METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA (4)

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TIDE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA ENGINEER'S REPORT PROGRAM TO LEVY READINESS -TO -SERVE CHARGE, INCLUDING LOCAL OPTION FOR STANDBY CHARGE, DURING FISCAL YEAR 2012/13 March 2012 BACKGROUND The Metropolitan Water District of Southern California is a public agency with a primary purpose to provide imported water supply for domestic and municipal uses at wholesale rates to its member public agencies. More than 18 miIlion people reside within Metropolitan's service area., which covers over 5,000 square miles and. includes portions of the six counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura. Metropolitan currently provides over 50 percent of the water used within its service area. REPORT PURPOSES As part of its role as an imported water supplier, Metropolitan builds capital facilities and implements water management programs that ensure reliable high quality water supplies throughout its service area. The purpose of this report is to: (1) identify and describe those facilities and programs that will be financed in part by Metropolitan's readiness -to -serve (RTS) charge in fiscal year 2012/13, and (2) describe the method. and basis for levying Metropolitan's standby charge for those agencies electing to collect a portion of their RTS obligation through Metropolitan's standby charge. Because the standby charge is levied and collected on a fiscal year basis the calculations in this report also are for the fiscal year, even though the RTS charge is imposed on a calendar year basis. The RTS charge for calendar year 2012 was adopted by Metropolitan's Board on April 13, 201.0 and the RTS charge for 2013 will be considered by the Board on March 13, 2012. Metropolitan levies the RTS charge on its member agencies to recover a portion of the debt service on bonds issued to finance capital facilities needed to meet existing demands on Metropolitan's system. The standby charge is levied on parcels of land within certain of Metropolitan's member agencies as a method of collecting part or all of such member agency's RTS charge obligation. The RTS charge will partially pay for the facilities and programs described in this report. The standby charge, if levied, will be utilized solely for capital payments and debt service on the capital facilities identified in this report. METROPOLITAN'S RESPONSE TO INCREASING WATER DEMANDS To respond to increasing demands for water, Metropolitan and its member agencies collectively examined the available local and imported resource options in order to develop a. least -cost plan that meets the reliability and quality needs of the region.. The product of this intensive effort was an Integrated Resources Plan (IRP) for achieving a reliable and affordable water supply for Southern California. The major objective of the IRP was to develop a comprehensive water resources plan that ensures (1) reliability, (2) affordability, (3) water duality, (4) diversity of supply, and (5) adaptability for the region, while recognizing the environmental, institutional, and political constraints to resource development. As these constraints change over time, the IRP is periodically revisited and updated by Metropolitan and the member agencies to reflect current conditions. To meet the water supply needs of existing and future customers within its service area, Metropolitan continues to identify and develop additional water supplies to maintain the reliability of the imported water supply and delivery systern. These efforts include the construction of capital facilities and implementation of demand management programs.