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Home My WebLink About03.a. Review Proposed Fiscal Year (FY) 2024-25 Central San Operations and Maintenance, Self-Insurance, and Debt Service BudgetsPage 1 of 29 Item 3.a. F__1_448�411C_S0 May 14, 2024 TO: FINANCE COMMITTEE FROM: KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: PHILIP LEIBER, DEPUTYGENERAL MANAGER -ADMINISTRATION ROGER S. BAILEY, GENERAL MANAGER SUBJECT: REVIEW PROPOSED FISCAL YEAR (FY) 2024-25 CENTRAL SAN OPERATIONS AND MAINTENANCE, SELF-INSURANCE, AND DEBT SERVICE BUDGETS The proposed Fiscal Year (FY) 2024-25 District Budget will be considered by the Board for adoption on June 6, 2024 upon conclusion of a scheduled public hearing to receive public comment. Central San's draft FY 2024-25 Budget book was distributed to Board Members on May 2, 2024, at a regularly scheduled public meeting. Commencing on page 51 of the draft FY 2024-25 Budget book, the Financial Summary section provides an overview of the core elements of Central San's entire Budget including analysis of specific funds, revenues, expenses, and reserves. Attached is a draft of the presentation planned to be given at the May 16, 2024 Board Meeting in regards to the Operations and Maintenance budget (Attachment 1). On May 8, 2024, the Engineering & Operations Committee reviewed the Capital Improvement Budget and Ten -Year Capital Improvement Plan portions of the draft FY 2024-25 Budget. At this meeting, the Finance Committee is being asked to review and provide feedback to staff on all non - capital improvement portions of the draft FY 2024-25 Budget, namely the Operations and Maintenance, Self -I nsurance, and Debt Service Budgets. To have sufficient time to produce a final Budget book for distribution as part of the June 6, 2023 Board meeting agenda packet, staff is requesting that all Board Members provide any proposed edits by the end of the day on Tuesday, May 21, 2024. The 10 year Cl P reflected in this budget document does not yet reflect likely necessary spending changes beyond FY 2024-25 to reflect the San Francisco Bay Regional Water Control Board's tentative order of April 6, 2024 R2-2024-OOXX / NPDES PERMIT CA0038873. The tentative order is subject to an approval hearing on June 12, and would become effective October 1, 2024. The tentative order will have a significant effect on CIP requirements for Central San and other publicly owned treatment works in the Bay area, due to imposed limitations on wastewater nutrients. Staff will brief the Board on this matter at the May 16, 2024 Board meeting. Strategic Plan re -In GOAL FOUR: Governance and Fiscal Responsibility Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 3 - Maintain financial stability and sustainability May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 3 of 33 Page 2 of 29 ATTACHMENTS: 1. Presentation May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 4 of 33 Page 3 of 29 1 Table of Contents 1 Budget Timeline 2 Accomplishments 3 Nexus to Strategic Priorities 4 Budget and Economic Overview Q Fund -Level Budget Highlights 6. Reserves Analysis 7 Benchmarking Data P Next Steps and Conclusion z 2 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 5 of 33 1 Page 4 of 29 Budget Timeline January -March: Budget data collection, calculations, analysis, and internal review/approval April 4: Board Financial Workshop March -April: Budget book development May 2: Draft budget released May 8: E&O Committee review of capital May 14: Finance Committee review of O&M May 16: Budget Presentation June 6: Scheduled Budget Approval Accomplishments Received a 3.95 out of 4.0 average customer service rating for collection system emergency calls (as of Q2). Launched "Go with the Flow" bike tours. Achieved 26th year of continuous compliance with all National Pollutant Discharge Elimination System (NPDES) treatment plant permit requirements. Experienced record low spills of 13 in calendar year 2023 (.84 per 100 mi). As of Q2 in FY 2023-24, experienced 6 spills (.4 spills per 100 miles). Collected approximately 1,800,000 pounds of hazardous waste. Developed a Fleet Electrification Strategic Plan. Began operation of a 1.75-megawatt solar energy project. Continued to collaborate with drinking water agencies in various potential projects to help augment the region's water supply. Completed the DEI Framework and Strategic Plan. Hosted the fourth Management Academy with 22 graduates from both Central San and sister agencies to promote interagency learning and development. Completed a wastewater cost of service study and recommended a new rate class for accessory dwelling units for Board consideration. May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 6 of 33 Page 5 of 29 Accomplishments (continued` 4 Upgraded Board meeting streaming services. Received GFOA's Certificate of Achievement for Excellence in Financial Reporting Award for the 23rd consecutive year. Received the GFOA Distinguished Budget Presentation Award for the 6th consecutive year. Hired a Cybersecurity Analyst to create and implement a complete cybersecurity- r :, program. Replaced or rehabilitated up to five miles of pipes in Alamo, Walnut Creek, , Lafayette, Pleasant Hill, and Orinda. i= Developed a long-term solids management strategy. -- Cleaned 361 miles of sewers (as of Q2). Completed 8,188 work orders for sewer system maintenance on schedule 99.6% of the time (as of Q2). Completed 4,991 work orders for plant maintenance, with 3% of those work orders being reactive maintenance (as of March 2024). nE a Hired an Operations Optimizations Division Manager to improve efficiencies and effectiveness in all dimensions of performance at Central San. Continued to optimize and improve the use of Oracle, including implementing Journeys, Permitting and Licensing, and Warehouse Management System. 5 G". May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 7 of 33 3 Page 6 of 29 Addressing 9 Strategic Priorities 77 CUSTOMER AND COMMUNITY Provide exceptional service 1. Balancing the need for Continue commitment to educating customers about financial resources against required revenue and resources needed to replace aging impacts to the customer infrastructure and meet regulatory requirements. FY 2024-25 Budgeted Project(s) Public outreach, including the highly successful Central San Academy, student education programs, facilities tours, bike tours, Pipeline community newsletter, and social media engagement. Feasibility study to determine the benefits and barriers to a consolidation with Mt. View Sanitary District. 77 ENVIRONMENTAL STEWARDSHIP Meet regulatory requirements, promote sustainability, and identify and reduce contributions to climate change 2. Evolving regulatory Anticipate changing regulations and plan for alternatives to Implement the Fleet Electrification Strategic Plan to meet new state requirements maintain reliability and meet requirements. requirements for zero -emission vehicles. Continue negotiating the regional Nutrient Watershed Permit with the SF Bay Area Regional Water Board. One additional staff position to address heightened regulatory compliance requirements. Addressing 9 Strategic Priorities ENVIRONMENTAL STEWARDSHIP Meet regulatory requirements, promote sustainability, and identify and reduce contributions to climate change air 3. Maintaining a sustainabl Partner with drinking water agencies to find creative water supply regional water supply solutions and identify ways to maximize cost-effective resource recovery and sustainability. Continue exploring partnerships with Contra Costa Water District (CCWD), Santa Clara Valley Water District (Valley Water) and San Francisco Public Utilities Commission (SFPUC) to advance the Refinery Recycled Water Exchange Project to utilize recycled water at nearby refineries in place of raw Delta water to increase the amount of drinking water available to the region. Added "bike tours" New New New New Collaborate with East Bay Municipal Utility District (EBMUD) and Dublin Updated to San Ramon Services District (DSRSD) to evaluate the feasibility of mention permanently diverting raw wastewater from Central San to DSRSD to focus produce recycled water via the DSRSD-EBMUD Recycled Water Authority beyond Refinery for delivery to new landscape irrigation customers in Central San's and Exchange EBMUD's overlapping service areas. May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 8 of 33 4 Page 7 of 29 9 Strategic Priorities Key Budget Priori WORKFORCE DIVERSITY AND DEVELOPMENT Recruit, educate, empower, and retain a workforce from diverse backgrounds 4. Driving employee 911111111111111111 Develop, retain, and equip high quality performance and rewarding employees with the tools needed to succeed, so Central excellence San may become a preferred employer 5. Fostering a culture of Continue investing in the development of Central San's diversity, equity, and incluslo DEI initiative (DEI) a ON Employee recognition, training and development programs, Added certifications, outside conferences, and professional association "certifications' memberships to inspire continuous education and improvement Retention of the services of DEI consultants and trainers to help guide and realize the efforts of Central San's Task Force. Implementation of prioritized recommendations of the DEI Action Plan. Establishment of ongoing leadership of DEI effort through supplementary responsibilities for existing staff. GOVERNANCE AND FISCAL RESPONSIBILITY Uphold integrity, transparency, and wise financial management in an effective governing model 6. Maintaining responsible Balance capital spending with affordability and rate Financial planning to forecast needs and sensible spending. rates at an affordable level impact concerns, and offset infrastructure replacement, regulatory responses, and other expenses with cost -saving Optimize ERP system to issue relevant and reliable financial reports efforts, efficiencies, optimizations, and innovations and to facilitate improved capital project budgeting and monitoring. Commencement of a cost -of -service study for FY 2025-26 rates with adoption of a new (multi -year) rate schedule. Addressing 9 Strategic Priorities Key Budget Priority IFY 2024-25 Budgeted Project(s) MESAFETYANDSECURITY Provide a safe, secure, and healthful workplace that foresees and addresses threats 7. Protecting the safety and Increase security at the treatment plant to address security of both people and increased contractor and construction activity and continue assets to develop cybersecurity efforts. INFRASTRUCTURE RELIABILITY Maintain facilities and equipment to be dependable, resilient, and long lasting 8. Aging infrastructure Make investments in capital improvements and internal climate resiliency resources to deliver on increased levels of capital spending, including staff development and regular reviews to ensure proper capital delivery capacity. 10 Updated with FY 2024-26 projects New New Projects to construct and provide safety upgrades, including planning for a new emergency notification system. Updated Continued development of cybersecurity program, including with FY training and anti-phishing campaigns. 2024-25 projects Implementation of physical security standards for facility -based projects. Major projects include the Solids Handling Facilities Improvements Phase-1A, Phase-1 Steam Renovations, electrical renovations at Headworks and the Pump and Blower Building, Updated new aeration diffusers, new ultraviolet lamps, the Large with FY Diameter Inspection Program, and the Grayson and Walnut 2024-25 Creek Levee Improvement Project. projects Continuation of the Limited Duration Position Program to assist with project -based peak workloads. May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 9 of 33 5 Page 8 of 29 Addressing 9 Strategic Priorities - i INNOVATION AND AGILITY - Optimize operations for continuous improvement, and remain flexible and adaptable 'IMENEEM 9. Optimization of Central* Continue to champion and initiate projects through the Execution of the IT/OT Strategic Plan, including five road maps for key San wide business and Information Technology / Operational Technology (IT/OT) programs. treatment processes, and Strategic Plan. Identification and implementation of process, chemical, and energy project workflow and Advance overall business and decision support processes to efficiency improvements. delivery through improve efficiencies and effectiveness in all dimensions of Updated technology performance at Central San. Continued work with internal stakeholders to develop the long-term plan with FY 2024-25 for the Solids Phase-2 project and regional biosolids handling research. projects Focused effort on the Operations Department to improve existing operations. Implementation of in-house treasury function eliminating manual and/or inefficient processes and optimizing modern banking-ERP integration technology. 11 12 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 10 of 33 6 Page 9 of 29 Budget Main Points Continued commitment to Excellence and High Level of Service Continued higher inflation impacts several expenditure categories (contributing to overall O&M increase of 5%); but O&M budget is below 2023 financial plan forecast. Capital Budget of $75.7 million (plus $5 million contingency) in FY 2024-25 reflective of carry -forward status Following slides show funding uses and sources at the fund level 13 Budget Summary Operations & Maintenance $79,520,131 $85,019,046 $91,446,671 $95,987,159 $4,540,488 5.0% Sewer Construction (Capital Budget) $107,955,000 $90,976,000 71,202,000 80,712,000 9,510,000 13.4% Debt Service $12,891,059 $13,251,922 9,160,142 8,815,875 (344,267) -3.8% Self -Insurance $1,285,000 $2,170,000 2,585,000 2,420,500 (164,500) -6.4% Total Budget" $201,651,190 $191,416,968 $174,393,813 $187,935,534 $13,541,721 7.8% *As amended **Excluding contributions to reserves 14 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 11 of 33 Page 10 of 29 Inflation Trend Percent Year -Over -Year inflation Inflation -February to February 9.0% 7.9% 80% 7.0% 60% 6.0% 52X 5.3% 5.0% 40% 3,4% 3.6% 3.5% 7% 2.9% 3.2% 3.0% 2.4% 2.5% 2.2.4% 20% 11 11 � II I I I L6% I 0.0% O.D% 2014 2013 20i6 2017 2018 2019 2020 2021 2022 2023 2024 -1.0% ■ N.6-1 ■ Bay Area 15 District -Wide: Use of Funds FY 2022-23 FY 2023-24 FY 2024-25 $213,536,900 $194,526,300 4,z31,1 13,998 Use of Funds $110,000.000 $100,000,ODD $90.000,000 $80,0w,wo S70,000,000 $W,000,OOo S50,000,000 540,000,000 530,000,000 $20,000,000 00,000 510,0 Operations&Maintenance SewerConstrucdon C1ebtService ■ FY 22-23 ■ FY 23-24 ■ FY 24-25 Budget Budget, Budget 10 Self-Inswance ContributontoReserves May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 12 of 33 $ Page 11 of 29 District -Wide: Sources of Funds FY 2022-23 FY 2023-24 FY 2024-25 $213,536,900 $194,526,300 $231,1 19,998 Sources of Funds 5140,000,000 5120,000,000 $100,000,000 S80,000,000 se0,000,000 $40,000.000 sz0,000,000 ' ■' ,11 M E N s- SemerSerwe Debt Proceeds Cityof Concord Tat Revenue Capacirzv Fees Charges M FY 2022-23 0 FY 2023-24 ■ FY 2,24-25 17 �=M Use of Reserves AIIClcher Revenue Ineti Sources Sewer Service Charge Rates and Revenues FY FY FY SSC Rates 22-23 23-24 24-25 Change ($) Change (%) Single Family $690 $697 $725 $28 4.0% Multi Family $654 $622 $647 $25 4.0% Other Classes -----Charges Vary — See Specific Ordinance ----- Budget Budget Budget FY 22-23 FY 23-24 FY 24-25 Chan e $ Chan e SSC Revenues ($Thousands) $114,657 $117,980 $121,310 $3,323 2.8% kballaw, 18 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 13 of 33 9 Page 12 of 29 19 1 •FundExpenditures Other Expenses, 1.7% Supplies & Additional UAAL Materials, 15.6% Other Purchased Services, 8.4% Salaries &Wages, 49.5% Purchased Property Services, 8.6% 11' Employee Benefits, IS.S% I tiPension UA :I. 1 - SD CEN-rRALSAN la 20 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 14 of 33 10 Page 13 of 29 0&M Fund Expenditure Trend $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 Salaries & Wages Employee Benefits Pension UAAL OPEB UAAL Additional UAAL Purchased Ocher Purchased Supplies & Ocher Expenses Contributions Property Services Services Materials 10— ■ FY 22-23 Budget ® FY 22-23 Actual ■ FY 23-24 Budget ■ FY 23-24 Projection ■ FY 24-25 Budget --ad 21 0&M Fund Spending by Department $35,000,000 $30,000,000 $25,000.000 $20,000,000 $15,000.000 $10,000,000 $5,000,000 $0 Executive Governance Administration Engineering & Collection System Plant Operations*« Recycled Water Technical Services Operations Program r FY 22-23 Budget $2,778,212 $20,283,342 $15,208,366 $13,480,048 $31,571,861 $1,697,217 YA FY 23-24 Budget $3, 169,121 $21,906,201 $15,257,107 $14,391,917 $34,297,520 $1,924,804 IN FY 24-25 Budget $3,951,510 $22,454,528 $15,595,650 $18,715,786 $33,136,196 $2,133,490 *Function shown separately given significance of service and for comparability with PY budgets **Includes Office of the Director of Operations, Plant Operations, Plant Maintenance, and Operations Optimization Functions r 22 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 15 of 33 11 Page 14 of 29 Budgeted Staffing Staffing of 302 proposed full-time equivalent (FTE) positions Heard requests from divisions Assessed relative operational and strategic priorities and considered intra-departmental synergy where feasible Four new FTE additions included: Associate Engineer (Capital Projects) Assistant Engineer (Regulatory & Environmental Compliance) Shift Supervisor (Plant Operations) Management Analyst (Plant Maintenance) Two additional Limited Duration Employees Risk Management Optimizations 23 0&M Labor -Related Budget Highlights Salaries & Wages: Overall increase of $2.3 million (5.2%) COLA is 3.75% (at ceiling) for all bargaining units based on latest MOU provisions considering CPI trend over past two years Assumed vacancy factor of 3.0%. Increase in total headcount by 4 positions to a total of 302 Benefits (Current Employee Costs): Overall increase of $1.3 million (9.3%) CCCERA (Normal Cost) contributions (as % of payroll) increasing 0.09%for legacy employees to 17.45%and increasing 0.08%for PEPRA employees to 11.60%(per December 2022 actuarial valuation) Base plan medical premium increase of 6.25% (based on 2023 to 2023 rates) Capitalized administrative overhead increasing by $0.6 million (10.8%) to $6.3 million 24 S - a May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 16 of 33 12 Page 15 of 29 0&M Labor -Related Budget Highlights (Continued) UAAL Costs Overall decrease of $0.6 million (-50.2%) OPEB: Modest increase in UAAL component of ADC by $0.1 million (59.6%) Retiree healthcare premiums estimated at $4.6 million, reflecting a 9.5% increase from the prior year. Retiree healthcare costs exceeding ADC budgeted to be reimbursed from OPEB trust consistent with the prior years Pension (CCCERA) Near elimination of UAAL payments to CCCERA following issuance of 2021 COPS in June 2021 and payoff of pension UAAL UAAL contribution rate of 1.06% in FY 2024-25 reflects noteworthy increase from rate of 0.15% for admin charges to CCCERA paid in past three years Debt service of COPS reported in Debt Service fund Proposed budget does not include "additional UAAL trust contribution" in consideration of healthy funded status and other priorities ($1 million budgeted in FY 2023-24) 25 Additional UAAL Pension Fiscal CCCERA Prefunding Year Trust T 2013-14 5.0 2014-15 5.0 2015-16 2.5 2016-17 - 2017-18 2017-18 2017-18 2018-19 2019-20 3.4 2.0 2.5 1.25 - Trust Contribution History OPEB Trust Total Source of Funds 5.0 Budgeted 5.0 Budgeted - 2.5 Budgeted 2.5 2.5 Budgeted, subsequent Board direction - 3.4 Board direction on fav variances - 2.0 Board direction on fav variances 2.5 2.5 Budgeted, subsequent Board direction - 2.5 Budgeted, subsequent Board direction Budgeted, subsequent Board direction; Board direction on 1.25 2.5 favorable variances Budgeted, subsequent Board direction; Board action on UAAL 2020-21 70.8 1.25 - 72.0 payoff 2021-22 - - 1.25 1.3 Budgeted, subsequent Board direction 2022-23 - 1.0 1.0 Budgeted, subsequent Board direction 2023-24 - 1.0 - 1.0 Budgeted, subsequent Board direction 83.3 11.4 * 8.5 103.2 *Balance of approximately $12.8 million (including investment gains) utilized to help finance payoff of pension UAAL balance June 2021 26 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 17 of 33 13 Page 16 of 29 Pension & OPEB Funding Status Pension Actuarial Results $160 100% $140 � 90% 80% o $120 70% $100 60% $80 50% J $60 40% Q $40 30% $20 10% $0 0% oyti oy�6 oyu oye oyb aye oy� oya otio otiti otiti ti ti ti ti ti ti ti ti ti ti ti Year ended 12/31 �UAAL —Funded% 27 0&M Funding Sources Total FY 2024-25 revenue of $98.2 million Largest source of revenue is sewer service charges City of Concord proportion to flow to plant and changes in non - collection O&M expenditures Investment income captured in "other" reflecting largely sustained Fed interest rates 28 $90 $80 c $70 2 $60 E $50 $40 Q $30 $20 $10 $0 OPEB Actuarial Results le07 Orb OHO 07b Off^ OHO O,Q O ` O`1y 11 P ti ti ti ti ti ti ti ti ti ti ti Year ended 6/30 �UAAL —Funded% Permits & Inspection otk1— — Fees $1.8 2% H Hw 51.1 1U 100% 90% 6% 80% 70% 60% 50% 40% 30% 20% 10% 0% hart in millions) May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 18 of 33 14 Page 17 of 29 Concord Reimbursement Revenue Analysis (O&M) $26.00 $24.00 $22.00 F $20.00 $18.0000 IA $16.00 0 r $14.00 I I I I I � � � ' y F y y ti�ti\ y Q Q F F F Q Q F y F F Q y Q y Q ■ Actual ■ Projected - No UAAL Payoff r. Projected - With UAAL Payoff 29 Capital Budget Highlights Infrastructure Investment Over Past 10 Years: $519.1 Million $110.0 $100.0 $90.0 $80.0 $70.0 $66.2 i $60.0 $50.0 $42.8 $45.3 $2.4 $40.0 $41 2 $30.6 - 3.1 $2.2 gl3 $1.6 $30.0 $25. $0.6 $20.0 $0.8 $0.3 $10.0 $0.0 - � Collection System Program Recycled Water Program Adopted Annual Budget ("Estimated Expenditures" prior to FY 2017-18) till $88.0 $4.0 $91.0 $3.1 � 1p0.0-1\ F( 201\ 2ti F� 102� �p13,yq IPtO,e�edl Treatment Plant Program iiiiiiiiiiiiiGencral Improvements Program May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 19 of 33 15 Page 18 of 29 Sewer Construction Fund Expenditures Recycled Water $0.3 0% Gener Improvemen Total FY 2024-25 expenditures of $80.7 million (including contingency) Increase in capital spending from prior year budget by $9.5 million Continued reduction in new appropriations next year will allow for catch-up on budgetary carryforward Capital spending ramping back up in FY 2025-26, and remaining higher than this for duration of 10-year plan 31 Sewer Construction Fund Sourcesapi City Reimbursement Concord 101 Reimbursement $0.£ Total FY 2024-25 funding sources of $121.8 million, including debt proceeds Increase in total sources by $28.7 million from the prior year due to higher debt proceeds expected Net contribution to reserves of $41.1 million necessary for future capital program spending increases and rate smoothing 32 Continsencv S5.0 6% Other $5.2 4% Capacity Fees $5.0 4% 1 :hart in millions) ions) May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 20 of 33 16 Page 19 of 29 Self Insurance Budget Operating Revenues: $2.3 million Operating Expenses: $2.4 million HHW Contribution Technical & Other Services, $25,000 $150,500 Expected LossAServices, $250,000 —Investment Income $449,123 $365,000Insurance Premiums, - - $1,655,000 t Sewer Service Charges \\ $1,858,965 i�. r 33 Debt Service Expenditures Total FY 2024-25 expenditures of $8.8 million Includes debt service on 2018 Revenue Refunding Bonds and 2021 cops Debt service entirely secured and funded by ad valorem property taxes 34 Trustee & Other Costs $6,000 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 21 of 33 17 Page 20 of 29 35 Reserve Balance Projections as of June 30, 2024 Reserve Policy Target $40,076,336 $47,791,500 $9,000,000 $96,867,836 Projected Balance $39,911,148 $153,591,673 $9,087,411 $202,590,232 Projected Balance Minus Reserve Policy Target ($165,188) $105,800,173 $87,411 $105,722,396 Reserves comply with policy specified minimums to ensure adequate resources Impacts allocation of SSC to various sub -funds Affects rate setting, in conjunction with drivers from 10-year financial plan 1 36 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 22 of 33 18 Page 21 of 29 Reserve Balance Projections as of June 30, 2025 Beginning Projected Reserve $39,911,148 $153,591,673 $9,087,411 $202,590,232 Increase/(Decrease) $2,191,570 $8,153,865 ($87,412) ($6,049,707) Ending Projected Reserve $42,102,718 $145,437,808 $9,000,000 $196,540,526 Reserve Policy Target $42,102,718 $53,572,500 $9,000,000 $104,675,218 Over/(Under) Target - $91,865,308 - $91,865,308 40 37 91:3 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 23 of 33 19 Page 22 of 29 Customer Accounts per Employee (excl. Concord and Clayton accounts) 900 w 800 0 E 700 W 600 w 500 401 396 391 400 300 w c 200 U100 0 n Customer Accounts per Employee (excl. Concord and Clayton accounts) AWWA Survey (Nationwide FY 20-21 data) 674 678 677 587 500 480 439 369 374 412 351 tt � tr AWWA Survey (Nationwide FY 21-22 data) ibk7 626 600 633 558 3 465 469 6314 394 341 ryyp aao �ydo ryy� a\sc 1yM ry`'\a Jac ^`'\o ry"\o aac �`'\o tr � tt * Customer accounts = number of residential parcels and non-residential parcels billed by Central San. Central San data not available for FY 23-24. 39 Customer Accounts per Employee Incl. Concord and Clayton accounts) Customer Accounts per Employee (incl. Concord and Clayton accounts) C°""niSaN AWWA Survey (Nationwide FY 20-21 data) d 1200 a 0 1000 981 970 957 E 810 w 800 p. 674 678 677 587 600 500 0 439 480 Q 412 400 369 351 374 3 200 I I ` I U 0 'e. AWWA Survey (Nationwide FY 21-22 data) 709 626 633 600 558 473 465 469 409 394 341 314 I I I a I 's' '& "'. "'. "3'. '\h\. '14\. 'ee ti`D9c ga\sc / * Customer accounts = number of residential parcels and non-residential parcels billed by Central San, plus Concord and Clayton accounts. FY 22-23 Concord and Clayton accounts were estimated by taking the average of FY 20-21 and 21-22. Central San data not available for FY 23-24. 40 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 24 of 33 20 Page 23 of 29 Wastewater Processed per Employee (MGD/FTE) Wastewater Processed per Employee (MGD/FTE) �(�!� CENiPAL $AN 0.40 w r 0 0.35 l7 0.30 a e 0.25 E W 0.20 'a 5 0.10.14 0.12 0.12 0,12 a c a.10 a` a 0.05 3 0.00 _ i i i -d LL LL LL y o 41 AW WA Survey (Nationwide FY 20-21 data) 0.27 0.22 ' 0.20 0.17 0.14 0.14 0.25 0.20 0.21 0.17 0.14 E&N AW WA Survey (Nationwide FY 21-22 data) 0.23 0.22 0.23 0.22 0.19 0.19 0.17 0.17 0.14 0.13 0.14 0.13 e e Staffing Levels: Total # of FTEs Total # of FTEs ,!7�00,CENTR SAN k rE K. 500 w LL 400 0 # 295 299 304 301 � 300 0 r ' 200 , 1, 42 FY FY FY FY 20-21 21-22 22-23 23-24 (up to Feb. 2024) AWWA Survey (Nationwide FY 20-21 data) a1s 260 256 2� 213 170 135 I 1■ 06 11 43 67 I 1 25% Median 75% 25% Median 75% 25% Median 75% 25% Median 75% VVW Only Utilities Combined Utilities Population of Population of FY 20-21 FY 20-21 100,001-500,000 >500,000 (4-13 participants) (18.96 participants) FY 20-21 FY 20-21 (7-54 participants) (8-28 participants) AW WA Survey (Nationwide FY 20-21 data) AW WA Survey (Nationwide FY 21-22 data) 470 :fT•i 293 299 230 238 186 194 120 it 51 I 1 25% Median 75% 25% Median 75% 25% Median 75% 25% Median 75% W W Only Utilities Combined Utilities Population of Population of FY 21-22 FY 21-22 100,001-500,000 >500,000 (3-10 participants) (19.74 participants) FY 21-22 FY 21-22 (36 participants) (26 participants) AVVWA Survey (Nationwide FY 21-22 data) FTEs include temp hours converted to FTE. *Central San FTE counts include FTEs or temps associated with Recycled Water or Household Hazardous Waste Collection Facility (HHWCF). District Counsel is not included in FTE count. May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 25 of 33 21 Page 24 of 29 FTE C-g-y -d S.b,.t.g.,y 'my 23-24 (,p t, Nal-I&AVIWAS-V (FY20-21 D-) 100,wi� z :1. f�DD,OQD FY 20-21 FY 20-21 % M.A.. 75% 25% M.di.. 75% -A 27.1 380 16.5 27.6 32.4 24.6 31.7 43.0 23.1 28.9 35.5 1L. R-2 -. -1. --1 IM 7.1 1.1 12 1.4 5.0 7. 11.6 5.0 6.5 10.3 3A 1� 6.1 1.1 1A 1.1 3.0 1.1 16 2 1.7 2.7 4.3 2.0 3.7 42 - - - 20 2.4 -0.8 1-1, 22 4.5 2.9 1,4 4.6 1.1 1.8 4.9 0.4 1.2 7.4 -.4 27.1 390 16.5 27.6 32.4 - - 13.1 1.-1 11.1 U3 112 �3 0.� �.-1 14.8 _1.1 1.6 1.1 4.1 43 ww 0 ly U 11111F.IEW1111M -11-- N�..md.A�AS.-V(�22-�D..) -21-12 �00,001-sw,ODG P.P.I.W. F >300,000 FY 2 FY 21-22 C26p.,1- 2 WIP.M.) 136pdidp.m.) .2.7 .1 .-1 %. 20. 25.3 39.2 17.6 2.0 32.0 213 29.3 41.G 23.2 2GA 32.2 .2-1 4.-5 --2 - 32 44 �A 7-� 11.4 1�1 1� 11.4 - - _49 , I IM 1.11 -1-6 -2 1.8 1.1 11 1.1 1.3 19 1.1 Ll 1.4 2.1 1m 13 1Z 21 1.1 08 16, 1.8 1.0 22 2.5 13 23 3.3 2.7 41 1.5 0.8 1.4 54 0.6 1.1 8.3 1.4 2.1 Ll 1.1 3.. .-7 0.11 M� 0.. 0., m, u., 1.6 1.4 1.1 10.1 44 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 26 of 33 22 Page 25 of 29 Total 0&M Cost per Customer Account Total O&M Cost of Wastewater (WW) Services per Account ($/account) 0'�I,C14MAtS"* AWWA Survey (Nationwide FY 20-21 data) AWWA Survey (Nationwide FY 21-22 data) 700 615 632 632 584.0 0 600 569.0 510 521 502 519 500 493 474 483 438.0 425 442 413.0 402 u 400 377 336 333 323 350 354 Q 306.0 317.0 ygg n 300 277 0 M 200 ae 0 100 0 0 ' tiory^ ry^�' ryry ti�\e ago y' ry4'- ago "& by\o aao 1$11 1$,* ago �-\ �i Q� tS tt eC WW Only Utilities Combined Utilities Pop. I00K-500K Pop. 500K & higher WW Only Utilities Combined Utilities Pop. I00K-500K Pop. 500K & higher * Customer accounts = number of residential parcels and non-residential parcels billed by Central San. Does not include Concord or Clayton accounts. Data not available for FY 23-24. 45 Total 0&M Cost per MG Treated Total O&M Cost of WW Services per MG ($/MG) 8,000 AWWA Survey (Nationwide FY 20-21 data) AWWA Survey (Nationwide FY 21-22 data) 7,000 6,812 6,373 C7 6,000 5,509 5,525 4,973 5,097 u 5,0002 e4,303 I 4,000 3,970 3,002 2,888 2,921 2,967 3,168 2,975 y 3,000 2,770 2,449 2,408 U 1,119 1,944 1,910 2,153 2,000 U 1,550 ' 1,679 5 1,503 1 1 1 I 1II I 1,000 F g WW Only Utilities Combined Utilities Pop. I00K-500K Pop. 500K & higher 1 WW Only Utilities Combined Utilities Pop. I00K-500K Pop. 500K & higher * Data not available for FY 23-24. 46 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 27 of 33 23 Page 26 of 29 Total 0&M Cost per 100 miles of Pipe Total O&M Cost of WW Services per 100 Miles of Pipe ($/100 miles of pipe) 8,000,000 CtNma a a c 7,000,000 6,000,000 4,378,739 4,55, . a 5,000,000 m'a 41229,39 ry m 4,000,000 I 3,000,000 `p w 2,000,000 0 U 1,000,000 O 0 r ry�:Y ry1'.tti QJ QJ 47 7,285,853 AWWA Survey (Nationwide FY 20-21 data) 7,371,485 AWWA Survey (Nationwide FY 21-22 data) 6,157,849 1,406 5,348,789 4,608,735 4,563,760 4,563,760 3 4,118,49, 4,344,533 2,171,162 3,535,627 3,561,376 3,669,332 3,772,014 3,276,467 3,043,226 3,005,183 2,699,536 2,171,333 2,256,657 2,126,095 2,202,651 2,322,267 2,259,550 ry,BA ryhde a\9C ryh\e ryy\e DaC 141e ryh\e aac 41- ryh\° aac 14\e ryy\e a\a0 ryh\e ryh\e da' 1h' ryh\e aac 141e ryh\e a\ac 14\° WW Only Utilities Combined Utilities Pop. IOOK-500K Pop. 500K & higher WW Only Utilities Combined Utilities Pop. IOOK-500K Pop. 500K & higher * Data not available for FY 23-24. Collection 0&M Cost per 100 miles of Pipe -f11_CE41-L SAN * 1,400,000 _a 1,132,439 1,193,857 a 1,200,000 1,147,503 0 1,107,985 1,072,2: N 1,000,000 e a e 'a ao 800,000 a� U of 600,000 0p O — 400,000 0 a 200,000 0 U 0 mi /// 111' 48 Collection O&M Cost per 100 Miles of Pipe ($/100 miles of pipe) AWWA Survey (Nationwide FY 20-21 data) 11 AWWA Survey (Nationwide FY 21-22 data) 1,034,622 1,034,622 1,049,436 829,099 671,875 710,664 673,522 539,4 475,912 475,912 �¢aac ^y\e ryy\e �ea�o ^y\e ryy� �eDac 1y\° ryy\° �eaac �y\° Only Utilities Combined Utilities Pop. I OOK-500K Pop. 500K & high * Data not available for FY 23-24. ,016,683 1,070,756 995,786 976,749 937,592 753,883 726,580 728,494 738,290 586,071 585,261 534,120 WW Only Utilities Combined Utilities Pop. I 00K-500K Pop. 500K & higher May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 28 of 33 24 Page 27 of 29 Treatment 0&M Cost per MG Treated rCrllmntSMl 2,500 c� y 2,000 1,940 1,906 ' 1,768 N 1,500 j 1,000 E W O 500 d ~ 0 � ti ro &iry�;p &iry^;b &,ryryti Treatment O&M Cost of WW Services ($/MG) 2,351 AWWA Survey (Nationwide FY 20-21 data) 1I AW WA Survey (Nationwide FY 21-22 data) 1,708 1,495 1.532 1,502 1,575 1,379 1,314 1,202 1,222 1,222 1,049 1,12s 1,104 1,076 1,011 95s 922 966 796 767 833 748 636 I aac 1y\ I � 1 tiy\ Dac "y\e ryy�o a`ac "1" 101, aac ^y\o $1, a`ao ^41e 0 aao 1y\ 1 ry$'- aac 1y\o rys'- aac �4'- � tr tAm d° Only Utilities Combined Utilities Pop. I OOK-500K Pop. 500K & higher — Only Utilities Combined Utilities Pop. I OOK-500K Pop. SOOK & higher * Data not available for FY 23-24. 49 50 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 29 of 33 25 Page 28 of 29 Public Hearing on June 6, 2024 Staff recommendation for Board to approve and adopt the following budgets: Operations & Maintenance Capital Improvement Self -Insurance Debt Service Coinciding with budget, Board also asked to delegate authority to General Manager to renew insurance 51 Conclusion FY 2024-25 budget is balanced, consistent with reserve policies Financial health of Central San remains strong Staff will continue to monitor impact of inflation and financial markets on budget "Thank you" to all dedicated staff involved in budget development process, as well as ongoing monitoring during the year 52 16 �W.;,�pi., M May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 30 of 33 26 Page 29 of 29 53 May 14, 2024 Regular FINANCE Committee Meeting Agenda Packet - Page 31 of 33 27