FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
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COVID-19 FINANCIAL IMPACT UPDATE
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GENERAL MANAGER'S RECOMMENDATION
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RECOMMENDATION:
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BACKGROUND
The Board of Directors requested a staff report on potential financial impacts related to COVID-19. Staff has summarized the potential financial impacts to date.
ADDITIONAL INFORMATION
Revenues
The Orange County Sanitation District (Sanitation District) has a broad-based revenue program. Although 85% of its income comes from two sources (65% from general user fees and 20% from property taxes), the income is collected from nearly one million different users. This distribution reduces the potential impact on the Sanitation District by any individual ratepayer. Additionally, both of these revenues are collected through the County of Orange (County) semi-annual property tax collection process. At present, the County has announced no change to its collection of these fees or the disbursement of funds to the Sanitation District as a result of COVID-19. We anticipate receiving our next County apportionment later this month.
The Sanitation District does receive 15% of its revenues from other sources that may be negatively impacted. However, those revenues are also broad-based, split between various permittees, other government agencies, and interest income. As such, any risk to Sanitation District revenue should be manageable. However, should the pandemic continue, this risk would increase.
Investment Portfolio
The Sanitation District portfolios remain conservatively positioned and are weathering the volatility in the markets fairly well given the circumstances.
However, all indications are that the short-term impact of the shutting down of major portions of the US economy due to the COVID-19 virus are going to be material.
We have already seen a large monetary policy response from the Federal Re...
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