BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Budget, Water Charge, & Capital Improvement Program Alternatives to Consider in Response to COVID-19 Pandemic.
End
RECOMMENDATION:
Recommendation
Discuss alternative actions and plans related to the Fiscal Year (FY) 2020-21 Budget, Water Charges, and Capital Improvement Program (CIP) and provide direction to staff as necessary.
Body
SUMMARY:
Given the tremendous economic pressures unfolding due to the COVID-19 Pandemic, the Board held a special meeting on April 6, 2020 to discuss alternatives for staff to consider in preparation for the Groundwater Production Charge and CIP public hearings scheduled for April 28, 2020, and the Budget Work Study Session scheduled for April 29, 2020. The following is a high level recap of Board Comments:
1. Examine no increase in water rates for FY 21 for a period of three months, one half of the year, and the entire year;
2. Bring back ideas on how Valley Water could engage in targeted assistance to end customers, including potential partnerships with non-profit organizations within the county that provide direct assistance to families;
3. Bring back ideas on how Valley Water could provide targeted loans to end customers or retailers; and
4. Discuss the merits of a hiring freeze
Financial Status Update
Before discussing these Board comments in detail, it is important to provide context regarding the financial health of Valley Water. The following is a brief summary of Valley Water's cash position, revenue streams, outstanding debt, CalPERS employer contributions, and cash flow projection.
Cash and investments total over $600M as of the beginning of April, 2020 of which $120M is in cash equivalent deposits. All major retailers are current on payments to Valley Water as of April 2, 2020. All retailers have suspended water shutoffs, which could cause some end customers that can afford to pay, to choose not to. This does not necessarily translate to retailers choosing not to pay Vall...
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