Diego Botanic Garden recycled water conversion
Work with SEJPA staff on potential Requeza Street recycled water main extension
Maintain 100% compliance with all recycled water and cross connection testing
50
Recycled Water Division
Fund: 531 Org: 53192693
FY 14/15
FY 15/16
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Classification (FTE)
Proposed
Actual
Actual
Approved
Proposed
Proposed
General Manager
436.9 RW Recycled Water $ 527,789 $
0.10
0.10
0.10
0.10
0.10
Senior Engineer
0.10
0.10
0.10
0.10
0.10
Superintendent
0.05
0.05
0.05
0.05
0.05
Engineer 1
0.10
0.10
0.10
0.10
0.10
Utility & Maintenance Specialist 1 / II
0.50
0.50
0.50
0.50
0.50
Utility & Maintenance Specialist 1 / 11
0.10
0.10
0.10
0.10
0.10
Finance Technician I / 11 / 111
0.05
0.05
0.05
0.05
0.05
Division Total
1.00
1.00
1.00
1.00
1.00
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Group
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
84,431 $
90,673 $
95,502 $
98,096
$ 101,912
Benefits
$
26,866 $
22,948 $
27,291 $
27,546
$ 28,117
Recycled Water Purchases RW
$
527,789 $
542,403 $
569,600 $
601,060
$ 640,500
Contracts & Services CS
$
3,529 $
8,165 $
10,400 $
12,800
$ 12,800
Division Total
$
642,615 $
664,188 $
702,793 $
739,502
$ 783,329
FY 14/15
FY 15/16
FY 16117
FY 17/18
FY 18/19
Account Description Actual
Actual
Approved
Proposed
Proposed
432.1 CS Technical Service Contracts $ 3,529 $
8,165 $
10,400 $
12,800 $
12,800
436.9 RW Recycled Water $ 527,789 $
542,403 $
569,600 $
601,060 $
640,500
51
Field Operations Division
Fund: 531 O rg : 53192694
The Field Operations Division operates and maintains the District's water distribution system, including over 175 miles of
pipeline and over 11,740 service connections. The District also maintains 19 pressure reducing stations, a 2.5 MG reservoir
and a 7.5 MG reservoir, an emergency pump station, and other appurtenances. District personnel provide ongoing
maintenance of the water system's distribution valves, water mains, service lines, water meters, and fire hydrants. Staff also
performs meter reading, customer service, water quality sampling, utility mark -outs, and emergency repairs.
Operations, maintenance, and repair of water infrastructure
Construction and installation of new water facilities
Monitoring and sampling of water quality compliance
Management of the cross connection program
Responding to customer inquiries and requests for assistance, including 24 -hour emergency response
Reading of water meters
Performing mark -outs for underground utilities
FY 15116 Rd FY 16/17 DivffflM Accomplishm is
Installed 37 new water services in FY 2015/16 and 45 new water services in FY 2016/17 (thru April)
Monitored and collected approximately 930 water quality samples each year
Responded to over 3,700 customer inquiries in FY 2015/16 and over 3,000 in FY 2016/17 (thru April)
Provided technical assistance for the rehabilitation of the 2.5 MG Balour Reservoir
Achieved 100% compliance related to backflow testing and cross connections
Performed ongoing enhancements to the District's inventory control procedures
Completed over 2,600 maintenance work orders each fiscal year
Implement meter testing program for small water meters
Complete Department of Homeland Security (DHS) SCADA Systems Audit
Implement water quality sample station replacement program
Complete GPS of all backflow devices within District service area
52
Field Operations Division
Fund: 531 Org: 53192694
53
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Classification (FTE)
Actual
Actual
Approved
Proposed
Proposed
General Manager
0.30
0.30
0.30
0.30
0.30
Superintendent
0.95
0.95
0.95
0.95
0.95
Utility & Maintenance Field Supervisor
1.00
1.00
1.00
1.00
1.00
Utility & Maintenance Specialist I / II
4.50
4.50
4.50
4.50
4.50
Utility & Maintenance Technician I / II / III / IV
6.00
6.00
6.00
6.00
6.00
Program Coordinator
1.00
1.00
1.00
1.00
1.00
Program Assistant I / II
1.00
1.00
1.00
1.00
1.00
Division Total
14.75
14.75
14.75
14.75
14.75
53
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Group
FY 18/19
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
1,054,080
$ 1,077,035
$ 1,143,505
$ 1,164,564
$ 1,208,850
Benefits
$
388,699
$ 341,679
$ 373,808
$ 374,892
$ 381,487
Materials & Supplies MS
$
232,289
$ 226,001
$ 273,400
$ 320,420
$ 320,420
Contracts & Services CS
$
152,022
$ 149,670
$ 247,846
$ 203,340
$ 203,340
Capital Outlay CO
$
41,205
$ 23,287
$ 20,000
$ -
$ -
Division Total
$
1,868,295
$ 1,817,671
$ 2,058,559
$ 2,063,216
$ 2,114,097
53
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account
Description
Actual
Actual
Approved
Proposed
Proposed
432.1
CS
Technical Services Contracts
$
2,509
$ 2,919
$ 6,000
$ 6,800
$ 6,800
432.2
CS
Maintenance Contracts
$
-
$ 30,396
$ 41,800
$ 38,240
$ 38,240
435.1
CS
Interagency Agreements
$
56,286
$ 35,946
$ 35,946
$ -
$ -
437.1
CS
Construction & Building Contracts
$
68,717
$ 44,122
$ 115,000
$ 105,000
$ 105,000
444
CS
Permits
$
22,930
$ 31,593
$ 43,350
$ 47,550
$ 47,550
445
CS
Rentals
$
1,480
$ 314
$ 3,750
$ 3,750
$ 3,750
452
CS
Communications
$
100
$ 911
$ 2,000
$ 2,000
$ 2,000
459
CS
Other Purchased Services
$
-
$ 3,469
$ -
$ -
$ -
462
MS
Field Supplies
$
2,963
$ 3,103
$ 8,500
$ 10,000
$ 10,000
463
MS
Safety & Emergency Supplies
$
4,634
$ 5,443
$ 7,000
$ 7,000
$ 7,000
464.1
MS
Repair & Maintenance Supplies
$
18,222
$ 12,572
$ 20,000
$ 22,500
$ 22,500
464.2
MS
Small Tools & Instruments
$
9,616
$ 8,980
$ 10,500
$ 12,500
$ 12,500
465
MS
Uniforms - Non- PERSable
$
2,425
$ 5,308
$ 11,600
$ 10,620
$ 10,620
466
MS
Fuel
$
32,820
$ 26,290
$ 45,000
$ 40,000
$ 40,000
467
MS
Inventory Expense
$
700
$ 12
$ -
$ -
$ -
467.1
MS
Inventory Expense - Mains
$
6,193
$ 5,676
$ 28,000
$ 28,000
$ 28,000
467.2
MS
Inventory Expense - Valves
$
12,374
$ 13,436
$ 12,000
$ 14,000
$ 14,000
467.3
MS
Inventory Expense - Services
$
30,720
$ 38,785
$ 35,000
$ 35,000
$ 35,000
467.4
MS
Inventory Expense - Laterals
$
11,655
$ 4,903
$ 20,000
$ 20,000
$ 20,000
467.5
MS
Inventory Expense - New Meter Installs
$
99,586
$ 101,149
$ 75,000
$ 100,000
$ 100,000
468.1
MS
Equipment <$5k
$
-
$ -
$ -
$ 20,000
$ 20,000
469
MS
Other Supplies
$
382
$ 344
$ 800
$ 800
$ 800
476
CO
Machinery & Equipment
$
41,205
$ 23,287
$ 20,000
$ -
$ -
53
Engineering & Planning Division
Fund: 531 Org: 53192695
Division Function
nl 7' METER W1 STRAINFR
III — HEATER I DEHUM.
(FUTURE] I (FUTURE)1
�u FCA S. GATE VALVE
11 IL'
11 '1�:
6' METER W/
STRAINER
The Engineering & Planning Division manages the design and construction of improvements to the District's water system
infrastructure, plans to ensure water reliability needs and other requirements of the water system are met, advises on the
operation of the distribution system, performs development and CIP inspection, and oversees the District's recycled water
program.
Division Programs and Activities
Manage the District's Capital Improvement Program (CIP)
Process water service applications
Perform plan checks for water improvement and grading plans
Inspection of water improvement and capital improvement projects
Manage the District's recycled water program
Collaboratively oversee Joint Facilities Projects
Performed the 2015 update to the District's Urban Water Management Plan
Abandoned the final portion of a 30" transmission main from Cambridge Ave. to SEJPA
Completed the Balour Reservoir Rehabilitation Project with Field Operations
Completed the relocation of a 16" transmission main at Balour
Completed the replacement of a 10" steel water main in NCTD right -of -way
Complete Cardiff Valve Replacement project
Complete Transmission Main Air Release and Blow -off Valve Replacement project
Complete Transmission Main Anode Bed Replacement project
Complete North Coast Highway 101 10" Water Main Replacement project
Update Asset Valuation Study
54
z ,rr CONTROL vain
11I�
-11-
HEATER —
(FUTURES
f
�`
--
- --
_
W GATE VALVE — 8' CONTROL
— —
--��� - --� VALVE_ _ 1
Division Function
nl 7' METER W1 STRAINFR
III — HEATER I DEHUM.
(FUTURE] I (FUTURE)1
�u FCA S. GATE VALVE
11 IL'
11 '1�:
6' METER W/
STRAINER
The Engineering & Planning Division manages the design and construction of improvements to the District's water system
infrastructure, plans to ensure water reliability needs and other requirements of the water system are met, advises on the
operation of the distribution system, performs development and CIP inspection, and oversees the District's recycled water
program.
Division Programs and Activities
Manage the District's Capital Improvement Program (CIP)
Process water service applications
Perform plan checks for water improvement and grading plans
Inspection of water improvement and capital improvement projects
Manage the District's recycled water program
Collaboratively oversee Joint Facilities Projects
Performed the 2015 update to the District's Urban Water Management Plan
Abandoned the final portion of a 30" transmission main from Cambridge Ave. to SEJPA
Completed the Balour Reservoir Rehabilitation Project with Field Operations
Completed the relocation of a 16" transmission main at Balour
Completed the replacement of a 10" steel water main in NCTD right -of -way
Complete Cardiff Valve Replacement project
Complete Transmission Main Air Release and Blow -off Valve Replacement project
Complete Transmission Main Anode Bed Replacement project
Complete North Coast Highway 101 10" Water Main Replacement project
Update Asset Valuation Study
54
Engineering & Planning Division
Fund: 531 Org: 53192695
Account
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Classification (FTE)
FY 18/19
Proposed
Actual
Actual
Approved
Proposed
Proposed
General Manager
$ 50,000
0.30
0.30
0.30
0.30
0.30
Senior Engineer
17
0.90
0.90
0.90
0.90
0.90
Engineer 1
Field Supplies
0.90
0.90
0.90
0.90
0.90
Utility & Maintenance Specialist 1 / II
464.1
0.90
0.90
0.90
0.90
0.90
Division Total
$ 2,000
3.00
3.00
3.00
3.00
3.00
1,997
$ 1,497
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Account Group
Actual
Actual
Approved
Proposed
Proposed
Salaries
$
326,807
$ 271,567
$ 334,762
$ 335,432
$ 358,515
Benefits
$
105,195
$ 70,581
$ 86,381
$ 86,723
$ 89,999
Materials & Supplies MS
$
30,417
$ 16,545
$ 50,000
$ 50,000
$ 50,000
Contracts & Services CS
$
3,571
$ 1,954
$ 11,300
$ 7,600
$ 7,600
Division Total
$
465,989
$ 360,647
$ 482,443
$ 479,755
$ 506,114
Account
Description
FY 14/15
Actual
FY 15/16
Actual
FY 16/17
Approved
FY 17/18
Proposed
FY 18/19
Proposed
431.1
CS
Professional Service Contracts
$
30,400
$ 16,545
$ 50,000
$ 50,000
$ 50,000
455
CS
Travel & Mileage
$
17
$ -
$ -
$ -
$ -
462
MS
Field Supplies
$
1,505
$ 457
$ 4,800
$ 1,600
$ 1,600
464.1
MS
Repair & Maintenance Supplies
$
69
$ -
$ 1,500
$ 2,000
$ 2,000
466
MS
Fuel
$
1,997
$ 1,497
$ 5,000
$ 4,000
$ 4,000
55
Overview
The process of providing a safe and reliable water supply to customers requires substantial infrastructure and
numerous facilities. District infrastructure and facilities require long -term investments in order to ensure continued
safe and reliable operation. Further adding to these investments are increases in service demands and more
stringent regulatory requirements over time. The District takes pride in maintaining its water system at the highest
level possible and believes that its customers are best served by this continued investment in its assets.
District staff uses numerous tools to evaluate its current and future capital program needs, including the following:
2010 Water Master Plan: The San Dieguito Water District's Water System Master Plan analyzed the
distribution system for reliability, water quality, adequacy of fire flow demands, and storage requirements.
The plan identifies and prioritizes capital improvement projects for the distribution system. This plan is
updated every 10 years.
- 2012 Joint Facilities Master Plan: The San Dieguito Water District and Santa Fe Irrigation District jointly own
infrastructure and treatment facilities utilized to convey and treat raw water supplies and then store and
transport treated water to the Districts. The plan identifies and prioritizes projects for a 10 -year Joint
Facilities Capital Improvement Program in order to maximize local water use and meet ever - increasing
water quality regulations.
2015 Urban Water Management Plan: Water agencies throughout the state are required by the California
Department of Water Resources to prepare Urban Water Management plans every five years in order to
show that adequate water supplies are available to meet existing and future water demands.
Using these plans, field observations and system knowledge, staff systematically determines and prioritizes capital
projects which best serve the needs of the District and its customers. As many of these capital projects are large
projects which may span multiple fiscal years, funding is then proposed and scheduled as available over a 7 -year
long -term financial plan in order to reasonably smooth out the financial impacts.
The District's Capital Program has four main components:
SDWD Infrastructure Projects: Projects which will upgrade and improve District infrastructure, such as water
mains, valves, meters, reservoirs, and other major water system components.
SDWD Consultant Services and Studies: Projects which will fund various consultant services and studies
for the District, such as the development of master plans, the implementation of new computer systems, and
other studies.
SDWD Capital Acquisitions: Provides for the purchase of major District assets and equipment which will
have long -term use.
- Joint Facilities Projects and Capital Acquisitions: Projects and purchases which will upgrade and improve
Joint Facilities infrastructure shared with the Santa Fe Irrigation District. These Joint Facilities include the
R.E. Badger Water Filtration Plant, San Dieguito Reservoir, and associated infrastructure.
The following section first summarizes the overall District Capital Program and then details the individual projects.
Individual project sheets are shown for projects that will be active during the two -year budget period.
56
Capital Improvement Program Summary
Project #
Project Title
Current
Current
Balance *
FY 17118
FY 18/19
FY 19/20
FY 20/21
FY 21/22
FY 22/23
Balance *
FY 23/24
CW12R
Utility Billing System Replacement
$
75,239
$
$
$
$
$
$ 1,005,000
$
$
$
$ 930,000
CW16F
Potable Reuse Implementation Plan
$
79,251
$
$
$
$ -
$
$ -
$
$
$
$
CW16G
Public Works Yard Landscape Improvements
$
50,000
$
$
$
$ 2,650,000
$
$
$
$
$
$ 2,830,000
CW17D
Non - Destructive Pipeline Assessment
$
57,550
$
$ 200,000
$
$
$
$
$
CW17F
Water Rate Study Update (2 -year)
$
100,000
$
$ 100,000
$
$
100,000
$
$ 100,000
$
CW18A
Joint Facilities Master Plan Projects
$
2,226,106
$ 1,750,000
$ 1,750,000
$
1,750,000
$
1,750,000
$ 2,250,000
$ 2,250,000
$
2,500,000
CW18B
Joint Facilities Capital Acquisitions
$
398,768
$ 150,000
$ 150,000
$
150,000
$
150,000
$ 150,000
$ 150,000
$
150,000
CW18C
Water Infrastructure Improvements
$
805,804
$ 600,000
$ 445,000
$
600,000
$
600,000
$ 600,000
$ 600,000
$
600,000
CW18D
Transmission Line Improvements
$
605,161
$ 305,000
$ 200,000
$
200,000
$
200,000
$ 200,000
$ 200,000
$
200,000
CW18E
Meter Replacement and Automation Program
$
932,053
$ 100,000
$ 100,000
$
100,000
$
100,000
$ 100,000
$ 100,000
$
100,000
CW18F
SCADA Automation Upgrade Program
$
73,121
$ -
$ 30,000
$
30,000
$
30,000
$ 30,000
$ 30,000
$
30,000
TBD
Urban Water Management Plan Update (5 -year)
$
-
$
$ -
$
-
$
75,000
$ -
$ -
$
-
TBD
Water Master Plan Update (10 -year)
$
-
$
$ 150,000
$
-
$
-
$ -
$ -
$
-
Total
$
5,403,053
$ 2,905,000
$ 3,125,000
$
2,830,000
$
3,005,000
$ 3,330,000
$ 3,430,000
$
3,580,000
Current
Funding Source Balance * FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
SDWD Capital Replacement Fund (Pay -Go) $ 5,403,053 $ 2,905,000 $ 3,125,000 $ 2,830,000 $ 3,005,000 $ 3,330,000 $ 3,430,000 $ 3,580,000
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
57
Current
Project Type
Balance *
FY 17/18
FY 18/19
FY 19120
FY 20/21
FY 21122
FY 22/23
FY 23/24
SDWD Infrastructure Projects
$
2,466,139
$ 1,005,000
$ 775,000
$ 930,000
$ 930,000
$ 930,000
$ 930,000
$ 930,000
SDWD Consultant Services and Studies
$
312,040
$ -
$ 450,000
$ -
$ 175,000
$ -
$ 100,000
$ -
Joint Facilities Projects and Capital Acquisitions
$
2,624,874
$ 1,900,000
$ 1,900,000
$ 1,900,000
$ 1,900,000
$ 2,400,000
$ 2,400,000
$ 2,650,000
Total
$
5,403,053
$ 2,905,000
$ 3,125,000
$ 2,830,000
$ 3,005,000
$ 3,330,000
$ 3,430,000
$ 3,580,000
Current
Funding Source Balance * FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24
SDWD Capital Replacement Fund (Pay -Go) $ 5,403,053 $ 2,905,000 $ 3,125,000 $ 2,830,000 $ 3,005,000 $ 3,330,000 $ 3,430,000 $ 3,580,000
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
57
Utility Billing System Replacement
Projects IMOTM I
Project # CW12R Start Date April 2016
Location District Office Completion Date December 2017
The Utility Billing System Replacement project includes software and implementation costs to replace the District's existing utility
billing system and associated software which is over 20 years -old. Implementation of a modern utility billing system will ensure
integration with the new City of Encinitas financial and planning systems and will provide the District and its customers with
greater functionality and efficiencies.
This project will address deficiencies with the current system, including technology obsolescence, feature gaps, lack of process
automation, lack of vendor support and product development, integration difficulty with new systems, and high cost of
ownership and maintenance. Key project benefits include greater employee efficiency, improved business processes,
enhanced customer service, improved data reporting, and timely access to critical business information.
Funding
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Consultant Services $75,239
$0
$0 $0
$75,239
Project Total $75,239
$0
$0 $0
$75,239
Anticipated Future Annual Operating Expense:
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
58
Potable Reuse Implementation Plan
Project # CW 16F Start Date July 2017
Location SEJPA / Joint Facilities Completion Date December 2017
In March 2016, the results of a Potable Reuse Feasibility Study were presented to the District Board. The conclusion of the
study was that a potable water reuse project is viable and potentially cost - effective. The Potable Reuse Implementation Plan
will build off of the Feasibility Study in order to progress with the development of a potable reuse project. The scope of work will
include planning a regulatory strategy, studying various governance structures, and identifying funding strategies.
The District's Water Sustainability Plan includes exploring the feasibility of potable water reuse in hopes of diversifying its water
supply portfolio. Potable water reuse has the potential to provide the District with a drought -proof local water supply at or below
the cost of imported water.
Funding I
Current
FY 17/18
FY 18/19
Future
Total 7 -Year
Category Balance *
Funding
Funding
Funding
Plan Funding
SDWD Consultant Study $79,251
$0
$0
$0
$79,251
Project Total $79,251
$0
$0
$0
$79,251
Anticipated Future Annual Operating Expense:
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
59
Public Works Yard Landscaping Improvements
Project # CW 16G Start Date July 2017
Location District Office Completion Date March 2018
This project will remove ornamental turf (grass) and hardscape (concrete) from the front public entrance of the shared
City /District Public Works Yard. Turf and hardscape will be replaced with drought tolerant and sustainable landscaping which
better meets landscaping needs related to water conservation and storm water capture. The re- landscaped area is envisioned
to act as a demonstration area for the public on many water conservation related landscaping techniques.
By removing ornamental turf and hardscape and replacing it with drought tolerant and sustainable landscaping, the City and the
District aim to save water, reduce irrigation costs, improve storm water capture, and provide examples to the public on water
conservation related landscaping techniques. The District will look to leverage partnership opportunities on this project,
including rebates and incentives for turf removal and irrigation upgrades, as well as potential storm water grant funding, both of
which may reduce the overall cost of the project.
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Infrastructure Project $50,000
$0
$0 $0
$50,000
Project Total $50,000
$0
$0 $0
$50,000
Anticipated Future Annual Operating Expense:
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
60
Non - Destructive Pipeline Assessment
PC Based Correlatvr
Receiver
Sensor Ifti- (�D -fftL x-
RF Transmitter
I o I
Project Informatio
Project # CW 17D Start Date July 2016
Location Various Locations Completion Date June 2019
The District's 2010 Water System Master Plan included an advanced asset management program to optimize the replacement
of District pipelines. The methodology called for the non - destructive testing of critical pipelines. The testing involves measuring
how quickly an acoustic signal is transmitted along a section of pipeline. Changes to the signal can be related to changes in
pipeline wall stiffness. The better or quicker the signal, the more structurally sound the pipeline is.
The asset management methodology combines the estimated useful life of a pipeline with the consequences of failure of the
pipeline to determine how critical the pipeline is to the system. By completing non - destructive testing of the critical pipelines,
District staff is able to identify pipelines that are still structurally sound, thereby deferring the scheduled replacement and
extending the pipeline's life. This ultimately reduces capital replacement costs.
F�ilrjils�
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Consultant Study $57,550
$0
$200,000 $0
$257,550
Project Total $57,550
$0
$200,000 $0
$257,550
Anticipated Future Annual Operating Expense:
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
61
Water Rate Study Update
IV
Project #
Location
SAN DIEGUITO
WATER
DISTRICT
Water Rate Study
FINAL Report / December 8, 2015
CW17F
District Office
Start Date
Completion Date
Sari Dieguito Water District
July 2017
June 2018
The Water Rate Study project provides for the hiring of a consultant to study and update the District's water rates and service
charges in accordance with cost of service principles. The 2017 Water Rate Study will update the previous study, performed in
2015. In addition to the water rate study, a fee study, asset management study, or water allocation study may be performed in
future years.
As an enterprise fund, the District is highly dependent on water rates and service charges in order to meet its financial
obligations. Due to the volatile nature of the water industry and associated costs, water rates and service charges need to be
evaluated and updated regularly in order to ensure relevance and accuracy, and to ensure the financial stability of the District.
Funding
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Consultant Study $100,000
$0
$100,000 $200,000
$400,000
Project Total $100,000
$0
$100,000 $200,000
$400,000
Anticipated Future Annual Operating Expense:
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
62
Joint Facilities Master Plan Projects
Project Information jd
Project # CW 18A (formerly CW 17A) Start Date On -Going
Location Joint Facilities Locations Completion Date On -Going
The Joint Facilities Master Plan Project funds upgrades and improvements to facilities jointly owned between SDWD and SFID
as per recommendations in the Joint Facilities Master Plan, completed in 2012. The joint facilities, including, but not limited to
the R.E. Badger Water Filtration Plant and San Dieguito Reservoir, provide for the conveyance and treatment of potable water
to be delivered to customers. Projects recommended over the next two years include:
- Completion of the San Dieguito Pump Station replacement
- Seismic improvements at the Plant clearwell and washwater tank
- Mechanical dewatering and washwater filtration improvements
- Safety improvements at San Dieguito Reservoir
- San Dieguito Dam concrete refurbishment
The R.E. Badger Water Filtration Plant is 47 years old and many of its components have reached the end of their useful lives.
The Joint Facilities Master Plan recommends projects to replace infrastructure that has reached the end of its useful life and to
improve existing water treatment processes to achieve compliance with current and foreseeable future water quality and water
treatment regulations. Compliance with regulations ensures that District customers have a safe and reliable water supply.
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
Joint Facilities Projects $2,226,106
$1,750,000
$1,750,000 $10,500,000
$16,226,106
Project Total $2,226,106
$1,750,000
$1,750,000 $10,500,000
$16,226,106
Anticipated Future Annual Operating Expense:
Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
63
Joint Facilities Capital Acquisitions
AWANWW
Project # CW18B (formerly CW17B) Start Date On -Going
Location Joint Facilities Locations Completion Date On -Going
The Joint Facilities Capital Acquisitions project provides for scheduled capital upgrades and purchases, which are not otherwise
accounted for in the Joint Facilities Master Plan Projects. These projects include items such as SCADA and security upgrades,
software and hardware upgrades, smaller miscellaneous plant improvements, and vehicle replacements. This continuing
project will fund these minor capital improvements as necessary with costs shared between the District and SFID.
This project accounts for minor joint facilities projects that are not planned as part of the larger joint facilities CIP process. The
District desires to not have these projects funded by the Operating Fund as it would distort actual water treatment costs. As
such, a capital project was created to capture these costs, shared with SFID.
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
Joint Facilities Capital Acquisitions $398,768
$150,000
$150,000 $750,000
$1,448,768
Project Total $398,768
$150,000
$150,000 $750,000
$1,448,768
Anticipated Future Annual Operating Expense:
Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
64
Water Infrastructure Improvements
Project lnformatio
Project # CW 18C (formerly CW 17C) Start Date On -Going
Location Various locations Completion Date On -Going
The Water Infrastructure Improvements project annually funds various repairs or upgrades to District facilities. Projects
scheduled to be funded during the next two -year budget cycle include:
- Cardiff Valve Replacement Project
- Encinitas Ranch Reservoir Rehabilitation
- North Coast Highway 101 10" Water Main Replacement
- Vault Lid Replacements (Multiple Locations)
- 12" Valve Replacement at Santa Fe Drive and 1 -5
Project Justification
The 2010 Water Master Plan identified a number of projects to be completed over a ten year period, several of which being
identified as high priority. Additionally, new projects are included as deemed necessary by staff during ongoing maintenance
and inspection of District infrastructure. Most projects are motivated by extending the life of critical facilities, as well as
enhancing fire -flow capacity, boosting system redundancy, and improving water quality.
Current FY 17/18 FY 18/19 Total 7 -Year
Category Balance * Funding Funding Future Funding Plan Funding
SDWD Infrastructure Project $805,804 $600,000 $445,000 $3,000,000 $4,850,804
Project Total $805,804 $600,000 $445,000 $3,000,000 $4,850,804
Anticipated Future Annual Operating Expense:
" Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
65
Transmission Line Improvements
(formerly Transmission Line Maintenance)
Project Information-4
Project # CW18D (formerly CW01A) Start Date On -Going
Location Various Locations Completion Date On -Going
This project facilitates the repair and replacement of valves and appurtenances on the District's 30 -inch and 36 -inch
transmission mains. Prior project phases included the replacement of large valves on the transmission mains. Upcoming
phases include the replacement of additional valves, as well as the replacement of corroded and inoperable blow -offs and
automatic air releases along the transmission main, which were discovered during prior work.
The 30 -inch and 36 -inch transmission mains are critical infrastructure which provide treated water from the R.E. Badger Water
Filtration Plant and San Diego County Water Authority pipelines to the District's main distribution system. The replacement of
the valves and appurtenances on the transmission mains will not only extend the useful life of these pipelines, but also allow
staff to better isolate smaller sections of the pipelines when necessary, in order to limit outages and water loss.
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Infrastructure Project $605,161
$305,000
$200,000 $1,000,000
$2,110,161
Project Total $605,161
$305,000
$200,000 $1,000,000
$2,110,161
Anticipated Future Annual Operating Expense:
* Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
66
Meter Replacement and Automation Program
Project Informabon
Project # CW18E (formerly CW17E)
Location Various Locations
Start Date On -Going
Completion Date On -Going
The Meter Replacement and Automation Program provides for the scheduled upgrading and replacement of older water meters
and endpoints (registers and radio transponders) throughout the District. Funding may also be utilized for hardware and
software upgrades, as well as the evaluation and implementation of new water meter technology.
Project Jl! , JWAtinn d
American Water Works Association (AWWA) studies and standards have shown that water meters over 12 years old have a
tendency to under - register the amount of water being consumed. Providing for the ongoing replacement of water meters
ensures accurate meter readings and also enables the District to implement advanced meter technology as it becomes
available and practically feasible.
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Infrastructure Project $932,053
$100,000
$100,000 $500,000
$1,632,053
Project Total $932,053
$100,000
$100,000 $500,000
$1,632,053
Anticipated Future Annual Operating Expense:
" Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
67
SCADA Automation Upgrade Program
Project Information ad
Project # CW 18F (formerly CW9813) Start Date On -Going
Location Various Locations Completion Date On -Going
The District's SCADA (Supervisory Control and Data Acquisition) system provides staff with real -time data related to system
pressures, reservoir water levels, and flows in and out of the reservoirs. This system provides supervisors and staff the ability to
make adjustments to distribution system pressures and flows at any time. Funding in this project provides for the installation,
upgrading and replacement of SCADA hardware, software, radios, and transmitters. The District endeavors to replace central
SCADA servers and components on a 5 -year schedule and is planning to install new controls in additional District pressure
reducing stations to allow for real -time pressure and flow monitoring.
The installation and upgrading of SCADA technology will allow for real -time pressure and flow monitoring of the distribution
system by staff from the office, thus reducing the need for staff to enter confined spaces. This project will also allow staff
greater control of the pressure reducing stations at District reservoirs. Future upgrades will further increase functionality of the
SCADA system from the central office location. In FY 2017/18, the District plans to take advantage of a free Department of
Homeland Security (DHS) Cyber Protection Audit, which will identify potential areas of vulnerability and what measures should
be taken to avoid cyber threats.
Current FY 17/18 FY 18/19
Total 7 -Year
Category Balance * Funding Funding Future Funding Plan Funding
SDWD Infrastructure Project $73,121 $0 $30,000 $150,000 $253,121
Project Total $73,121 $0 $30,000 $150,000 $253,121
Anticipated Future Annual Operating Expense:
Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
68
Urban Water Management Plan
2015 Urban Water Management Plan
(UWMP)
Prepared for:
San Dieguito Water District
160 Calle Magdalena
Encinitas. CA 92024
Project lnformabo
Project # TBD Start Date July 2020
Location District Office Completion Date December 2021
The Urban Water Management Plan (UWMP) provides a detailed analysis of the District's water supply status to help guide
short and long -term water supply strategies. The plan addresses system demands, system supplies, reliability, shortage
contingency plans, baseline demands, and target goals. Also included is a Water Sustainability Plan for the District. The 2020
UWMP, due by December 31, 2021, will be an update of the 2015 plan.
The California State Water Code requires water agencies to update their Urban Water Management Plan at least once every
five years in years ending in "one" and "six." The District last updated its UWMP in 2015 and submitted it in 2016. The next
update will occur in 2021.
Current
FY 17/18
FY 18/19
Total 7 -Year
Category Balance *
Funding
Funding Future Funding
Plan Funding
SDWD Consultant Study $0
$0
$0 $75,000
$75,000
Project Total $0
$0
$0 $75,000
$75,000
Anticipated Future Annual Operating Expense:
Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
69
Water Master Plan Update
Project InformaticM
Project # TBD
Location District Office
Start Date September 2019
Completion Date June 2020
The Water Master Plan analyzes existing and future planned developments, as well as planned population increases, against
current infrastructure sizing and then recommends improvements for any potential deficiencies in the system. The plan also
contains an asset management component which evaluates the current condition and remaining useful life of existing
infrastructure.
Consistent with good infrastructure planning practices, the District reviews and updates the Master Plan of the water distribution
system every ten years. The Master Plan is an essential tool that is utilized to guide the development of the District's long -term
Capital Improvement Program.
ma .
Current FY 17/18 FY 18/19 Total 7 -Year
Category Balance * Funding Funding Future Funding Plan Funding
SDWD Consultant Study $0 $0 $150,000 $0 $150,000
Project Total $0 $0 $150,000 $0 $150,000
Anticipated Future Annual Operating Expense:
Current Balance as of March 31, 2017 (FY 2016/17 3rd Quarter end)
70
Overview
The District is currently repaying two debt issuances which were used to fund prior District and Joint Facilities capital
projects.
2007 District Note Payable to R.E. Badger Water Facilities Financing Authority (Authority)
On November 20, 2007, the Authority issued $20,685,000 of 2007 Water Refunding Bonds while concurrently
redeeming all of its outstanding 1999 Water Revenue Bonds, on behalf of its member agencies, the Santa Fe
Irrigation District and the San Dieguito Water District. The transaction was a current refunding intended to save the
member agencies future interest costs due to lower market interest rates. No new funds were raised by either
agency. New Installment Purchase Agreements were executed, which save the District approximately $60,000 per
year on debt service.
The overall Bond issue consists of $20,685,000 of serial bonds maturing from 2008 through 2024. The District's
portion of the refinancing totaled $7,705,000. Principal is due and payable annually in amounts ranging from
$360,000 to $620,000. Interest is due and
payable semi - annually at rates ranging from 3.5% Total Debt Service
to 4.5 %. The District accounts for its share of the 81,600,000
bonds as a Note Payable to the Authority. $1,400,000
$1,200,000
2014 Water Revenue Refunding Bonds $1 „000,000
5800,000
5600,000
On September 30, 2014, the District issued $400,000
$5,870,000 of revenue refunding bonds, Series $200,000
2014. The Series 2014 bonds redeemed all of the
District's outstanding 2004 Water Revenue
tia+ �1�ti01a�1�ti0�° ����ODti�y0ti�ti0��1�3�0Dti�tiOti �ti0�'���
Refunding Bonds, which were themselves a
refunding of the District's original 1993 Water ■Principal ■interest
Revenue Bonds. The 2014 refunding was
intended to save the District approximately $250,000 annually in debt service costs due to lower market interest rates
and the elimination of a reserve previously required on the 2004 bonds.
The 2014 Water Revenue Refunding Bonds consist of $5,870,000 of serial bonds maturing from 2015 through 2023
in annual principal installments of $570,000 to $755,000. Interest is due and payable annually at rates ranging from
3.0% to 4.0 %. These bonds are not subject to optional or mandatory redemption prior to maturity.
Debt Coverage Ratio
400°% —
300°%
zaa�s
lams
0%
_1sl 1a 11 1 1�
-Debt Coverage Ratio Requirement
Debt Covenants
The two District debt issues described above
contain various covenants and restrictions,
principally that the District pledge its net revenues
(as defined) equal to at least 1.15 times the loan
installments coming due and payable during any
fiscal year. The District maintains compliance with
these covenants.
Administrative Fees
The District is also proposing to budget $3,004
annually for trustees fees and continuing disclosure
compliance related to these debt issuances.
71
Long Term Debt
Fiscal Year 2017/18
Principal
Interest
Total
2007 R.E. Badger Water Refunding Bonds
$
455,000
$
171,619
$
626,619
2014 Water Revenue Refunding Bonds
$
605,000
$
167,225
$
772,225
Debt Administration Fees
$
-
$
-
$
3,004
Total
$
1,060,000
$
338,844
$
1,401,848
Fiscal Year 2018/19
$
Principal
$
Interest
$
Total
2007 R.E. Badger Water Refunding Bonds
$
475,000
$
152,919
$
627,919
2014 Water Revenue Refunding Bonds
$
625,000
$
148,775
$
773,775
Debt Administration Fees
$
-
$
-
$
3,004
Total
$
1,100,000
$
301,694
$
1,404,698
Fiscal Year
Principal
Interest
Total
Prior Years (FY 2006/07 - FY 2016/2017)
$
3,430,000
$
2,404,976
$
5,834,976
FY 2017/18
$
455,000
$
171,619
$
626,619
FY 2018/19
$
475,000
$
152,919
$
627,919
FY 2019/20
$
490,000
$
133,619
$
623,619
FY 2020/21
$
525,000
$
111,466
$
636,466
FY 2021/22
$
545,000
$
89,397
$
634,397
FY 2022/23
$
570,000
$
66,044
$
636,044
FY 2023/24
$
595,000
$
40,916
$
635,916
FY 2024/25
$
620,000
$
13,950
$
633,950
Total
$
7,705,000
$
3,184,906
$
10,889,906
Fiscal Year
Principal
Interest
Total
Prior Years (FY 2014/15 - FY 2016/17)
$
1,155,000
$
493,536
$
1,648,536
FY 2017/18
$
605,000
$
167,225
$
772,225
FY 2018/19
$
625,000
$
148,775
$
773,775
FY 2019/20
$
645,000
$
126,500
$
771,500
FY 2020/21
$
665,000
$
100,300
$
765,300
FY 2021/22
$
695,000
$
73,100
$
768,100
FY 2022/23
$
725,000
$
44,700
$
769,700
FY 2023/24
$
755,000
$
15,100
$
770,100
Total
$
5,870,000
$
1,169,236
$
7,039,236
72
(Fleet Replacement_.M
Overview
The Fleet Replacement Fund is responsible for the planning, budgeting, and purchasing of vehicles and equipment in
a single consolidated fund and purchasing program. In Fiscal Year 2010/11, the San Dieguito Water District
separated its Fleet Replacement fund from the City of Encinitas in order to obtain more direct control and oversight
over its vehicle fleet. Prior to this move, the District would contribute funding to the City's replacement fund and City
staff would oversee the replacement schedule for District vehicles. By separating the District's fund, District staff has
greater flexibility and control when determining when to replace vehicles and has increased oversight on contributions
to the fund.
District staff appropriates funding to the Fleet Replacement Fund by following a 7 -year vehicle replacement schedule.
When a new vehicle is purchased, the District determines the cost of replacement for that vehicle in the future
(typically the current purchase price plus 10 %) and amortizes that amount over a period of 7 years in equal annual
contributions. When the 7 years have passed, the District ceases the contribution of funds for that vehicle, even if the
vehicle is in use for longer than 7 Vehicles /Equipment by Year
years. Doing this calculation for all of Chait urea
the District's vehicles determines the
annual contribution that the District
makes to its Fleet Replacement
Fund. The method levels out annual
contributions to the fund and helps
avoid drastic fluctuations in
contributions by spreading out the
costs of the vehicles.
y��' ��co n ti��. , ��°ti��'v�� 'p e��`' -0, -155, ti��v�`� y °tia�oti�ti °titi ����'ti °��ti °�� � °,b y °��
Even with the use of a 7 -year vehicle
replacement schedule, District staff •Equipment ■ v�h��l�5
has the flexibility to delay replacement of vehicles beyond 7 years of use. In many cases, due to continuous
maintenance and upkeep, District vehicles typically last much longer than 7 years, and in many cases vehicles have
lasted 10 -15 years. The District conducts regular vehicle condition assessments on its fleet and only replaces
vehicles once they have passed their useful life span and are no longer able to function safely or efficiently.
Summary
Since separating the District's Fleet Replacement Fund in Fiscal Year 2010/11, the District has made an effort to
strategically reduce the number of vehicles in its fleet in order to reduce fleet purchase and maintenance costs. After
a minor reorganization in Fiscal Year 2011/12, two vehicles were eliminated from the District's fleet. The District's
current fleet of 29 units includes a mix of light and heavy -duty service trucks, large construction vehicles, and other
specialized equipment necessary to perform the day -to -day activities of the District.
District Vehicles
Quantity
Description
8
Light -Duty Truck
5
Heavy -Duty Truck
3
Dump Truck
2
Sport Utility Vehicle
1
Water Tender
District Equipment
Quantity
Description
4
Backhoe / Loader
2
Flat Bed Trailer
1
Forklift
1
Large Water Pump
1
Vacuum Trailer
1
Mobile Emergency Generator
73
During the previous two -year budget cycle, the District replaced one vehicle in FY 2015/16 and one vehicle in FY
2016/17. Both vehicles were 14 years old at the time of replacement and their replacements were purchased at
under their budgeted costs.
In FY 2017/18, the District is proposing to purchase a vacuum truck, which would be a new addition to the fleet. The
vacuum truck is a 2009 model which is being retired by the City of Encinitas Wastewater Division. Therefore, the
District will save money by purchasing a used vehicle and the City will receive direct funding from the District at an
agreed upon price of $60,000, based upon industry valuation estimates. A brand new vacuum truck would cost
approximately $400,000. While it is rare for the District to add new vehicles to its fleet, adding a vacuum truck will
enable staff to repair leaks more efficiently and in a more timely manner, will allow staff to be more self- sufficient and
not require the rental of a vacuum truck at an hourly rate when needed, and will lessen wear and tear (and extend the
useful life) of the District's smaller vacuum trailer, which is designed for lesser loads and is currently being used
outside of its class. The District is projecting a $537,166 balance in the Fleet Replacement Fund at the beginning of
FY 2017/18. Given the size of the current balance, and due to the fact that in recent years several prior purchases
have been made at prices under their estimated replacement cost, staff is confident that the Fleet Replacement Fund
can accommodate the purchase of this new vehicle without adding any new money to the Fund. Adding this vehicle
to the fleet will increase the District's total fleet size to 30 in FY 2017/18.
In FY 2018/19, the District is proposing to replace an existing heavy -duty service truck, which is 10 years old and has
passed its useful life. This purchase is projected to be $100,000 and has previously been funded via contributions to
the Fleet Replacement Fund.
The District's Fleet replacement Fund is projected to end FY 2017/18 with a fund balance of $581,892 and end FY
2018/19 with a fund balance of $591,904. These ending fund balance figures represent approximately 35% of the
current replacement value of the District's entire vehicle and equipment fleet, respectively.
74
Fleet Replacement Fund
New Vehicle Information
Vehicle # Vehicle Description
Replaced Vehicle Information
Vehicle # Vehicle Description
Age
Purchase Cost
Fiscal Year 2014/15 Actual
FM -312 Ford F -150
FM -169
2001 Ford Ranger (4x4)
14
$
35,932
FM -313 Ford F -150
FM -182
2001 Ford F -150
14
$
35,932
FM -324 Flat Bed Trailer
FM -238
2004 Bobcat Trailer
11
$
--
Total
$
71,864
Fiscal Year 2015/16 Actual
FM -331 Toyota Rav4 Hybrid
FM -185
2002 Ford Explorer (4x4)
14
$
32,252
Total $ 32,252
Fiscal Year 2016/17 Approved
FM -332 3 -Yard Dump Truck FM -216 2003 3 -Yard Dump Truck 14 $ 80,000
Total $ 80,000
Fiscal Year 2017/18 Proposed
TBD 2009 Vacuum Truck (Used) N/A New Addition to Fleet N/A $ 60,000
Total $ 60,000
Fiscal Year 2018/19 Proposed
TBD Heavy -Duty Service Truck FM -261 2009 Ford F -550 10 $ 100,000
Total $ 100,000
(1) Flat Bed Trailer ($12,743) purchased with available Capital Outlay (53192694 -476) funding from Operating Fund.
75
Fleet Replacement Fund
I�to�•i.��a�:a�la; �
Revenue Source
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Actual Actual Approved Proposed Proposed
Transfer -In from Operating Fund $ 124,630 $ 133,900 $ 124,628 $ 104,726 $ 110,012
Proceeds from Fixed Asset Disposal $ 18,085 $ - $ - $ - $ -
Total $ 142,715 $ 133,900 $ 124,628 $ 104,726 $ 110,012
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Expenditure Actual Actual Approved Proposed Proposed
Vehicle / Equipment Purchases $ 71,863 $ 32,252 $ 80,000 $ 60,000 $ 100,000
Total: $ 71,863 $ 32,252 $ 80,000 $ 60,000 $ 100,000
76
FY 14/15
FY 15/16
FY 16/17
FY 17/18
FY 18/19
Transaction
Actual
Actual
Approved
Proposed
Proposed
Beginning Fund Balance
$
320,039
$ 390,891
$ 492,538
$ 537,166
$ 581,892
Revenue (Transfer -In)
$
124,630
$ 133,900
$ 124,628
$ 104,726
$ 110,012
Proceeds from Fixed Asset Disposal
$
18,085
$ -
$ -
$ -
$ -
Expenditures
$
(71,863)
$ (32,252)
$ (80,000)
$ (60,000)
$ (100,000)
Ending Fund Balance
$
390,891
$ 492,538
$ 537,166
$ 581,892
$ 591,904
76
Overview
An important component in maintaining the District's financial stability is the maintenance of proper reserve funds in
order to help protect the District in the event of emergencies or unforeseen conditions. The District currently
maintains three reserve funds; an
Operations Reserve, a Rate
Fund Balance and Reserves
Stabilization Reserve, and a Capital
Replacement Reserve. Each reserve
$14,000000
-
serves a specific purpose and has its
$12,0;000
- -
own target funding levels, set in
$10,o00,000
accordance with the District's water rate
$s0,00,ow
studies. All three reserves are
"unrestricted," meaning that while the
$5''
reserves are designed to serve a
$4,,OW,000
specific purpose, they are not legally
$2,0)00.000
limited in their use. The District
$0
performs long -term financial projections
FY 2013/14 FY 2014/15
FY 2015/16 FY 201647 FY 2017/19 FY 2018/19
to ensure these reserves are funded to
(actuaq (actuaq
(actuaq (estimated) (projected) (projected)
a proper level.
■ Capital Replacement
■ Operating
■ Rate Stabilization
■ Fleet Replacement
Reserves
■ Debt Service
■Additional Revenue Requirement
Ooeratina Reserve
The District's Operating Reserve is kept to meet the ongoing operating expenses of the District in the event of an
emergency or unforeseen event. This reserve is set at 60 days' worth of annual operating expenses for the District.
Rate Stabilization Reserve
The District's Rate Stabilization Reserve is maintained to help offset unexpected or unforeseen costs for purchased
water or system repair, or is used to help mitigate short -term water rate increases due to a sudden rise in costs. This
reserve is set at 15% of the District's annual rate revenue.
Capital Replacement Reserve
The District's Capital Replacement Reserve is used to ensure adequate funding is available for capital projects in the
event of an emergency or sudden loss of funding. This reserve is set at 2 to 3 times the District's future 5 -year
average of annual capital expenditures.
Other Balances
The District also maintains an annual balance in its Fleet Replacement Fund based upon scheduled contributions to
and purchases from the fund. See the "Fleet Replacement" section for more information on this Fund and its
balance.
Long -Term Planning
In addition to short -term (two -year) budgeting, the District also performs long -term planning in order to try to
anticipate and plan for potential issues in future years. The District currently performs long -term planning in the form
of a five -year cash -flow document, designed to look at overall projected revenue requirements, expenditures, and
reserve levels. This five -year cash -flow includes the current proposed two -year budget as well as three additional
years for planning purposes.
77
While the District can reasonably project many items, due to the volatile and ever - changing nature of the water
industry, it is difficult to perform accurate long -term planning beyond two years. Items which comprise a large portion
of the District's revenue and expenditures, such as wholesale water rates, local vs. imported water supplies, and
customer water demand, can change drastically over a short period of time, potentially leading to shifts in the
District's financial situation.
The following five -year cash -flow projects the major categories of revenue and expenditures for the District through
FY 2021/22, and illustrates how these projections will impact the District's fund balance and reserve levels.
Generally, Non - Operating revenues, Debt Service expenditures, Capital Improvement appropriations, and Fleet
Replacement expenditures are relatively well known through the life of the five -year cash -flow, and actual projected
amounts are included. While operating revenues are projected for the two -year budget based upon currently
available information, beyond two years conservative estimates of 2% revenue growth is built in annually.
Furthermore, while operating expenditures are projected for the two -year budget based upon currently available
information, beyond two years, conservative estimates of 5% expenditure increases is built in annually.
It should be noted that planning documents such as the Fund Budget Summaries and the Cash Flow documents in
the "Long -Term Planning" section of the document reflect an "additional revenue requirement" in order to meet target
ending fund balances which will satisfy reserve requirements as shown above. These "additional revenue
requirements" are not otherwise reflected in the District's proposed two -year revenue projections, which projects
revenues under the District's current water rates.
The District received Board approval in April 2017 to conduct an update to its Water Rate Study in late 2017 to
determine potential water rate plans for FY 2017/18 and FY 2018/19. The District aims to perform an update to its
Water Rate Study every two years to ensure that revenues are sufficient to meet the operating and capital needs of
the District, as well as meeting reserve requirements. Taking information from the approved two -year budget and
final audited FY 2016/17 financial results, District staff and its consultant will develop short and long -term financial
plans and model potential revenue adjustments required from water rates and service charges to potentially satisfy
this "additional revenue requirement." Scenarios will be vetted through the public Water Rate Subcommittee and the
full Board of Directors, who will have options available to them in how to meet these requirements, including
potentially modifying the information presented in this budget at a later time.
78
Five -Year Cash Flow
79
Approved
FY 16/17
Proposed
FY 17/18
Proposed
FY 18/19
Projected
FY 19/20
Projected
FY 20/21
Projected
FY 21/22
1
Beginning Balance
$
10,649,966
$
9,854,674
$
11,808,980
$
12,175,126
$
12,660,238
$
12,963,789
2
3
Operating Revenues
Non- Operating Revenues
$
$
16,911,640
100,000
$
$
17,351,692
100,000
$
$
17,725,962
100,000
$
$
18,080,481
100,000
$
$
18,442,091
100,000
$
$
18,810,933
100,000
4
Total Revenues ( 2 + 3)
$
17,011,640
$
17,451,692
$
17,825,962
$
18,180,481
$
18,542,091
$
18,910,933
5
6
7
8
9
Operating Expenditures
Debt Service
Subtotal Expenditures ( 5 + 6)
CIP's / Work Projects
Vehicle / Equipment Replacement
$
$
$
$
$
13,146,890
1,405,042
14,551,932
3,175,000
80,000
$
$
$
$
$
12,501,131
1,401,848
13,902,979
2,905,000
60,000
$
$
$
$
$
15,222,710
1,404,698
16,627,408
3,125,000
100,000
$
$
$
$
$
15,983,846
1,398,123
17,381,969
2,830,000
90,000
$
$
$
$
$
16,783,038
1,404,770
18,187,808
3,005,000
215,000
$
$
$
$
$
17,622,190
1,405,501
19,027,691
3,330,000
215,000
10
Total Expenditures ( 7 + 8 + 9)
$
17,806,932
$
16,867,979
$
19,852,408
$
20,301,969
$
21,407,808
$
22,572,691
11
Transfers In (Out)
$
-
$
-
$
-
$
-
$
-
$
-
12
Current Year Net (4- 10+ 11)
$
(795, 292)
$
583,713
$
(2,026,446)
$
(2,121, 487)
$
(2,865,717)
$
(3,661,758)
13
Additional Revenue Requirement
$
-
$
1,370,593
$
2,392,592
$
2,606,599
$
3,169,268
$
3,816,136
14
Ending Fund Balance ( 1 + 12 + 13)
$
9,854,674
$
11,808,980
$
12,175,126
$
12,660,238
$
12,963,789
$
13,118,167
15a
15b
15c
15d
Operating Reserve
Rate Stabilization Reserve
Capital Replacement Reserve
Vehicle /Equipment Replacement Balance
$
$
$
$
2,062,687
1,176,820
6,078,000
537,166
$
$
$
$
2,511,747
2,427,340
6,288,000
581,892
$
$
$
$
2,637,335
2,475,886
6,470,000
591,904
$
$
$
$
2,769,201
2,525,404
6,738,000
627,631
$
$
$
$
2,907,661
2,575,912
6,936,000
544,215
$
$
$
$
3,053,044
2,627,430
7,004,000
433,691
16
Total Reserves ( 15a + 15b + 15c + 15d)
$
9,854,674
$
11,808,980
$
12,175,126
$
12,660,238
$
12,963,789
$
13,118,167
79
20x2020 — A Bill by the State of California (Senate Bill X7 7) with the goal of achieving a 20- percent reduction in
urban per capita water use in California by the year 2020.
Acre -Feet — A unit of measurement defined as the amount of water needed to cover an acre, one foot deep in water,
or 325,851 gallons.
Acquisition - The process of gaining assets.
ACWA/JPIA - Association of California Water Agencies / Joint Powers Insurance Authority.
ADA - Americans with Disabilities Act of 1990.
Allocate - To divide a lump -sum appropriation which is designated for expenditure by specific organization units
and /or for specific purposes, activities or objects.
Appropriation - An authorization made by the Board which permits the District to incur obligations and to make
expenditures of resources.
APWA — American Public Works Association.
AWWA — American Water Works Association.
Assessed Value - A dollar valuation set upon real estate or other property by the County Assessor as a basis for
levying property taxes.
Asset - Anything having commercial or exchange value that is owned by a business, institution or individual.
Audit - Conducted by an independent Certified Public Accounting (CPA) firm, the primary objective of an audit is to
determine if the District's Financial Statements present the District's financial position fairly and results of operations
are in conformity with generally accepted accounting principles.
Balanced Budget - A budget in which planned expenditures do not exceed projected funds available.
Balance Sheet - A financial statement reporting the organization's assets, liabilities, and equity activities.
Bond - A written promise to pay a specified sum of money (principal) at a specific date in the future, together with
periodic interest at a specific rate. In the Operating Budget, these payments are identified as Debt Service. Bonds
are used to obtain long -term financing for capital improvements.
Budget - A financial plan for a specified period of time that matches planned revenues and expenditures to municipal
services.
CaIPERS — California Public Employee Retirement System.
Calendar Year — Period of January 1 through December 31 of any given year.
Capacity - The maximum that can be contained in a system whether it be a tank or a pipe, etc.
Capital Budget - The annual adoption by the Board of project appropriations. Project appropriations are for the
amount necessary to carry out a capital project's expenditure plan, including multi -year contracts for which a total
appropriation covering several years' planned expenditures may be required.
Capital Improvement Program - The annual updated plan or schedule of project expenditures for District
infrastructure and facilities (pipelines filtration plant, etc.) with estimated project costs, sources of funding, and timing
of work over a five -year period. For financial planning and general management, the capital program is a plan of work
and expenditures and is the basis for annual appropriations and bond issues.
Capital Outlay - Expenditures which result in the acquisition of or addition to fixed assets. Per District policy, fixed
assets will normally have a useful life greater than two years and with a cost greater than $1,500.
Capital Project - Any project, or phase of a project, that is to be a permanent physical improvement to District
infrastructure or facilities, where the total cost of the project will be greater than $10,000. Equipment, as a rule, will
not be considered as a capital project.
Commodity Rate — Cost per unit of water.
Consumer Price Index (C.P.I.) - A statistical description of price levels provided by the U.S. Department of Labor.
The change in this index from year to year is used to measure the cost of living and economic inflation.
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Contingency - An appropriation of funds to cover unforeseen events that occur during the fiscal year, such as flood
emergencies, Federal mandates, shortfalls in revenue and similar eventualities.
Continuing Appropriation - Funds committed for a previous fiscal year expenditure which were not spent in the year
of appropriation but are intended to be used in the current year.
Contractual Services - Services rendered to District activities by private firms, individuals or other governmental
agencies. Examples of these services include engineering, law enforcement and attorney services.
Debt - All long -term credit obligations of the District, whether backed by the District's full faith and credit or by
pledged revenues, and all interest - bearing short -term credit obligations.
Designated Fund Balance - A portion of unreserved fund balance designated by District policy for a specific future
use.
Distribution System - The piping system and appurtenances necessary to deliver adequate quantities of water at
sufficient pressures at all times under continually changing conditions, while at the same time protecting water quality.
Division — An organizational unit of the District to track costs related to specific programs and services.
Encumbrance - The legal commitment of appropriated funds to purchase an item or service. To encumber funds
means to set aside or commit funds for a future expenditure.
Enterprise Fund — An governmental accounting entity that operates similar to a private business enterprise, where
the cost of providing goods and services is either partially or fully recovered by user charges.
Environmental Impact Report (EIR) - An in -depth analysis of potential environmental impacts of a project which
includes strategies to mitigate the impacts. Either an Environmental Impact Report or a Negative Declaration (ND) is
required of certain projects by the California Environmental Quality Act.
Expenditure - The outflow of funds paid for goods or services obtained.
Fees for Services - Charges paid to the District by users of a service to help support the costs of providing that
service.
Financial Plan - The document created by the staff and approved by the Board which establishes the broad policy
guidance on the projection of revenues and the allocation toward various types of expenditures.
Financial Report - A comprehensive annual document providing a snapshot of the District's financial position on the
final day of the fiscal year. A formal audit performed by an independent CPA firm supports the report's financial
information.
Fines, Forfeitures and Penalties - Revenues received and /or bail monies forfeited upon conviction of a
misdemeanor or municipal infraction.
Fiscal Year (FY) - The beginning and ending period for recording financial transactions. The District has specified
July 1 to June 30 as its fiscal year.
Fixed Assets - Assets of long -term nature such as land, buildings, machinery, furniture and other equipment. The
District has defined such assets as those with an expected life in excess of one year and an acquisition cost in
excess of $ 1,500.
FTE — Full -Time Equivalent.
Full Accrual Basis — Basis of accounting where revenues are recognized when they are earned and expenses are
recognized when the liability is incurred.
Fund - An accounting entity that records all financial transactions for specific activities or government functions.
Fund Balance - The excess of current assets over current liabilities, and represents the cumulative effect of
revenues and other financing sources over expenditures and other financing uses.
Goal - A statement of broad direction, purpose or intent.
Grant - Contributions of cash or other assets from another governmental agency to be used or expended for a
specified purpose, activity or facility.
Imported Water — Water purchased from SDCWA, which is typically transported from Northern California or the
Colorado River.
Infiltration - The seepage of rain and /or groundwater into underground pipes and utility holes via cracks in the
system.
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Infrastructure - The District's basic system of its physical plant, i.e., pipelines, valves, filtration plant and other
facilities.
Infrastructure Access Charge — A pass- through charge from SDCWA based upon meter size to finance projected
fixed annual costs including the construction, operation and maintenance of aqueducts and the Emergency Storage
Project.
Internal Cost Allocation — The annual amount paid by the District to the City of Encinitas for services provided in the
areas of Finance, Human Resources, Information Technology, Records Management, Risk Management and Vehicle
Maintenance.
Internal Service Fund - A fund which provides services to other internal entities and bills for services rendered. The
District receives internal services from the City of Encinitas in the areas of Finance, Human Resources, Information
Technology, Records Management, Risk Management, and Vehicle Maintenance.
Investment Earnings - Earnings received as interest from the investment of funds not immediately required to meet
cash disbursement obligations.
Joint Facilities — Infrastructure jointly owned by SDWD and SFID for the mutual benefit of both agencies, including
the R.E. Badger Water Filtration Plan, San Dieguito Reservoir, and associated facilities.
Joint Powers Authority (J.P.A.) - A joint venture comprised of two or more governmental entities sharing the cost of
providing a public service.
Key Objective - A statement of specific direction, purpose, or intent based on the needs of the community and the
goals established for a specific program.
LAFCO - Local Agency Formation Commission.
Lake Hodges - A lake in North San Diego County to which the District maintains water rights to.
Liability - A claim on the assets of an entity.
Line -Item Budget - A budget that lists detailed expenditure categories (salary, materials, telephone service, travel,
etc.) separately, along with the amount budgeted for each specified category. The District uses a program rather
than line -item budget, although detailed line -item accounts are maintained and recorded for financial reporting and
control purposes.
Local Water — Water utilized by the District from Lake Hodges.
Master Plan - A comprehensive planning document which encompasses all aspects of current and future needs of
the District.
Material and Supplies - A general category used for clarifying expenditures for various materials and supplies which
are normally used within a fiscal year.
Municipal - In its broadest sense, an adjective which denotes the state and all subordinate units of government. In a
more restricted sense, an adjective which denotes a city or village as opposed to other local governments.
MWD — Metropolitan Water District of Southern California.
OMWD — Olivenhain Municipal Water District.
OPEB — Refers to "Other Post Employment Benefits ", meaning other than pension benefits which consist primarily of
retiree health care benefits, but may also include other benefits such as life insurance and long -term care that
employers have promised to employees.
Operating Financial Plan - The portion of the budget that pertains to daily operations of providing basic services.
Personnel Services - Costs associated with providing the staff necessary to provide the desired levels of service.
Included are both salary and benefit costs.
Phase - A project carried out in planned incremental stages, usually with the highest priority items being addressed
first in Phase 1.
Policy - A direction that must be followed to advance toward a goal. The direction can be a course of action or a
guiding principle.
Potable Water - Water that does not contain objectionable pollution, contamination, minerals, or ineffective agents
and is considered satisfactory for drinking.
Program - A grouping of activities organized to accomplish basic goals and objectives.
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Program Budget - A budget that focuses upon the goals and objectives of an agency or jurisdiction rather than upon
its organizational budget units or object classes of expenditure.
Property Tax - An ad valorem tax imposed on real property (land and permanently attached improvements) and
tangible personal property (movable property).
Proposition 13 - Article XIIIA of the California Constitution, commonly known as Proposition 13, which limits the
maximum annual increase of any ad valorem tax on real property to 1 % of the full cash value of such property.
R.E. Badger Water Filtration Plant - A water treatment plant that is jointly -owned by San Dieguito Water District and
Santa Fe Irrigation District, located in Rancho Santa Fe. The treatment plant provides the necessary treatment to
make the water safe and suitable for drinking.
Real Property Transfer Tax - Also called Documentary Transfer Tax, this tax is imposed on the transfer of
ownership in real estate at a rate of $0.55 per $500.00 of property value.
Recycled Water - Non - potable water used primarily for landscaping and floriculture irrigation.
Reclamation - The process of recovering usable but non - potable water from the tertiary treatment of wastewater.
Regional Water Quality Control Board - A state agency which among other responsibilities regulates the discharge
of water into streams, groundwater, and bodies of water.
Reimbursement for State Mandated Costs - Article XIIIB, Section 6 of the California Constitution which requires the
state to reimburse local agencies for the cost of state - imposed programs. Process is commonly called "SB 90" after
its original 1972 legislation.
Rents - Revenues received through the rental of public properties to private parties such as convention space and
library facilities.
Reserve - The portion of any fund's balance that is restricted for a specific purpose and is, therefore, not available for
general appropriation.
Revenue - Funds that the government receives as income. It includes such items as tax payments, fees from
specific services, receipts from other governments, fines, forfeitures, grants, shared revenues and interest income.
Revenue Bonds - Bonds issued to acquire, construct or expand public projects for which fees or admissions are
charged. Bonds are repaid solely from the income generated by use of that project.
Risk Management - An organized attempt to protect an organization's assets against accidental loss in the most
cost - effective manner.
San Diego Association Of Governments (SANDAG) - A public agency formed by local governments to assure
overall area -wide planning and coordination for the San Diego region.
SCADA - Supervisory Control And Data Acquisition. A computer system to monitor and control the water system.
SDCWA —San Diego County Water Authority.
SDID — San Dieguito Irrigation District.
SDR Pump Station — San Dieguito Reservoir Pump Station.
SDWD — San Dieguito Water District.
SEJPA — San Elijo Joint Powers Authority.
SEWRF — San Elijo Water Reclamation Facility.
SFID — Santa Fe Irrigation District.
SWRCB — State Water Resources Control Board.
Second -Year Revise — The process in which the District adopts the second year of its two -year budget with revisions
from the original document.
Service Charges - Charges imposed to support services to individuals or to cover the cost of providing such
services. The fees charged are limited to the cost of providing the service or regulation required (plus overhead).
Special Revenue Funds - Funds used to account for the proceeds from specific revenue sources (other than trusts
or major capital projects) that are legally restricted to expenditures for specific purposes.
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Subsidiary District — A district of limited powers for which a city council is designated as the ex officio board of
directors of the district.
Take -or -Pay Agreement - A contractual agreement in which one party agrees to purchase a specific amount of
another party's goods or services or to pay the equivalent cost even if the goods or services are not needed.
Unrestricted Reserve — A reserve which is not limited or restricted in its use and may be utilized for any purpose.
Unsecured Property - As the property tax is guaranteed by placing a lien on the real property, unsecured property is
that real property in which the value of the lien is not sufficient to assure payment of the property tax.
User Fees - The payment of a fee for direct receipt of a service by the party benefiting from the service.
Work Projects Program - A program to provide for the maintenance or replacement of existing public facilities and
assets and for the construction or acquisition of new ones.
Working Capital - Difference between current assets and current liabilities.
Zero -Based Budgeting - A method of budgeting in which all expenditures must be justified each new period, as
opposed to only explaining the amounts requested in excess of the previous period's funding.
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