ORLAND-ARTOIS WATER DISTRICT SPECIAL MEETING OF THE BOARD 2020 PROP 218 INFOMATIONAL MEETING AUGUST 19,2020 6:00 PM 1 Slide Number
SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE ORLAND-ARTOIS WATER DISTRICT WEDNESDAY AUGUST 19, 2020 6:00 PM Pursuant to Governor Newsom’s Executive Orders N-29-20 this meeting will be conducted by teleconference. The meeting can be accessed via telephone at: +1 (408) 650-3123 Access Code: 958-399-373, or by computer, smartphone, or tablet at https://global.gotomeeting.com/join/958399373 AGENDA 1. ROLL CALL AND DETERMINATION OF A QUORUM. 2. INTRODUCTIONS. 3. 2020 OAWD PROP 218 INFORMATIONAL PRESENTATION. 4. QUESTIONS AND COMMENTS ON 2020 PROP 218 PROCESS 5. OAWD AREA GROUNDWATER LEVEL PRESENTATION. 6. QUESTIONS AND ANSWERS ON GROUNDWATER LEVELS. 7. ADJOURNMENT. Slide Number 2
Conference Etiquette • If you are having trouble connecting, email ajones@oawd.org or call 530-865-4304. • In an effort to reduce background noise, please keep your microphone muted unless you are speaking. • Comments and questions before or during meeting; • Email ecavagnolo@oawd.org or ajones@oawd.org. • Enter a Comment in Go to Meeting Chat. • Enter your name in Go to Meeting Chat to be called on. • Call in on phone line and participate via phone. • We will address questions and comments at different breaks in the presentations. 3 Slide Number
PLEASE HOLD QUESTIONS & COMMENTS FOR THE END OF THE PRESENTATION If you are calling in, use *6 for muting and unmuting. Slide Number 4
Participants • OAWD Board of Directors • Mike Vereschagin - President • Ernie Pieper – Vice President • John Erickson • Jim Jones • Chuck Schonauer • General Manager – Emil Cavagnolo • Office Secretary – Karen Osborn • Administrative Assistant – Andrea Jones • District Counsel – Josh Horowitz, Bartkiewicz, Kronick & Shanahan • Municipal Advisor – Brant Smith, Senior Vice President, Backstrom McCarley Berry & Co., LLC 5 Slide Number
WATER INFRASTRUCTURE IMPROVEMENT FOR THE NATION (WIIN) ACT The WIIN Act of 2016, Section 4011, has provisions for the early pay off of the District’s CVP Construction Loan. The CVP Construction loan is interest free and paid for with a component of the Cost of Service in the Water Rate For 2020, the Cost of Service Portion is $34.37 per acre-foot for 2020. The CVP Construction Loan is due to be paid off in 2030. The WIIN Act provides benefits for early pay off including; o Converting the 25-year Water Service Contract to a permanent contract. o Relieving contractors of RRA rules and restrictions. o A discount on the balance due for CVP Construction. 6 Slide Number
WIIN ACT 2016 Details 7 Slide Number
2020 Prop 218 The District is proposing to convert the CVP Construction Loan to a 20-year bank loan paid for with a “Land-Based Charge”, (Loan Conversion Charge). The per-acre rate for the Loan Conversion Charge has a “not to exceed” amount of $28.31 per-acre per year of assessed District land. 8 Slide Number
The Assessment The District Distribution System was paid for with an interest free 9(d) loan from the USBR due to be paid off in mid-2032. To relieve District Landowners of RRA Rules, the District will be required to pay off the 9(d), interest free, loan for the District’s Distribution System. Because it is interest free, the District is subsidized. The 9(d) loan will be converted to a 20-year bank loan paid for with the “Assessment” which is already in place and will not change its “not to exceed” amount of $24.94 per-acre per year of assessed District land. Because the Assessment is not changing its purpose or maximum rate, it is not part of this Prop 218 Process. 9 Slide Number
USBR 9(d) Loan Payment Schedule Slide Number 10
The ‘not to exceed” amounts are based on worst case, 4.1% interest rates. The interest rates could be lower at the time the loans are set up. Current rates are around 2.5%. The OAWD Directors will negotiate for the best rates available at the time the loans are executed. The Loan Conversion Charge, like the Operations Charge, is taken from the Water Rate and is a “Water Charge”. Slide Number 11
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Benefits of the WIIN Act for contractors who pay off early include the following: The District’s 25-year Water Service Contract will be converted to a permanent contract. This will secure the 53,000-acre-foot contract forever. The current contract is due to be renegotiated in 2030. CVP Construction obligations will be discounted by ½ the Treasury Rate. The District will borrow less money. District Landowners will no longer be subject to the requirements of RRA. The 960-acre limitation, excess land, and RRA forms go away. Landholdings will be free of ownership and/or Full Cost pricing limitations of Federal Reclamation law. Water for irrigation will be the same rate for all acres except M&I. • The 2020 Full Cost Water Rate is $238.00 per acre-foot. 14 Slide Number
Benefits for the District and its area of influence: There will no longer be restrictions for excess or full cost lands. Those with excess or full cost lands now will be able to irrigate at the same water rate as the rest of the district. This will increase the use of surface water. If a grower uses 1 acre-foot of water per assessed acre, their annual cost for water will be less than previous years. The increased use of Surface Water will help with future SGMA challenges for groundwater use. The ground water levels in the OAWD sphere of influence are trending downward. The District will not have to worry about losing part of its contract water in 2030. Relief from RRA will reduce paper and legal work for the District and many of its landowners. 15 Slide Number
Combined District Costs for 100 Acres USING WATER (1 AF/ACRE) Charges 1 AF / Acre Current Low Rate 3.1% High Rate 4.1% Charges per-acre Current Low Rate 3.1% High Rate 4.1% Assessment $ 1,994.00 $ 1,886.00 $ 2,494.00 Assessment (per acre) $ 19.94 $ 18.86 $ 24.94 CVP Construction $ - $ 2,038.00 $ 2,831.00 CVP Construction (per acre) $ - $ 20.38 $ 28.31 Operations Charge $ 3,860.00 $ 3,860.00 $ 3,860.00 Water Rates (per AF) $ 85.50 $ 51.50 $ 51.50 Water Rate $ 8,550.00 $ 5,150.00 $ 5,150.00 Operations Charge $ 38.60 $ 38.60 $ 38.60 TOTAL $ 14,404.00 $ 12,934.00 $ 14,335.00 % Change from Total $ 144.04 $ 129.34 $ 143.35 Current -10.21% -0.48% NOT USING USING WATER (2 AF/ACRE) WATER Charges 2 AF/Acre Current Low Rate 3.1% High Rate 4.1% Charges Current Low Rate 3.1% High Rate 4.1% Assessment $ 1,994.00 $ 1,886.00 $ 2,494.00 Assessment $ 1,994.00 $ 1,886.00 $ 2,494.00 CVP Construction $ - $ 2,038.00 $ 2,831.00 CVP Construction $ - $ 2,038.00 $ 2,831.00 Operations Charge $ 3,860.00 $ 3,860.00 $ 3,860.00 Operations Charge $ 3,860.00 $ 3,860.00 $ 3,860.00 Water Rate $ 17,100.00 $ 10,300.00 $ 10,300.00 TOTAL $ 5,854.00 $ 7,784.00 $ 9,185.00 TOTAL $ 22,954.00 $ 18,084.00 $ 19,485.00 % Change from % Change from Current 32.97% 56.90% Current -21.22% -15.11% Slide Number 16
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ORLAND-ARTOIS WATER DISTRICT TOTAL WATER DELIVERIES MONTHS / YEARS - Bureau Charges Slide Number 18
Effects of Transferred Water on rates. The District purchases transfer water from other contractors each year so that water is available in years when allocations are reduced. In 2020, with a 50% allocation, the District had enough water for its growers at a reasonable rate. In full allocation years, transferred water is more expensive than contract water. When water is left over, it is contract water, the least expensive water. The more water the District delivers, the lower the overall water rate. 19 Slide Number
2020 Water Rate 50% Allocation TYPE 50% USBR Purchase PUE TPUD Power Resto Per AF Total USBR 26,500.00 60.41 0.00 0.94 0.12 4.65 10.91 77.03 2,041,295.00 Wells Power 963.00 0.00 0.00 0.00 0.00 70.00 0.00 70.00 67,410.00 C/S Pump Power 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,000.00 Baber 2,500.00 73.66 30.00 0.00 0.00 0.00 0.00 103.66 259,150.00 MID 6,000.00 65.46 35.00 0.00 0.00 0.00 0.00 100.46 602,760.00 PCGID 3,500.00 64.92 50.00 0.00 0.00 0.00 0.00 114.92 402,220.00 215 Water 0.00 0.00 20.00 0.00 0.12 4.65 10.91 35.68 0.00 Total AF 39,463.00 Total Cost of water 3,375,835.00 O&M D 0.00 Cost per acre‐foot. 85.54 20 Slide Number
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