Preliminary Use Audit FY 2021-22 & Net Pension Liability by Member Agency
This content provides a preliminary use audit for Fiscal Year 2021-22 along with the net pension liability by member agencies as discussed in the finance committee meeting held on September 20, 2022. It includes actual spending, budget comparisons, statement of revenues, expenses, changes in net position, and more.
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SOCWA Preliminary Use Audit Fiscal Year 2021-22 & Net Pension Liability by Member Agency Finance Committee September 20, 2022 1
FY 2021 FY 2021- -22 Preliminary USE AUDIT Summary 22 Preliminary USE AUDIT Summary Actual Spending and Actual Usage O&M FY 2021-22 Actual FY 2021-22 Budget1 (Over)/Under Budget SOCWA by Member Agency City of Laguna Beach City of San Clemente City of San Juan Capistrano El Toro Water District Emerald Bay Service District Irvine Ranch Water District Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District Total Member Agency $2,364,580 236,448 2,048,256 972,988 183,452 233,568 9,511,328 2,975,156 4,220,728 24,068 $22,770,572 $2,179,567 182,040 2,138,571 884,248 154,451 166,373 9,411,942 3,029,218 4,127,834 22,534 $22,296,778 $185,013 54,408 (90,315) 88,740 29,001 67,195 99,386 (54,062) 92,894 1,534 $473,794 Actual Spending, $22,296,778, is the Authority s Operating Revenue for FY 2021-22 before consolidation with PC 23, North Coast Interceptor (NCI). Spending was only 2% below the Budget; the Board approved additional expenditures, $597 thousand, are not included in the above Budget. 2
Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2022 Statement of Revenues, Expenses and Changes in Net Position For the year ended June 30, 2022 SOCWA Actual 6/30/2022 *PC23 Actual 6/30/2022 Consolidated Actual 6/30/2022 OPERATING REVENUES O & M Member Agency Assessments City of Laguna Beach City of San Clemente City of San Juan Capistrano El Toro Water District Emerald Bay Service District Irvine Ranch Water District Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District Total O & M Member Agency Assessments $2,179,567 182,040 2,138,571 884,248 154,451 166,373 9,411,942 3,029,218 4,127,834 22,534 $22,296,778 $2,179,567 182,040 2,138,571 884,248 154,451 166,373 9,411,942 3,029,218 4,127,834 22,534 $22,296,778 *PC 23 Financials are in progress. 3
Actual Expenditures by Member Agency Distributed by Member Agency using the Budget Distribution % s Actual Expenditures by Member Agency Distributed by Member Agency using the Budget Distribution % s Actual Spending and Budget Usage O&M FY 2021-22 Actual FY 2021-22 Budget (Over)/Under Budget SOCWA by Member Agency City of Laguna Beach City of San Clemente City of San Juan Capistrano El Toro Water District Emerald Bay Service District Irvine Ranch Water District Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District *Total Member Agency $2,364,580 236,448 2,048,256 972,988 183,452 233,568 9,511,328 2,975,156 4,220,728 24,068 $22,770,572 $2,315,380 231,528 2,005,637 952,743 179,635 228,708 9,313,423 2,913,251 4,132,906 23,567 $22,296,778 $49,200 4,920 42,619 20,245 3,817 4,860 197,905 61,905 87,822 501 $473,794 The Budget Variance is due to changes in Spending and Usage by Member Agencies. The above distribution by member agency differs from slide #2 because of budgeted usage and slide #2 is actual usage. The Budget Variance is due to changes in Spending and Usage by Member Agencies. The above distribution by member agency differs from slide #2 because of budgeted usage and slide #2 is actual usage. 4
Member Agencies Usage Variance Member Agencies Usage Variance Usage Variance (Used More)/Used Less O&M FY 2021-22 Budget (Over)/Under Budget FY 2021-22 Actual SOCWA by Member Agency City of Laguna Beach City of San Clemente City of San Juan Capistrano El Toro Water District Emerald Bay Service District Irvine Ranch Water District Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District Total Member Agency $135,812 49,488 (132,934) 68,495 25,184 62,336 (98,519) (115,967) 5,072 1,033 $0 The City of San Juan Capistrano, Santa Margarita Water District and Moulton Niguel Water District used more services respectively, ($132,934), ($115,967) and ($98,519) and will pay more. The remaining agencies used less services. Agencies who used more services will be invoiced and a refund is due to Agencies who used less services. 5
Spending Variance is $474 thousand under Budget Spending Variances Payroll Costs including fringe benefits $569,447 Management Support Services 413,813 IT 116,200 Offshore Monitoring 57,787 Access Road Expenses 43,139 Effluent Chemistry 39,808 Laboratory Services 33,605 Training & Conference 32,545 Other Miscellaneous 31,566 Safety Program & Supplies 31,526 Offshore Biochemistry 23,024 Storm Damage 21,000 Janitorial Services 20,278 UAL & OPEB 18,078 Small Tools & Supplies 15,426 Contract Serv - Digester Cleaning 13,502 Potable & Reclaimed Water 12,969 Diesel Truck Maint 11,546 Contract Services Generators 11,124 Maintenance (10,146) Spending Variance is $474 thousand under Budget Reason 120.2% Hiring delays and more time off. 87.3% Delayed Environmental work 24.5% 12.2% 9.1% 8.4% 7.1% 6.9% 6.7% 6.7% 4.9% 4.4% 4.3% 3.8% Health Insurance selection 3.3% 2.8% 2.7% 2.4% 2.3% -2.1% Grit from digester cleaning & upstream treatment plant to JBL -11.8% Increased Permit Fees -12.5% Contract cost increases -14.7% Rate increases -19.5% Insurers' increases for Property & Liability -23.4% -31.0% Contract cost increases -34.4% Usage during Cogen warranty repairs -60.5% Contract cost increases 100.0% Grit Hauling Permits Contract Services Electricity Insurance Legal Biosolids Disposal Natural Gas Chemicals (47,805) (55,784) (59,081) (69,791) (92,365) (110,944) (146,875) (163,067) (286,731) $473,794 -10.1% 6 Total Spending Variance
Net Pension Liability by Member Agency 7
UAL and OPEB Annual Expense included in Actuals UAL and OPEB Annual Expense included in Actuals O&M Bd Approved Method FY 21-22 Bd Approved Method FY 20-21 % Change between 2022 and 2021 FY 2021-22 Budget FY 2021-22 Actual (Over)/Under Budget % Expended UAL & OPEB City of Laguna Beach City of San Clemente City of San Juan Capistrano El Toro Water District Emerald Bay Service District Irvine Ranch Water District Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District Total $177,192 11,149 172,858 58,142 7,558 12,622 743,846 165,273 308,971 295 $1,657,907 $175,863 11,411 170,266 56,524 7,700 12,366 725,434 169,855 310,096 314 $1,639,829 $1,329 (262) 2,592 1,618 (142) 256 18,413 (4,582) (1,125) (19) $18,078 99.25% 102.35% 98.50% 97.22% 101.88% 97.97% 97.52% 102.77% 100.36% 106.54% 98.91% 10.72% 0.70% 10.38% 3.45% 0.47% 0.75% 44.24% 10.36% 18.91% 0.02% 100.00% 10.71% 0.68% 10.43% 3.47% 0.47% 0.76% 44.55% 10.14% 18.77% 0.02% 100.00% 0.02% 0.01% -0.05% -0.03% 0.00% 0.00% -0.31% 0.22% 0.14% 0.00% 0.00% The expense is under budget, $18,078, due to retiree health "pay-go" premiums. 8
Questions from Member Agencies 9
Question 1: [Preliminary Use Audit Book] Page 2: Please discuss the allocation of the Unfunded Pension Liability (UAL) and Retiree Health (OPEB) costs. SMWD has an almost $5K overage. 10
Question 2: [Preliminary Use Audit Book] Page 5: Please walk through the middle table as part of the presentation. City of Laguna Beach City of San Clemente City of San Juan Capistrano El Toro Water District Emerald Bay Service District Irvine Ranch Water District Moulton Niguel Water District Santa Margarita Water District South Coast Water District Trabuco Canyon Water District Total O&M Actual Project Committee PC 2 - Jay B. Latham Plant PC 5 - San Juan Creek Ocean Outfall PC 8 - Pretreatment Program PC 12 SO- Water Reclamation Permits PC 15 - Coastal Treatment Plant/AWT PC 17 - Joint Regional Wastewater Reclaimation PC 21 Effluent Transmission Main PC 23 North Coast Interceptor PC 24 - Aliso Creek Ocean Outfall $ - $ - 97,738 34,601 $1,643,566 $ - 65,159 7,459 9,412 - - - - - $1,725,595 $ - $ - $1,217,649 91,210 33,392 25,607 190,959 5,939,024 83 $2,192,654 260,635 46,722 25,659 - - - - - $2,525,670 $1,379,738 $ - 87,543 31,386 10,908 1,386,664 401,976 - - 67,108 $3,365,323 $6,433,607 602,285 191,833 81,103 2,823,872 7,476,335 - - - - - - 8,536 - 6,327 - - 616,522 188 2,532 - 60,688 22,269 20,879 (1) - - - - - - - - - 188 - 9,517 - - - - - $9,517 1,185,562 496,545 - - 291 4,252 $90,032 458 7,063 545,148 6,772 59,966 $1,757,380 - - 88,870 $711,907 85,914 $106,980 239,038 $7,736,962 $132,339 $18,161,705 Total $246,325 $38,290 $242,710 $115,817 $56,719 $47,026 $949,546 $333,693 $452,416 $12,702 $2,495,244 Total Admin, General Fund & Engineering Admin Allocation to Project Committees: Project Committee PC 2 - Jay B. Latham Plant PC 5 - San Juan Creek Ocean Outfall PC 8 - Pretreatment Program PC 12 SO- Water Reclamation Permits PC 15 - Coastal Treatment Plant/AWT PC 17 - Joint Regional Wastewater Reclaimation PC 21 Effluent Transmission Main PC 23 North Coast Interceptor PC 24 - Aliso Creek Ocean Outfall 0.0% 0.0% 0.5% 0.0% 67.5% 28.3% 0.0% 0.4% 3.4% 100.0% 0.0% 73.9% 26.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 95.2% 3.8% 0.4% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.9% 0.0% 0.0% 86.6% 0.0% 0.0% 12.5% 100.0% 0.0% 0.0% 2.8% 0.0% 67.4% 24.7% 0.0% 0.3% 4.7% 100.0% 0.0% 0.0% 19.5% 0.0% 0.0% 0.0% 0.2% 0.0% 80.3% 100.0% 15.7% 1.2% 0.4% 0.3% 2.5% 76.8% 0.0% 0.0% 3.1% 100.0% 86.8% 10.3% 1.8% 1.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 41.0% 2.6% 0.9% 0.3% 41.2% 11.9% 0.0% 0.0% 2.0% 100.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 35.4% 3.3% 1.1% 0.4% 15.5% 41.2% 0.0% 0.0% 3.0% 100.0% (2) Total Admin Allocation to Project Committees: Project Committee PC 2 - Jay B. Latham Plant PC 5 - San Juan Creek Ocean Outfall PC 8 - Pretreatment Program PC 12 SO- Water Reclamation Permits PC 15 - Coastal Treatment Plant/AWT PC 17 - Joint Regional Wastewater Reclaimation PC 21 Effluent Transmission Main PC 23 North Coast Interceptor PC 24 - Aliso Creek Ocean Outfall $ - $ - 28,278 10,011 $231,173 $ - 9,165 1,049 1,324 - - - - - $242,710 $ - $ - $149,440 11,194 4,098 3,143 23,436 728,888 10 - 29,337 $949,546 $289,694 34,435 6,173 3,390 - - - - - $333,693 $185,485 $ - 11,769 4,219 1,466 186,416 54,040 - - 9,022 $452,416 $855,792 94,841 38,549 22,025 414,260 966,854 - - - - - - 1,196 - 166,175 69,599 1,029 - - 100,299 1,595 - 38,233 14,029 9,178 - - - 83 - 37,766 $47,026 (3) - - - - - - 12,702 - - - - - $12,702 - 949 8,405 $246,325 31 - - 183 2,679 $56,719 123 1,132 101,666 $2,495,244 14,458 $115,817 $38,290 Total (1) O&M distribution by project committee and member agency are based on actual usage, flows, solids, AWT, and other agreed to methods (2) Admin, general fund, and Engineering are distributed based on O&M and a Board approved method for general fund, respectively (see pages 3&4) (3) The amounts distributed on pages 3&4 are distributed by Project Committees and Member Agency based on O&M actuals in #1. Member Agencies require this. 11
Question 3: [Preliminary Use Audit Book] Page 7: Note 1 Do we know what the impact of the additional budget approved will be by agency? A preliminary amount? There is no Use Audit Impact because the additional budget was not invoiced. 02 - Jay B. Latham Plant Electricity Natural Gas Chlorine/Sodium Hypochlorite Ferric Chloride Odor Control Chemicals Grit Hauling Management Support Services Insurance - Property/Liability Permits Biosolids Disposal Contract Serv - Digester Cleaning - 29E Maintenance Equip. & Facilities (Solids) Maintenance Equip. & Facilities (Common) $ 30,000 70,000 15,000 90,000 15,000 18,000 5,000 35,000 12,000 20,000 30,000 50,000 45,000 435,000 12 - Water Reclamation Permits Management Support Services 45,000 15 - Coastal Treatment Plant Management Support Services 5,000 17 - Joint Regional Wastewater Reclamation Natural Gas Management Support Services Legal Fees Insurance - Property/Liability 30,000 5,000 30,000 40,000 105,000 23 - North Coast Interceptor Legal Fees 7,070 12 597,070 $
Question 3 (cont.): [Preliminary Use Audit Book] Page 7: Note 1 Do we know what the impact of the additional budget approved will be by agency? A preliminary amount? The Use Audit results will not change because the additional budget was not invoiced. Additional Board Approved Budget by Project Committee and Member Agency 16 17 18 19 20 21 22 23 24 25 City of San Juan Capistrano El T oro W ater District Emerald Bay Service District Irvine Ranch W ater District Moulton Niguel W ater District Santa Margarita W ater District T rabuco Canyon W ater District City of Laguna Beach City of San Clemente South Coast W ater District T otal PC 2 - Jay B. Latham Plant PC 3A-Plant 3A/AWT PC 5 - San Juan Creek Ocean Outfall PC 8 - Pretreatment Program PC 12 SO- Water Reclamation Permits PC 15 - Coastal Treatment Plant/AWT PC 17 - Joint Regional Wastewater Reclaimation PC 21 Effluent Transmission Main PC 23 North Coast Interceptor PC 24 - Aliso Creek Ocean Outfall $ - $ - $ 110,693 $ - $ - $ - $ 83,300 $ 146,675 $ 94,332 $ - 435,000 $ 5,236 14,216 1,463 77,691 14,184 6,069 1,493 6,558 5,295 45,000 5,000 105,000 1,896 8,146 150 395 12,210 6,779 291 7,070 $ 16,820 2.8% $ - $ 115,929 19.4% $ 12,210 2.0% $ 835 0.1% $ - $ 176,670 29.6% $ 160,859 26.9% $ 108,451 18.2% $ 5,295 0.9% 597,070 $ 0.0% 0.0% 02/03/2022 Board approved budget amendment for PC 12-Water Reclamation Management Support Services, $45,000, for Support Services Salt & Nutrient Management Plan. 02/03/2022 Board approved budget amendment for PC 2- $5,000, PC 15- $5,000, PC 17- $5,000 Management Support Services, total $15,000 for CASA Climate Change Program. 02/14/2022 PC 23 Committee approved budget amendment for PC 23 - $7,070, for work performed on the Intertie Project. * * * *05/19/2022 Board approved budget amendment for PC 2 - $430,000 and PC 17 - $100,000, due to expense inflationary increase. 13
Question 4: [Preliminary Use Audit Book] Page 15 Note 1: If this is construction support labor, wouldn t this be capitalized to labor rather than the O&M? O&M labor supporting capital projects has been identified and capitalized. The increase in overtime was backfill O&M work unrelated to Capital projects. Question 5: [Preliminary Use Audit Book] Page 16: Note 1: please discuss the nature of the reclassification. Reclassification; the engineering trailer was budgeted in O&M. 14
