Page 429 - FY 2021-22 Blue Book Volume 2

SEWER CONSTRUCTION AND MAINTENANCE FUND

BASIS FOR THE PROPOSED BUDGET

The 2021-22 Proposed Budget for the Sewer Construction and Maintenance Fund (SCM) relates to current year
funding as follows:

Amount % Change

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

2021-22 Proposed Budget $ 1,135,773,272

Change from 2020-21 Budget $ 31,593,836 2.9%

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 and Technology Improvement Expenditure
Program ($301,569,318) and the related capital labor and expense costs ($116,995,488). Also included are the
costs of operating and maintaining the Clean Water System ($404,821,834), payment of debt service on
Wastewater System Revenue Bonds ($243,732,630), a 45-day operating reserve ($63,325,402), and various other
expenses ($5,328,600).

BUDGET HIGHLIGHTS

 The Terminal Island Treatment Plant Advanced Water Purification Facility, completed in January 2017, is
anticipated to double its water production from five to 12 million gallons per day. The enhanced production will
increase revenue from recycled water sales to the Department of Water and Power to $7.6 million based on
sales price and volume.

 The General Fund will make its first two of four annual payments in the amount of $26 million to the SCM Fund
for the over-payment of related costs to the Bureaus of Sanitation, Contract Administration, and Engineering
since 2015. The reimbursement begins in 2021-22 and will end in 2023-24 when the SCM Fund is fully
reimbursed.

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