and Los Alisos Water District Consolidation Update Presentation - - PowerPoint PPT Presentation

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

4

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.

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

Water Operations Recycling Operations Finance and Treasury Customer Service Water Quality Water Resources

Board of Directors

General Manager Human Resources Engineering Public Affairs

6

Asset Management

Legal Counsel

Why IRWD & LAWD Consolidated:

Common expertise. Aligned values. Lower rates.

8

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
• perating facilities with IRWD.
• Relied primarily on imported water supplies.
• Located mostly within San Diego Creek watershed.

Sustainable and Reliable Service for Customers

Local Water Supply

Water Use Efficiency

Resource Recovery

Common Expertise. Aligned Values. Lower Rates.

9

Innovative Solutions Fiscal Responsibility Water-Energy Nexus

10

LAWD Motivation to Consolidate

• Increase water system reliability.
• Diversify water supply.
• Lower expenses from economies
• f scale.
• Improve customer satisfaction.
• Streamline government services.

Opportunities identified in the South County Consolidation Study. (dated May 1997)

11

IRWD Water Supply Reliability. Then and Now.

11 T

• tal Water Demands: ~90,000 AF

66% 9% 11% 14%

Imported Water Clear Groundwater Local Surface Water Recycled Water

15% 36% 28% 21%

Imported Water Clear Groundwater Local Surface Water Recycled Water Treated Groundwater

2017

Population Served: 390,000 Total Water Provided: ~82,000 AF

1990

Population Served: 114,000 Total Water Provided: ~ 70,000 AF

12

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.

Consolidation Results:

Excellent services. Lower rates. Good governance.

IRWD / LAWD Consolidation

• Managing funds and facilities.
• Debt, financing authority, improvement districts, disposition of property
• r facilities, existing contracts, etc.

Key elements of Pre-Consolidation Agreement:

IRWD / LAWD Consolidation

• Managing funds and facilities.
• Rates and charges.
• Regulations and ordinances, initial rate reduction, cost of service,

connection fees, etc.

Key elements of Pre-Consolidation Agreement:

IRWD / LAWD Consolidation

• Managing funds and facilities.
• Rates and charges.
• Governance.
• Board structure, Los Alisos Management Committee, representation at
• ther organizations, etc.

Key elements of Pre-Consolidation Agreement:

IRWD / LAWD Consolidation

• Managing funds and facilities.
• Rates and charges.
• Governance.
• Personnel.
• LAWD staff transition to IRWD, conforming pay and benefits, policies,

buyout program, etc.

Key elements of Pre-Consolidation Agreement:

IRWD / LAWD Consolidation

• Managing funds and facilities.
• Rates and charges.
• Governance.
• Personnel.
• Operations.
• Facilities transferred “as-is”, permits remain in effect, etc.

Key elements of Pre-Consolidation Agreement:

IRWD / LAWD Consolidation

• Managing funds and facilities.
• Rates and charges.
• Governance.
• Personnel.
• Operations.
• Miscellaneous.
• Rights and obligations, effective date, disclosures, etc.

Key elements of Pre-Consolidation Agreement:

• 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.

IRWD / LAWD Consolidation

Ancillary benefits from consolidation:

Los Alisos Area Potable Water Charges

$0 $10 $20 $30 $40 $50 $60

Monthly residential water bill based on 18 ccf's Fiscal Year

Los Alisos Rate Area

Buy-in Period average annual rate increase:

Los Alisos Rate Area 2% Similar Agency (imported water) 5% MWDOC 6%

Rates reduced by 10% Converted to budget based rates Rates reduced by another 22% Fixed charges aligned

Santiago Canyon Area Potable Water Charges

$0 $15 $30 $45 $60 $75

Monthly residential water bill based on 18 ccf's Fiscal Year

Santiago Canyon Rate Area

Rates reduced by 20% Rates reduced by another 52%

Buy-in Period average annual rate increase:

Santiago County Water District (12%) Similar Agency (blended water sources) 7% MWDOC 10%

Orange Park Acres Area Potable Water Charges

$0 $10 $20 $30 $40 $50 $60 $70 2007/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18

Monthly residential water bill based on 18 ccf's Fiscal Year

Orange Park Acres Rate Area

Rates reduced by 20% Rates reduced by another 36%

Buy-in Period average annual rate increase:

Orange Park Acres Water District (5%) Similar Agency (blended water source) 4% MWDOC 7%

Questions

24

Paul A. Cook, P.E.

General Manager Email: cook@irwd.com Phone: (949) 453-5590