Page 477 - 2022-23 Blue Book Vol 2

SEWER CONSTRUCTION AND MAINTENANCE FUND

BASIS FOR THE PROPOSED BUDGET

The 2022-23 Proposed Budget for the Sewer Construction and Maintenance Fund (SCM) relates to current year
funding as follows:

Amount % Change

2021-22 Adopted Budget $ 1,137,749,269
2022-23 Proposed Budget $ 1,219,523,112

Change from 2020-21 Budget $ 81,773,843 7.2%

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 ($369,021,000) and the related capital labor and expense costs ($120,230,889). Also included are the
costs of operating and maintaining the Clean Water System ($422,995,208), payment of debt service on
Wastewater System Revenue Bonds ($248,485,128), a 45-day operating reserve ($51,638,755), and various other
expenses ($7,152,132).

BUDGET HIGHLIGHTS

 Capital improvements at the Donald C. Tillman Water Reclamation Plant and Hyperion Water Reclamation
Plant Advanced Water Purification Facilities are projected to increase the production of treated recycled water.
The enhanced production will increase revenue from recycled water sales to the Department of Water and
Power to $8.3 million based on sales price and volume.

 The General Fund completed payments to the SCM for the $85.7 million over allocation of related costs during
the period of 2015-2021 through an interim fund transfer in 2021-22.

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