Page 148 - Yucaipa Valley Water District - Board Workshop

Workshop Memorandum No. 18-239 Page 4 of 18

o East Branch Extension Operational Costs - 50% of the annual overall expenses will
be included in the imported water rate.
o Department of Water Resources Energy and Transmission Costs - This is the largest
component to the imported water rate and will likely include a projection of anticipated
energy increases based on prior year data.
o Yuba Dry Year Transfers - This cost component provides additional water supplies
to the region.
o Nickel Water Supplies - This cost component is the second most significant
component and will be a factor in future rates for the remaining term of the contract
(about 19 years).
o Water Quality Cost - The cost for reducing algae in the State Water Project will likely
be an ongoing expense.

To actively contribute to the rate setting process, the District staff recommends that the Board of
Directors consider making the following request to facilitate the imported water rate process:

• The Yucaipa Valley Water District should request from the San Gorgonio Pass Water
Agency, monthly invoices from the Department of Water Resources from January 2010 to
current to evaluate the past trend of 12% annual increases in expenses from the Department
of Water Resources.

• The spreadsheet model prepared by David Taussig & Associates should be expanded to
include actual data from 2012, 2013, 2014, 2015, and 2016.

• The spreadsheet model prepared by David Taussig & Associates should be expended to
include projected revenue and expenses for 2022, 2023, 2024, and 2025.

• The final rate spreadsheet should be made available to the retail water agencies in its native
format so future expenses related to water supplies can be quickly analyzed to determine the
impact on rates before agreements are executed.

• The San Gorgonio Pass Water Agency should consider conducting an annual review of the
imported water rate spreadsheet at a public workshop to determine the future trends of likely
imported water rate changes.

• The San Gorgonio Pass Water Agency should provide written memorandums and distribute
data, tables, and concepts in advance of workshops and meetings to maximize the
involvement by the board members and public.

• The San Gorgonio Pass Water Agency should use this opportunity to develop a wheeling
rate to provide retail water agencies with the ability to secure additional sources of
supplemental water.

Yucaipa Valley Water District - October 9, 2018 - Page 148 of 172