Irvine Ranch Water District and Los Alisos Water District Consolidation Update Presentation for: Orange County Local Agency Formation Commission October 11, 2017
Presentation Agenda 1. Background on IRWD. 2. Why consolidate? 3. Consolidation results. 4. Questions. 2
IRWD Basics: An Introduction to the District.
Irvine Ranch Water District A California Special District Serving Central Orange County 1961: District formation, began providing drinking water services. 1963: Added sewage collection and treatment services. 1967: IRWD initiated its recycled water program. 1997: District began treating urban runoff. 4
Irvine Ranch Water District Service Area 181 Square Miles 20% of Orange County 530,000 Daytime Population 390,000 Residential Customers 115,000 Service Connections 6 Cities Served ∙ Irvine ∙ Lake Forest ∙ Newport Beach ∙ Tustin ∙ Costa Mesa ∙ Orange ∙ Unincorporated County Area 5
IRWD Organization Board of Directors Legal Counsel General Water Recycling Manager Operations Operations Water Public Customer Water Quality Affairs Service Resources Asset Finance and Human Engineering Management Treasury Resources 6
Why IRWD & LAWD Consolidated: Common expertise. Aligned values. Lower rates.
Los Alisos Water District LAWD District Overview (2000): • Provided drinking water, sewage collection, and recycled water service to approximately 43,000 customers. • Served customers in Lake Forest and unincorporated Orange County; located adjacent to IRWD. • Governed by a five-member, publicly elected board of directors. • Shared similar standards for planning, designing, and operating facilities with IRWD. • Relied primarily on imported water supplies. • Located mostly within San Diego Creek watershed. 8
Common Expertise. Aligned Values. Lower Rates. Local Fiscal Water Responsibility Supply Sustainable and Innovative Water-Energy Reliable Service Solutions Nexus for Customers Water Use Resource Recovery Efficiency 9
LAWD Motivation to Consolidate • Increase water system reliability. • Diversify water supply. • Lower expenses from economies of scale. • Improve customer satisfaction. • Streamline government services. Opportunities identified in the South County Consolidation Study. (dated May 1997) 10
IRWD Water Supply Reliability. Then and Now. 1990 2017 T otal Water Demands: ~90,000 AF Population Served: 390,000 Population Served: 114,000 Total Water Provided: ~82,000 AF Total Water Provided: ~ 70,000 AF 14% 15% 21% 11% 66% 36% 9% 28% Imported Water Imported Water Clear Groundwater Clear Groundwater Local Surface Water Local Surface Water Recycled Water Recycled Water Treated Groundwater 11 11
Key Considerations for a Successful Consolidation 1. Making the Case. - Both agencies developing a business-driven rationale for consolidation. - Customers in each area must benefit, but not at the expense of the other. 2. LAFCO’s Role. - Statutory oversight. - Appropriate community involvement. 3. Community Outreach. - Communicate value to customers. - Public hearings, community meetings, mailers; address concerns and incorporate community input. 12
Consolidation Results: Excellent services. Lower rates. Good governance.
IRWD / LAWD Consolidation Key elements of Pre-Consolidation Agreement: • Managing funds and facilities. - Debt, financing authority, improvement districts, disposition of property or facilities, existing contracts, etc.
IRWD / LAWD Consolidation Key elements of Pre-Consolidation Agreement: • Managing funds and facilities. • Rates and charges. - Regulations and ordinances, initial rate reduction, cost of service, connection fees, etc.
IRWD / LAWD Consolidation Key elements of Pre-Consolidation Agreement: • Managing funds and facilities. • Rates and charges. • Governance. - Board structure, Los Alisos Management Committee, representation at other organizations, etc.
IRWD / LAWD Consolidation Key elements of Pre-Consolidation Agreement: • Managing funds and facilities. • Rates and charges. • Governance. • Personnel. - LAWD staff transition to IRWD, conforming pay and benefits, policies, buyout program, etc.
IRWD / LAWD Consolidation Key elements of Pre-Consolidation Agreement: • Managing funds and facilities. • Rates and charges. • Governance. • Personnel. • Operations. - Facilities transferred “as - is”, permits remain in effect, etc.
IRWD / LAWD Consolidation Key elements of Pre-Consolidation Agreement: • Managing funds and facilities. • Rates and charges. • Governance. • Personnel. • Operations. • Miscellaneous. - Rights and obligations, effective date, disclosures, etc.
IRWD / LAWD Consolidation Ancillary benefits from consolidation: • Improvements in regional reliability. - South County Interconnection - Baker Water Treatment Plant • Sewage treatment / solids handling. • Elimination / repurposing of redundant facilities. • Lower cost of financing. • Improved water use efficiency. • Reduced rates – parity with IRWD customers.
Los Alisos Area Potable Water Charges Los Alisos Rate Area $60 Fixed charges Converted to budget Rates reduced Rates reduced by 10% aligned based rates by another 22% $50 Monthly residential water $40 bill based on 18 ccf's $30 $20 Buy-in Period average annual rate increase: Los Alisos Rate Area 2% $10 Similar Agency (imported water) 5% MWDOC 6% $0 Fiscal Year
Santiago Canyon Area Potable Water Charges Santiago Canyon Rate Area $75 Rates reduced Rates reduced by 20% by another 52% $60 Monthly residential water bill based on 18 ccf's $45 $30 Buy-in Period average annual rate increase: $15 Santiago County Water District (12%) Similar Agency (blended water sources) 7% MWDOC 10% $0 Fiscal Year
Orange Park Acres Area Potable Water Charges Orange Park Acres Rate Area $70 Rates reduced Rates reduced by 20% by another 36% $60 Monthly residential water $50 bill based on 18 ccf's $40 $30 $20 Buy-in Period average annual rate increase: Orange Park Acres Water District (5%) Similar Agency (blended water source) 4% $10 MWDOC 7% $0 2007/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Fiscal Year
Questions Paul A. Cook, P.E. General Manager Email: cook@irwd.com Phone: (949) 453-5590 24
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