PROPOSED ADMIN CODE REVISIONS "ARTICLE 17" WATER SHORTAGE RESPONSE POLICIES AND PROCEDURES - Board of Directors September 16, 2021
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PROPOSED ADMIN CODE REVISIONS
“ARTICLE 17”
WATER SHORTAGE RESPONSE POLICIES AND
PROCEDURES
Board of Directors
September 16, 2021
2 The Purpose of the Revisions Conform to the 2018 Water Conservation Legislation Ensure consistency with the District’s recently adopted Water Shortage Contingency Plan Reflect the six shortage levels and the associated actions
3 Summary of the Revisions Updated the reference to the County Water Authority’s Water Shortage Contingency plan (CWA’s WSCP) since the previously referenced Drought Management Plan has evolved into the CWA’s WSCP. Added reference of water-use reduction goals/ measures in addition to conservation throughout the document Added WSCP to the “Definitions” section Revised references to “Santa Fe Irrigation District” to just “District” throughout the document, given that District is a defined term Updated the list of water use reduction and conservation measures for level 1 thru level 4 to correspond with “Table 7-3: Restrictions and Prohibitions” of the 2020 UWMP and WSCP adopted in June 2021.
4
Summary of the Revisions
Added 2 additional sections for Level 5 and Level 6 along with the
applicable water use reduction and restriction measures
Included that the “District may implement drought rate structure, if deemed
appropriate at this stage by the Board of Directors” in the water use reduction/
restriction and conservation measures for all six levels.
Updated to the “Conservation Measures and Target” table to correspond with
the current WSCP’s six stages
Water
Shortage Conservation Conservation Water
WSCP Stage
Response Measures Target Allocations
Levels
1 Voluntary Up to 10% No Stage 1
2 Mandatory Up to 20% No Stage 2
3 Mandatory Up to 30% No Stage 3
4 Mandatory Up to 40% Possible Stage 4
5 Mandatory Up to 50% Possible Stage 5
6 Mandatory Above 50% Possible Stage 6
5 Additional Revisions Based on WRC Recommendation Additional clarifying language was added to sections 17.4.3, 17.4.4 and 17.4.5. regarding the applicability of the Article 17 policies and procedures. Minor cleanup items either for clarification and consistency
6
Summary of the Revisions
No changes were made to the following sections;
Procedures for Determination and Notification of Water
Shortage Response Level
Hardship Variance
Violations and Penalties
Notices of Violations/ Citation and Complaint
Recovery of Costs and Appeals
7 Staff Recommendation Adopt Resolution No. 21-20 amending Article 17 of the District’s Administrative Code as shown in Exhibit A to Resolution No. 21-20
8 Questions?
DROUGHT RESPONSE LEVEL 1 Board of Directors September 16, 2021
2 Todays Discussion • Supply conditions • Statewide actions • Regional wholesale actions/outreach • Level 1 Response Recommendation
3 State Water Supply Conditions • Water year ends Sept. 30 • Second driest year on record • Anticipation of dry winter
4 State Water Supply Conditions
5
State Water Supply Conditions
Lake Oroville July 2021
Lake Oroville June 20186 SDCWA / MWD Actions • August – MWD declared water supply alert • MWD and SDCWA have begun outreach campaigns
7 Level 1 Drought Response • Call to action: 10% voluntary reduction • Increase outreach efforts • Tag on to existing outreach • Brand SDCWA materials with SFID logo • Important to collaborate and do our part to reduce use in anticipation of another dry winter • Emails, social media, outreach to local organizations and HOAS
8 Level 1 Drought Response • Level 1 may apply when there is a reasonable probability that there will be water supply shortages and that a consumer demand reduction of up to 10% is required. At this stage restrictions are voluntary, and the District would increase its public education and outreach efforts to encourage customers to take actions to encourage water conservation. A Level 1 condition is declared by the General Manager upon a written determination of the existence of the facts and circumstances supporting the determination. Some voluntary measures under Level 1 include stop hosing down paved surfaces, stop runoff from landscape irrigation, wash vehicles with a hand-held hose/shut-off nozzle or at a commercial site with recirculated water, require restaurant water refills only upon request, provide hotel laundering only upon request, and use non-potable water for construction purposes when available.
1
WATER SYSTEM AND CAPITAL IMPROVEMENT
PROGRAM MASTER PLAN UPDATE
Board of Directors Meeting
September 16, 2021The Master Plan is an important tool that
supports SFID’s Mission and Vision
Mission Vision
To meet the water • Sustainable water supplies
supply needs of all its • Reliable infrastructure
customers—safely, • High performing staff
sustainably, reliably, • Cost‐effective operations
and cost‐effectively. • Customer focus
• Environmental stewardship
• ResiliencyIn consideration of SFID’s Strategic Business Goals: GOAL 3. Cost-Effective, Resilient Infrastructure and Operations The purpose of the Master Plan is to define distribution and joint facilities needs and develop the 10-year capital improvement program required to address those needs. Substantial infrastructure investment is required to ensure its long-term reliability and services
4
2021 Master Plan Goals
Document existing facilities and systems performance
What do we
Reassess the conditions and capabilities of existing facilities have?
Define specific capital investments to achieve the What do we
need?
Districts’ strategic goals
Prioritize projects and develop the 10-year CIP How we can
get there?Dudek Project Team • Dudek – Lead Master Planning Consultant • Dexter Wilson Engineering – Hydraulic Analysis, General Support • Trussell Technologies Inc. – Water Process Treatment • Moraes, Pham & Associates – Electrical Evaluation • Peterson Structural Engineers – Structural Evaluation
The Master Plan Covers both
SFID’s Distribution System and Jointly Owned Facilities
Distribution Facilities Jointly Owned Facilities
• Raw water conveyance pipelines
• Pipelines – 150 miles • Raw water pump stations and force mains
• Services and Meters • San Dieguito Reservoir
• 31 Pressure Reducing Stations • R.E. Badger WFP
• Larrick Reservoir & Pump Stations • Treated water transmission pipelines7 The Master Planning Process Was Structured to Encourage Discussion, Share Concerns and Solutions, and Obtain Alignment with: • Operations • Engineering • SDWD • Strategic Business Plan
Master Plan Development Process Documentation of Existing “Base‐Case” Conditions Determination of System Needs Identification of Potential Capital Projects To Address Needs Determination of Planning Level Capital Costs Establishment of Prioritization Criteria Implementation of Prioritization Process Definition of 10‐Year Capital Improvement Program
9
Existing “Base Case” SFID Distribution System
• Current and Future Demands
o Potable - 8,830 AFY up to 10,176 AFY (2045)
o Recycled – 513 AFY to 600 AFY (2045)
• Service Area Description
o Boundary
o Topography
o Pressure Zones
o Interconnections with other Agencies
• Major Infrastructure
o Pipelines
o Pressure Reducing Stations
o Larrick Reservoir and Pump Station
• “Key Assets” Summary Tables
o Pipelines, valves, hydrants, services, meters.10
Distribution System Needs Assessment
• Ability to Achieve Performance Criteria
o Hydraulic Modeling
Normal Operating System pressure
Fire flow
Flow velocity
o Regulatory Reports
Chlorine residual
• Safety
o Multiple Staff Discussions
o Field Visits – Above Ground Facilities
• Reliability
o Performance History
o “Limited” Condition Assessment (Utilized GIS)
o Pipeline Pressure Ratings
o Accessibility
• Energy Management/Cost Savings/Efficiency
o SFID 2021 Energy Management Study11
General Findings of the Distribution System Needs Evaluation
• System is meeting performance requirements.
• No improvements needed for projected future
demands.
• Chlorine residual monitoring indicate no water age
issue within pipelines.
• Number of pipeline failures relatively small
compared to size of system.
• Majority of pipeline failures associated with older,
smaller diameter pipelines.
• Majority of the identified needs associated with
reliability concerns – condition/accessibility
• Larrick Reservoir improvements required to
address reliability concerns and avoid potential
water age problems.
• Ongoing corrosion control program continues to be
effective.12
Potential Distribution System Capital Projects
• 26 Potential Distribution System Capital Projects
were identified
• Total estimated capital cost for all 26 projects =
$56.7 Million
• The Plan includes an overview of the potential
capital projects, and the primary needs
addressed by the projects13 A Prioritization Process Was Conducted To Stimulate Discussion Regarding The Relative Importance Of Each Potential Capital Project • Multiple meetings were held to establish criteria, weighting factors, and prioritize projects. • The prioritization process stimulated discussion and supported the development of a consensus driven prioritization matrix. • Prioritization scoring provides a general indication of the relative importance of a project. • The prioritization score is important, however a higher score does not indicate that one project must take precedence over another. • The list of Prioritized Distribution System Projects is provided in the Plan.
14
Distribution System Project Prioritization Process
Evaluation Categories and Weighting Factors (Possible 1-10) Were Established
Weight Distribution System Project Evaluation Category
10 Regulatory compliance (water age) and/or the ability to achieve Hydraulic
Capacity/Pressure requirements For Normal Peak Flow Conditions and Fire
Flow
10 Staff safety & working environment
10 Consequence of Failure Rating (NOT Probability of Failure)
9 Reliability – remaining useful life/condition/accessibility
8 Redundancy – distribution system or treatment
8 Capital and/or Operation & Maintenance (O&M) cost efficiency
6 Enhanced operational control15
A Consequence Of Failure Analysis (COFA)
Was Conducted For The Distribution System
• The analysis considered consequence of failure – NOT Probability of Failure
• The COFA considered:
• Potential Water Loss Volume
• Pipeline Pressure
• Customer Disruption
• Traffic Impacts
• Over 1,600 segments:
• Lower consequence of failure
• Moderate consequence of failure
• More significant consequence of failure
• Highest consequence of failure16
Distribution System Project Prioritization Process
Priority Rating Factors Were Established (0 to 3) and then -
Each Project Received A Prioritization Score For Each Criteria
Prioritization Rating Factor Descriptions and Scoring Example
Project
Capital Improvement Project Evaluation
Categories and Weights Prioritization Rating Factors and Definitions Example Project
Prioritization Rating Factor Prioritization Rating Factor Prioritization Rating Factor Prioritization Rating Factor
Category
Evaluation Criteria Weight 3 2 1 0 PRF Score
Regulatory compliance 10 Project is critical to Project will moderately Project may have a low Project has no impact on 2 20
and/or flow-pressure achieving improve ability to achieve level of impact on the ability to achieve
objectives compliance/objectives, or is compliance/objectives ability to achieve compliance/
a prerequisite project to a compliance/objectives objectives
project critical to achieving
compliance/objectives.17
Potential “District Only” Projects Not Considered In The Prioritization Process
• Corporate Yard Building Program
• Identified in the 2009 AMMP
• Estimated Capital Cost = $23.7 Million (2021 Dollars)
• A total of $500,000 “District Corporate Yard Building
Program Evaluation and Conceptual Design Project” was
included in the proposed project list and 10-Year CIP
• Non-Potable Reuse and/or Potable Reuse Programs
• Multiple options described in various SFID studies.
• Estimated Total Capital Cost = $152 Million for Potable Reuse Project (2019 Recycled Water Expansion Plan)
= $31 Million Non-Potable Reuse Phase 1
• Future detailed studies will determine the potential viability of these and other potential alternative water supply programs.18
Existing “Base Case” Joint Facilities
• Current and Projected Demands (SFID
& SDWD)
14,293 AFY to 16,787 AFY (2045)
12.76 MGD to 15.0 MGD (2045)
• Current water supplies and costs
Raw Water Quality
• Raw Water Facilities Descriptions
• Water Treatment Facilities Description
• Design Criteria
• Base Case Treatment Cost
Determination19
Joint Facilities Needs Assessment
• Ability to Achieve Regulatory Requirements and
other Performance Criteria
• Treatment Process Evaluation
• Hydraulic Evaluation
• Energy Management/Cost Savings
• SFID 2021 Energy Management Study
• Safety
• Multiple Staff Discussions
• Field Visits – Above Ground Facilities
• Reliability
• Performance History – Multiple O&M Staff Discussions
• Limited Condition Assessment
• Mechanical Evaluation
• Structural Evaluation
• Electrical Evaluation20 General Findings of the Joint Facilities Needs Evaluation • The Joint Facilities are meeting current regulatory requirements. • No capacity related improvements required. • Projected demands in 2012 JFMP = 19,124 AFY (17.0 MGD) • Projected demands in 2020 UWMP = 17,590 AFY (15.7 MGD) • Most of the need is associated with aging infrastructure/reliability concerns. • Pumping from the Cielo P.S. to the plant for Chlorine Dioxide addition and aeration is currently required to achieve regulatory targets. The raw water is then sent through the gravity drain line to the SDR for preconditioning prior to pumping back up to the Plant. The cost to double pump is approximately $300,000 to $350,000 per year. However, the capital cost to avoid this practice is substantial, but could improve overall water quality. • The District’s Energy Management Study identified a potential hydroelectric project and two solar array projects that may prove viable following additional study.
21
Potential Joint Facilities Capital Projects
• 17 Potential Joint Facilities Capital Projects were
identified
• Total estimated capital cost for all 17 projects = $90.4
Million
• Includes one SDR Dredging Project has an estimated capital
cost of $35.4 Million
• Project costs are the total for both SFID and SDWD
shares
• The Plan includes an overview of the potential Joint
Facilities capital project list and the primary needs
addressed by the projects22
A Prioritization Process Similar To The Distribution Portion Of The
Project Was Conducted
• Multiple meetings were held to establish criteria, weighting factors, and
prioritize projects.
• The prioritization process stimulated discussion and encouraged the sharing
of opinions regarding system needs and potential projects.
• Prioritization scoring provides a general indication of the relative importance of
a project.
• The prioritization score is important, however a higher score does not indicate
that one project must take precedence over another.23
Joint Facilities Project Prioritization Process
Evaluation Categories and Weighting Factors (Possible 1-10) Were Established
Weight Distribution System Project Evaluation Category
10 Regulatory compliance
10 Staff safety & working environment
9 Reliability – remaining useful life/condition/accessibility
8 Redundancy – Joint Facilities
8 Operation & Maintenance (O&M) cost efficiency
8 Increased Local Water Usage
7 Water Quality Enhancement – Taste and Odor Control
6 Enhanced Operational Control24
Joint Facilities Project Prioritization Process
Similar to the Distribution Portion, Priority Rating Factors Were Established
(0 to 3) and Each Project Received A Prioritization Score For Each Criteria
Prioritization Rating Factor Descriptions and Scoring Example
Project
Capital Improvement Project Evaluation
Categories and Weights Prioritization Rating Factors and Definitions Example Project
Prioritization Rating Factor Prioritization Rating Factor Prioritization Rating Factor Prioritization Rating Factor
Category
Evaluation Criteria Weight 3 2 1 0 PRF Score
Regulatory compliance 10 Project is critical to Project will moderately Project may have a low Project has no impact on 2 20
achieving improve ability to achieve level of impact on the ability to achieve
compliance/objectives, or is compliance/objectives ability to achieve compliance/
a prerequisite project to a compliance/objectives objectives
project critical to achieving
compliance/objectives.25
Potential Projects Not Considered In The Prioritization Process
• Energy Management Projects (Identified in the 2021 Energy Management Study)
New Hydroelectric Facilities – Conceptual level cost = $3,850,000
Large Solar Array Project at the R.E. Badger Plant - Conceptual level cost = $4,780,000
Small Solar Array Project at the San Dieguito Reservoir - Conceptual level cost = $750,000
• Future detailed studies are required to confirm the viability of the conceptual energy
management projects
• Hodges Dam Refurbishment/Replacement Projects
Near Term Refurbishment Costs – $880,000
Long Term Dam Replacement Costs - $37,800,000
Hodges Dam is not owned by the Districts and
are not Joint Facilities Projects26
10-Year Capital Improvement Program (CIP)
• The 10-Year CIP includes both Distribution and Joint Facilities projects
• SFID and SDWD Engineering, Operations, and Administration Staff
worked collaboratively to develop the DRAFT 10-Year CIP
• 10-Year CIP Development
• First - considered the urgency of each project
• Second - considered practical funding limitations
• Third - established a timeline for project implementation that
matched priorities and expenditure preferences
• The DRAFT 10-Year CIP includes 15 Distribution System
or “District Only” Projects and 15 Joint Facilities Projects
• An overview of the DRAFT Distribution and Joint Facilities
10-year CIP will be discussed at the
Water Resources Committee Meetings27
Next Steps
• Staff recommends the Board Receive and File the 2021 Master Plan.
• A programmatic EIR will be prepared for the 10-Year CIP.
• The scopes of projects are conceptual. Further vetting and scope development will take place at the
inception of each project and as a part of the pre-design phase.
• The 10-Year CIP budget will be updated and reviewed by the Board on an annual basis during the
budget adoption process.
• Pursue Infrastructure-related grant funding opportunities as they become available1 SANTA FE IRRIGATION DISTRICT PENSION FUNDING POLICY Board of Directors September 16, 2021
2
Pension Funding Policy Background
• Best practice as noted by subject matter experts (GFOA, rating agencies, ICCMA, etc.)
• Every Policy is unique to the district, municipality, county, etc. based on
• Their specific level of liabilities (current funding percentage, closed / open plans,
demographics, etc.),
• Financial outlook and revenue generating capabilities (i.e., water rates versus tax revenues),
• Specific state and local laws that may dictate how pensions should be funded.
• Proposal is based on feedback received at August Board of Director’s meeting & September AFC3
1. Policy Statement
• Adoption of a Pension Funding Policy is a critical component in Santa Fe Irrigation District’s
(District) Strategic Business Plan goal of achieving sustainable and effectively managed finances
• Policy is adopted by the Board of Directors to:
• Create the goal of reaching and maintaining a funded ratio of 100% in a timeline and manner that the
Board determines is appropriate and sustainable;
• Provide guidance in making annual budget decisions and in developing long-range projections;
• Demonstrate prudent financial management practices to rate payers, rating agencies, and those who
have vested benefits in a retirement plan;
• Aim to create more stability in potable water rates.
• Board will review this policy at least every two years to determine if changes are needed to be made to
achieve the stated goal of achieving a 100% funded level4
2. Background
• Define three District pension plans that employees currently have vested pension benefits in
• Outline steps District has taken to mitigate the level of unfunded liability growth
• Elimination of the Classic Plan for new employees,
• Implementation of PEPRA,
• Reducing the unfunded liability through one-time payments.
• The adoption of this Policy continues these positive steps taken by the District to address the
unfunded pension liability5
3. Pension Funding Objectives
• At minimum, the District has committed to ensuring that the full required annual UAL Contribution
is pre-paid to CalPERS each July to receive a 3.5% discount each year from CalPERS
• The timeline to reach 100% funded status is dependent on available resources and how they are
applied & at Board discretion
• Potential utilization of undesignated fund balance to advance funded status
• Amounts are generated through revenue requirements included in the rate setting process or through
positive operating performance above levels anticipated in the rate setting process (increased
revenues and / or decreased expenditures)
• Fund balance available for potential utilization to address the UAL are the amounts above Board
appropriated reserve levels in accordance with the District’s Reserve Policy6
3. Pension Funding Objectives….. cont.
• Per the Reserve Policy, the total fund balance and amounts appropriated in each reserve are
reconciled on an annual basis in conjunction with the review and acceptance of the annual audit
• At that time (or any other as determined appropriate by the Board), the Board will also decide
what, if any, fund balance amounts are available above the appropriated reserve levels and if
they should be utilized for the benefit of reducing the UAL
• Amounts determined by the Board to be available and to utilize to reduce the UAL should be
utilized for the following objectives7
3. Objective #1 - : Level annual UAL Contribution through ADP
• District will create a consistent annual UAL Contribution from year-to-year without extending the
District’s anticipated payoff time period for the UAL
• Accomplished through the contribution of ADP to CalPERS to reduce the District’s various
amortization bases in a manner consistent with the Board’s direction
• ADP may be made to reduce the consistent year-to-year UAL Contribution, but not decrease the
time to being 100% funded; or, conversely, made to reduce the time to being 100% funded
without reducing the UAL Contribution
• The Board will determine any available ADP and how it is to be applied during the annual
reconciliation of District reserves.8
3. Objective # 2 - : Section 115 Trust / Pension Stabilization Fund
• Be established as a Pension Stabilization Fund, which will be a mechanism to offset any
increase in the District’s UAL due to CalPERS negative variance from their projected rate-of-
return and / or change in demographics
• General Manager will offset this new amortization base with any available contribution(s) from
the Pension Stabilization Fund to maintain the level UAL Contribution
• Based on any negative variance that cannot be accommodated by the Pension Stabilization
Fund due to insufficient balance, Staff will bring forward a proposal to the Board on option(s) to
replenish this fund or to make an additional ADP to CalPERS to maintain the consistent UAL
Contribution, including the timeframe to do so
• Funds will be deposited with a qualified administrator in fund(s) that have the appropriate
investment objective(s) as determined by the Board9
3. Objective # 3 - : Leveraged Funding and Other Options
• Staff will continue to review the benefits of utilizing debt to achieve the stated goals of this Policy.
This includes the analysis of a tax-exempt exchange for the District, utilizing debt proceeds from
typical pay-go capital improvement projects to apply to the UAL. Any tax-exempt exchange
should be reviewed holistically with the District’s 10-year capital improvement program, debt
capacity, covenants, cost-of-service, and other relevant information.
• This Policy does not allow for the issuance of pension obligation bonds due to potential negative
arbitrage and other potential negative impacts.10 4. Authority The Board of the Santa Fe Irrigation District has sole authority to amend or revise the District’s Reserve Funds Policy. Management responsibility for the Pension Funding Policy is hereby delegated to the General Manager, who through approval of this Policy has established written procedures for the management of the District’s Funds.
11 Requested Actions 1. Adopt the Pension Funding Policy Staff will return to Committee / Board in fall 2023 to revisit the Policy for any potential modification
12 Questions?
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