1. CALL TO ORDER
Chair Wornham called the Special Administrative and Finance Committee meeting to order at 1:38 p.m.
2. ROLL CALL
Committee members present were Chair Wornham, Vice-Chair Hogan, Vice-Chair Price and Directors Bond, Hilliker, Johnson, Lewis, Petty, Pocklington, Smith, Thompson, and H. Williams. Committee members absent were Directors Quist and Saunders. Also present were Directors Bowersox, Dailey, Ferguson, Johnson, Knutson, Lewinger, Linden, Martin, McMillan, Muir, Saxod, and K. Williams. At that time, there was a quorum of the committee. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, and Director of Finance/Treasurer Sandler. Also present was Richard Morales of Wedbush Morgan.
3. PUBLIC COMMENT
There were no members of the public who wished to address the Committee.
4. CHAIR’S REPORT
Chair Wornham started the meeting by reversing the two agenda items and announced Ms. Stapleton would present the mid-term budget update first.
He stated following the budget item the Board would be hearing from Mr. Sandler about the proposed calendar year 2009 rates and charges. Chair Wornham announced staff had put together a fact sheet for the Board to review about the recommended rates and charges.
He announced the committee recommendations were the same recommendations which
would be brought to the full Board on June 26, 2008.
1. Discussion and consideration of fiscal years 2008-2009 Mid-Term Budget update.
Staff recommendation: Recommend adoption of the mid-term budget adjustments, described below, to the full Board at the June 26, 2008 board meeting.
1-A Multi-Year Budget for FY 2008 and 2009 (“multi-year budget”).
Approve the reallocation of $1.625 million within the operating budget to fund the enhanced conservation campaign; and
1-B CIP Lifetime Budget:
Amend the CIP Lifetime Budget from $3.653 billion to $3.731 billion, which is an increase of $78.7 million or approximately 2.2%. This action adds $31.0 million for the new Vidler/Semi-tropic Water Storage project, of which $30.4 million is reimbursable by State grant funds; and this action increases the project lifetime budgets for three existing CIP projects (San Vicente Pipeline, Lake Hodges Project and Mission Trails Tunnel) by a total $47.7 million.
Ms. Stapleton presented an overview of the Mid-Term Budget update for fiscal year 2008 and 2009, commenting that fiscal year 2008 has been a productive and challenging year and fiscal year 2009 would pose for additional financial challenges.
She provided examples of how the budget provides a prudent level of risk mitigation and how the budget does not provide for “worst case” scenarios. Ms. Stapleton explained the multi-year budget reflects board policy decisions and looking into the future with the implementation of CRACA “Lite”, which would be a committee to relook at costs and associated needs and timing of projects and programs and to develop the fiscal years 2010 and 2011 multi-year budget, and rates and charges.
She described with two pie charts, the mid-term assessment of revenues and expenditures, and how the budget of nearly $1.5 billion was broken down. She also reviewed the mid-term projections for revenues and expenditures and the estimated fiscal year 2008 and projected fiscal year 2009 operating budget expenditures for each Water Authority department as well as what areas the Water Authority could make savings and programmatic reductions to fund enhanced conservation communications plan.
She covered the mid-term projections for the Capital Improvement Program (CIP)
by reviewing the existing CIP budgets (CIP/Project lifetime budget and CIP multi-year
budget). She stated that staff was not asking for any changes for the 2-year
amount and the budget was on track, on budget, and expected to utilize all projected
funds by this time next year. Ms. Stapleton explained the lifetime budget verses
the multi-year budget to the board in full detail. The lifetime budget is the
total life of the project and the multi –year budget is expenditures in
the two-year budget. Ms. Stapleton recommended changes to the project lifetime
budget for the Vidler/Semitropic Water Storage project, San Vicente Pipeline,
the Lake Hodges project, and the Mission Trails Tunnel.
Ms. Stapleton reviewed the staff recommendations with the board before concluding her presentation and answered questions from the Board members.
Director Price moved, Director Petty seconded and the motion carried unanimously
recommend adoption of the mid-term budget adjustments to the full Board at the June 26, 2008 Board meeting.
2. Discussion and consideration of proposed calendar year 2009 rates and
charges and the annual standby availability charge.
Staff recommendation: Recommend adoption of the proposed calendar year 2009 rates and
charges for water, services and facilities, and to continue the existing Annual Water Standby Availability Charge at its current level to the full Board for consideration at the June 26, 2008 public hearing.
Mr. Sandler presented on proposed calendar year 2009 rates and charges. He
proposed increase in overall rates and charges would be 11.9% staring January 1, 2009. The increase was below the Long Range Finance Plan high-rate projection of 12.3%. The impact on a typical household was estimated at $3.42 per month.
Director Hogan moved, Director Petty seconded and the motion carried unanimously
to recommend adoption of the proposed rates and charges and to continue the
existing Annual Water Standby Availability Charge at its current level to the
full Board for consideration at the June 26, 2008 public hearing.
There being no further business to come before the Administrative and Finance Committee, Chair Wornham adjourned the meeting at 3:35 p.m.
Tom Wornham, Chair