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Home My WebLink AboutApprove the West Orange County Water Board (WOCWB) Joint Pow osa:CI Gjo2 2000 Main Street, se. . ., : Huntington Beach,CA 92648 City of Huntington Beach APPROVED 7-0 cylami File #: 26-648 MEETING DATE: 8/18/2026 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Travis Hopkins, City Manager VIA: Chau Vu, Director of Public Works PREPARED BY: Chris Davis, Senior Management Analyst Subject: Amend Fiscal Year 2026/27 West Orange County Water Board (WOCWB) Budget by $4,600,000 to Return Unexpended Cathodic Protection Program Funds to Member Agencies' Water Enterprise Funds Based on Ownership Percentage Statement of Issue: WOCWB currently holds a fund balance of$7.6 million. This balance is the result of pre-financing for the Cathodic Protection Program. However, now that the Cathodic Protection Program is no longer necessary, these funds are no longer intended for a specific project, and the Board could return them to member agency's enterprise funds. Financial Impact: Approval of the budget amendment would reduce the WOCWB fund balance to approximately $2,000,000. Funds in the amount of$2,580,600 would be added to the City's Water Master Plan Fund (507) undesignated unreserved fund balance. Recommended Action: Approve budget amendment and return funds to member agency's water enterprise funds. Alternative Action(s): Do not approve budget amendment and maintain current fund balance with WOCWB and direct staff accordingly. Analysis: The City is a member of the West Orange County Water Board (WOCWB) Joint Powers Authority. The individual member agencies of WOCWB need to approve the proposed WOCWB budget amendment prior to ratification by the Board as a whole. The Board currently holds a fund balance of $7.6 million as of June 30, 2026. This high balance is City of Huntington Beach Page 1 of 3 Printed on 8/13/2026 powered by Legistarm 181 File #: 26-648 MEETING DATE: 8/18/2026 the result of pre-financing for the Cathodic Protection Program. However, the Cathodic Protection Program is no longer necessary, and these funds are no longer intended for a specific project - therefore, the Board could return them to member agencies. In 2020, Engineering staff presented to the WOCWB Board of Directors a proposal to implement a Cathodic Protection Program on the OC-9 and OC-35 transmission mains to extend the lifespans of the 60+ year old mains. At the time, the cost of Cathodic Protection for both mains was estimated to be $8 million. This cost was based on comparable projects at that time and not based on a physical analysis of the pipelines. To mitigate the financial burden on member agencies, the WOCWB approved a plan to contribute a total of $1 million per year beginning in Fiscal Year 2020/21, prorated by each agency's ownership percentage of the Board. Design on the OC-9 project was to begin in Year 3, with construction to be performed in Year 4. Due to the pandemic and staff turnover, design was delayed on the project. Member agency contributions continued annually, with $6 million collected from member agencies for this project. Additionally, the WOCWB had approximately $1.4 million on hand prior to FY 2020/21, and accrued interest on its unspent money. The WOCWB's fund balance currently stands at $7.6 million. In Fiscal Year 2023/24, the Board's engineering consultant, Ardurra, began a study of the OC-9 transmission main as part of the initial project design. During the study, it was determined that Cathodic Protection was not a feasible solution for OC-9 or OC-35 due to certain segments of the mains being too narrow. At the October 2024 Board meeting, the Board authorized Ardurra to perform a condition assessment of both transmission mains to better determine their feasibility. The study identified numerous areas to be investigated further or monitored, but there is no immediate danger of failure in either transmission main. Specifically, the study listed repairs totaling $620,000 to areas of high concern. The study also recommended performing a condition assessment every five (5) years to identify areas of concern before they become major problems. Upon receiving the report, the WOCWB included $1,000,000 in funding to perform these repairs (plus contingency) as well as correct any ancillary issues discovered during repairs and ongoing maintenance. As noted above, the WOCWB has a fund balance of approximately $7.6 million. Approximately $2 million is held in CAMP Term, which is a fixed CD-like instrument that matures in November 2026. Staff is proposing to return $4.6 million to the member agencies, prorated by each agency's ownership percentage of the WOCWB. WOCWB would retain $3 million, including $1 million in the FY 2026/27 approved budget. Of the $3 million that WOCWB would retain, approximately $1 million would remain liquid until the other $2 million in the CAMP Term Account matures in November 2026. WOCWB would be able to access the $2 million in CAMP Term if needed, but there would be an early redemption penalty and WOCWB would lose any interest earnings. As of June 30th, 2026, the estimated earnings from CAMP Term were $27,890.96. Upon maturity on November 2026, the $2 million will be transferred back to the CAMP Pool and available to be redeemed that day. Under this scenario, the WOCWB would receive the initial principal of $2 million and anticipated interest earnings of approximately $57,957.81. City of Huntington Beach Page 2 of 3 Printed on 8/13/2026 powered by LegistarT" 182 File #: 26-648 MEETING DATE: 8/18/2026 Agency Percent Owner Total Return Huntington Beach 56.1% $2,580,600 Westminster 25.4% $1,168,400 Seal Beach 14.3% $657,800 Garden Grove 4.2% $193,200 Total 100% $4,600,000 Assuming the WOCWB spends the full $1,000,000 on repairs, staff believe that it would be prudent to keep $2,000,000 in the WOCWB reserve. This would provide a financial buffer in the event of emergency repairs. These funds could also be directed towards the next recommended condition assessment in Fiscal Year 2029/30. Conversely, the Board has not held a balance greater than $1.4 million prior to the beginning of the Cathodic Protection program, and staff is not recommending keeping an excessive balance. At July 15, 2026, WOCWB regular meeting, the Board voted 5-0 in favor of returning funds to each member agency's water enterprise fund. Each member agency's City Council will need to approve the amendment, and WOCWB will vote to ratify the amended budget at the October 21, 2026, regular meeting. Funds would be returned to each member agency after the CAMP term ends in November 2026. Environmental Status: Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project. Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. PowerPoint Presentation City of Huntington Beach Page 3 of 3 Printed on 8/13/2026 powered by LegistarT"^ 183 . es -~� c_ORP0RATip'•. _ _ ••.c \\\\ Ila I N G 7;9 4<65 Funds Transfer from West °7�lr'� �`„ r, ,' Orange County Water Board to i Huntington Beach � -- , ,� Q City Council , _ — ► August 18, 2026 Q 6)°0 NTH °)*1\ 184 WOCWB Overview Over the last 70 years, the West Orange County Water Board has supported water transportation for member agencies via a Joint Powers Agreement • West Orange County Water Board (WOCWB) is a Joint Powers Agency originally established in 1955 with the mission of transporting water to its member agencies via two large-capacity pipelines ❖ Member agency cities are Huntington Beach, Seal Beach, Westminster, and Garden Grove as of the revised Joint Power Agreement drafted in 1967 ❖ Water is delivered from the Municipal Water District of Orange County through the OC-9 and OC-35 connections at Katella Avenue and Dale Street in Stanton ❖ WOCWB has no employees but contracts several functions on a time/materials basis ❖ WOCWB General Manager formulates budget to conduct administrative affairs and issue purchase/work orders • Ownership/capacity rights across member agencies as follows : 56 . 1% for Huntington Beach, 25 . 4% for Westminster, 14 . 3% for Seal Beach, and 4 . 2% for Garden Grove (WOCWB Board has five seats with Huntington Beach having two seats and other member agencies having one seat each) 185 Current Situation WOCWB has the opportunity to revert over $4 million back to its member agencies ' Enterprise Funds (specifically Water Fund) due to prior payments that are no longer necessary for capital improvements • In 2020, Engineering staff presented a $8 million proposal to the WOCWB Board implementing a Cathodic Protection Program on the transmission mains to extend their 60+ year lifespans rather than replace them ➢ Board approved plan to contribute $1 million per year beginning in Fiscal Year 2020/21 (prorated by each agency' s ownership percentage of the Board) and a total of $6 million was collected ➢ In Fiscal Year 2023/24 , the Board' s engineering consultant began a study and determined that Cathodic Protection was not feasible for OC-9 or OC-35 due to segments being too narrow ➢ A subsequent engineering feasibility study in 2024-2025 listed repairs totaling $ 620 , 000 to areas of high concern and the Board repurposed $1 million to cover these repairs and contingencies • These collections have left WOCWB with an approximately $7 . 6 million fund balance versus a conservative estimate of $2 million required to cover necessary future capital expenditures - we are proposing to revert $4 . 6 million to member agencies and leave approximately $3 million in WOCWB (highest fund balance prior to Cathodic Program was $1 . 6 million) 186 Recommendation Approve and authorize the WOCWB Board members for Huntington Beach to vote in favor of the return of $ 4 . 6 million in excess funds to the member agencies at the October 21 , 2026 WOCWB meeting fe\NTINGi y •#. � t • = OUNT\ �,,1 187 ( Nc\t\ li I N G I 04/ .e):66, - or / ,,,,r • C,,.) • =- _ _ , Questions ? __ _ _ ___. ____ _ ___ mczci. �/� /_mil/� •• .. , rim' - �'/� )„,/,./' h`""'"•• 9 . . ....... _ ______ .. 41 A.../..1.1., -.„, - --- , c, . =' Cr e _ _.____________ icks.,a` 1 •• ' J l, 19 a , N. •� <cC: >0 C°ONTN 188 NTING 2000 Main Street, ?s // Huntington Beach,CA yr % 92648 -:_ City of Huntington Beach e=r APPROVED 7-0 it File#: 26-172 MEETING DATE: 3/17/2026 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Travis Hopkins, City Manager VIA: Chau Vu, Director of Public Works PREPARED BY: Chris Davis, Senior Management Analyst Subject: Approve the West Orange County Water Board (WOCWB) Joint Powers Authority Fiscal Year 2026/27 proposed budget in the amount of$1,518,500 Statement of Issue: The City is a member of the West Orange County Water Board (WOCWB) Joint Powers Authority. Each member agency must approve the proposed WOCWB Fiscal Year 2026/27 prior to its adoption by the Board as a whole. Financial Impact: The City's share of the West Orange County Water Board (WOCWB) Fiscal Year 2026/27 total proposed budget of$1,518,500 is $459,894. The amount consists of$74,894 for the annual operating budget and $385,000 for the City's share of the loan repayment for the OC-35 Pipeline Relocation Project. The $1,000,000 expenditure for the OC-9 and OC-35 transmission main lifespan extension program will not require additional contributions from member agencies, as these funds have been collected by WOCWB over the past seven years. The Fiscal Year 2026/27 proposed operating budget is included in Water Fund (Business Unit 50685801), and the debt service is included in Water Master Plan (Business Unit 50791006). Recommended Action: Approve the West Orange County Water Board (WOCWB) Proposed Fiscal Year 2026/27 budget, including the City of Huntington Beach's share in the amount of$459,894. Alternative Action(s): Do not approve the proposed West Orange County Water Board (WOCWB) Fiscal Year 2026/27 budget and direct staff accordingly. City of Huntington Beach Page 1 of 3 Printed on 3/11/2026 powered by LegistarTM" 236 File#: 26-172 MEETING DATE: 3/17/2026 Analysis: The West Orange County Water Board (WOCWB) is a Joint Powers Authority comprised of the cities of Garden Grove, Seal Beach, Westminster, and Huntington Beach, for the purpose of purchasing water from the Municipal Water District of Orange County and transporting it through the OC-9 and OC-35 transmission mains owned by the member agencies. Huntington Beach owns 56.1 percent of the transmission system. WOCWB is governed by a five-member board consisting of one elected official each from Garden Grove, Seal Beach, and Westminster and two elected officials from Huntington Beach. Council Members Pat Burns and Gracey Van Der Mark represent the City of Huntington Beach. The General Manager of the WOCWB (the City of Huntington Beach Deputy Director of Public Works) submits a proposed budget to the Board for review at midyear. Each member agency will approve their portion of the budget, with ratification by the WOCWB at the April meeting. The total proposed budget for FY 2026/27 is $1,518,500. This includes $133,500 for the operating budget, which covers maintenance, electricity, and administrative costs (insurance, legal costs, audit fees); $385,000 in debt service for the OC-35 realignment project reimbursement agreement with OCTA; and $1,000,000 for the OC-9/OC-35 transmission main lifespan extension program (formerly the Cathodic Protection Program). Expenditures for the transmission main lifespan extension program will not require contributions from the member agencies this fiscal year, as funds have been accumulated over the previous seven years. These funds are being carried over from the previous year, but budget authority is required in order to expend the funds. Context for the debt service- The City of Huntington Beach is the final agency in WOCWB that has not paid off their obligation of the 10-year loan early. This budget request includes funding to make the final payments, thereby eliminating future interest payments as well as administrative tasks. As a reminder, in 2017, OCTA notified WOCWB that they would only offer the low-interest loan to the Board as a whole and not enter into loans with individual member agencies. Therefore, debt payments were made by WOCWB to OCTA. Conversely, WOCWB entered into a Financial Participation Agreement with each member agency to ensure that they paid their portion of the loan, and each member agency paid their share of the loan payment to WOCWB. The loan balance is currently $579,758, with one more quarterly payment due this fiscal year. The Board reviewed the proposed budget at the January 21, 2026 regular meeting. Upon approval by each member agency, the Board will ratify the budget at its next regular meeting, scheduled for April 15, 2026. Environmental Status: Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project. Strategic Plan Goal: Goal 6 - Infrastructure Investment, Strategy C - Conduct an assessment of all City facilities to determine priorities for upgrades and repairs, implementation and financial priority. City of Huntington Beach Page 2 of 3 Printed on 3/11/2026 powered by LegistarT" 237 File #: 26-172 MEETING DATE: 3/17/2026 Attachment(s): 1. WOCWB Proposed Fiscal Year 2026/27 Budget 2. PowerPoint Presentation City of Huntington Beach Page 3 of 3 Printed on 3/11/2026 powered by LegistarTe 238 WEST ORANGE COUNTY WATER BOARD PROPOSED FISCAL YEAR 2026/27 BUDGET FY 25/26 FY 26/27 Approved Proposed ACCOUNT NUMBER ACCOUNT DESCRIPTION OPERATING EXPENSES 50885101.61200 Electricity $4,500 $4,500 50885101.64620 General Repairs and Maintenance $30,000 $35,000 50885101.64620 Interconnect Rehabilitation $25,000 $70,000 50885101.69345 Auditing $5,500 $6,000 50885101.69375 Attorney Fees $2,500 $2,500 50885101.73010 General/Liability Insurance $9,500 $10,500 50885101.75400 Board Stipend Expense $2,500 $2,500 50885101.79100 Contingency $2,500 $2,500 OPERATING EXPENSES $82,000 $133,500 NON OPERATING EXPENDITURES 50885102.88010 Debt Service $475,000 $385,000 SUBTOTAL $557,000 $518,500 CAPITAL EXPENSES 50885104.82100 Condition Assessment2 $1,000,000 $1,000,000 TOTAL $1,557,000 $1,518,500 1City of Huntington Beach for OC-35 realignment project loan; pass thru 2 Condition Assessment Project Funds will come from funds already collected for the project beginning in FY 2020-21, and will not increase the contributions from member agencies. January 15,2026 239 FISCAL YEAR 2026/27 PROPOSED BUDGET AGENCY CONTRIBUTIONS Operating Budget ACCOUNT NUMBER AGENCY OWNERSHIP FY 26/27 COST PERENTAGE 50800508.46610 Huntington Beach 56.1 $74,894 50800508.46620 Garden Grove 4.2 $5,607 50800508.46630 Seal Beach 14.3 $19,091 50800508.46640 Westminster 25.4 $33,909 Totals 100.0 $133,500 Seventh Year OC-35 Relocation Project Loan Payment 50800508.46610 Huntington Beach 56.1 $385,000 50800508.46620 Garden Grove* 4.2 $0 50800508.46630 Seal Beach * 14.3 $0 50800508.46640 Westminster* 25.4 $0 Totals 100.0 $385,000 *Garden Grove and Westminster have paid off their portions of the loan; Seal Beach is in the process of paying off their portion of the loan. Total Adopted Budget 50800508.46610 Huntington Beach 56.1 $459,894 50800508.46620 Garden Grove* 4.2 $5,607 50800508.46630 Seal Beach * 14.3 $19,091 50800508.46640 Westminster* 25.4 $33,909 Total Budget $518,500 January 15, 2026 240 /00.40 'rr,,.r..• Isw, 1 ti\ -11 I N 111111. `� . .. 6 TO Approve West Orange . ip c .•40 milk cj0�PORATF `` County Water Board o . `• • -- - =- •• -37 Fiscal Year 2026/27 ' •. cam +, �- , .. ., Ili Budget_____,,_, _ ka ---- iii "c:C i- 10 - - ,/i >>,%,,: March 17, 2026 • v . . -'. -- - - ' - .. ) • •• 44:;k** 00 ., 17, 19 n ,c en Islissevolo <C 00 low LI 0°OONTNlow C.) "Ar,# 241 WOCWB • Joint Powers Authority that owns and operates OC-9 and OC-35 Water Transmission mains • Five (5) member board — Councilmembers Pat Burns and Gracey Van Der Mark representing Huntington Beach • Proportional share: • Huntington Beach (56. 1 %) • Garden Grove (4.2%) • Seal Beach (14.3%) �,�NTiNcroA • Westminster (25.4%) � �.� �fORP0Rgtfp'•414s<55�� • • Each Member Agency must approve the budget before the o WOCWB as a whole can approve the budget in April ist: coi31. .gy p,•\�o 242 1 WOCWB FY 2026/27 Budget FISCAL YEAR 2026/27 PROPOSED BUDGET AGENCY CONTRIBUTIONS Operating Budget ACCOUNT NUMBER AGENCY OWNERSHIP FY 26/27 COST PERENTAGE 50800508.46610 Huntington Beach 56.1 $74,894 50800508.46620 Garden Grove 4.2 $5.607 50800508.46630 Seal Beach 14.3 $19,091 50800508.46640 Westminster 25.4 $33,909 Totals 100.0 $133.500 Seventh Year 0C-35 Relocation Project Loan Payment 50800508.46610 Huntington Beach 56.1 $385,000 50800508.46620 Garden Grove' 4.2 $0 50800508.46630 Seal Beach' 14.3 $0 50800508.46640 Westminster' 25.4 $0 Totals 100.0 $385,000 /irotoarrp��' `Garden Grove and Westminster have paid off their portions of the loan,Seal Beach is in the process of paying +► oft their pottier of the loan di",��%t NO ro Total Adopted Budget �0, O`!.'\ „,70Rq)Fp•h*��` 50800508.46610 Huntington Beach 56,1 $458.894 ll _ -i 'z� ' 50800508.46620 Garden Grove' 4.2 $5,607 � "-; „.ram-. T ira. x ilk 50800508.46630 Seal Beach' 14.3 $19.091 % U;- -__-.=7;.M 50800508.46640 Westminster' 25.4 533.909 _ k may: • ._ " w.,,- .'ma � •r1, i Total Budget 5518,500 1\�17 'y., ,F T o .••' CDUNTV c ' 243 WOCWB FY 2026/27 Budget • Budget presented at January 21 , 2026 meeting • Requested each agency to approve before adoption by the Board at the April 16 , 2026 meeting • 0 "kit.A ...... iff N.\ 0. ORPORAT 644 .• _N e A-t Ilk • - - • , % 244 � ar Y Questions ? ,.....,., c,/,4, ,,,., i ,..„...,...„, ,,:. , .. 0 ./. ...., . , • ......., t� ,, , ..„._,.....,...,....,.... ...,__. .,.., , ... ,..-=',Fi,=3; r:'7,- t} Y_ 4 'i . rNV" E,, _ . -,v s .. ' • i - f�,may+'"'' ra�.yi�C la r� r