District 29 Malibu Water System Master Plan

Moving Forward Recommendations

June 24, 2013

1

Master Plan Objectives

• Investigate the existing system• Understand future system needs• Determine where upgrades are needed• Present funding options• Suggest options for moving forward

Our commitment was to deliver a Master Plan using a stakeholder process

2

The Master Plan Answered the “What” Question

Identified hydraulic deficiencies, replacements due to age and future needs totaling…..

$266 Million

Then we evaluated several funding options…

3

We looked at a portfolio approach to funding…

113

Connection Fees (future growth/private conversion)

Property Assessments (entire District 29 land area)

User Rates (existing customer base only)

4

…and Different Allocation Methods

• Regional existing user rates

• Sub-regional deficiencies (Topanga/Malibu) Property assessment

• Area/Canyon-Specificcombination of user rate increase, property assessment, and connection fees

5

Regional

Area-Specific

Sub-Regional

Recommendation: “Start Smaller” –Develop Priority 1 Project List

• Target: 1st Phase Cost ≈ $50M– 50% from existing revenues– 50% from new capital source(s)

• Target: highest priority projects– Water quality protection– System reliability – Address fire flow needs

• Target: positive steps forward– Make measureable progress

1 2 3 4 5

Recommended projects (Phase I ~ $57M)7

Recommended Environmental Approach

• Multiple approval agencies, permits, etc.

• Many projects with similar impacts

• Avoid piecemealing- comprehensive approach

Therefore: Program level document for entire Master Plan (with as much project specific detail for first Phase as possible)

8

Environmental Process Timeline9

Contracting Process (6

Months)

Initial Agency

Coordination

(Mos. 6-7)

Initial Study, Notice of

Preparation of PEIR, Public

Meeting (Mos. 6-9)

Conduct special studies i.e. bio, cultural,

etc. (Mos. 8-

14)

Draft PEIR

(Mos. 5-14)

Permit Application Packages

(Mos. 17-19)

Finalize PEIR

(Mos. 20-24)

~ 20 – 24 Months

Consult with Permitting Agencies

(Month 8)

Public Review of Draft PEIR &

Public Meeting (Mos. 15-16)

ACO Fund Financial Goals FY2015-16 to FY2019-20

• Fund Capital Improvements ($56.6M)

• Maintain reserves levels (25% of Revenues)

• Maintain Debt Service Coverage (1.25x)

• Minimize Rate Increases (District approved 5% average

annual increases from FY2012-13 through FY2016-17)

• Find Optimal combination of debt and rate increases to

fund capital improvements

10

ACO Fund Financial Plan ResultsFY2013-14 to FY2019-20

11

-$25.0

-$20.0

-$15.0

-$10.0

-$5.0

$0.0

$5.0

$10.0

$15.0

2014 2015 2016 2017 2018 2019 2020

Mill

ions

Revenues Capital ExpensesEOY Cash Balance Reserves Requirements

**Capital Expenses for FY2014 and FY2015 include projects programmed in WWDs Existing 5-year Plan

ACO Fund Financial Plan ResultsFY2013-14 to FY2022-23

12

*30 Year Bonds4% Interest1.5% Issuance Cost

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Mill

ions

Revenues Capital ExpensesEOY Cash Balance Reserves Requirements

No debt or rate increases can support $3.1M in CIP

$30M Bonds*

**Capital Expenses for FY2014 and FY2015 include projects programmed in WWDs Existing 5-year Plan

Funding Strategy FY2013-14 to FY2017-18 13

Capital Surcharges,

$15.92

Property Taxes, $12.36

Bond Proceeds,

$29.32

Capital Improvement

Charges, $2.26

Cash Reserves, $2.36

Current Annual Revenuesand Reserves to Fund 53% of Phase I Projects

ACO Fund Financial Plan ResultsFY2013-14 to FY2022-23 ($10M CIP) Calibrated

14

*30 Year Bonds4% Interest1.5% Issuance Cost

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Mill

ions

Revenues Capital ExpensesEOY Cash Balance Reserves Requirements

$30M Bonds$23M Bonds

2.5% rate increase or property assessments

**Capital Expenses for FY2014 and FY2015 include projects programmed in WWDs Existing 5-year Plan

In Summary…

1. Phase 1 accomplishes our critical goals:– Provides new emergency interconnections – Implements water quality upgrades– Addresses all pipelines and ~50% of the tanks for fire flow

needs2. No new rate increases or taxes needed for now

– Future phases will require new funding sources3. Timeline - 18-24 months to complete planning,

financial, design and environmental– Planned CIP projects continue in the meantime

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Where do we go from here?16

Present to Malibu City Council

Develop Implementation Plan:

-infrastructure plan-financial plan

-EIR/EIS

Secure funding and various permits:

(CEQA, 404, Coastal Commission, etc.)

Implement

+/- 7 years

Questions ?

17