Page 463 - FY 2020-21 Blue Book Volume II

SEWER CONSTRUCTION AND MAINTENANCE FUND

BASIS FOR THE PROPOSED BUDGET

The 2020-21 Proposed Budget for the Sewer Construction and Maintenance Fund (SCM) relates to current year
funding as follows:

Amount % Change

2019-20 Adopted Budget $ 1,191,049,285

2020-21 Proposed Budget $ 1,104,179,436

Change from 2019-20 Budget $ (86,869,849) (7.3%)

The SCM funds the Clean Water Program (CWP), which serves over four million people in the City of Los Angeles
and 29 contract cities, encompassing a service area of approximately 600 square miles. CWP operations include
sewage conveyance and treatment, water reclamation, industrial sewage management, environmental monitoring,
and a capital program. The wastewater collection and treatment system is operated and maintained by the Bureau
of Sanitation and includes 6,700 miles of sewers, 49 pumping plants, three water reclamation plants, and one
treatment plant.

All properties that use the City’s sewer system pay a Sewer Service Charge (SSC), which determines sewage
volume by multiplying water usage by the SSC rate. Revenue is deposited into the SCM and is used to support
ongoing maintenance and capital improvements for the sewer system. In addition to SSC revenues, the SCM was
converted into an enterprise fund in order to support revenue bonds. A number of separate funds were created to
properly account for revenues and expenditures and interest earnings on bond proceeds.

The Proposed Budget for SCM includes the Clean Water Capital Improvement Expenditure Program
($313,074,000) and the related capital labor and expense costs ($118,742,123). Also included are the costs of
operating and maintaining the Clean Water System ($379,043,198), payment of debt service on Wastewater
System Revenue Bonds ($241,130,193), a 45-day operating reserve ($48,968,144), and various other expenses
($3,221,778).

BUDGET HIGHLIGHTS

 SSC receipts will increase by 6.6 percent over the 2019-20 estimated revenues, reflecting a 6.6 percent rate
adjustment on July 1, 2020 (C.F. 10-1947) and is the final approved increase for the current rate case.

 The Terminal Island Treatment Plant Advanced Water Purification Facility, completed in January 2017, doubles
its water production from 5 to 12 million gallons per day. The projected revenue from recycled water sales to
the Department of Water and Power is $5.1 million as a result of an anticipated increase in sales price and
volume.

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