Regional Sewerage Program Technical Committee Meeting

AGENDA

Thursday, February 27, 2014 4:00 p.m.

Location Inland Empire Utilities Agency 6075 Kimball Avenue Chino, CA 91708

Thursday, February 27, 2014

Call to Order and Roll Call 1. Approval of Minutes

A. Minutes of January 30, 2014 Meeting

2. Action Item A. Request by the Cucamonga Valley Water District for Two Regional

Connection Points to the Etiwanda Interceptor (CVWD Regional Sewer Connections #CW-16 and #CW-17, Project No. CW19014.03)

3. Informational Items A. 2nd Quarter Budget Variance (Written/Powerpoint) B. Financial Update (Written/Powerpoint) C. Recycled Water Semi-Annual Update (Written/Powerpoint)

4. Receive and File

A. Minutes of the Pretreatment Subcommittee Meeting B. Building Activity Report (YTD) C. Recycled Water Operations Summary

5. Other Business

A. IEUA General Manager’s Update B. Committee Member Requested Agenda Items for Next Meeting C. Committee Member Comments D. Next Meeting – March 27, 2014

6. Adjournment

Regional Sewerage Program Technical Committee Meeting Agenda February 27, 2014 Page 2 of 2

DECLARATION OF POSTING

I, Cheyanne Reseck-Francis, Administrative Assistant of the Inland Empire Utilities Agency, A Municipal Water District, hereby certify that a copy of this agenda has been posted by 5:30 p.m. in the foyer at the Agency's main office, 6075 Kimball Avenue, Building A, Chino, CA on Thursday, February 20, 2014.

Cheyanne Reseck-Francis

APPROVAL OF MINUTES

1A

1

Regional Sewerage Program Technical Committee Meeting

MINUTES OF January 30, 2014 MEETING

CALL TO ORDER A regular meeting of the IEUA/Regional Sewerage Program – Technical Committee was held on Thursday, January 30, 2014, at the Inland Empire Utilities Agency located at 6075 Kimball Avenue, Chino, California. Jim Hill, City of Chino called the meeting to order at 4:02 p.m. ATTENDANCE

Committee Members:

Jim Hill City of Chino

Steve Nix City of Chino Hills

Chuck Hays City of Fontana

Mike Hudson City of Montclair

Ryan Shaw City of Ontario

Rosemary Hoerning City of Upland

P. Joseph Grindstaff Inland Empire Utilities Agency

Absent Committee Members:

Scott Burton City of Ontario

John Bosler Cucamonga Valley Water District

Others Present:

Cheyanne Reseck-Francis Inland Empire Utilities Agency

Chris Berch Inland Empire Utilities Agency

Christina Valencia Inland Empire Utilities Agency

Craig Parker Inland Empire Utilities Agency

Ernest Yeboah Inland Empire Utilities Agency

Javier Chagoyen-Lazaro Inland Empire Utilities Agency

Jesus Plasencia City of Chino

Liza Munoz Inland Empire Utilities Agency

Nicole Greene City of Montclair

Rebecca Long Inland Empire Utilities Agency

Sylvie Lee Inland Empire Utilities Agency

Teresa Velarde Inland Empire Utilities Agency

Warren Green Inland Empire Utilities Agency

IEUA/RSP –Technical Committee Meeting Minutes of January 30, 2014

2

1. APPROVAL OF MINUTES A. Minutes of November 7, 2013 Meeting

Motion: By Chuck Hays/City of Fontana and seconded by Rosemary Hoerning/City of Upland to approve the revised minutes of the November 7, 2013 Technical Committee meeting. Motion carried: Unanimously, with Steve Nix/City of Chino Hills and Ryan Shaw/City of Ontario abstaining.

2. ACTION ITEMS

A. Request by the City of Ontario for One Regional Connection Point to the RP-1 Bypass Sewer (Ontario Regional Sewer Connection #O-96, Project No. CW19014.06) Craig Parker/IEUA gave a brief overview of the recommendation to approve the request by the City of Ontario for one Regional Connection Point to the RP-1 Bypass Sewer (Ontario Regional Sewer Connection #O-96, Project No. CW19014.06).

Motion: By Steve Nix/City of Chino Hills and seconded by Chuck Hays/City of Fontana to approve the request by the City of Ontario for one Regional Connection Point to the RP-1 Bypass Sewer (Ontario Regional Sewer Connection #O-96, Project No. CW19014.06). Motion carried: Unanimously.

B. Approval of the FY 2014/15 Ten Year Capital Improvement Program

Chris Berch/IEUA gave a presentation on the FY14/15 TYCIP, highlighting key changes, planning initiatives, schedule, EDU growth forecasts, budget estimates by fund, the comparison of FY13/14 TYCIP to the FY14/15 TYCIP, and major projects over $5 million.

Motion: By Ryan Shaw/City of Ontario and seconded by Chuck Hays/City of Fontana to approve and make recommendation to the IEUA Board of Directors to approve the FY 2014/15 Ten-Year Capital Improvement Program. Motion carried: Unanimously.

3. INFORMATIONAL ITEMS

A. Financial Update Christina Valencia/IEUA gave a presentation on the FY2014/15 Budget Workshop that was held by the IEUA Board on January 22, 2014. She highlighted the financial position, including total revenues, expenses, fund reserves, debt coverage ratio, and sources/uses of funds. Ms. Valencia also highlighted business goals: fiscal responsibility, workplace environment, business practices, water reliability, wastewater management, and environmental stewardship.

IEUA/RSP –Technical Committee Meeting Minutes of January 30, 2014

3

B. Regional Contract Audit Teresa Velarde/IEUA gave an oral presentation on the Regional Contract Audit. She reviewed specifics of the process, including ensuring clear criteria in contracts with member agencies, following “paper trails”, defining what is working for member agencies and what is not, finding out what resources IEUA can provide, gathering facts, and compiling surveys. Ms. Velarde stated that the current contract expires in 2023, and that this audit will assist in determining now if anything should be changed or updated during the contract renewal process. She stated that she will send out the questionnaire that will be used for the audit to all member agencies so that they can familiarize themselves with it.

C. Self-Regenerating Water Softener Update

Rebecca Long/IEUA gave an oral presentation on the status of the water softener removal program. She stated that the Cities of Chino, Chino Hills, and Ontario have not adopted any ordinances to support the program, and that CVWD is currently in the process of adopting an ordinance. Ms. Long stated that 631 water softeners have been removed to date (2008 through the end of 2013) and that this has kept 291,000 lbs. of salt out of the regional system.

4. RECEIVE AND FILE ITEMS

A. Draft Minutes of the January 7, 2014 Pretreatment Subcommittee Meeting The Draft Minutes of the January 7, 2014 Pretreatment Subcommittee Meeting item was received and filed by the Committee.

B. Building Activity Report (YTD) The Building Activity Report (YTD) was received and filed by the Committee.

C. Recycled Water Operations Summary The Recycled Water Operations Summary was received and filed by the Committee.

D. IEUA Quarterly Water Newsletter

The IEUA Quarterly Water Newsletter was received and filed by the Committee.

5. OTHER BUSINESS A. IEUA General Manager’s Update

P. Joseph Grindstaff/IEUA reported the following:

The Governor has declared a drought. The State reported 15% allocation last month, and we are currently at 12%. He anticipates that the Governor will announce in the near future that there is 0% allocation. The Governor has asked for a voluntary conservation effort of 20%, and it is anticipated that this will become mandatory.

Sharmeen Bhojani has been hired as the Human Resources Manager and Joanne Chan has been hired as the Operations Supervisor.

Montclair Pump Station contract award that was approved for up to $3.3 million by both the Regional Technical and Regional Policy Committees has been combined with the Philadelphia Pump Station contract award for a total which is under the approved amount.

IEUA/RSP –Technical Committee Meeting Minutes of January 30, 2014

4

Recycled Water recharge totals through December 2013 were the best on record with 7,400 acre-feet. Last year’s total Recycled Water use was 32,000 acre-feet and this year’s total is anticipated to reach at least 40,000 acre-feet.

BAR actuals are low at 732 connections to date, which is 25% of what was projected.

B. Committee Member Requested Agenda Items for Next Meeting None.

C. Committee Member Comments None.

D. Next Meeting – February 27, 2014

6. ADJOURNMENT - Meeting was adjourned at 5:15 p.m. Transcribed by:

Cheyanne R. Reseck-Francis Administrative Assistant, IEUA

ACTION ITEM

2A

G:\ PP \ Tech Policy Committee \ 2014 \ 2-27-14 Tech \ CW19014.03 CVWD Reg Connections C-16 CW17

Etiwanda Interceptor

Date: February 27, 2014

To: Regional Technical Committee

From: Inland Empire Utilities Agency

Subject: Request by the Cucamonga Valley Water District for Two Regional Connection

Points to the Etiwanda Interceptor (CVWD Regional Sewer Connections #CW-16

and #CW-17, Project No. CW19014.03)

RECOMMENDATION

It is recommended that the Regional Technical Committee approve the request by the Cucamonga

Valley Water District for two new connection points to the Regional System (CVWD Regional

Sewer Connections #CW-16 and #CW-17, Project No. CW19014.03).

BACKGROUND

On February 5, 2014, IEUA received a request from the Cucamonga Valley Water District

(Attachment “A”) for the approval of two connections to the Etiwanda Interceptor. The purpose

of the connections is to discharge flows from a proposed residential development by Lennar

Homes consisting of 291 condominium units. The connections are required due to a lack of a

CVWD sewer located in close proximity. The connections will be made by two new regional

manholes and will discharge domestic sewer flow to the existing 42-inch sewer pipeline, which

is located in Arrow Route between Pecan Avenue and Hickory Avenue (Attachment “B”).

SUMMARY OF FLOW RATE

CW-16: Peak Flow Rate - 0.30 MGD or 0.46 cfs

CW-17: Peak Flow Rate - 0.10 MGD or 0.15 cfs

The 42-inch Etiwanda Interceptor is designed to deliver a maximum flow rate of 27.8 MGD to

the Regional Water Recycling Plant No. 4. The proposed additional flow rate of 0.40 MGD is

within the capacity of this sewer.

ATTACHMENT 'B'CVWD REGIONAL CONNECTIONS # CW-16 & # CW-17

PECA

N

HICK

ORY

CVWD Regional Connection # CW-16 CVWD Regional Connection # CW-17

Ü

LENNAR HOMESTRACT 18870-1

42" Etiwanda Interceptor

ARROW ROUTEET

IWAN

DA/SA

N SE

VAIN

E CHA

NNEL

INFORMATION ITEM

3A

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\FY 2013-14 2nd Quarter Budget Variance.docx

Date: February 27, 2014

To: Regional Technical Committee

From: Inland Empire Utilities Agency

Subject: Budget Variance 2nd

Quarter FY 2013/14

RECOMMENDATION

This is an informational item for the Regional Technical Committee to receive and file.

BACKGROUND

This item was presented at the IEUA Board of Directors meeting on February 19, 2014.

Date: February 19, 2014

To: The Honorable Board of Directors

From: P. Joseph Grindstaff

General Manager

Submitted by: Christina Valencia

Chief Financial Officer/Assistant General Manager

Javier Chagoyen-Lazaro

Manager of Finance and Accounting

Subject: FY 2013/14 Second Quarter Budget Variance, Performance Goals

Updates, and Budget Transfer

RECOMMENDATION

This is an informational item for the Board of Directors to receive and file.

BACKGROUND

The Budget Variance report represents the Agency’s financial performance through the second

quarter ending December 31, 2013. Exhibit A provides a comparison of actual revenues and

expenses against the FY 2013/14 Amended Budget including an explanation of significant

variances by categories. Exhibit B provides progress status of Division and Department Goals

and Objectives for the current fiscal year. Exhibit C presents a summary of Capital and O&M

budget transfers approved by management during the second quarter, and Exhibit D provides a

summary of total project budget changes.

The historically dry winter that has resulted in the Drought Declaration by California Governor

has had an impact in some of the revenues and expenses of the Agency during the first half of

current fiscal year.

REVENUES

The Agency’s total revenues and other funding sources at the end of the second quarter were

$61.5 million, or 41% of budget. Key highlights of revenues are:

Connection Fees – Member agencies reported $3.7 million or 41% of the annual budget.

A total of 732 new connections were reported through December compared to annual

budget of 1,800 new EDU connections and to member agencies projections of 2,867.

Budget Variance and Performance Goals Updates for the

Second Quarter Ended December 31, 2013

February 19, 2014

Page 2 of 5

G: Board-Rec/2013/14041 FY 2012/13 Second Quarter Budget Variance and Performance Goals Updates

Recycled Water Sales –Recycled water direct and groundwater recharge sales were $3.2

million (14,235 AF) and $2.0 million (7,377 AF) respectively, for a combined total of

$5.2 million or 73% of the budget. The dry winter supported the sales increase, with total

year to date deliveries of 21,612 AF compared to the 31,400 AF projected for the fiscal

and to 15,570 AF for the same period of the previous year.

MWD LPP Rebate Direct recycled water sales in excess of 3,500 AF and up to 17,000

AF are eligible for rebates from the Metropolitan Water District (MWD) Local Project

Program (LPP) at a rate of $154/AF, for a maximum amount of $2.1 million per fiscal

year. Total rebate received was $1.7 million for 10,948 AF reached 81% of the budget,

compare to $1.3 million and 8,439 AF in the previous year

Property Taxes – The $13.8 million in property tax receipts included $13.6 million of

general ad-valorem property tax receipts and $0.2 million in “pass-through” incremental

taxes (RDA) account for 41.4% of the budget. The first of two pass through RDA pass

through payments from the San Bernardino County Tax Assessor was received in January

for $5.5 million. The second RDA payment from the San Bernardino County Tax

Assessor is expected in June 2014.

Grants & Loans – The total receipts were $6.5 million or 21% of budget; $1.5 million

grants and $5.0 million of SRF loan proceeds from SWRCB for the Southern Area

Recycled Water projects. The total budget of $31.8 million consists of $8.9 million of

grants and $22.9 million of SRF loan proceeds. Lower SWRCB grant and SRF loan

proceeds for the Recycled Water Program are anticipated in this fiscal year due to the

delay of the Central/Wineville projects.

Other Revenues and Reimbursements – The Agency received a total of $3.4 million, or

36% of the annual budget. The reimbursement included $1.5 million from the Inland

Empire Regional Composting Authority (IERCA), $0.6 million from Chino Basin

Desalter Authority (CDA), and $0.8 million from Chino Basin Watermaster (CBWM) for

operating and debt service costs. The total other revenue budget of $9.3 million includes

JPA reimbursements budget of $5.3 million, reimbursement from CBWM of $1.0 million

for O&M and share of debt service for the 2008A bonds, and $1.4 million of capital cost

reimbursements, and annual lease payment of $.6 million for the RP-5 Solids Handling

Facility/REEP.

EXPENSES The Agency’s total expenses at the end of the second quarter were $61.2 million, or 34% of

Amended Budget.

The Amended Budget includes Board approved encumbrances and budget carried over from FY

2012/13 to FY 2013/14 in the amount of $8.5 million; $6.6 million for capital projects and $1.9

Budget Variance and Performance Goals Updates for the

Second Quarter Ended December 31, 2013

February 19, 2014

Page 3 of 5

G: Board-Rec/2013/14041 FY 2012/13 Second Quarter Budget Variance and Performance Goals Updates

million for O&M Expenses. In accordance with Agency Policy A-81 (Fiscal Year-End Carry

Forward of Encumbrances and Related Budget), carry forward encumbrances and budget that are

not expended by December 31st of each year are subject to cancellation, unless otherwise

approved by Executive Management. As of January 31, 2014, a total of $1.5 million in unspent

carry over encumbrances and budget were reversed; $1.1 million from projects and $0.4 million

from O&M expenses.

Capital &

Special

Projects

O&M Total

Carried Forward – September 2013 $6.6 $1.9 $8.5

Encumbrance Return – January 2014 ($1.1) ($0.4) ($1.5)

Total Used or Remaining Encumbrance $5.5 $1.5 $7.0

Key highlights on expenses are:

Employment Expenses – The employment expenses at the end of the second quarter

were $17 million or approximately 48% of the Amended Budget. A total of 33 positions

were vacant at the end of the second quarter, equivalent to an 11% vacancy factor which

compared favorably to the Agency’s targeted 5% vacancy factor (15 FTEs). The

favorable variance was partially offset by payment of the annual sick leave buy in

December, and the one-time compensation adjustment paid in October pursuant to the

Memorandum of Understanding and Personnel Manuals adopted by the Board on

September 4, 2013.

Office and Administrative Expenses – This category expended 30% of the budget

resulting in a favorable variance, which was mainly due to the GM contingency account

with remaining budget of $300,000 and other budgeted items (training, dues and

subscriptions) not anticipated to be expended until later in the year.

Chemicals Expenses –This category expended approximately $2.0 million, or 43% of

Amended Budget. The favorable variance was attributed by lower Polymer usage than

projected due to seasonal variation of solids production and digester performance, along

with the warmer temperatures for the unseasonal weather pattern. Additionally, a change

in treatment process (new dewatering facility) results in a decreased usage of anti-scalant

chemicals for the Non-Reclaimable Wastewater line.

Budget Variance and Performance Goals Updates for the

Second Quarter Ended December 31, 2013

February 19, 2014

Page 4 of 5

G: Board-Rec/2013/14041 FY 2012/13 Second Quarter Budget Variance and Performance Goals Updates

Utilities – This category expended $4.9 million or 51% of the budget, which is slightly

over budget due to higher energy demand during the peak period, (July through October).

The dry winter season also increased recycle water deliveries, resulting in higher energy

demand and pumping costs.

Capital - Total project expenditures through the end of the second quarter were $15.2

million, or 21% of the $73.1 million in the Amended budget. The low capital spending in

the second quarter can be attributed to delays in the construction of several of the larger

budgeted projects. Permit, scope of work, and design delays pushed estimated

construction dates into late in this fiscal year. Current estimates approximately 50% of

the project budget will be used by fiscal year end.

Debt Service – Total debt service expenses were $10.2 million or 46% of the $22.1

million budget for the second quarter. The category is expected to be slightly below

budget for the final two quarters, as the interest rates for the 2008B Variable Rate

Demands Bonds continues to stay low with an average of rate .05% compared to a 1%

budgeted rate.

More detailed explanations of significant revenue and expenses are included in the attached

Exhibit A.

FUND BALANCES AND RESERVES

Total cash and investment position as of December 31

st amount to $138.7 million, as indicated in

the Financial Affairs report. This balance compares with $113.8 million in the same period of

the previous fiscal year and $145 million as of June 30, 2013.

GOALS AND OBJECTIVES

Exhibit B provides information on division and related department goals and objectives and the

status of each through the end of the second quarter. The goals and objectives indicators are

measures used to track the volume and complexity of work by type and to track the effort

invested to accomplish that work. Staff will use the indicators to justify current resource

allocations, requests for additional resources, or re-allocation of staff and to track productivity.

PRIOR BOARD ACTION

The Board reviewed the Agency’s variance report for FY 2013/14 First Quarter Ending

September 30, 2013, on December 18, 2013.

IMPACT ON BUDGET

Budget Variance and Performance Goals Updates for the

Second Quarter Ended December 31, 2013

February 19, 2014

Page 5 of 5

G: Board-Rec/2013/14041 FY 2012/13 Second Quarter Budget Variance and Performance Goals Updates

Positive net revenues of $0.3 million will increase Agency’s fund balances.

I. Actual vs. Budget Summary:

Second Quarter Ended December 31, 2013

% of the Year Elapsed: 50%

AdoptedAnnual Budget

Amended AnnualBudget

ActualQuarter Ended

12/31/13Amended vs.

Actual % of Amended

Budget

Revenues $75,553,237 $75,553,237 $37,307,740 (38,245,497) 49.4%

Other Sources of Fund 75,530,021 75,530,021 24,186,639 (51,343,382) 32.0%

Administrative & Operating Expense (80,410,174) (82,375,273) (35,376,787) 46,998,485 42.9%

CIP Expense (67,981,934) (73,127,684) (15,238,511) 57,889,173 20.8%

Debt Service / Financial Expense (22,494,185) (22,494,185) (10,544,964) 11,949,221 46.9%

Surplus/(Deficit) (19,803,035) (26,913,884) 334,117 27,248,001

EXHIBIT A

0

50

100

150

200

Revenues (Incl. Other Funding Sources)

Administrative & OperatingExpense

CIP Expense Debt Service /   FinancialExpense

Mill

ion

s

Actualvs.AnnualBudgetFortheQuarter

EndedDecember31,2013

AmendedAnnualBudget

ActualQuarter Ended12/31/13

Page 1

2. Actual Revenue vs. Budget:

% of the Year Elapsed: 50%

AdoptedAnnual Budget

Amended AnnualBudget

ActualQuarter Ended

12/31/13Amended vs.

Actual % of Amended

Budget

User Charges

Property Tax/ AdValorem

Recycled Water

Interest Income

MWD LPP Rebates

Connection Fees

Grants and Loans

Cost Reimbursements and Other Revenues

Interest Income is approximately 13% of the annual budget, the variance is attributed to a lower average interestrate of return of .448% compared to the budgeted interest rate of 1.0%.

MWD LPP rebate is budgeted at $2.1 million or $154/AF for direct recycled water deliveries up to 17,000 AFY, excluding the initial 3,500 AFY. The second quarter, total rebate revenue is $1.7 million, or 81.1% of budget, equivalent to 10,948 of eligible AF. The previous fiscal year 2nd quarter total LPP rebates were approximately 33% lower at 8 439 AFMember agencies have reported a total of 732 new connections through the second quarter, $3.7 million in new EDU connection fees, 40.6% of the annual $9.0 million (1,800 new EDU connections) budget and 36% lower than the member agencies projection of 2,827 new EDU Connections.Total receipts were $6.5 million, 20.6% of budget; $1.5 million grants and $5.0 million of loan proceeds from SWRCB for the Recycled Water Southern Area projects. Total budget of $31.8 million consists of $8.9 million of grants and $22.9 million of SRF loan proceeds for the Recycled Water Program Southern and Central/Wineville area projects. Due to the delays of the Central/Wineville projects, it is estimated that only 10% of the budgeted SRF loan ($11.5 million) and SWRCB grant receipts ($4 million) for the Central/Wineville projects will be received in the current fiscal year.Budgeted grant reimbursements: (a) $8.7 million from SWRCB/SAWPA/USBR Water Recycling Program for the Southern and Central/Wineville Area projects and (b) $0.2 million from Department of Water Resources (DWR) and CA Dept of Parks Recreation (DPR)Total cost reimbursements and other revenues were $3.4 million or 36.1% of the annual budget. Receipts include reimbursements of $1.5 million from the Inland Empire Regional Composting Authority (IERCA), $.6 million from Chino Basin Desalter Authority (CDA), and $.8 million from Chino Basin Watermaster (CBWM) for operating and debt service costs, $.3 million from lease payments, and $17,000 from energy rebates. The total other revenue budget of $9.3 million, includes JPA reimbursements budget of $5.3 million, reimbursement from CBWM of $1.4 million for O&M, share of debt service for the 2008A bonds, and $1.3 million of capital cost reimbursements, and annual lease payment of $.6 million for the RP-5 Solids Handling Facility/REEP.

User charges were $27 million, or 47% of the Amended Budget. This category includes budgeted EDU servicecharges of $43.5 million; Non-Reclaimable Wastewater volumetric, capacity, strength and administrative fees of$9.0 million; and surcharge revenues for imported water deliveries and monthly meter fees of $4.9 million.

General ad-valorem property tax receipts from the San Bernardino County Tax Assessor receipts are $13.6million and the first payment of RDA pass through payments receipt totaled $0.2 million, for a total of $13.8million, or 41.1% of budget. In January an additional $5.2 million of RDA pass through payments was received,the final annual payment of RDA pass-through tax is due in June.Actual direct and recharged recycled sales water through the second quarter were $3.2 million (14,235 AF) and$2.0 million (7,377 AF), respectively, for a combined total of $5.2 million or 72.8% of budget. Total deliveries of21,612 AF compares favorably to the direct and recharge recycled water budget of 31,400 AF.

Total Revenues $151,083,258 $151,083,258 $61,494,379 $89,588,879 40.7%

Other Revenue 4,069,652 4,069,652 1,268,864 2,800,788 31.2%

Grants & Loans 31,764,226 31,764,226 6,549,570 25,214,656 20.6%

Non-Operating Revenues:

Connection Fees $9,012,600 $9,012,600 $3,663,122 $5,349,478 40.6%

Property Tax - Debt, Capital, Reserves $30,683,543 $30,683,543 $12,705,082 $17,978,461 41.4%

Interest 1,001,032 1,001,032 129,587 871,445 12.9%

MWD LPP Rebate 2,079,000 2,079,000 1,686,146 392,854 81.1%

Cost Reimbursement from JPA 5,251,221 5,251,221 2,155,834 3,095,387 41.1%

Recycled Water Sales 7,151,000 7,151,000 5,204,034 1,946,966 72.8%

Property Tax - O&M 2,668,134 2,668,134 1,104,790 1,563,344 41.4%

Operating Revenues:

User Charges $57,402,850 $57,402,850 $27,027,348 $30,375,502 47.1%

Page 2

3. Actual Operating and Capital Expense vs. Budget:

% of the Year Elapsed: 50%

AdoptedAnnual Budget

Amended AnnualBudget

ActualQuarter Ended

12/31/13Amended vs.

Actual % of Amended

Budget

Employment $35,223,023 $35,223,023 $16,950,276 $18,272,747 48.1%

Admin & Operating 45,187,151 47,152,250 18,426,511 $28,725,738 39.1%

Capital 67,981,934 73,127,684 15,238,511 $57,889,173 20.8%

Debt Service and All Other Expenses 22,494,185 22,494,185 10,544,964 $11,949,221 46.9%

Total Expenses $170,886,293 $177,997,142 $61,160,262 $116,836,880 34.4%

Employment Expense

Financial Expenses

Capital Expense

Administrative & Operating Expense

Professional Fees & Services - 32.6%

Biosolids Recycling - 47.2%

Chemicals - 43.0%

Special and Reimbursable Projects - 9.7% and 14.8%

Favorable variance was due to minimal need of funds for operational emergency repairs, timing of contract laborand contract services as several items are to be performed in the final quarter of the fiscal year. Other itemswhich account for the favorable variance include: computer systems maintenance, lab services, external auditfees, landscaping, and security services.

This category is slightly under budget due to KPI monitoring and normal operating conditions. It is anticipatedthat this category will continue to be on track with the projected budget through the end of the fiscal year.

Employment - 48.1%

Office and Administrative - 30%

Financial Expense - 46.1%

Capital Costs - 20.8%

A combination of factors can be attributed to the favorable variance for chemicals. Unusually dry winter monthsincreased recycled water demands resulted in lower than projected usage of sodium bisulfite. Polymer use wasalso lower than projected due to seasonal variation of solids production and digester performance. Additionally achange in treatment process (new dewatering building) has resulted in a lowered dosage of anti-scalantchemicals for the NRW line, and close monitoring of hydrogen sulfide production and ferric chloride dosing havealso contributed to the favorable variance.

Utilities - 51.4%Utilities was slightly over budget at the end of the second quarter, due higher demand during the "peak season"(October-July). Higher than projected recycled water deliveries year to date, as a result of the unusually drywinter season, also increased pumping costs.

The table below summarizes the major special (O&M) and reimbursable projects. The status updates accountsfor the favorable variance in this category to date: combined actual costs were $.7 million or 12.3% compared toa combined annual budget of $6.4 million.

The favorable second quarter variance is due to continued low variable rate interest expense. The category isexpected to be slightly below budget in this fiscal year as the interest rates on the 2008B Variable RateDemands Bonds continue to average .05% compared to a budgeted rate of 1%.

Capital expenditures through the second quarter were approximately $15.2 million. Delays in scope of work,design, and permit issues have contributed to the reduction of capital expense through the second quarter. A keyfactor is the Central Wineville Area project which has been delayed to conduct geotechnical investigations priorto initiation of construction. Current projections through the end of fiscal year indicate that only approximately50% of the amended budget will be expended. Listed below is a brief status report on some of the major projectscurrently under construction

This category includes both wages and benefits. Employment expenses through the second quarter were $17 million or approximately 48.1% of Amended Budget. The favorable variance was due to a total of 33 vacant /on hold) positions at the end of the quarter, resulting in a vacancy factor of 11.2%; more than double the budgeted 5.0%. Offsetting the vacancy variance was payment of the annual sick-leave buy back in December and the one-time compensation adjustment pursuant to the Memorandum of Understanding and Personnel Manuals adopted by the Board on September 2013.

The favorable variance was mainly due to reduced; office & administrative costs, director's expenses, training,travel related expenses, and avoided election expenses. Online webinar training is being utilized when availablein lieu of offsite training.

Non-Operating Expenses:

Operating Expenses:

Page 3

Capital ProjectAmended FY

2013/14YTD

Expenditure

Budget Amount

Remaining

EN06025 Capital Projects 233,852 7,783,087

EN13045 Wineville Recycled Water Extension Segment B Capital Projects 664 7,000,000

EN13023 Capital Projects 2,171,826 6,100,000

EN13022 Capital Projects 2,881,824 5,100,000

EN07010 CCWRF Recycled Water Pump Station Expansion Capital Projects - 3,750,000

EN13038 RP-1 Outfall Relocation Capital Projects 2,000,000

EN13049 RP-2 Digester No. 4 Dome Improvements Capital Projects 100,352 1,870,180 A pre-construction meeting with W. M. Lyles took place on December 20, 2013, a notice to proceed will be issued to the Contractor in early January 2014. RMS has somesafety concerns regarding the contractor's proposed dome lifting method. RMSrecommends that 18 screw jacks be placed under the dome (on the corbels) and not to relyon ratcheted cables when working under the dome.

This project is funded in part by the State Water Resources Control Board (Grant#SWB012-1). The Jack-and-Bore efforts under the Eucalyptus Avenue and Peyton Drive(City of Chino Hills) intersection continues; and under Ramona Avenue (City of Chino)started in early December. It is anticipated that the Jack-and-Bore efforts at this locationwill continue through January 2014. MNR Construction continued and completed pipelineinstallation in the English Channel, and will continue into the City of Chino residentialstreets - Daisy Drive and Bluebell Drive.

The Contractor, Olsson Construction and their Electrical subcontractor completed themajority of underground mechanical and electrical installations for the RW pump station,electrical equipment has been installed. The Contractor and subcontractors will completeabove ground mechanical piping installation, electrical equipment terminations andcommence field testing of respective systems in the upcoming period.

In late November the legal description of the easement was finalized, in December theappraisal report was issued and provided to the County for review. In January the Countywill verify the determination of the valuation and provide comments.

Summary of major capital and special project expenses and status as of December 31, 2013

The construction bid package for the project will be advertised the last week of February,2014. The construction contract is scheduled for award in June, 2014. The delays are dueto IEUA plans to conduct further baseline geotechnical investigations. The project is toconstruct a 24 and 20 inch recycled water pipeline from the Wineville Recycled WaterPipeline at Jurupa and Wineville to the RP-3 basins at Beech and Jurupa.

The construction bid packages for the projects are being advertised 2014. Thisconstruction contract is scheduled for award in May, 2014. This project has also beendelayed due to plans to conduct further baseline geotechnical investigations. The projectpertains to Wineville RW Extension Pipeline Segment B which was budgeted for incombination with Segment A both segments will be advertised for construction bidsseparately.

This project is funded in part by the State Water Resources Control Board (Grant#SWB012-1). Paso Robles Tank completed installation of the Reservoir in earlyDecember. Coating and painting of the Reservoir started in December, and is anticipatedto be completed at the end of January. Concurrently, the associated pipeline installation,and permanent electrical installation are progressing. Irrigation and landscaping of theReservoir is anticipated to start in late January. IEUA Public Relations efforts and visitswith City of Chino Hills’ residents adjacent to construction efforts are on-going and havebeen well-received. Due to unforeseen conditions during the pipeline installation, theportion of the Horse/Hiking Trail will be closed to public access, and extend into late

930 Zone Recycled Water Reservoir

930 Zone Recycled Water Pipeline

Wineville Extension Recycled Water Pipeline

Page 4

Special & Reimbursable ProjectsAmended FY

2013/14YTD

Expenditure

Budget Amount

Remaining

PL05007 Facilities Master Planning Special Projects 4,091 4,091

WR13023 USBR Vegetative Monitoring Reimbursable Project 20,000 20,000

WR13024 Urban Runoff Capture Retrofits Reimbursable Project 12,442 200,000

WR14003 Wastewater Facilities Update and CEQA Special Projects 505,000

WR14019 IEUA Integrated Regional IRP Special Projects 66,553 450,000

WR14020 Recycled Water Intertie Special Projects 1,868 100,000

EN14039 Digester Gas Analysis Special Projects 2,800 150,000 Expenses have been incurred and invoices are being processed for payment. This projectbudget is for digester gas analysis at RP-1 and net energy metering applicationimplementation at RP-1. The net energy metering application implementation portion wasestablished as contingency and may not be expended by the end of the fiscal year.

100% of the $505,000 budget was encumbered by the end of the second quarter due to anopen PO for the same amount. Work will commence in the third and fourth quarters.Project completion is expected in FY 2014/15.

Project commenced at the end of September and is on track to be completed in FY2014/15.

The project agreement between MWD and IEUA was executed in second quarter; work willcommence in the third quarter.

This project is complete and project closure forms have been submitted to finance.

100% of the budget was expensed as a prepayment that is required by USBR to performwork. Work will commence in the third quarter.

While only ten percent of the budget was expended by the end of the second quarter,major expenses are anticipated to be paid in third and fourth quarters. Project is on track.

Page 5

Exhibit A Detail

Adopted Amended YTD

FY 2013/14 FY 2013/14 Actual %

Annual Annual Quarter Ended YTD Budget# Budget Budget 12/31/2013 Variance Used

OPERATING REVENUES

User Charges $57,402,850 $57,402,850 $27,027,348 ($30,375,502) 47.1%

Recycled Water 7,151,000 7,151,000 5,204,034 (1,946,966) 72.8%

MWD LPP Rebates 2,079,000 2,079,000 1,686,146 (392,854) 81.1%Property Tax - O&M 2,668,134 2,668,134 1,104,790 (1,563,344) 41.4%Cost Reimbursement from JPA 5,251,221 5,251,221 2,155,834 (3,095,387) 41.1%

Interest Revenue 1,001,032 1,001,032 129,587 (871,445) 12.9%TOTAL OPERATING REVENUES $75,553,237 $75,553,237 $37,307,740 ($38,245,497) 49.4%

NON-OPERATING REVENUES

Property Tax - Debt, Capital, Reserves $30,683,543 $30,683,543 $12,705,082 ($17,978,461) 41.4%

Connection Fees (CCRA) 9,012,600 9,012,600 3,663,122 (5,349,478) 40.6%

Grants 8,883,473 8,883,473 1,484,975 (7,398,498) 16.7%

SRF Loan Receipts 22,880,753 22,880,753 5,064,595 (17,816,158) 22.1%

Project Reimbursements 800,547 800,547 806,078 5,531 100.7%

Other Revenue 3,269,105 3,269,105 462,786 (2,806,319) 14.2%TOTAL OPERATING REVENUES $75,530,021 $75,530,021 $24,186,639 ($51,343,382) 32.0%

TOTAL REVENUES $151,083,258 $151,083,258 $61,494,379 ($89,588,879) 40.7%

ADMINISTRATIVE and OPERATING EXPENSES

EMPLOYMENT EXPENSES

Wages $21,202,087 $21,202,087 $11,361,374 $9,840,713 53.6%

Benefits 14,020,936 14,020,936 5,588,902 8,432,034 39.9%

TOTAL EMPLOYMENT EXPENSES $35,223,023 $35,223,023 $16,950,276 $18,272,747 48.1%

ADMINISTRATIVE EXPENSES

Office & Administrative $1,790,973 $1,823,211 $547,380 $1,275,830 30.0%

Insurance Expenses 568,500 568,500 303,498 265,002 53.4%

Professional Fees & Services 7,502,032 8,196,135 2,673,652 5,522,483 32.6%

Special Projects 3,677,147 4,668,658 452,731 4,215,927 9.7%

Reimbursable Projects 1,284,153 1,701,864 252,725 1,449,139 14.8%

TOTAL ADMINISTRATIVE EXPENSES $14,822,805 $16,958,369 $4,229,986 $12,728,382 24.9%

INLAND EMPIRE UTILITIES AGENCYFiscal Year 2013/14

CONSOLIDATED BUDGET VARIANCE ANALYSIS REPORT

Second Quarter Ended December 31, 2013

Page 6

Exhibit A Detail

Adopted Amended YTD

FY 2013/14 FY 2013/14 Actual %

Annual Annual Quarter Ended YTD Budget# Budget Budget 12/31/2013 Variance Used

INLAND EMPIRE UTILITIES AGENCYFiscal Year 2013/14

CONSOLIDATED BUDGET VARIANCE ANALYSIS REPORT

Second Quarter Ended December 31, 2013

OPERATING EXPENSES

Material & Supplies/Leases $2,774,742 3,250,693 $1,352,664 $1,898,028 41.6%

Biosolids Recycling 3,498,017 3,489,086 1,646,982 1,842,104 47.2%

Chemicals 4,493,663 4,778,285 2,054,597 2,723,688 43.0%

CSDLAC & SARI, Operating Fees/Water 10,003,039 9,080,932 4,212,170 4,868,762 46.4%

Utilities 9,594,885 9,594,885 4,930,112 4,664,773 51.4%

TOTAL OPERATING EXPENSES $30,364,346 $30,193,881 $14,196,525 $15,997,356 47.0%

TOTAL ADMINISTRATIVEand OPERATING EXPENSES $80,410,174 $82,375,273 $35,376,787 $46,998,485 42.9%

NON-OPERATING EXPENSES

CAPITAL OUTLAY $67,981,934 $73,127,684 $15,238,511 $57,889,173 20.8%

FINANCIAL EXPENSESPrincipal, Financial and Interest Expenses 22,112,093 22,112,093 10,197,621 11,914,472 46.1%

OTHER NON OPERATING EXPENSES 382,092 382,092 347,342 34,750 90.9%

TOTAL NON-OPERATING EXPENSES $90,476,119 $95,621,869 $25,783,475 $69,838,394 27.0%

TOTAL EXPENSES $170,886,293 $177,997,142 $61,160,262 $116,836,879 34.4%

REVENUES IN EXCESS/

(UNDER) EXPENSES ($19,803,035) ($26,913,884) $334,117 ($27,248,001)

FUND BALANCE SUMMARY

Beginning Balance, July 01 $120,401,747 $144,661,865 144,661,865 $0

Surplus/ (Deficit) (19,803,035) (26,913,884) 334,117 (27,248,001)

ENDING BALANCE, June 30 $100,598,712 $117,747,981 144,995,983 $27,248,001

Page 7

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dge

t

Am

t. o

f

Tran

sfer

In /

(Ou

t)

Ne

w T

P B

ud

get

FY 2

013/

14

An

nu

al P

roje

ct

Bu

dge

t

An

nu

al P

roj.

Bu

dge

t

Ch

ange

Ne

w A

nn

ual

Pro

ject

Bu

dge

t

Pro

ject

Tran

sfer

red

To/(

Fro

m)

Rea

son

Fo

r Tr

ansf

er

1050

0C

ap7/

25/1

3Ye

sYe

sN

oEN

1400

8N

RW

S C

on

n &

Em

erg

Pro

ject

s FY

13/1

4$1

00,0

00$0

$100

,000

($58

,000

)$4

2,0

00$1

00,0

00($

58,0

00)

$42,

000

EN13

027

Bu

dge

t tr

ansf

er f

rom

EN

1400

8 to

EN

1302

7 to

fu

nd

co

nst

ruct

ion

, co

nst

ruct

ion

man

agem

ent

cost

s an

d

con

tin

gen

cy f

or

casi

ng

exte

nsi

on

fo

r N

RW

cro

ssin

g U

PR

R in

On

tari

o a

nd

Fo

nta

na.

Cap

7/25

/13

Yes

Yes

No

EN13

027

NR

W C

ross

ing

UP

RR

$52,

000

$0$5

2,00

0$5

8,00

0$1

10,0

00$5

2,0

00$5

8,00

0$1

10,0

00

(EN

1400

8)B

ud

get

tran

sfer

fro

m E

N14

008

to f

un

d c

on

stru

ctio

n, c

on

stru

ctio

n m

anag

emen

t co

sts

and

co

nti

nge

ncy

for

casi

ng

exte

nsi

on

fo

r N

RW

cro

ssin

g U

PR

R in

On

tari

o a

nd

Fo

nta

na.

Cap

9/26

/13

Yes

Yes

No

EN13

011

CM

Mis

c N

RW

S C

on

st

& E

mer

g P

roj F

Y13/

14$2

25,0

00$0

$225

,000

($55

,000

)$1

70,0

00$1

50,0

00($

55,0

00)

$95,

000

EN13

039

Tran

sfer

fro

m E

N13

011

to E

N13

039

to

co

ver

the

inte

rnal

lab

or

cost

s to

clo

se o

ut

the

pro

ject

, wh

ich

was

com

ple

ted

in F

Y201

3. C

ost

s w

ere

no

t ac

cru

ed b

ack

to F

Y 12

/13

du

e to

late

su

bm

itta

l of

invo

ice

in O

ct

2013

Cap

9/26

/13

Yes

Yes

No

EN13

039

Ph

illy

PS

Forc

e M

ain

Cle

ano

ut

Inst

all

$136

,000

$0$1

36,0

00$5

5,00

0$1

91,0

00$6

8,6

63$5

5,00

0$1

23,6

63

(EN

1301

1)

Tran

sfer

fro

m E

N13

011

to E

N13

039

to

co

ver

the

inte

rnal

lab

or

cost

s to

clo

se o

ut

the

pro

ject

, wh

ich

was

com

ple

ted

in F

Y201

3. C

ost

s w

ere

no

t ac

cru

ed b

ack

to F

Y 12

/13

du

e to

late

su

bm

itta

l of

invo

ice

in O

ct

2013

$513

,000

$513

,000

$370

,663

$370

,663

1060

0C

ap7/

29/1

3Ye

sYe

sN

oEN

0602

5W

inev

ille

Ext

RC

Pip

elin

e Se

g A

$18,

155

,518

$0$1

8,15

5,51

8($

35,0

00)

$18,

120

,518

$8,0

00,0

00($

35,0

00)

$7,9

65,0

00

EN13

055

Tran

sfer

fro

m E

N06

025

to E

N13

055

to s

up

po

rt t

he

com

ple

tio

n o

f th

e co

nst

ruct

ion

by

cove

rin

g th

e

chan

ge o

rder

s d

evel

op

ed d

uri

ng

the

con

stru

ctio

n p

has

e an

d in

tern

al la

bo

r co

st t

o c

lose

ou

t th

e p

roje

ct.

Cap

7/29

/13

Yes

Yes

No

EN13

055

RP

-4 P

ow

er

Dis

trib

uti

on

Ass

essm

ent

& R

ep

$279

,550

$0$2

79,5

50$3

5,00

0$3

14,5

50$3

2,4

17$3

5,00

0$6

7,41

7 (E

N06

025)

Tran

sfer

fro

m E

N06

025

to E

N13

055

to s

up

po

rt t

he

com

ple

tio

n o

f th

e co

nst

ruct

ion

by

cove

rin

g th

e

chan

ge o

rder

s d

evel

op

ed d

uri

ng

the

con

stru

ctio

n p

has

e an

d in

tern

al la

bo

r co

st t

o c

lose

ou

t th

e p

roje

ct.

Cap

8/14

/13

Yes

Yes

Yes

EN13

001

San

Sev

ain

e B

asin

Imp

rove

men

ts$2

,525

,000

$0$2

,525

,000

($15

0,00

0)$2

,375

,000

$1,7

00,0

00($

150,

000)

$1,5

50,0

00

EN14

044

Tran

sfer

fro

m E

N13

001

to c

reat

e n

ew p

roje

ct,E

N14

044,

fo

r th

e h

ydra

ulic

an

alys

es o

f th

e re

cycl

ed w

ater

syst

em t

o b

e p

erfo

rmed

as

vari

ou

s sc

enar

ios

dep

icti

ng

exis

tin

g an

d f

utu

re f

acili

ties

an

d d

eman

ds

as

dir

ecte

d b

y IE

UA

Cap

8/14

/13

Yes

Yes

Yes

EN14

044

RW

Hyd

rau

lic M

od

elin

g$0

$0$0

$150

,000

$150

,000

$0$1

50,0

00$1

50,0

00

EN13

001

Tran

sfer

fro

m E

N13

001

to c

reat

e n

ew p

roje

ct,E

N14

044,

fo

r th

e h

ydra

ulic

an

alys

es o

f th

e re

cycl

ed w

ater

syst

em t

o b

e p

erfo

rmed

as

vari

ou

s sc

enar

ios

dep

icti

ng

exis

tin

g an

d f

utu

re f

acili

ties

an

d d

eman

ds

as

dir

ecte

d b

y IE

UA

Cap

8/14

/13

Yes

Yes

Yes

EN13

001

San

Sev

ain

e B

asin

Imp

rove

men

ts$2

,525

,000

($15

0,00

0)$2

,375

,000

($10

0,00

0)$2

,275

,000

$1,5

50,0

00($

100,

000)

$1,4

50,0

00

EN14

045

Tran

sfer

fro

m E

N13

001

to c

reat

e n

ew p

roje

ct, E

N14

045,

to

dev

elo

p a

lon

g te

rm s

trat

egy

for

the

pro

gram

ove

r th

en n

ext

10-2

0 ye

ars

for

its

ult

imat

e d

irec

t u

se a

nd

pro

ject

ed g

rou

nd

wat

er r

ech

arge

pro

ject

s

Cap

8/14

/13

Yes

Yes

Yes

EN14

045

RW

Pro

gram

Str

ateg

y$0

$0$0

$100

,000

$100

,000

$0$1

00,0

00$1

00,0

00

(EN

1300

1)

Tran

sfer

fro

m E

N13

001

to c

reat

e n

ew p

roje

ct, E

N14

045,

to

dev

elo

p a

lon

g te

rm s

trat

egy

for

the

pro

gram

ove

r th

en n

ext

10-2

0 ye

ars

for

its

ult

imat

e d

irec

t u

se a

nd

pro

ject

ed g

rou

nd

wat

er r

ech

arge

pro

ject

s

Cap

8/20

/13

Yes

Yes

No

EN06

025

Win

evill

e Ex

t R

C

Pip

elin

e Se

g A

$18,

155

,518

($35

,000

)$1

8,12

0,51

8($

30,0

00)

$18,

090

,518

$7,9

65,0

00($

30,0

00)

$7,9

35,0

00

EN13

055

Tran

sfer

fro

m E

N06

025

to

EN

1305

5 su

pp

ort

th

e co

mp

leti

on

of

the

con

stru

ctio

n b

y co

veri

ng

the

chan

ge

ord

ers

dev

elo

ped

du

rin

g th

e co

nst

ruct

ion

ph

ase

and

inte

rnal

lab

or

cost

to

clo

se o

ut

the

pro

ject

.

Cap

8/20

/13

Yes

Yes

No

EN13

055

RP

-4 P

ow

er

Dis

trib

uti

on

Ass

essm

ent

& R

ep

$279

,550

$35,

000

$314

,550

$30,

000

$344

,550

$67,

417

$30,

000

$97,

417

(EN

0602

5)Tr

ansf

er f

rom

EN

0602

5 t

o E

N13

055

sup

po

rt t

he

com

ple

tio

n o

f th

e co

nst

ruct

ion

by

cove

rin

g th

e ch

ange

ord

ers

dev

elo

ped

du

rin

g th

e co

nst

ruct

ion

ph

ase

and

inte

rnal

lab

or

cost

to

clo

se o

ut

the

pro

ject

.

Cap

8/28

/13

Yes

Yes

Yes

EN13

001

San

Sev

ain

e B

asin

Imp

rove

men

ts$2

,525

,000

($25

0,00

0)$2

,275

,000

($75

,000

)$2

,200

,000

$1,4

50,0

00($

75,0

00)

$1,3

75,0

00

EN14

046

Tran

sfer

fro

m E

N13

001

to c

reat

e n

ew p

roje

ct, E

N14

046,

to

cre

ate

an O

&M

Man

ual

fo

r th

e re

cen

tly

exp

and

ed R

P-5

Pu

mp

Sta

tio

n t

o p

rovi

de

esse

nti

al o

per

atin

g p

roce

du

res

to O

per

atin

g St

aff

Cap

8/28

/13

Yes

Yes

Yes

EN14

046

RP

-5 R

W P

um

p S

tati

on

O&

M M

an$0

$0$0

$75,

000

$75,

000

$0$7

5,00

0$7

5,00

0 (E

N13

001)

Tran

sfer

fro

m E

N13

001

to c

reat

e n

ew p

roje

ct, E

N14

046,

to

cre

ate

an O

&M

Man

ual

fo

r th

e re

cen

tly

exp

and

ed R

P-5

Pu

mp

Sta

tio

n t

o p

rovi

de

esse

nti

al o

per

atin

g p

roce

du

res

to O

per

atin

g St

aff

Cap

10/7

/13

Yes

Yes

No

EN06

025

Win

evill

e Ex

t R

C

Pip

elin

e Se

g A

$18,

155

,518

($65

,000

)$1

8,09

0,51

8($

125,

000)

$17,

965

,518

$7,9

35,0

00($

125,

000)

$7,8

10,0

00

EN13

031

Tran

sfer

fro

m E

N06

025

to E

N13

031

for

add

itio

nal

wo

rk a

ctiv

itie

s in

clu

din

g w

eed

ing,

bio

logi

cal s

urv

eys

and

to

po

grap

hic

su

rvey

s to

co

mp

ly w

ith

reg

ula

tory

per

mit

co

nd

itio

ns.

Cap

10/7

/13

Yes

Yes

No

EN13

031

Win

evill

e P

roo

f o

f

Co

nce

pt

$300

,000

$0$3

00,0

00$1

25,0

00$4

25,0

00$2

00,0

00$1

25,0

00$3

25,0

00

(EN

0602

5)Tr

ansf

er f

rom

EN

0602

5 to

EN

1303

1 fo

r ad

dit

ion

al w

ork

act

ivit

ies

incl

ud

ing

wee

din

g, b

iolo

gica

l su

rvey

s

and

to

po

grap

hic

su

rvey

s to

co

mp

ly w

ith

reg

ula

tory

per

mit

co

nd

itio

ns.

Sub

tota

l No

n-R

ecla

imab

le W

ater

(N

C):

Inla

nd

Em

pir

e U

tilit

ies

Age

ncy

Ch

ange

s in

To

tal P

roje

ct B

ud

gets

Inte

r-D

epar

tmen

tal/

Div

isio

n T

ran

sfer

s FY

20

13

/14

Exh

ibit

D

Fu

nd

Cap

ital

or

Spec

Pro

j?D

ate

Tota

l Pro

j

Bu

dge

t C

han

ge

(Y/N

)?

An

nu

al P

roj

Bu

dge

t

Ch

ange

(Y/N

)?

Ne

w

Pro

j? Y

/N

Pro

ject

Nu

mb

erP

roje

ct T

itle

Ad

op

ted

To

tal

Pro

ject

Bu

dge

t

Pri

or

FY 2

013/

14

TP A

dju

stm

ents

Cu

rren

t To

tal

Pro

ject

Bu

dge

t

Am

t. o

f

Tran

sfer

In /

(Ou

t)

Ne

w T

P B

ud

get

FY 2

013/

14

An

nu

al P

roje

ct

Bu

dge

t

An

nu

al P

roj.

Bu

dge

t

Ch

ange

Ne

w A

nn

ual

Pro

ject

Bu

dge

t

Pro

ject

Tran

sfer

red

To/(

Fro

m)

Rea

son

Fo

r Tr

ansf

er

1060

0C

ap11

/4/1

3Ye

sYe

sN

oEN

0602

5W

inev

ille

Ext

RC

Pip

elin

e Se

g A

$18,

155

,518

($19

0,00

0)$1

7,96

5,51

8$0

$17,

965

,518

$7,8

10,0

00($

26,9

13)

$7,7

83,0

87

EN12

014

Tran

sfer

fro

m E

N06

025

to E

N12

014

to s

up

po

rt t

he

con

stru

ctio

n f

or

the

recy

cled

wat

er p

ipel

ine

relo

cati

on

. To

tal p

roje

ct b

ud

get

will

no

t ch

ange

.

Cap

11/4

/13

No

Yes

No

EN12

014

East

Ave

nu

e 16

30 E

RW

P R

elo

cati

on

$650

,108

$0$6

50,1

08$0

$650

,108

$470

,371

$26,

913

$497

,284

(E

N06

025)

Tran

sfer

fro

m E

N06

025

to E

N12

014

to s

up

po

rt t

he

con

stru

ctio

n f

or

the

recy

cled

wat

er p

ipel

ine

relo

cati

on

. To

tal p

roje

ct b

ud

get

will

no

t ch

ange

.

Cap

11/7

/13

Yes

Yes

Yes

EN12

019

GW

R &

RW

SC

AD

A

Syst

em U

pgr

ades

$2,5

26,3

90$0

$2,5

26,3

90($

932,

000)

$1,5

94,3

90$7

81,6

57($

136,

000)

$645

,657

EN

1404

7

Tota

l pro

ject

bu

dge

t tr

ansf

er o

f $9

32,0

00 f

rom

EN

1201

9 to

cre

ate

new

pro

ject

, EN

1404

7. A

nn

ual

bu

dge

t tr

ansf

er o

f $1

36,0

00 f

rom

EN

1201

9 to

EN

1404

7. T

he

reas

on

fo

r th

e tr

ansf

er is

to

ad

d f

un

din

g to

the

new

pro

ject

wh

ich

was

sep

arat

ed t

o a

dd

ress

tw

o p

roje

ct s

ched

ule

s.

Cap

11/7

/13

Yes

Yes

Yes

EN14

047

GW

R &

RW

SC

AD

A

Co

ntr

ol U

pgr

ades

$0$0

$0$9

32,0

00$9

32,0

00$0

$136

,000

$136

,000

(E

N12

019)

Tota

l pro

ject

bu

dge

t tr

ansf

er o

f $9

32,0

00 f

rom

EN

1201

9 to

cre

ate

new

pro

ject

, EN

1404

7. A

nn

ual

bu

dge

t tr

ansf

er o

f $1

36,0

00 f

rom

EN

1201

9 to

EN

1404

7. T

he

reas

on

fo

r th

e tr

ansf

er is

to

ad

d f

un

din

g to

the

new

pro

ject

wh

ich

was

sep

arat

ed t

o a

dd

ress

tw

o p

roje

ct s

ched

ule

s.

$84,

232

,670

$83,

577

,670

$37,

961

,862

$37,

961

,862

1080

0C

ap12

/16/

13Ye

sYe

sY

esEN

1402

1R

P-1

Sec

on

dar

y

Cla

rifi

er A

sset

Reh

ab$3

,680

,000

$0$3

,680

,000

($74

5,00

0)$2

,935

,000

$800

,000

($74

5,00

0)$5

5,00

0 EN

1405

2

Tota

l pro

ject

bu

dge

t tr

ansf

er a

nd

an

nu

al p

roje

ct b

ud

get

tran

sfer

of

$745

,000

fro

m E

N14

021

to c

reat

e

enw

pro

ject

, EN

1405

2. T

he

reas

on

fo

r th

e tr

ansf

er is

bec

ause

th

e as

sets

mu

st b

e re

pla

ced

as

the

curr

ent

stat

e o

f th

e as

set

has

rea

ched

th

e en

d o

f it

s u

sefu

l lif

e. T

he

fisc

al y

ear

allo

cati

on

un

der

EN

1402

1

will

be

use

d b

ecau

se M

ain

ten

ance

an

d O

per

atio

ns

staf

f d

eem

ed w

ork

un

nec

essa

ry a

fter

a s

erie

s o

f

inte

rnal

eva

luat

ion

s.

Cap

12/1

6/13

Yes

Yes

Yes

EN14

052

RP

-1 P

rim

ary

Cla

rifi

er

Wes

t Ef

flu

ent

Pip

elin

e

Rep

lace

men

t

$0$0

$0$7

45,0

00$7

45,0

00$0

$745

,000

$745

,000

(E

N14

021)

Tota

l pro

ject

bu

dge

t tr

ansf

er a

nd

an

nu

al p

roje

ct b

ud

get

tran

sfer

of

$745

,000

fro

m E

N14

021

to c

reat

e

enw

pro

ject

, EN

1405

2. T

he

reas

on

fo

r th

e tr

ansf

er is

bec

ause

th

e as

sets

mu

st b

e re

pla

ced

as

the

curr

ent

stat

e o

f th

e as

set

has

rea

ched

th

e en

d o

f it

s u

sefu

l lif

e. T

he

fisc

al y

ear

allo

cati

on

un

der

EN

1402

1

will

be

use

d b

ecau

se M

ain

ten

ance

an

d O

per

atio

ns

staf

f d

eem

ed w

ork

un

nec

essa

ry a

fter

a s

erie

s o

f

inte

rnal

eva

luat

ion

s.

$3,6

80,0

00$3

,680

,000

$800

,000

$800

,000

1090

0C

ap8/

13/1

3Ye

sYe

sN

oEN

1401

9R

P-1

Hea

dw

ork

s G

ate

Rep

lace

men

t$1

0,7

25,0

00$0

$10,

725,

000

($29

0,00

0)$1

0,4

35,0

00$7

25,0

00($

290,

000)

$435

,000

EN

1201

7/

EN12

021

Bu

dge

t tr

ansf

er f

rom

EN

1401

9 to

incr

ease

pro

ject

bu

dge

t EN

1201

7 an

d E

N12

021

to

ad

dre

ss a

dd

itio

nal

dra

inag

e im

pro

vem

ents

bec

ause

EN

1401

9 b

ud

get

will

no

t b

e fu

lly e

xpen

ded

th

is y

ear

sin

ce m

ajo

r

con

stru

ctio

n is

sch

edu

led

in f

ollo

win

g fi

scal

yea

rs.

Cap

8/13

/13

Yes

Yes

No

EN12

017

RP

-4 G

rad

ing

&

Dra

inag

e

Imp

rove

men

ts

$385

,000

$0$3

85,0

00$1

20,0

00$5

05,0

00$1

02,5

05$1

20,0

00$2

22,5

05

(EN

1401

9)

Bu

dge

t tr

ansf

er f

rom

EN

1401

9 to

incr

ease

pro

ject

bu

dge

t EN

1201

7 an

d E

N12

021

to

ad

dre

ss a

dd

itio

nal

dra

inag

e im

pro

vem

ents

bec

ause

EN

1401

9 b

ud

get

will

no

t b

e fu

lly e

xpen

ded

th

is y

ear

sin

ce m

ajo

r

con

stru

ctio

n is

sch

edu

led

in f

ollo

win

g fi

scal

yea

rs.

Cap

8/13

/13

Yes

Yes

No

EN12

021

RP

-5 P

on

d/D

rain

age

Imp

rove

men

ts$3

50,0

00$0

$350

,000

$170

,000

$520

,000

$304

,666

$170

,000

$474

,666

(E

N14

019)

Bu

dge

t tr

ansf

er f

rom

EN

1401

9 to

incr

ease

pro

ject

bu

dge

t EN

1201

7 an

d E

N12

021

to

ad

dre

ss a

dd

itio

nal

dra

inag

e im

pro

vem

ents

bec

ause

EN

1401

9 b

ud

get

will

no

t b

e fu

lly e

xpen

ded

th

is y

ear

sin

ce m

ajo

r

con

stru

ctio

n is

sch

edu

led

in f

ollo

win

g fi

scal

yea

rs.

Cap

8/22

/13

Yes

Yes

No

EN14

019

RP

-1 H

ead

wo

rks

Gat

e

Rep

lace

men

t$1

0,7

25,0

00($

290,

000)

$10,

435,

000

($22

5,00

0)$1

0,2

10,0

00$4

35,0

00($

225,

000)

$210

,000

EN

1201

7B

ud

get

tran

sfer

fro

m E

N14

019

to E

N12

017

to a

dd

ress

ad

dit

ion

al d

rain

age

imp

rovm

ents

Cap

8/22

/13

Yes

Yes

No

EN12

017

RP

-4 G

rad

ing

&

Dra

inag

e

Imp

rove

men

ts

$280

,000

$120

,000

$400

,000

$225

,000

$625

,000

$222

,505

$225

,000

$447

,505

(E

N14

019)

Bu

dge

t tr

ansf

er f

rom

EN

1401

9 to

EN

1201

7 to

ad

dre

ss a

dd

itio

nal

dra

inag

e im

pro

vmen

ts

Cap

9/17

/13

Yes

Yes

No

EN06

020

RP

-5 S

yste

m F

ac

Up

grad

e &

Imp

rv$2

9,7

76,6

48$0

$29,

776,

648

($55

8,92

6)$2

9,2

17,7

22$5

58,9

26($

558,

926)

$0

EN13

056

Bu

dge

t tr

ansf

er f

rom

EN

0602

0 to

EN

1305

6 to

co

mp

lete

th

e co

nst

ruct

ion

ph

ase

of

the

Age

ncy

-Wid

e

HV

AC

Imp

rove

men

ts -

Pck

g N

o. 2

, wh

ich

is c

urr

entl

y in

th

e fi

nal

des

ign

ph

ase

Cap

9/17

/13

Yes

Yes

No

EN13

056

Age

ncy

-Wid

e H

VA

C

Imp

rove

men

ts -

Pck

g

No

. 2

$100

,000

$0$1

00,0

00$5

58,9

26$6

58,9

26$1

00,0

00$5

58,9

26$6

58,9

26

(EN

0602

0)B

ud

get

tran

sfer

fro

m E

N06

020

to E

N13

056

to c

om

ple

te t

he

con

stru

ctio

n p

has

e o

f th

e A

gen

cy-W

ide

HV

AC

Imp

rove

men

ts -

Pck

g N

o. 2

, wh

ich

is c

urr

entl

y in

th

e fi

nal

des

ign

ph

ase

Sub

tota

l Rec

ycle

d W

ater

(W

C):

Sub

tota

l Reg

ion

al O

per

atio

ns

(RO

):

Inla

nd

Em

pir

e U

tilit

ies

Age

ncy

Ch

ange

s in

To

tal P

roje

ct B

ud

gets

Inte

r-D

epar

tmen

tal/

Div

isio

n T

ran

sfer

s FY

20

13

/14

Exh

ibit

D

Fu

nd

Cap

ital

or

Spec

Pro

j?D

ate

Tota

l Pro

j

Bu

dge

t C

han

ge

(Y/N

)?

An

nu

al P

roj

Bu

dge

t

Ch

ange

(Y/N

)?

Ne

w

Pro

j? Y

/N

Pro

ject

Nu

mb

erP

roje

ct T

itle

Ad

op

ted

To

tal

Pro

ject

Bu

dge

t

Pri

or

FY 2

013/

14

TP A

dju

stm

ents

Cu

rren

t To

tal

Pro

ject

Bu

dge

t

Am

t. o

f

Tran

sfer

In /

(Ou

t)

Ne

w T

P B

ud

get

FY 2

013/

14

An

nu

al P

roje

ct

Bu

dge

t

An

nu

al P

roj.

Bu

dge

t

Ch

ange

Ne

w A

nn

ual

Pro

ject

Bu

dge

t

Pro

ject

Tran

sfer

red

To/(

Fro

m)

Rea

son

Fo

r Tr

ansf

er

1090

0C

ap11

/4/1

3Ye

sYe

sN

oEN

1103

9R

P-1

Dis

infe

ctio

n P

um

p

Imp

rove

men

ts$6

00,0

00$0

$600

,000

($20

8,00

0)$3

92,0

00$5

31,1

17($

372,

352)

$158

,765

EN

1202

2

Tran

sfer

$37

2,35

2 fr

om

EN

1103

9 A

nn

ual

Bu

dge

t to

co

mp

lete

maj

or

con

stru

ctio

n o

f EN

1202

2 b

efo

re

Jun

e 20

14. T

ran

sfer

$20

8,00

0 fr

om

EN

1103

9 To

tal P

roje

ct B

ud

get

to E

N12

022

to a

dd

ress

th

e re

cen

t

chan

ges

in t

he

pro

ject

sco

pe

of

add

ing

actu

ato

rs a

nd

ad

dit

ion

al b

utt

erfl

y va

lves

to

elim

inat

e fu

ture

rep

lace

men

t an

d a

void

ad

dit

on

al p

roce

ss in

terr

up

tio

ns.

Cap

11/4

/13

Yes

Yes

No

EN12

022

RP

-1 A

erat

ion

Du

ctin

g

Rep

air

Pro

ject

$1,0

48,0

00$0

$1,0

48,0

00$2

08,0

00$1

,256

,000

$848

,000

$372

,352

$1,2

20,3

52

(EN

1103

9)

Tran

sfer

$37

2,35

2 fr

om

EN

1103

9 A

nn

ual

Bu

dge

t to

co

mp

lete

maj

or

con

stru

ctio

n o

f EN

1202

2 b

efo

re

Jun

e 20

14. T

ran

sfer

$20

8,00

0 fr

om

EN

1103

9 To

tal P

roje

ct B

ud

get

to E

N12

022

to a

dd

ress

th

e re

cen

t

chan

ges

in t

he

pro

ject

sco

pe

of

add

ing

actu

ato

rs a

nd

ad

dit

ion

al b

utt

erfl

y va

lves

to

elim

inat

e fu

ture

rep

lace

men

t an

d a

void

ad

dit

on

al p

roce

ss in

terr

up

tio

ns.

Cap

12/5

/13

Yes

Yes

Yes

EN14

037

Sew

er M

anh

ole

s

Reh

abili

tait

on

$1,9

00,0

00$0

$1,9

00,0

00($

75,0

00)

$1,8

25,0

00$2

00,0

00($

75,0

00)

$125

,000

EN

1405

0

Tran

sfer

$75

,000

fro

m E

N14

037

An

nu

al a

nd

To

tal P

roje

ct B

ud

get

to c

reat

e n

ew p

roje

ct, E

N14

050,

Co

llect

ion

Sys

tem

Rea

pir

s P

has

e V

, Wes

tsid

e In

terc

epto

r. U

rgen

t re

pai

rs r

equ

ired

. To

tal p

roje

ct

bu

dge

t fo

r EN

1405

0 w

ill b

e $5

75,0

00 w

ith

$75

,000

use

d in

FY1

3/14

.

Cap

12/5

/13

Yes

Yes

Yes

EN14

050

Co

llect

ion

Sys

tem

Rep

airs

Ph

ase

V,

Wes

tsid

e In

terc

epto

r

$0$0

$0$7

5,00

0$7

5,0

00$0

$75,

000

$75,

000

(EN

1403

7)

Tran

sfer

$75

,000

fro

m E

N14

037

An

nu

al a

nd

To

tal P

roje

ct B

ud

get

to c

reat

e n

ew p

roje

ct, E

N14

050,

Co

llect

ion

Sys

tem

Rea

pir

s P

has

e V

, Wes

tsid

e In

terc

epto

r. U

rgen

t re

pai

rs r

equ

ired

. To

tal p

roje

ct

bu

dge

t fo

r EN

1405

0 w

ill b

e $5

75,0

00 w

ith

$75

,000

use

d in

FY1

3/14

.

$55,

889

,648

$55,

719

,648

$4,0

27,7

19$4

,027

,719

Ad

op

ted

Am

end

edA

do

pte

dA

men

ded

$144

,315

,318

$14

3,4

90,3

18$4

3,1

60,2

44$4

3,1

60,2

44

1060

0Sp

ec11

/14/

13Ye

sYe

sY

esEN

1404

8R

W A

V R

elo

cati

on

ove

r

Dee

r C

ree

k C

han

nel

$0$0

$0$1

6,00

0$1

6,0

00$0

$16,

000

$16,

000

(O&

M)

Tran

sfer

fro

m O

& M

acc

ou

nt

to

EN

1404

8, R

W A

V R

elo

cati

on

ove

r D

eer

Cre

ek

Ch

ann

el, t

o a

llow

fo

r

relo

cati

on

of

exis

tin

g re

cycl

ed w

ater

air

rel

ease

/vac

uu

m r

elie

f va

lve.

Spec

11/2

0/13

Yes

Yes

Yes

EN14

029

WC

Ass

et

Man

agem

ent

Pro

ject

s$2

,500

,000

$0$2

,500

,000

($20

,000

)$2

,480

,000

$250

,000

($20

,000

)$2

30,0

00

EN14

049

Tran

sfer

fro

m E

N14

029

to c

reat

e n

ew p

roje

ct, E

N14

049,

to

cre

ate

an O

&M

man

ual

fo

r o

per

aito

n o

f th

e

pre

ssu

re r

edu

cin

g va

lve

bet

wee

n 1

158

and

105

0 R

ecyc

led

Wat

er P

ress

ure

Zo

nes

. Th

e O

&M

man

ual

will

pro

vid

e es

sen

tial

op

erat

ing

pro

ced

ure

s to

Op

erat

ion

s St

aff.

Th

e to

tal b

ud

get

for

this

pro

ject

is $

20,0

00.

Spec

11/2

0/13

Yes

Yes

Yes

EN14

049

SOP

fo

r 11

58/1

050

RW

Pre

ssu

re Z

on

es P

RV

$0$0

$0$2

0,00

0$2

0,0

00$0

$20,

000

$20,

000

(EN

1402

9)

Tran

sfer

fro

m E

N14

029

to c

reat

e n

ew p

roje

ct, E

N14

049,

to

cre

ate

an O

&M

man

ual

fo

r o

per

aito

n o

f th

e

pre

ssu

re r

edu

cin

g va

lve

bet

wee

n 1

158

and

105

0 R

ecyc

led

Wat

er P

ress

ure

Zo

nes

. Th

e O

&M

man

ual

will

pro

vid

e es

sen

tial

op

erat

ing

pro

ced

ure

s to

Op

erat

ion

s St

aff.

Th

e to

tal b

ud

get

for

this

pro

ject

is $

20,0

00.

Spec

12/3

1/13

Yes

Yes

No

EN14

048

RW

AV

Rel

oca

tio

n o

ver

Dee

r C

ree

k C

han

nel

$0$1

6,00

0$1

6,00

0$7

,000

$23,

000

$16,

000

$7,0

00$2

3,00

0 (O

&M

)

Tran

sfer

fro

m O

& M

acc

ou

nt

to

EN

1404

8, R

W A

V R

elo

cati

on

ove

r D

eer

Cre

ek

Ch

ann

el, t

o e

stab

lish

ed

to r

elo

cate

exi

stin

g re

cycl

ed w

ater

air

rel

ease

/vac

uu

m r

elie

f va

lve.

Aft

er t

he

pre

-bid

job

wal

k, t

he

sco

pe

of

wo

rk w

as e

xpan

ded

by

Age

ncy

sta

ff t

o a

dd

res

add

ito

nal

mai

nte

nan

ce n

eed

s.

$2,5

00,0

00$2

,539

,000

$266

,000

$289

,000

1090

0Sp

ec7/

30/1

3Ye

sYe

sN

oP

L050

07Fa

cilit

ies

Pla

nn

ing

$558

,449

$0$5

58,4

49($

143,

325)

$415

,124

$147

,416

($14

3,32

5)$4

,091

W

R14

003

Rem

ain

ing

fun

ds

of

PL0

5007

are

nee

ded

to

co

mp

lete

th

e cu

rren

t co

mp

reh

ensi

ve M

aste

r P

lan

Up

dat

e,

tran

sfer

red

to

WR

1400

3

Spec

7/30

/13

Yes

Yes

No

WR

1400

3W

aste

wat

er F

acili

ties

Up

grad

e an

d C

EQA

$300

,000

$0$3

00,0

00$1

43,3

25$4

43,3

25$1

50,0

00$1

43,3

25$2

93,3

25(P

L050

07)

Rem

ain

ing

fun

ds

of

PL0

5007

are

nee

ded

to

co

mp

lete

th

e cu

rren

t co

mp

reh

ensi

ve M

aste

r P

lan

Up

dat

e,

tran

sfer

red

to

WR

1400

3

$858

,449

$858

,449

$297

,416

$297

,416

Ad

op

ted

Am

end

edA

do

pte

dA

men

ded

$3,3

58,4

49$3

,397

,449

$563

,416

$586

,416

Tota

l An

nu

al C

apit

al B

ud

get

Tota

l An

nu

al S

pec

ial B

ud

get

Spec

ial T

ota

l Pro

ject

Bu

dge

t

Cap

ital

To

tal P

roje

ct B

ud

get

Cap

ital

To

tal P

roje

ct B

ud

get

Spec

ial T

ota

l Pro

ject

Bu

dge

t

Sub

tota

l Rec

ycle

d W

ater

(W

C):

Sub

tota

l Reg

ion

al C

apit

al (

RC

):

Sub

tota

l Reg

ion

al C

apit

al (

RC

):

FY

2

01

3/1

4

2nd Q

uarter B

ud

ge

t V

aria

nc

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INFORMATION ITEM

3B

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\Financial Update - Budget Workshop No. 2.docx

Date: February 27, 2014

To: Regional Technical Committee

From: Inland Empire Utilities Agency

Subject: Financial Update

RECOMMENDATION

This is an informational item for the Regional Technical Committee to receive and file.

BACKGROUND

This item was presented at the IEUA Board of Directors meeting on February 5, 2014.

Date: February 5, 2014

To: The Honorable Board of Directors

From: P. Joseph Grindstaff

General Manager

Submitted by: Christina Valencia

Chief Financial Officer/Assistant General Manager

Javier Chagoyen-Lazaro

Manager of Finance and Accounting

Subject: FY 2014/15 Budget Workshop #2: Challenges, Opportunities & Strategies

RECOMMENDATION

This is an informational item for the Board of Directors to review.

BACKGROUND

On January 22, 2014 the Agency’s Board of Directors held the first of three budget workshops. As

summarized in the FY 2014/15 Budget Workshop Outline (Appendix A), management provided an

overview of the Agency’s current financial position and presented the proposed long term,

intermediate and immediate Business Goals relative to Fiscal Responsibility. A key recommendation

by the Board was the payment of long term liabilities. These long term obligations include: high

interest bonds and unfunded accrued liabilities (UALs) for retirement benefits. Early repayment of

high interest bonds and a reduction in UALs will help support another key recommendation from the

Board: improvement of the Agency’s total debt coverage ratio (DCR) to 3.0X and achieve AAA

credit rating sooner than FY 2017/18. The approved fiscal goals, as summarized in Appendix B will

serve as the framework in the development of the FY 2014/15 budget and ensuing year forecasts.

Today’s workshop will focus on the anticipated challenges and opportunities and the financial

policies and strategies necessary to achieve the approved fiscal goals. Discussion is expected to

identify key assumptions for the development of budget scenarios for review and evaluation.

Challenges and Opportunities

Sources of funds

A key opportunity is the recent improvement in economic conditions throughout the Agency’s

service area. Along with the upsurge in new EDU connection fees resulting from the recovery of the

housing industry, property tax receipts are also expected to increase in the current fiscal year. In July

2013, the San Bernardino Tax Assessor estimated an average increase of 3 percent in assessed

property values across the county. Adding to the Agency’s revenue base is implementation of the last

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 2 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

of a three year rate increase adopted by the Board in February 2012 for the Regional Wastewater and

Recycled Water programs.

Despite the increase in some of the major revenue sources, a key challenge is still the achievement of

full cost of service rates for all Agency programs as defined in the Agency’s Long Range Plan of

Finance (2007). While the multi-year rate increases have narrowed the gap between program

revenues and costs; a structural deficit still exists. Achieving rates that fully cover operating and

replacement and rehabilitation (R&R) costs is essential to ensuring a reliable and high quality level of

service. As the Agency moves beyond the three year adopted rates, future rate structures that support

full cost of service will continue to be a high priority to ensure the Agency’s financial health.

Continuing the practice of adopting multiyear rate increases will also support the Agency’s transition

to a biennial budget in FY 2015/16, as well as provide member agencies more stability in their

financial planning.

Uses of funds

Through continual cost containment efforts implemented in FY 2008/09 in response to the economic

downturn, and despite significant increases in energy and employment costs, operating costs have

been sustained at a FY 2007/08 level. Offsetting these increases has been a reduction in the number

of authorized full time equivalent (FTE) positions, primarily through attrition, from a high of 308 in

FY 2007/08 to 295 in FY 2013/14. Another reduction in the number of authorized FTE positions

from 295 to 290 is proposed for FY 2014/15 while still maintaining a vacancy factor of five (5)

percent (equivalent to 15 FTEs). Also contributing to cost containment has been the pension reform

negotiated with the various employee bargaining units. Beginning in October 2011, employees began

paying two (2) percent of the Employer Paid Member Contribution (EPMC). As part of the recently

negotiated Memorandum of Understanding (MOUs), employees will assume the full EPMC, or eight

(8) percent, by the end of the five year term.

A shift from expansion to R&R beginning in 2008 has also attributed to significantly reduced capital

improvement plan (CIP) costs. The only exception being construction of the Agency’s Recycled

Water Distribution System (RWDS) which has been in an accelerated construction mode since the

adoption of the Recycled Water Business Plan in 2007. With the economy now showing signs of

recovery, a key drive for the Agency’s CIP will be reinstatement of some of the deferred projects to

ensure facilities are expanded to meet the anticipated future growth. To more accurately identify

these requirements, the Agency is in the process of updating long term planning documents,

including: Ten Year CIP, Asset Management Plan, Integrated Resources Plan, Recycled Water Plan,

Long Range Plan of Finance, Wastewater Facilities Master Plan, and Energy Plan, (Appendix C).

Effectively leveraging these opportunities to mitigate the anticipated challenges will help to position

the Agency’s fiscal health to more effectively meet its short and long term goals.

Strategies

Another key portion of the discussion will be defining the strategies necessary to achieve the Board’s

goals and objectives. Some of the major strategies include:

Sound and prudent long term planning to provide for:

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 3 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

o Adoption of multiyear budget and rates

o Full cost of service recovery through rates

o Timely investment in resources to support future demands

o Payment of retirement unfunded liabilities

o Early payment of high interest bonds

Refinement of financial policies and thresholds

o Define the right level of reserves for each category by fund

o Optimize use of property taxes

o Balance funding of CIP with PAYGO and new debt

o Use of non-recurring revenues

The discussion and refinement of these strategies will guide the development of budget scenarios to

be presented at the final workshop on March 5, 2014.

PRIOR BOARD ACTION

On October 16, 2013 the Board of Directors approved the IEUA Business Goals.

IMPACT ON BUDGET

None.

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 4 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

Appendix A – FY 2014/15 Budget Workshop Outline

WORKSHOP 1: FINANCIAL POSITION AND PROPOSED GOALS

January 22, 2014

1. Financial position overview

a. Key drivers

b. Trend in in total funding sources and uses of funds

c. Trend in total fund reserve balances and debt coverage ratio

2. Agency Business Goals: Fiscal Responsibility

a. Long term goals: > 5 years

b. Intermediate term goals: 2 to 5 years

c. Immediate goals: FY 2014/15 Budget

WORKSHOP 2: Challenges, Opportunities & Strategies

February 5, 2014

1. Challenges & opportunities related to funding sources

a. Economic recovery

b. Stable and reliable funding sources

c. New borrowings to support capital investment

2. Challenges and opportunities related to uses of funds

a. Cost containment – “doing more with less”

b. Succession planning and investment in employee development

c. Long term planning to support operational and capital requirements

3. Strategies

a. Adoption of multi-year budgets and rates

b. Sustainment of full cost of service for all programs

c. Reallocation of property taxes

d. Funding of CIP through combination of PAYGO and new debt

e. Prudent long term planning for financial, capital, employees, and regional water

resources

f. Establishment of financial policies and fund reserve thresholds

g. Improvement of the Agency’s financial condition

h. Renew Regional Sewage Service Contract

i. Predefinition of budget scenarios

WORKSHOP 3: FINANCIAL POLICIES AND BUDGET SCENARIOS

March 5, 2014

1. Financial policies consensus and threshold definitions

2. Long Range Plan of Finance Model: Budget Scenarios analysis

3. Other key areas identified in prior workshop

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 5 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

WORKSHOP 4: COMPILE AND SUMMARIZE POLICY DECISIONS

April 2, 2014

1. Funding plans for long term obligations and key initiatives

2. Financial policies and reserve threshold targets

3. FY 2014/15 Preliminary budget overview

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 6 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

Appendix B: Agency Business Goals

Summary of Budget Workshop #1

FISCAL RESPONSIBILITY: BUSINESS GOALS

LONG TERM

> 5 years

INTERMEDIATE TERM

2-5yrs

IMMEDIATE TERM 1 year

• Sustain Full Cost

of Service

• Transition to biennial budget

and adopt multi-year rates

• Achieve Full Cost of Service

rates for all Agency

programs

• Implement adopted multi-year

rates Implement new NRW

North system rate structure

• Improve budget forecasts

• Continue cost containment

• Instill Lean management

principles

• Sustain AAA

credit rating and

3.00 DCR

• Achieve AAA credit rating

by FY 2017 or sooner

• Refine reserve policies

• Begin paying unfunded

liabilities

• Pay down high interest debt

• Fully fund

unfunded

liabilities

• Pay 100% of OPEB accrued

unfunded liability

• Implement plan to fully pay

unfunded liabilities

• Pay 50% of OPEB accrued

unfunded liability

• Establish a plan to fully pay

unfunded liabilities

• Fully fund

annual PAYGO

requirements

• Establish a PAYGO policy

for R&R and portion of CIP

• Adopt FY 2015-2024 TYCIP

inclusive of Asset Management

Plan

• Maintain

established

reserves

• Allocate property taxes to

support water resources

• Increase reserves by $15

million per year

• Refine reserve policies and

establish appropriate thresholds

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 7 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

APPENDIX C: Long Term Planning Documents

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 8 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

Appendix D – Agency Program Rates

Program Rate

FY 2012/13 Effective

July 1, 2012

FY 2013/14 Effective

July 1, 2013

FY 2014/15 Effective

July 1, 2014

Regional Wastewater*

Monthly EDU Volumetric Fee

$12.39 $13.39 $14.39

New Per EDU Connection Fee

$4,909 $5,007 $5,107

Recycled Water*

Direct Delivery Rate Per AF

$155 $215 $290

Groundwater Recharge Per AF

$195 $255 $335

Imported Water Surcharge

Per AF $12 $13 TBD

Imported Water Rate**

Tier 1 Per AF

$560 January 1, 2012

$593 January 1, 2013

$593 January 1, 2014

$593 January 1, 2013

$593 January 1, 2014

TBD

Tier 2 Per AF

$686 January 1, 2012

$743 January 1, 2013

$593 January 1, 2014

$743 January 1, 2013

$735 January 1, 2014

TBD

FY 2014/15 Budget Workshop #2

February 5, 2014

Page 9 of 9

G:\PP\Technical and Policy Committee\2014\02-27-14 Tech\14032 Budget Workshop No 2_20140205 Draft v1.docx

Appendix E – Acronyms

AF – Acre Foot

CIP - Capital Improvement Program/Projects

Comm. Paper – Commercial Paper

DCR - Debt Coverage Ratio

EDU - Equivalent Dwelling Unit

EPMC – Employer Paid Member Contribution

FY – Fiscal Year

HQ - Headquarters (buildings A and B)

IRP – Integrated Resources Plan

LRPF – Long Range Plan of Finance

O&M - Operation and Maintenance

R&R - Repair and Rehabilitation, also Repair and Replacement

RDA - Redevelopment Agencies

RP-1 - Regional Water Recycling Plant #1

RP-4 - Regional Water Recycling Plant #4

RP-5 - Regional Water Recycling Plant #5

RWDS –Recycled Water Distribution System

SRF – State Revolving Fund (loans)

TYCIP – Ten Year Capital Improvement Plan

UAL - Unfunded Accrued Liabilities

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ENT

•Su

stai

nin

g le

vel o

f se

rvic

e a

s d

eman

d

gro

ws

•Ti

mel

y ex

pan

sio

n o

f ex

isti

ng

faci

litie

s

•H

igh

er C

on

nec

tio

n F

ees

•H

igh

er P

rop

erty

Tax

Rec

eip

ts

ENV

IRO

NM

ENTA

L •

Seve

rity

an

d d

ura

tio

n o

f cu

rren

t d

rou

ght

•M

ore

str

inge

nt

regu

lati

on

s

•In

vest

in s

up

ple

men

tal a

nd

loca

l w

ater

res

ou

rces

•

Focu

s o

n e

ner

gy e

ffic

ien

cy

SUC

CES

SIO

N

PLA

NN

ING

•

Imp

end

ing

reti

rem

ent

of

“bab

y b

oo

mer

s”

•Lo

ss o

f in

stit

uti

on

al k

no

wle

dge

•If

do

ne

rig

ht

ensu

re lo

ng

term

su

cces

s o

f th

e A

gen

cy

REG

ION

AL

SEW

AG

E C

ON

TRA

CT

•R

equ

ired

allo

cati

on

of

65

% o

f p

rop

erty

tax

es t

o R

C F

un

d

•B

egin

neg

oti

atio

ns

to u

pd

ate

con

trac

t

CH

AL

LE

NG

ES

A

ND

OP

PO

RT

UN

IT

IE

S

7

FUN

DIN

G S

OU

RC

ES

CH

ALL

ENG

ES

OP

PO

RTU

NIT

IES

Was

tew

ate

r an

d

Re

cycl

ed

Wat

er

pro

gram

rat

es

•FY

20

14

/15

rat

es a

lrea

dy

ado

pte

d

•St

ill h

ave

no

t ac

hie

ved

fu

ll co

st o

f se

rvic

e

•C

on

tin

ued

incr

ease

in r

ecyc

led

w

ater

del

iver

ies

•St

ead

y gr

ow

th o

f ED

U v

olu

met

ric

un

its

Pro

pe

rty

taxe

s •

Rea

lloca

tio

n o

f u

se li

mit

ed b

y R

egio

nal

Sew

age

Co

ntr

act

•U

nce

rtai

nty

of

futu

re s

hif

ts b

y St

ate

•R

ise

in p

rop

erty

ass

esse

d v

alu

es

•Su

rge

in n

ew d

evel

op

men

t

•H

igh

er “

pas

s-th

rou

gh”

RD

A

pay

men

ts s

ince

dis

solu

tio

n

Co

nn

ect

ion

fe

es

•Li

nke

d t

o e

con

om

ic c

ycle

•

Rel

iab

ility

of

pro

ject

ion

s •

Rat

e in

crea

ses

limit

ed t

o E

NR

ind

ex

•Su

rge

in n

ew d

evel

op

men

t

•U

rban

dev

elo

pm

ent

•C

an b

e u

se f

or

deb

t re

dem

pti

on

Gra

nts

•

Hig

hly

co

mp

etit

ive

•

Lin

ked

to

pro

ject

exe

cuti

on

•

Ad

min

istr

ativ

e re

qu

irem

ents

•R

edu

ce c

ost

of

cap

ital

inve

stm

ent

•P

rom

ote

reg

ion

al c

olla

bo

rati

on

New

de

bt

bo

rro

win

gs

•H

igh

er f

utu

re in

tere

st r

ates

•

Imp

act

on

DC

R a

nd

cre

dit

qu

alit

y •

Cu

rren

t lo

w in

tere

st r

ate

envi

ron

men

t

CH

ALL

EN

GE

S A

ND

OP

PO

RT

UN

IT

IE

S

8

USE

S O

F FU

ND

S C

HA

LLEN

GES

O

PP

OR

TUN

ITIE

S

Op

era

tin

g (O

&M

) C

ost

s •

Emp

loye

es U

nit

s M

OU

’s

•C

lass

an

d C

om

pen

sati

on

stu

dy

•G

row

ing

un

fun

ded

liab

iliti

es

•Fu

ture

en

ergy

an

d c

hem

ical

co

sts

•P

red

icta

bili

ty o

f 5

yea

r M

OU

’s

•D

evel

op

ing

a fu

nd

ing

pla

n f

or

un

fun

ded

liab

iliti

es

•C

on

tin

ued

co

st c

on

tain

men

t

•Fo

cus

on

en

ergy

eff

icie

ncy

De

bt

Serv

ice

•

Hig

h le

vel o

f o

uts

tan

din

g d

ebt

•R

isin

g an

nu

al d

ebt

serv

ice

cost

s •

Rep

aym

ent

of

inte

r fu

nd

loan

s

•R

efu

nd

ing

of

hig

h in

tere

st r

ate

bo

nd

s •

Low

inte

rest

, 30

yea

r te

rm S

RF

loan

s

Cap

ital

Imp

rove

me

nt

Pla

n (

CIP

) •

Sust

ain

leve

l of

serv

ice:

•

Tim

ely

exp

ansi

on

to

mee

t gr

ow

ing

dem

and

•

Fully

fu

nd

Rep

air

&

Reh

abili

tati

on

(R

&R

) n

eed

s

•C

om

ple

tio

n o

f lo

ng

term

p

lan

nin

g d

ocu

men

ts

•O

pti

miz

e PA

YGO

an

d n

ew d

ebt

to f

inan

ce C

IP

CH

AL

LE

NG

ES

A

ND

OP

PO

RT

UN

IT

IE

S

9

Co

st o

f S

ervic

e C

om

pa

re

d to

ED

U V

olu

me

tric

R

ate

: H

isto

ric

R&

R s

upport

ed b

y R

egio

nal C

apital Im

pro

vem

ent

(RC

) fu

nd u

p t

o 2

006/0

7

F

Y 2

008/0

9 inclu

des inte

r fu

nd loan t

o R

C f

und (

$3.4

M,

or

$1.1

1 p

er

ED

U)

03

/04

04

/05

05

/06

06

/07

07

/08

08

/09

09

/10

10

/11

11

/12

12

/13

13

/14

Cap

ital

& D

ebt

$0

.00

$0

.00

$0

.00

$0

.00

$0

.60

$1

.84

$0

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$0

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$1

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$1

.96

$1

.10

Op

erat

ing

$1

0.8

7$

10

.09

$1

1.0

5$

12

.39

$1

3.7

3$

13

.78

$1

3.3

4$

12

.73

$1

2.5

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12

.58

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4.0

1

EDU

Rat

e$

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7.6

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7.6

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8.4

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9.1

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9.6

2$

10

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4$

11

.14

$1

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9$

13

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$0$2$4$6$8

$10

$12

$14

$16

$18

$ p

er

EDU

Ke

y A

ssu

mp

tio

ns:

O

&M

costs

based o

n b

aselin

e p

roje

ctions

R

&R

co

st

ba

se

d o

n p

rop

ose

d F

Y 2

01

4/1

5 T

YC

IP

R

ate

in

cre

ase

s b

y $

1.0

0/E

DU

in

FY

20

15

/16

, 5

% in

cre

ase

in

FY

20

16

/17

an

d

20

17

/18

, a

nd

3%

ea

ch

ye

ar

the

rea

fte

r

10

Co

st o

f S

ervic

e C

om

pa

re

d to

ED

U V

olu

me

tric

R

ate

: P

ro

je

cte

d

Sc

en

ario

A

FY

201

3/1

4F

Y 2

01

4/1

5F

Y 2

01

5/1

6F

Y 2

01

6/1

7F

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01

9/2

0

Co

st

of S

erv

ice

$1

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8.3

0$1

8.3

2$1

7.1

0

ED

U R

ate

$1

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9$1

4.3

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8$1

8.0

0

$0

$2

$4

$6

$8

$1

0

$1

2

$1

4

$1

6

$1

8

$2

0

$ p

er

EDU

Key A

ssum

ption

s:

O

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incre

ases b

y $

3%

per

year

R

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costs

$5M

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ge p

er

year

R

ate

incre

ase:

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0/E

DU

in F

Y 2

01

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6,

5%

incre

ase in F

Y

20

16

/17

an

d 2

01

7/1

8,

an

d 3

% e

ach

ye

ar

the

rea

fte

r

11

Co

st o

f S

ervic

e C

om

pa

re

d to

ED

U V

olu

me

tric

R

ate

: P

ro

je

cte

d

Sc

en

ario

B

FY

201

3/1

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01

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01

5/1

6F

Y 2

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6/1

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Y 2

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7/1

8F

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01

9/2

0

Co

st

of S

erv

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$1

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7$1

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8$1

7.7

1$1

8.3

7$1

8.8

2

ED

U R

ate

$1

3.3

9$1

4.3

9$1

5.3

9$1

6.1

6$1

6.9

7$1

7.4

8$1

8.0

0

$0

$2

$4

$6

$8

$1

0

$1

2

$1

4

$1

6

$1

8

$2

0

($ Per EDU)

12

Re

cycle

d W

ater (W

C) F

und

Co

st o

f S

ervic

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R

ecycle

d w

ate

r d

eliv

erie

s a

re p

roje

cte

d to

re

ach ~

50

,00

0 A

FY

in

FY

20

18/1

9

HO

W F

AR

AR

E TH

E R

ATES

fro

m F

ULL

co

st o

f se

rvic

e re

cove

ry

$4

98

/AF

$4

91

/AF

$5

03

/AF

$4

80

$4

85

$4

90

$4

95

$5

00

$5

05

$0

$5

0

$1

00

$1

50

$2

00

$2

50

$3

00

10

Yea

rs1

st 5

Ye

ars

2n

d 5

Ye

ars

CO

S p

er

AF

Mill

ion

s

Ave

rage

d C

ost

of

Serv

ice

Rat

e

O&

M, R

&R

an

d D

ebt

Serv

ice

Co

sts

AF

Co

st o

f Se

rvic

e

48

5,4

41

AF

21

5,6

40

AF

26

9,8

01

AF

80%

dro

p in n

ew

ED

U C

onne

ctio

ns fro

m F

Y 2

006/0

7 d

ue

to

econo

mic

dow

ntu

rn in

FY

200

8/0

9.

13

Histo

ric

al E

DU

C

on

ne

ction

s

7,6

68

7

,16

0

4,8

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5,9

07

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85

1,2

31

1

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7

1,1

16

1

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4

2,9

97

0

1,5

00

3,0

00

4,5

00

6,0

00

7,5

00

9,0

00

20

03

/04

20

04

/05

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

Ten

Ye

ar H

isto

rica

l Act

ual

ED

U C

on

ne

ctio

n

14

Pro

je

cted

N

ew

E

DU

C

onn

ec

tio

ns

2,8

27

5,1

06

5,6

49

5,3

01

4,1

32

3,0

08

2

,94

5

2,0

97

1

,98

1

1,9

24

1,5

29

3,5

00

4,0

00

3

,80

0

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00

3

,40

0

2,5

00

2

,30

0

1,8

00

1

,70

0

1,7

00

1,7

00

0

50

0

1,0

00

1,5

00

2,0

00

2,5

00

3,0

00

3,5

00

4,0

00

4,5

00

5,0

00

5,5

00

6,0

00

20

13

/14

Pro

j Act

ual

20

14

/15

20

15

/16

20

16

/17

20

17

/18

20

18

/19

20

19

/20

20

20

/21

20

21

/22

20

22

/23

20

23

/24

Ten

Ye

ar E

DU

Co

nn

ect

ion

s M

em

be

r A

gen

cy v

s. IE

UA

Pro

ject

ion

s

Mem

ber

Age

ncy

IEU

A

201

2/1

3 a

ctu

al pro

pe

rty t

ax r

eceip

ts in

clu

de

s $

10.2

mill

ion fo

r

On

e T

ime

RD

A

15

Sta

ble

&

R

elia

ble

F

un

din

g S

ourc

es:

Pro

pe

rty T

axe

s

$0

$1

0

$2

0

$3

0

$4

0

$5

0

$6

0

20

03

/04

20

04

/05

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

His

tori

cal P

rop

ert

y A

sse

ssm

en

t V

alu

es

and

P

rop

ert

y Ta

x R

ece

ipts

AD

VA

LOR

EM (

$Mill

ion

)R

DA

($M

illio

n)

ON

E-TI

ME

RD

A (

$Mill

ion

)A

sses

smen

t V

alu

e ($

Bill

ion

)

3%

in

cre

ase p

roje

cte

d f

or

FY

s 2

013/1

4 a

nd

20

14/1

5

1%

in

cre

ase p

roje

cte

d f

or

FY

20

15/1

6 a

nd

the

rea

fter

16

Pro

pe

rty T

ax R

ece

ipts P

ro

jec

tio

ns

$-

$1

0

$2

0

$3

0

$4

0

$5

0

$6

0

$7

0

20

13

/14

20

14

/15

20

15

/16

20

16

/17

20

17

/18

20

18

/19

20

19

/20

20

20

/21

20

21

/22

20

22

/23

20

23

/24

Pro

ject

ed

Pro

pe

rty

Ass

ess

me

nt

Val

ue

s an

d

Pro

pe

rty

Tax

Re

ceip

ts

AD

VA

LOR

EM (

$M

illio

n)

RD

A (

$M

illio

n)

Ass

essm

ent

Val

ue

($ B

illio

n)

63%

PA

YG

O:

Ca

pita

l C

all,

Gra

nts

,

Reim

burs

em

ents

,

Pro

pert

y t

axes

37%

Deb

t fu

nd

ing

:

Bond

s a

nd S

RF

loans

17

CIP

F

un

din

g S

ou

rc

es

FY

s 2

00

4-2

01

4: $

63

6M

$0

$2

0

$4

0

$6

0

$8

0

$1

00

$1

20

20

03

/04

20

04

/05

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

20

10

/11

20

11

/12

20

12

/13

20

13

/14

Pro

j Act

$ in Millions

Pay

- G

oB

on

ded

Deb

tSR

F Lo

ans

Gra

nts

CC

RA

Cal

lsC

on

trac

t R

eim

bC

apit

al E

xpen

se

$1

41

.8 $1

26

.9

$1

06

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$8

4.0

$1

69

.7

$7

.5

$M

illio

n

Pay

- G

o

Bo

nd

ed D

ebt

SRF

Loan

s

Gra

nts

CC

RA

Cal

ls

Co

ntr

act

Rei

mb

7

9%

PA

YG

O:

Capital call,

Gra

nts

,

Reim

burs

em

ents

,

Pro

pert

y t

ax

21%

Deb

t fu

nd

ing

:

SR

F loans

18

CIP

F

un

din

g S

ourc

es

2015

-2

02

4: $

337

M

$0

$1

0

$2

0

$3

0

$4

0

$5

0

$6

0

20

13

/14

Pro

j Act

20

14

/15

20

15

/16

20

16

/17

20

17

/18

20

18

/19

20

19

/20

20

20

/21

20

21

/22

20

22

/23

20

23

/24

$ in Millions

Pay

- G

oB

on

ded

Deb

tSR

F Lo

ans

Gra

nts

CC

RA

Cal

lsC

apit

al C

on

trac

t R

eim

bC

apit

al E

xpen

se

$1

01

.1

$7

1.2

$

6.7

$1

50

.2

$7

.4

$M

illio

n

Pay

- G

o

Bo

nd

ed D

ebt

SRF

Loan

s

Gra

nts

CC

RA

Cal

ls

Cap

ital

Co

ntr

act

Rei

mb

ST

RA

TE

GIE

S

19

20

Bu

sin

ess G

oal: F

isca

l R

esp

on

sib

ility

Strate

gic

F

in

an

cia

l P

rin

cip

le

s

S

oun

d a

nd p

ruden

t lo

ng term

fin

ancia

l pla

nnin

g t

o p

rovid

e f

or:

•F

ull

cost

of serv

ice r

ate

s f

or

all

Agency p

rogra

ms

•F

undin

g o

f essential re

pair a

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RECEIVE AND FILE

4A

REGIONAL SEWERAGE PROGRAM PRETREATMENT SUBCOMMITTEE

January 7, 2014

1:30 PM IEUA HQ Building A, Raines Conference Room

6075 Kimball Avenue Chino, CA 91710

Minutes

Members Present

Ruben Valdez………………………………………… City of Chino Richard Gutierrez……………………………………. City of Chino Hills Tony Mata…………………………………………….. City of Fontana Nicole Greene………………………………………... City of Montclair Alisa Hasbrouck……………………………………… City of Ontario Robert Herbster………………………………………. City of Upland Shawn Perumean…………………………………… Cucamonga Valley Water District Craig Proctor………………………………................ IEUA

Absent none

Others Present Tad Garrety………………………………………….…City of Chino Hills Tanya Honeycutt……………………………………...City of Fontana Kenneth Tam…………………………………………..IEUA Julio Im…………………………………………………IEUA Mike Sigsbee…………………………………………. City of Ontario

A. Introductions - Introductions of those present were given. B. Approval of Minutes from November 19, 2013 – Craig Proctor requested that

additional language in the first paragraph of Section B of the draft minutes be changed from “hazardous household collection centers” to “household hazardous waste collection centers”. Robert Herbster made a motion to accept the minutes of November 19, 2013, with the clarification in language, which was seconded by Ruben Valdez. There were no objections.

1. Tech Meeting Report – There was no Technical Meeting held in December. 2. Treatment Plants –

RP-1/RP-4:

RP-1/RP-4 met all the NPDES requirements during this reporting period.

RP-5:

o RP-5 met all the NPDES requirements during this reporting period.

CCWRF:

o CCWRF met all the NPDES requirements during this reporting period.

Agency-wide:

o The Agency-wide 12-month running average incremental increase between final effluent and water supply TDS for the month of October 2013 was 242 mg/L, which did not exceed the 250 mg/L 12-month running average limit. The secondary effluent TDS 12-month running average was 212 mg/L for the month of October 2013.

o The Agency-Wide 12-month running average TDS for the month of November 2013 was 497 mg/L, which is below the 550 mg/L Agency-wide 12-month running average limit.

Collections System:

o No SSOs occurred during the month of November 2013.

Recycled Water:

o No unauthorized discharges of more than 50,000 gallons of disinfected tertiary recycled water into the waters of the state occurred during the month of November 2013.

o No agricultural runoff events were reported to IEUA by member agencies during the month of November 2013.

3. Pretreatment Programs –

A. Chino – Due to State Circuit Boards receiving a violation for exceeding their monthly average discharge limit for copper last October, Chino increased sampling to weekly for 4 consecutive weeks. No other problems have been reported.

B. Fontana – There are no problems to report.

C. CVWD – Evolution Fresh received a TDS violation in December 2013. Best Management Practices are being evaluated as a corrective action.

Printed Circuits Unlimited has closed its doors and will not reopen. The owner of the business and the building management company will be working together to remove all hazardous substances. IEUA has requested that CVWD plug the discharge line as a precaution.

C. Discussion Items

1. IEUA Regional Ordinance Revision IEUA has completed the draft for the revised Regional Wastewater Ordinance. As soon as some minor formatting changes are completed Craig Proctor will send out the draft ordinance to committee members for review and comments. The draft ordinance will be presented to the Regional Technical Committee as an information item in March. IEUA reminded the committee members that once IEUA’s wastewater ordinance is adopted member agencies ordinances will need to be revised as necessary to be consistent with IEUA’s ordinance recognizing that IEUA is the primary Control Authority for Significant Industrial Users.

2. IEUA Local Limits Scope of Work A Request for Proposal for the IEUA Local Limits study was posted to the Agency’s BidNet system at the end of December 2013. Proposals will be accepted until January 29, 2014. IEUA would like committee members to participate in the review and consultant selection process. After a consultant is selected, IEUA would like for the committee members to continue their participation through the local limits development process.

3. Mutual Aid Agreement The Mutual Aid Agreement, adding Jurupa Community Services District, will be going to the IEUA Board on January 15 for approval. Most member agencies have completed the approval process, however several are still ongoing: City of Ontario approved the MAA on December 3, 2013; CVWD’s Engineering Committee will review it this evening with its expected Board approval on January 14, 2014; City of Fontana will have its Council approve it also on January 14; and City of Montclair’s Council is scheduled to review and approve the MAA on February 3.

4. Future Discussion Topics Craig Proctor reiterated that there will be a lot of work involved with the Local Limits revision, which will be the major project this subcommittee will be

involved in throughout the year. The goal is to complete the project by the end of the year.

D. Other Items – Craig Proctor announced that future meetings will continue to be held on the 1st Tuesday of each month at 1:30 pm. Meeting will continue to be held monthly while the Local Limits study is being conducted. RFP’s for the Local Limits will be brought back for discussion at the next meeting. Tad Garrety provided an update on the FOG partnership with S. Groner Associates, Inc. A high degree of interest exists by residential households in recycling and disposal of cooking oil. Residential recycling/disposal is not very high on the Chino Hills’ program, however understanding the nexus and connection between it and SSO’s is being reviewed for outreach opportunities. He thanked Jason Gu (IEUA) for his assistance in working with the City of Chino Hills seeking grant funding for the projects development and outreach program. The City of Chino Hills has revamped its NPDES program to incorporate the pretreatment program, and is now reaching out to auto mechanic shops on recycling and disposal of oil. Tad will keep the Subcommittee updated on the City’s progress. Ruben Valdez stated that in January the City of Chino began waste cooking oil counts, which will continue for six months.

The next meeting will be held on February 4, 2014 at 1:30 pm at IEUA. The meeting adjourned at 1:50 pm.

REGIONAL SEWERAGE PROGRAM PRETREATMENT SUBCOMMITTEE

February 4, 2014

1:30 PM IEUA HQ Building A, Raines Conference Room

6075 Kimball Avenue Chino, CA 91710

Minutes

Members Present

Ruben Valdez………………………………………… City of Chino Nicole Greene………………………………………... City of Montclair Robert Herbster………………………………………. City of Upland Shawn Perumean…………………………………… Cucamonga Valley Water District Mike Sigsbee…………………………………………. City of Ontario Craig Proctor………………………………................ IEUA

Absent Richard Gutierrez……………………………………. City of Chino Hills Tony Mata…………………………………………….. City of Fontana

Others Present Kenneth Tam…………………………………………..IEUA Julio Im…………………………………………………IEUA

1. Introductions - Introductions of those present were quickly given. 2. Approval of Minutes from January 7, 2014 – There were no changes to the minutes.

Robert Herbster made a motion, seconded by Shawn Perumean, to approve the minutes of January 7, 2014 as presented. There were no objections.

3. Informational Items & Updates –

a. Tech Meeting Report – There were no updates from the Technical Meeting

held January 30.

b. Treatment Plants – There were no violations or unauthorized discharges for the month of January 2014.

RP-1/RP-4 met all the NPDES requirements during the month of December 2013.

RP-5 met all the NPDES requirements during the month of December 2013.

CCWRF met all the NPDES requirements during the month of December 2013.

The Agency-wide 12-month running average incremental increase between final effluent and water supply TDS for the month of November 2013 was 243 mg/L, which did not exceed the 250 mg/L 12-month running average limit. The secondary effluent TDS 12-month running average was 213 mg/L for the month of November 2013.

The Agency-Wide 12-month running average TDS for the month of December 2013 was 499 mg/L, which is below the 550 mg/L Agency-wide 12-month running average limit.

No SSOs occurred during the month of December 2013.

No unauthorized discharges of more than 50,000 gallons of disinfected tertiary recycled water into the waters of the state occurred during the month of December 2013.

One agricultural runoff event was reported to IEUA by a member agency during the month of December 2013.

c. Pretreatment Programs

CVWD – Evolution Fresh continues to have high TDS issues above their 550 mg/L discharge limit, which they have not able to reduce. They have hired Environ Strategies as a consultant to assist them in resolving the issue. IEUA is working closely with Evolution Fresh on the TDS issues.

Printed Circuits Unlimited owners are continuing to work closely with the property management company to remove all plating solutions and hazardous substances from the vacated facility. Progress is slow but Printed Circuits has committed to do the right thing and remove remaining hazardous substances from the site. All materials removed are being properly manifested and disposed by a licensed hazardous waste hauler. Ontario – Four industries received late notices for deficient Self-Monitoring Reports. Those included: Korden, Nestle Waters, Net Shapes, and Sun

Badge. IEUA staff continues to provide training to the industries on Self-Monitoring Report preparation and timely submission. Chino – High levels of copper in State Circuit Boards discharge was discovered to be due, in part, the discovery that Printed Circuits Unlimited had used State Circuit Boards facility for several weeks in December. Although Printed Circuits Unlimited was basically out of business, it used State Circuits’ facility and appears to have discharged wastewater with high levels of copper under State Circuits’ permit. State Circuit Boards will be listed in Significant Non-Compliance (SNC) for the copper violations.

4. Discussion Items

a. IEUA Regional Ordinance Revision The draft Regional Wastewater Ordinance was reviewed. Although the ordinance has been revised to attempt to match EPA’s ordinance, IEUA’s program is rather unique and appropriate language must be drafted to reflect its uniqueness. Ontario staff suggested changing language in Section 2.3 of the ordinance from “no person” to “no SIU”. There was no objection to this suggested change and IEUA staff will include this clarification in the draft. The definition of “monthly average limit” will be removed since this phrase is not used anywhere else in the ordinance. The phrase “medical waste” is too vague and too general. It should be defined specifically, but clearly it does not include solids. CVWD staff felt that having too many rules complicates the implementation and compliance process. Every rule in the ordinance should be evaluated to determine its current need, enforceability and applicability. Certain mandates by the EPA must be included, however staff will review all optional ones and remove those that are not necessary. The “Detergents, surface-active agents (surfactants)” prohibition needs to be addressed in the ordinance language due to past foaming incidents in the City of Chino. Language stating “might cause excessive foaming” should be changed to “that causes excessive foaming” since this type of incident has and could happen again. Discussion was held regarding 40 CFR language and definitions. Section 17 of the draft ordinance prohibitions will be removed entirely. Montclair staff felt that the definition of “hazardous waste” should also be reviewed and tweaked. Further discussion was held regarding 40 CFR

language and definitions. CVWD staff disagreed, stating that specific definition of what constitute hazardous waste is not needed. Having such definitive language of what is and is not considered hazardous waste depending on the setting would be burdensome and difficult to enforce. Also, many varying definitions by the different state and federal environmental agencies create additional confusion. Additional language defining hazardous waste is not needed; the definition is already covered under other sections of the Regional Ordinance. There were no further comments on the draft Ordinance. IEUA reminded the committee members that once the Ordinance is adopted, member agency ordinances will need to be revised indicating that IEUA is the primary Control Authority for Significant Industrial Users. While some member agencies already have language in their ordinances covering this requirement, IEUA provided sample language to the committee members.

b. IEUA Local Limits Scope of Work Four proposals were received for the IEUA Local Limits study. IEUA requested that several of the committee members assist in the review and consultant selection process. Shawn Perumean (CVWD), Robert Herbster (Upland), and Nicole Greene (Montclair) volunteered to assist with the review and selection process. IEUA informed the committee that an update on the local limits will be presented as an information item to the Regional Technical Committee in March.

c. Mutual Aid Agreement Most member agencies have completed the approval process and submitted signature pages, however several are still outstanding: Chino Hills, Montclair and CVWD.

d. Future Discussion Topics There were no future discussion topics suggested.

5. Other Items

Craig Proctor announced that IEUA will be closing the Regional Plant No. 2 drying beds to member agency combination trucks as the site is undergoing rehabilitation. He asked if the committee members would please pass on this information to their collection system operations group.

The next meeting will be held on March 4, 2014 at 1:30 pm at IEUA. The meeting adjourned at 2:35 pm.

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