HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 10/11/2017REG ULA R BO A RD MEET IN G
C losed Session Begins at 4:30 PM
October 11, 2017 - 5:30 P M
31111 Greenspot Road, Highland, C A 92346
AG E N D A
"In order to comply with legal requirements for posting of agenda, only those items filed
with the District C lerk by 12:00 p.m. on Wednesday prior to the following Wednesday
meeting not requiring departmental investigation, will be considered by the Board of
Directors".
C A LL TO O RD ER
RO LL C A LL O F BO A RD MEMBERS
P U B L I C C O MME N T S
Any person wishing to speak to the Board of Directors is asked to complete a Speaker
Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is
limited to three (3) minutes, unless waived by the C hairman of the Board. Under the State
of C alifornia Brown Act, the Board of Directors is prohibited from discussing or taking
action on any item not listed on the posted agenda. T he matter will automatically be
referred to staff for an appropriate response or action and may appear on the agenda at a
future meeting.
AGE N D A - T his agenda contains a brief general description of each item to be
considered. Except as otherwise provided by law, no action shall be taken on any item not
appearing on the following agenda unless the Board of Directors makes a determination
that an emergency exists or that a need to take immediate action on the item came to the
attention of the District subsequent to the posting of the agenda.
1.Approval of Agenda
REC ESS IN TO C LO SED SESSIO N
C L OSE D SE S SI ON
2.C O N FEREN C E WIT H LEG A L C O UN SEL - EXIST IN G LIT IG AT IO N
[Government C ode Section 54956.9(d) (1)]
Name of C ase: C ity of San Bernardino v. East Valley Water District, et al.,
San D iego Superior Court C ase No. 37-2016-00038119-C U-WM-C T L
3.C O N FEREN C E WIT H LEG A L C O UN SEL - EXIST IN G LIT IG AT IO N
[Government C ode Section 54956.9(d)(1)]
Name of Case: C arl F. Kovach v. East Valley Water D istrict, C A SE No. C IVD S
1603176
4.C O N FEREN C E WIT H LEG A L C O UN SEL - A N T IC IPAT ED LIT IG AT IO N
Initiation of litigation pursuant to Government C ode Section 54956.9(d)(4)
One Potential C ase
5:30 P M RE C ON VE N E ME E T I N G
PLED G E O F A LLEG IA N C E
RO LL C A LL O F BO A RD MEMBERS
A N N O UN C EMEN T O F C LO S ED S ESS IO N A C T IO N S IT EMS
PRESEN TAT IO N S A N D C EREMO N IA L IT EMS
• Introduction of N ewly Hired Employee: Roxana Morales, Public Affairs
Representative
P U B L I C C OMME N T S
5.AP P RO VAL O F C ON SE N T C AL E N D AR
All matters listed under the C onsent C alendar are considered by the Board of
Directors to be routine and will be enacted in one motion. T here will be no
discussion of these items prior to the time the board considers the motion unless
members of the board, the administrative staff, or the public request specific items to
be discussed and/or removed from the C onsent C alendar.
a.September 13, 2017 regular meeting minutes
b.Directors' fees and expenses for September 2017
D I SC U SSI O N AN D P OS SI B L E AC T I O N I T E MS
6.Review and Approve D raft C omprehensive Annual Financial Report for Year Ended
J une 30, 2017
7.Review and Approve the Updated Purchasing/Procurement Policy 7.1
8.Adopt Resolution 2017.15 - Imagine a Day Without Water
9.Approve recommendations by staff regarding Water Quality Update
RE P O RT S
10.Board of Directors' Reports
11.General Manager/C EO Report
12.Legal C ounsel Report
13.Board of Directors' Comments
AD J O U RN
P LEAS E NO T E:
Materials related to an item on this agenda s ub mitted to the Board after dis trib utio n of the agend a pac ket
are available for p ublic ins p ectio n in the Dis tric t's o ffice lo cated at 31111 G reens pot R d., Highland, during
no rmal b usines s hours . Also, s uc h d o cuments are available o n the Dis tric t's web s ite at www.eas tvalley.o rg
sub ject to s taff's ab ility to post the d o cuments b efo re the meeting.
P urs uant to G overnment C o d e S ec tion 54954.2(a), any reques t fo r a d is ab ility-related mo dific ation or
ac commod ation, inc luding auxiliary aids or s ervic es , that is s ought in order to participate in the abo ve-
agendized p ublic meeting s hould b e d irected to the Dis tric t C lerk at (909) 885-4900 at leas t 72 hours prior
to said meeting.
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Draft Pending Approval
EAST VALLEY WATER DISTRICT September 13, 2017
REGULAR BOARD MEETING
MINUTES
The Chairman of the Board called the meeting to order at 4:30 p.m.
PRESENT: Directors: Carrillo, Coats, Morales, Shelton, Smith
ABSENT: None
STAFF: John Mura, General Manager/CEO; Brian Tompkins, Chief
Financial Officer; Kelly Malloy; Public Affairs/Conservation
Manager; Justine Hendricksen, District Clerk; Shayla Gerber,
Administrative Assistant
LEGAL COUNSEL: Jean Cihigoyenetche
GUEST(s): Members of the public
PUBLIC COMMENTS
Chairman Coats declared the public participation section of the meeting open at 4:31
p.m.
There being no written or verbal comments, the public participation section was closed.
APPROVAL OF AGENDA
M/S/C (Shelton-Smith) that the September 13, 2017 agenda be approved as
submitted.
CLOSED SESSION
The Board entered into Closed Session at 4:31 p.m. as provided in the Ralph M. Brown
Act Government Code Section 54956.9(d)(1) and 54956.9(d)(4) to discuss the item(s)
listed on the agenda.
THE BOARD RECONVENED THE MEETING AT 5:30 P.M.
Mr. Milroy led the flag salute.
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ROLL CALL
PRESENT: Directors: Carrillo, Coats, Morales, Shelton, Smith
ABSENT: None
ANNOUNCEMENT OF CLOSED SESSION ACTIONS
With respect to Item #2: No reportable action taken.
With respect to Item #3: No reportable action taken.
With respect to Item #4: This item was not discussed in closed session.
PUBLIC COMMENTS
Chairman Coats declared the public participation section of the meeting open at 5 :31
p.m.
There being no written or verbal comments, the public participation section was closed.
APPROVE THE AUGUST 9, 2017 REGULAR BOARD MEETING MINUTES
M/S/C (Smith-Shelton) that the Board approve the August 9, 2017 regular board
meeting minutes as submitted.
APPROVE THE AUGUST 23, 2017 REGULAR BOARD MEETING MINUTES
M/S/C (Smith-Shelton) that the Board approve the August 23, 2017 regular board
meeting minutes as submitted.
APPROVE THE AUGUST 31, 2017 SPECIAL BOARD MEETING MINUTES
M/S/C (Smith-Shelton) that the Board approve the August 31, 2017 special board
meeting minutes as submitted.
DIRECTORS’ FEES AND EXPENSES FOR AUGUST 2017
M/S/C (Smith-Shelton) that the Board approve the Directors’ fees and expenses
for August 2017 as submitted.
LEGISLATIVE UPDATE
The Public Affairs/Conservation Manager reviewed primary activity to legislative bills
that took place over the past few months and the District’s position on each topic: lead
in drinking water, two potential water bonds, low income rate assistance, water tax,
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and water conservation; she stated that there are a number of different topics that the
District is actively engaged in; that there was a change in strategies to be more involved
in proactive workgroups; she stated that the Legislative Update was previously
presented to the Community Advisory Commission and the Legislative & Public Affairs
Committee; and the deadline for the Senate to move items is September 15, 2017. Staff
will review the Legislative Platform this winter so the Board has clear direction moving
forward and where the District stands in regard to new legislation.
Director Morales commended staff of moving forward on the Legislative Platform.
Vice Chairman Carrillo commended the Public Affairs/Conservation Manager and staff
for their hard work and information on new legislation.
Chairman Coats thanked the Public Affairs/Conservation Manager and the District’s
Advocacy group for actively monitoring new legislative bills.
Information only.
ADOPTION OF THE UPDATED FACILITY USE FEES FOR THE HEADQUARTERS FACILITY
USE POLICY
The Public Affairs/Conservation Manager reviewed revisions made to the Facility Use
Policy; she stated that the draft policy revisions were already taken to the Community
Advisory Commission and the Legislative & Public Affairs Committee; that both groups
had valuable input that was incorporated into the policy revisions; she stated that the
Facility Use program has been very successful, but has significantly increased wear and
tear on the facilities and use of staff; that this led staff to look at the major goal of the
program and to determine revisions that were necessary. The Public Affairs and
Conservation Manager reviewed major revisions to the policy: if a time slot was
available, that it wasn’t necessarily available for rent; the changes made to the criteria
of those who may rent the facility; and changes to the alcohol policy. She stated that
the revisions would take effect immediately, except for those with current rental
agreements.
Director Shelton stated that she always receives compliments from those that have
attended an event at the District.
Director Smith asked for clarification regarding the facility rental only being open to
residents/customers of the District.
Director Morales stated that he and Vice Chairman Carrillo reviewed the policy and
revisions line-by-line; and supported changes made by staff regarding the requirements
to rent the facility.
Vice Chairman Carrillo reiterated Director Morales’ comments and stated that he is
happy with the policy revisions recommended by staff.
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Chairman Coats had questions regarding the transition of the policy to the newly revised
policy and expressed that he is glad that it was reevaluated.
M/S/C (Morales-Carrillo) that the Board approve the updates to the Facility Use
Fees and Policy.
BOARD MEETING CANCELLATIONS
M/S/C (Morales-Smith) that the Board approve the cancellation of the November
22, 2017 and the December 27, 2017 regularly scheduled board meetings.
BOARD OF DIRECTORS’ REPORTS
Director Morales reported on the following: On September 1 he met with the East Valley
Board of Realtors where he presented a legislative update on the Sterling Natural
Resource Center and the legislative arena, and he attended the Legislative & Public
Outreach Committee meeting; on September 5 he attended the City of San Bernardino
Board of Water Commissioners meeting where he noted that in closed session, the
general manager’s leave of absence was on the agenda; and on September 7 he met
with the General Manager/CEO to discuss District business.
Director Shelton reported that on September 12 she attended the memorial bench
dedication at District headquarters.
Director Smith reported that on the following: on August 31 he attended a board
communication training where social media was the topic; on September 13 he attended
the San Bernardino Valley Water Conservation Board meeting where they voted on the
slate for the ACWA Region 9 ballot.
Vice Chairman Carrillo reported on the following: on August 31 he attended a board
communication training where social media was the topic; on September 1 he attended
the Legislative & Public Outreach Committee meeting; and on September 7 he reviewed
the agenda with the Chairman and General Manager/CEO.
Chairman Coats reported on the following: on September 5 he attended the San
Bernardino Valley Municipal Water District board meeting where they opposed the MOU
for the maintenance of the demonstration garden at California State University San
Bernardino (CSUSB).
Information only.
GENERAL MANAGER/CEO REPORT
The General Manager/CEO reported on the following: that September is National
Preparedness month and next month, the District will be participating in the Great
Shakeout; the District reached out to a number of organizations and agencies offering
assistance after Hurricane Harvey, though no mutual aid was requested, it served as a
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great exercise in the District’s responsibilities for future disasters; as part of the Board’s
Goals and Objectives, a communication training session was held on August 31. The
General Manager/CEO announced that on September 18 he will be meeting with staff to
discuss the District’s Strategic Plan; and next week he will be attending WEFTEC
conference with Vice Chairman Carrillo, Director Smith and the Director of Engineering
and Operations.
The General Manager/CEO informed the Board of upcoming events:
• September 22 @ 9:00 a.m. – 2X2 Recycled Water Ad-Hoc Committee meeting is
canceled
• September 25 @ 2:30 p.m. – Engineering & Operations Committee meeting
• September 26 @ 3:30 p.m. – Finance & Human Resources Committee meeting
Information only.
LEGAL COUNSEL REPORT
Legal Counsel provided brief information regarding a tax issue that was brought to the
California Supreme Court: Cannabis Coalition Vs. City of Upland; he provided insight on
how the implications of the court ruling on Prop 218 may affect East Valley Water
District.
BOARD OF DIRECTORS’ COMMENTS
Director Morales expressed that he was moved by the memorial bench dedication. He
announced that he attended the City of Highland Economic Update where he addressed
questions regarding the District’s availability to serve new development.
Chairman Coats wished Director Morales a happy birthday and announced that Doug
Headrick will be at the next regular board meeting to provide a presentation on the
California WaterFix; and he adjourned the meeting with the following statement: “Help
ensure your water future by supporting the Sterling Natural Resource Center”.
Information only.
ADJOURN
The meeting adjourned at 6:34 p.m.
___________________________
Ronald L. Coats, Board President
__________________________
John Mura, Secretary
R ec o mmend ed b y:R espec tfully s ubmitted:
John Mura
G eneral Manager/C EO
Jus tine Hendric ks en
District C lerk
B OAR D AG E N D A S TAF F R E P O RT
Agenda Item #5.b.
Meeting Date: O c tob er 11, 2017
C ons ent Item
To: G overning Board Memb ers
From: G eneral Manager/C E O
S ubject: Direc tors ' fees and exp ens es for S eptember 2017
R E COMME N D AT IO N:
Ap p ro ve the G o verning Board Members’ fees and exp ens es for S eptember 2017.
B AC KG R O UN D / AN ALYS IS :
T he Board has instruc ted staff to lis t all d irec tor fees and exp ens es as a s ep arate agenda item to s how full fisc al
transparenc y. O nly after Board review and ap p ro val will the c o mpens ation and exp ens es be p aid.
AGE N C Y ID E ALS AN D E N DE AVO R S:
Ideals and End eavo r I I - Maintain An Environment C o mmitted To Elevated P ublic S ervic e
(E) – P rac tic e trans p arent & ac countable fisc al management
R E VIE W B Y O T HE R S :
T his agend a items has been reviewed b y the Administration d ep artment.
F IS CAL IMPAC T
T he fis c al imp ac t as s o c iated with this agenda item is $6,650.00 whic h is inc luded in the c urrent fisc al b udget.
ATTAC H M E NTS:
Description Type
Directo rs Fees and Expenses Septembe r 201 7 Backup Material
B OAR D AG E N D A S TAF F R E P O RT
Agenda Item #6.
Meeting Date: O c tob er 11, 2017
Dis c ussion Item
To: G overning Board Memb ers
From: G eneral Manager/C E O
S ubject: R eview and Ap p rove Draft C o mprehens ive Annual F inanc ial R ep o rt for Year Ended June 30, 2017
R E COMME N D AT IO N:
S taff recommends that the Board o f Direc tors review and approve the attached C omp rehensive Annual
F inancial R eport (C AF R ) and aud it reports.
B AC KG R O UN D / AN ALYS IS :
Attac hed is the Eas t Valley Water Dis tric t C omp rehensive Annual F inanc ial R ep o rt (C AF R ) fo r the fis cal year
end ed June 30, 2017. T he C AF R inc lud es the Distric t annual financ ial statements with acc o mpanying note
d isc lo s ures , Management Dis cussion and Analys is , and s tatistical info rmatio n compiled by s taff. T he C AF R is
ac companied by an aud it o pinio n letter is s ued b y the Dis tric t’s C PA firm C lifto nLars o nAllen LLC (C LA),
whic h cond ucted an aud it in acc o rd ance with auditing s tand ards generally acc epted in the United S tates o f
Americ a and guidelines es tablis hed b y the C alifornia S tate C o ntroller fo r S p ec ial Dis tric ts.
Also in this year ’s C AF R is a c o p y o f the C ertificate of Achievement for Exc ellenc e in F inanc ial R ep orting
rec eived for last year ’s repo rt. T his year ’s rep o rt is in d raft form, b ut will b e finalized up on ac c ep tanc e and
approval b y the Board.
AGE N C Y ID E ALS AN D E N DE AVO R S:
Ideals and End eavo r I I - Maintain An Environment C o mmitted To Elevated P ublic S ervic e
(E) - P rac tic e trans p arent & ac countable fis c al management
R E VIE W B Y O T HE R S :
T his agend a item has been reviewed b y the F inanc e and Human R es o urces S tanding C ommittee.
F IS CAL IMPAC T
R ec o mmend ed b y:R espec tfully s ubmitted:
John Mura
G eneral Manager/C EO
Brian Tomp kins
C hief F inancial O fficer
F IS CAL IMPAC T
T here is no fis cal imp ac t as s oc iated with this agend a item.
ATTAC H M E NTS:
Description Type
Board P resentation P resentation
F Y 201 7-18 Draft CAFR Backup Material
COMPREHENSIVE ANNUAL
FINANCIAL REPORT (CAFR)
October 11, 2017
REPORT HIGHLIGHTS
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•Financial Condition
−$1.4 Million Grant Receivable for Advanced Metering Infrastructure (AMI)
−$3.8 Million Increase in Non -Current Liabilities
−$4.7 Million Increase to Net Position
−$3.1 Million Increase in Water Revenue
−$1.3 Million Increase in Wastewater Revenue
−$2.3 Million Increase Unrestricted Reserves
•Significant Investment in Capital Assets
−Spent $11.9 Million on Asset Acquisition / Construction
−Completed 5 Major CIP Projects
•Continued to Meet Debt Service Coverage Requirements
PRIOR YEAR COMPARISON
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FY 2016-17 FY 2015-16
Operating Revenue $ 37,448,549 $ 33,024,082
Operating Expenses (32,299,587) (32,655,921)
Operating Income 5,148,962 368,161
Non-Operating Revenue 470,560 977,680
Non-Operating Expenses (1,776,684) (1,843,440)
Contributions 2,446,118 732,642
6,288,956 235,043
Special Items (1,615,241)
Increase In Net Position $ 4,673,715 $ 235,043
FINANCIAL CONDITION: WATER SALES
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FY 2016-17 EXPENDITURES
■Employee Services
■Payment to Suppliers
■Debt Service Payments
■Capital Assets
FINANCIAL CONDITION: QUICK RATIO
6
FINANCIAL CONDITION: DAYS CASH ON HAND
7
FINANCIAL CONDITION: UNRESTRICTED RESERVES
8
CAPITAL ASSET CONDITION
9
CAPITAL ASSET CONDITION
10
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DEBT SERVICE COVERAGE
■2010 Refunding Bonds
■2013 Refunding Bonds
■U.S. Bank Lease Purchase
■SBVMWD Loan
■SRF Loans
DEBT SERVICE COVERAGE
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Comprehensive Annual Financial Report
Fiscal Year Ended
June 30, 2017
East Valley Water District
Prepared by: Finance Department
31111 Greenspot Road
Highland, CA 92346
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Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
Table of Contents
Page No.
Introductory Section
Letter of Transmittal .............................................................................................................. 3
Organizational Structure ....................................................................................................... 7
Principal Officials .................................................................................................................. 8
GFOA Certificate .................................................................................................................. 9
Financial Section
Independent Auditor’s Report ......................................................................................... 12-14
Management’s Discussion and Analysis ........................................................................ 15-25
Basic Financial Statements
Statement of Net Position ............................................................................................ 28-29
Statement of Revenues, Expenses, and Changes in Net Position ............................... 30-31
Statement of Cash Flows ............................................................................................ 32-33
Notes to the Basic Financial Statements ..................................................................... 34-60
Required Supplementary Information
Schedule of Proportionate Share of Net Pension Liability ................................................. 62
Schedule of Contributions ................................................................................................ 63
Schedule of Funding Progress for Retirees Health Coverage .......................................... 64
Supplementary Information
History and Organization .................................................................................................. 67
Combining Schedule of Net Position ........................................................................... 68-69
Combining Schedule of Revenues, Expenses, and Changes in Net Position .............. 70-72
Combining Schedule of Cash Flows ............................................................................ 74-75
Refunding Revenue Bonds - Series 2010 ................................................................... 76-77
Refunding Revenue Bonds - Series 2013 ................................................................... 78-79
US Bancorp Installment Purchase Agreement ................................................................. 80
San Bernardino Valley Municipal Water District Loan ....................................................... 81
Department of Water Resources Construction Loan - Contract 00C412 ........................... 83
Department of Water Resources Construction Loan - Contract 10CX110 ................... 84-85
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Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2017
Table of Contents
Page No.
Department of Water Resources Construction Design Loan - Contract 10PX102 ............ 87
Department of Water Resources Construction Loan - Contract 11CX101 ................... 88-89
Statistical Information Section
Changes in Net Position by Component – Last Ten Fiscal Years .................................... 92-93
Operating Revenue by Source – Last Ten Fiscal Years ....................................................... 94
Water Operating Expenses – Last Ten Fiscal Years............................................................. 95
Wastewater Operating Expenses – Last Ten Fiscal Years ................................................... 96
Water Sales and Production – Last Ten Fiscal Years ........................................................... 97
Revenue Rates for Water – Last Ten Fiscal Years .......................................................... 98-99
Revenue Rates for Wastewater – Last Ten Fiscal Years ............................................. 100-101
Active Services by Type – Last Ten Fiscal Years ............................................................... 102
Principal Customers – Current Fiscal Year and Nine Years Ago ........................................ 103
Ratio of Outstanding Debt – Last Ten Fiscal Years ............................................................ 104
Debt Service Coverage – Last Ten Fiscal Years ................................................................ 105
Demographic and Economic Statistics – Last Ten Calendar / Fiscal Years ........................ 106
Full-Time Equivalent Employees by Department – Last Ten Fiscal Years .......................... 107
Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ...... 108
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EAST VALLEY WATER DISTRICT
Letter of Transmittal
Year Ended June 30, 2017
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September 26, 2017
To the Board of Directors and Customers of East Valley Water District,
We are pleased to submit the Comprehensive Annual Financial Report (CAFR) for East Valley Water District for
the year ended June 30, 2017. This report was prepared by District staff in accordance with standards established
by the Governmental Accounting Standards Board.
The District’s management is responsible for the presented data, and the completeness and fairness of the
presentation, including the note disclosures. We believe that the report presented is accurate in all material
respects, and that the financial statements and other information are presented in a manner that enables readers
to gain a full understanding of the District’s financial activities for the year. Readers should also refer to the
Management Discussion and Analysis in the Financial Section of the CAFR for a detailed discussion regarding the
District’s financial condition and results of operations.
The CAFR follows the guidelines recommended by the Government Finance Officers Association (GFOA) of the
United States and Canada. In November 2017, the District will, again, submit the CAFR to this organization for
review and possible recognition for achievement in reporting excellence.
Background
East Valley Water District was formed on January 18, 1954, and since then, has provided retail water service to
customers in an expanding service area which now covers 27.7 square miles. The District directly serves treated
water to approximately 102,208 people in the City of Highland, the eastern portion of the City of San Bernardino ,
the San Manuel Band of Mission Indians, and portions of the County of San Bernardino. In 1964, the District began
providing wastewater collection services to the same service area.
As of June 30, 2017, the District had 22,591 active water connections and 20,290 active wastewater connections.
Water Supply and Reliability
The District’s water supply for the year ended June 30, 2017 includes groundwater (77.4 percent) and surface water
(22.6 percent). Groundwater is pumped from the Bunker Hill Basin, and surface water from the Santa Ana River is
diverted based on rights acquired from the North Fork Water Company. DR
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EAST VALLEY WATER DISTRICT
Letter of Transmittal
Year Ended June 30, 2017
4
Local Economy
The District is located within San Bernardino County in a metropolitan area referred to as the “Inland Empire”. The
District’s population has grown by nearly 38 percent since 2006, but has experienced a low number of new
connections during the national economic downturn. The District’s customer base is substantially residential and
commercial, with no major industrial users. Large consumers remain consistent year to year with the San
Bernardino City Unified School District, Patton State Hospital, City of Highland, and San Manuel Mission Indians
forming the list of top four users.
In 2010, median household income (MHI) in San Bernardino County was $55,845, 8.3 percent lower than the State
of California median of $60,883. The City of Highland, whose resident s comprise approximately 75 percent of the
District’s customer base, had an MHI of $59,549, while the City of San Bernardino, where the remainder of the
District’s customers reside, had an MHI of $39,895 in 2010.
Financial Management
The District manages its resources conservatively in order to deliver safe and reliable services to its customers at
a fair and cost-effective price. It focuses on establishing fair rates, cost containment, long-term planning, maintaining
and upgrading infrastructure, and pursuing alternative source of funding. This approach has allowed the District to
undertake substantial capital improvement projects during tough economic times, while passing a series of modest
rate increases.
The keys to the District’s successful financial management are the District’s Capital Improvement and Financial
Plan (CIP), comprehensive reviews of water and wastewater rates, and the annual budget process. The CIP
provides a comprehensive view of infrastructure investments necessary over a seven year pe riod to ensure that
water resources are adequate, water quality is maintained, and the water and wastewater service needs of current
and future customers are met. The CIP is reviewed annually by the District’s Board of Directors during the budget
77.4%
22.6%
Water Supply Sources
Groundwater
Surface Water
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EAST VALLEY WATER DISTRICT
Letter of Transmittal
Year Ended June 30, 2017
5
process, at which time the highest priority projects are adopted and receive authorization for expenditure along with
the District’s operating budget.
The District’s financial planning also includes the establishment and funding of reserves, and the pursuit of
alternative funding sources, both of which help reduce reliance on rates and rate increases. In recent years the
District has been very successful in pursuing project funding from the State Revolving Fund and FEMA, and have
applied for water and energy efficiency project funding from the Bureau of Reclamation and Edison.
Internal Control
District management is responsible for establishing a system of internal accounting controls designed to provide
reasonable assurances that assets of the District are safeguard ed against losses from unauthorized use or
disposition, and theft. The District’s internal controls also ensure the proper recording of financial transactions, and
the preparation of financial statements in accordance with generally accepted accounting principles. The District’s
internal control structure is designed to provide reasonable assurance that these objectives are met. The concept
of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be derived
and 2) the valuation of costs and benefits requires estimates and judgments by management.
Budgetary Control
The District’s Board of Directors annually adopts a balanced operating and capital budget prior to the new fiscal
year. The budget authorizes expenditures and provides a basis for accountability over the District’s enterprise
operations and capital projects. Each quarter, management provides the Board with a quarterly budget review to
allow Board assessment of staff’s progress in meeting goals and obj ectives, and budget adjustments, if necessary,
are requested at the mid-year budget review in January.
Debt Administration
The District utilizes proceeds from long-term debt, along with reserves and contributions from the operating budget,
to finance major construction projects. Current debt consists of Revenue Bonds and loans from the State Revolving
Fund.
The District received a credit rating of AA- from Standard and Poor’s and Fitch when the Revenue Bonds were
issued in June 2013. This rating was affirmed by Fitch as the result of a review conducted in April 2017.
Investment Policy
The Board of Directors annually adopts an investment policy that conforms to California State Law, District
ordinances and resolutions, and the prudent person standard. The objectives of the policy are safety, liquidity, and
yield. District funds are normally invested in the State Treasurer’s Local Agency Investment Fund (LAIF), and
Federal government Treasury notes or agency obligations.
Audit and Financial Reporting
State law requires the District to obtain an annual audit of its financial statements by an independent Certified Public
Accountant. This year, the District’s Financial statements were audited by CliftonLarsonAllen LLP from Glendora,
California. Their audit opinion is included in the Basic Financial Statements section of this report.
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the District for its Comprehensive Annual Financial Report for
the fiscal year ended June 30, 2017. This was the third year that the District has achieved this prestigious award.
In order to be awarded a Certificate of Achievement, a governmental entity must publish an easily readable and
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Letter of Transmittal
Year Ended June 30, 2017
6
efficiently organized Comprehensive Annual Financial Report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive
Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgements
Preparation of this report was accomplished by the combined efforts of District staff. We appreciate the dedication
and professionalism that our staff bring to the District. We would also like to thank the members of the Board of
Directors for their continued support in the planning and implementation of the financial affairs of the District.
Respectfully submitted,
John Mura
General Manager
Brian W. Tompkins
Chief Financial Officer
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Organizational Structure
Year Ended June 30, 2017
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Principal Officials
Year Ended June 30, 2017
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Vision
Enhance and preserve the quality of life for our community through innovative leadership and
world class public service.
Core Values
Leadership: Motivating a group of people to act towards achieving a common goal or
destination.
Partnership: Developing relationships between a wide range of groups and individuals
through collaboration and shared responsibility.
Stewardship: Embracing the responsibility of enhancing and protecting resources
considered worth caring for and preserving.
East Valley Water District
Governing Board Members as of June 30, 2017
Name Title
Elected /
Appointed Current Term
Ronald Coats Chairman of the Board Elected 2013 - 2018
Chris Carrillo Vice-Chairman of the Board Elected 2015 - 2020
David Smith Governing Board Member Elected 2015 - 2020
James Morales, Jr.Governing Board Member Elected 2013 - 2018
Nanette Shelton Governing Board Member Appointed 2015 - 2018
Contact Information
East Valley Water District
John Mura, General Manager/CEO
31111 Greenspot Road
Highland, CA 92346
(909) 889-9501
www.eastvalley.org
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GFOA Certificate
Year Ended June 30, 2016
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Independent Auditor’s Report
Year Ended June 30, 2017
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EAST VALLEY WATER DISTRICT
Independent Auditor’s Report
Year Ended June 30, 2017
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EAST VALLEY WATER DISTRICT
Independent Auditor’s Report
Year Ended June 30, 2017
14
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2017
15
The District
East Valley Water District (District) is a California Special District established under section 30000 et seq. of the
California Water Code. The District is engaged in pumping, treating, and distributing water to its customers, as well
as maintaining a collection system for residential and commercial wastewater that is delivered for treatment at a
plant owned by the City of San Bernardino Water Department.
The District serves the City of Highland, and portions of the City of San Bernardino and the County of San
Bernardino in California.
The Basic Financial Statements
East Valley Water District is a special-purpose government engaged in activities that are supported exclusively by
user charges. As such, the District’s financial statements are presented in the format prescribed for p roprietary
funds by the Governmental Accounting Standards Board.
The following financial statements for the year ended June 30, 2017 (2016 for comparative purposes only) consist
of three interrelated statements designed to provide the reader with relevant , understandable data about the
District’s financial condition and operating results. They are the Statement of Net Position, the Statement of
Revenue, Expenses, and Changes in Net Position, and the Statement of Cash Flows.
The Statement of Net Position presents financial information on the District’s assets, liabilities, and deferred inflow
and outflows of resources, with the difference reported as net position as of the last day of the District’s fiscal year.
Over time, increases or decreases in net position can serve as a useful indicator of whether the financial position
of the East Valley Water District is improving or deteriorating.
The Statement of Revenues, Expenses, and Changes in Net Position presents information showing how the
District’s net position changed during the most recent fiscal year. All changes in net position are reported as soon
as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows.
The Statement of Cash Flows (direct method) conveys to financial statement users how the District managed cash
resources during the year. This statement converts the change in net position presented on the Statement of
Revenues, Expenses, and Changes in Net Position into actual cash provided by or us ed for operations. The
Statement of Cash Flows also details how the District obtains cash through financing and investing activities, and
conversely, how cash is spent for these purposes.
Summary Financial Information and Analysis
Financial Condition
During the year ended June 30, 2017, the District’s total assets increased by $1.8 million to 19.6 million – the net
effect of increases in Current and Restricted assets, and a decrease in Capital assets.
Current assets increased 11% to $19.5 million. This increase is substantially all due to an increase in year-end
Utility Billings receivable, the result of rate adjustments that became effective during 2016 -17, and a grant receivable
of $1.4 million. The grant receivable is related to a $2.0 million ‘Water-Energy Grant’ from the State of California for
the purpose of implementing an Automated Metering Infrastructure pilot program designed to detect and prevent
water losses due to leaks on customer property.
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Management’s Discussion and Analysis
Year Ended June 30, 2017
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Restricted Asset balances increased from $5.9 to $6.4 million with the receipt of capacity fees from small
development projects occurring within the District. Larger development projects representing more than 4,000
homes are temporarily stalled by community concerns about issues such as traffic congesti on. The nature of the
Restricted Cash balances at June 30, 2017 are further dietailed in Note 3 to the financial statements.
East Valley Water District’s Net Position
(in millions)
2017 2016
Current Assets 19.5$ 17.6$
Restricted Assets 6.4 5.9
Other Assets 0.4 0.4
Capital Assets - Net 159.2 155.5
Total Assets 185.5 179.4
Total Deferred Outflow of Resources 3.2 1.4
Current Liabilities 8.0 8.2
Non-Current Liabilities 62.5 58.7
Total Liabilities 70.5 66.9
Total Deferred Inflows of Resources 0.5 0.9
Net Position
Net Investment in Capital Assets 105.1 103.2
Restricted 2.8 2.3
Unrestricted 9.8 7.5
Total Net Position 117.7$ 113.0$
Capital Assets increased by $3.7 million despite recognition during the fiscal year of $6.5 million in charges for
depreciation. The completion of a $2 million Automated Metering pilot program, completion of a state water project
turnout and hydroelectric generation facility at the District’s Plant 134, and continued planning efforts for a recycled
water facility known as the Sterling Natural Resource Center (SNRC) represent a majority of capital asset
investments during fiscal year 2016-17.
Total Deferred Outflow of Resources increased $1.8 million reflecting pension contributions made subsequent to
the measurement date (June 30, 2016) and net differences between projected and actual earnings on pension plan
investments.
While current assets have increased by $1.9 million, current liabilities decreased by $0.2 million. As a result, the
District’s current ratio has improved from 2.1:1 to 2.4:1, and the liquidity ratio from 1.5:1 at June 30, 2016, to 1.6:1
at June 30, 2017.
Non-Current Liabilities increased by $3.8 million, the net effect of:
• $(2.5) million in principal payments on outstanding debt
• $4.3 million loan from the San Bernardino Valley Municipal Water District for the state water project turnout
• $2.0 million increase in Net Pension Obligations calculated in accordance with Governmental Accounting
Standards Board (GASB) statement number 68 Accou nting and Financial Reporting for Pensions
Long term debt and the accounting for District pensions are further explained in financial statement Notes 5 and 8,
respectively.
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Management’s Discussion and Analysis
Year Ended June 30, 2017
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The District’s net position totaled $117.7 million at the end of fiscal year 2017, a $4.7 million increase compared to
the end of the previous fiscal year. Of the $117.7 million Net Position balance, $105.1 million is categorized as
Investment in Capital Assets, $2.8 million is Restricted for Capital Expansion Projects, and $9.8 million is
Unrestricted. The calculation of Net Position Invested in Capital Assets is included in Note 7 of the accompanying
financial statements. Restricted Net Position consists of developer capacity fees, and Unrestricted Net Position is
the amount available for encumbrance at June 30, 2017.
Looking at longer term results, the District’s total Net Position has increased $9.1 million, and $25.9 million over five
and ten year periods, respectively
Activities and Changes in Net Position
Water Operations
East Valley Water District, and the rest of California, entered the 2016-17 fiscal year in a ‘state of emergency’
declared during five years of severe drought. Extraordinarily heavy rain and snowfall during the 2017 winter months
caused the California Governor to declare an end to the drought on April 7, 2017, and to relax drought restrictions
and emergency conservation mandates. The changing circumstances effected both water revenues and expenses.
Water sales for 2016-17 increased 22% to $14,556,339, the resu lt of both rate adjustments at the beginning of the
fiscal year, and an increase in customer consumption. Rate adjustments were phase two of a three -part increase
adopted in March of 2015 and increased the District tier rates by approximately 12%. With res pect to consumption,
the District produced 17,922 acre feet of water and sold 16,223 acre feet to consumers during the year The amount
of water sold represents an 8.1% increase over the prior year. The difference between water produced and water
sold of 1,699 acre feet (9.5%) was the result of District flushing programs, water use at District facilities, and system
leaks. Water System, or Meter Charge revenue, increased 11% to $8,944,652, also due to rate adjustments adopted
in 2015. Increases scheduled at the beginning of fiscal year 2016-17 were 10% for all meter sizes.
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Water Department Operating
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Revenue
Expenses
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Management’s Discussion and Analysis
Year Ended June 30, 2017
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Though the drought ended in April 2017, the impacts on water supplies to Southern California agencies continued
past April. State Water Project reservoirs that hold water imported from Northern California had been drawn down
to low levels, allowing water temperatures to rise and foster the growth of organic materials. The District’s surface
water treatment, which is used to treat State Project water, could not sufficiently treat the heavy concentration of
organics, so water production shifted more toward groundwater at the end of the fiscal year. The quality of imported
water created problems for most water agencies, so while State Water Project contractors began working to address
the organic material in state reservoirs, the District and other agencies began research on treatment processes that
can handle high concentrations of organics which may result in future capital projects.
The District’s shift to groundwater production offset some of the energy savings the District was realizing as a result
energy conservation measures implemented in 2014, but did not result in a large spike in power costs. Some
significant variances that did occur during the year include:
• Source of supply: costs increased by $960 thousand (39.3%) as the District participated in a regional effort
to buy imported water from Northern California, available after the heavy winter rainfall, to recharge the
local groundwater basin. Higher groundwater levels resulting from the recharge not only helps ensure the
health of the basin but makes pumping groundwater more cost effective.
• Pumping: power costs for boosting water to higher pressure zones decreased by 10%, however, contract
services increased by $110 thousand for two reasons, 1) implementation of a preventative maintenance
program whereby a designated number of booster pumps are pulled and inspected each year, and 2)
building and landscape maintenance costs previously charged as an administrative expense were charged
to this cost center in 2015-16. This caused pumping costs to increase 15% overall.
• Water Treatment: costs decreased 5% during the 2016-17 as a result of the District transferring water
production from surface water to groundwater. Lower power, chemical, and other materials costs all
contributed to the decrease in treatment costs overall.
• Transmission & Distribution (T&D): – the addition of two staff to repair crews and increased medical
insurance costs resulted in a $107 thousand increase in labor & benefits costs, but this increase was offset
by a decrease in contract services of $207 thousand. Overall T&D costs decreased by 5% to $2.2 million.
Wastewater Operations
Wastewater operating revenues consist of System Charges and Treatment Charges. System Charge rates are set
by the District to cover the cost of maintaining the District’s wastewater collection system and to cover a portion of
administrative and general expenses.
Treatment Charge rates are established by the City of San Bernardino Water Department, which treats the
wastewater generated by the District’s customers – the District currently has no wastewater treatment facilities. All
wastewater treatment revenues collected by the District are directly offset by remittance payments to the City of
San Bernardino Water Department, therefore, wastewater treatment has no net effect on the District’s operating
results.
During the 2016-17 fiscal year wastewater operating revenues increased 11.5%, from $11.6 to $12.9 million.
System charges, assessed by the District for maintenance of wastewater collection mains, increased by 9.7% as a
result of higher water usage by commercial customers. Commercial cus tomers, which include multi-family
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Management’s Discussion and Analysis
Year Ended June 30, 2017
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residential complexes larger than 4 units, are billed for wastewater charges based on water consumption. Therefore,
the 8.1% increase in water consumption discussed above, had a related impact on wastewater revenue. A com plete
list of wastewater rates in effect for the last 10 years is included in the statistical section at the end of this document.
Wastewater treatment revenues, and costs, both rose 11.3% to $8.1 million. The primary reason for the increase
was rate adjustments implemented by the City of San Bernardino. City treatment rates were increased in phases
over three years, with the second phase becoming effective during the 2016 -17 fiscal year. In addition, increased
water usage by commercial customers raised treatment along with system chare revenue, as discussed above.
Wastewater collection line maintenance costs increased by 4% compared to the prior year. The increase is the net
effect of increased staffing costs, and a decrease in contract services as the District had to make fewer spot repairs
to collection mains. The need for spot repairs is identified while District staff is video logging, and making conditional
assessments of, the Districts mains. When a breach in the integrity of a main is identified, a pre-qualified contractor
is dispatched to make a repair in order to mitigate the risk of wastewater system backup and overflows. The District
has had no reportable wastewater overflows since beginning the video inspection program in 2006.
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Wastewater Department Operating
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Revenue
Expenses
Costs related to Customer Accounts (Water & Wastewater Operations) increased $32 thousand, or 2%, due
primarily increased labor and benefit costs. Labor increases were related to step increases for newer employees
who have not reached the top of their salary range, and benefits cost increases are District participation in employee
health insurance premiums, which rose approximately 10% at the beginning of 2017.
Administrative and general costs for the District decreased by 16.3% to $8.3 million. The primary reason for the
decrease was the contraction of the District’s aggressive conservation rebate program as heavy rainfall signaled
the end of California’s historic drought – direct customer rebates for conservation measures were $287 thousand
in 2016-17 compared to $1.65 million in the previous year. The District will cont inue to promote conservation, but
will focus funding on Capital Improvement Projects to eliminate system water losses.
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Management’s Discussion and Analysis
Year Ended June 30, 2017
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Other significant changes in general and administrative costs included:
1) Salaries and Benefits decreased 2.3% to $5.36 million as the As sistant General Manager position was
vacated and not filled during 2016-17.
2) Legal Services increased 24% as the District commits resources to dissolving old mutual water companies
whose membership has connected to the District’s water distribution system, and to defend against a retiree
benefits lawsuit.
Depreciation expense recorded by the District’s water department decreased from $6.3 million to $5.7 million. Prior
year expense included approximately $600 thousand in accelerated depreciation on certain assets whose
remaining useful lives had been shortened to align with District experience and standards published by the
California State Controller. Affected assets included pumps, valves and other mechanical components capitalized
as part of a larger utility plant assets. Wastewater department depreciation expense remained consistent at
approximately $800 thousand.
Non-Operating Activities
The District’s non-operating revenue of $471 thousand includes investment earnings of $69 thousand, discussed
below, and $402 thousand in other income. Other income includes quarterly remittances from energy purveyors,
for participation in demand response programs, whereby the District takes designated plants off -line when power
grids are approaching capacity.
Non-operating expenses includes $1.84 million in interest on District long -term obligations.
East Valley Water District Changes in Net Position
(in millions)
2017 2016
Water Revenues 24.5$ 21.4$
Water Operating Expenses (20.5) (21.5)
Wastewater Services 12.9 11.6
Wastewater Operating Expenses (11.8) (11.2)
Non-Operating Revenues 0.5 1.0
Non-Operating Expenses (1.8) (1.8)
Income Before Contributions & Special Item 3.8 (0.5)
Developer Contributions 0.5 0.6
Grant Funds Contributed 2.0 0.1
Special Item - Abandon Projects (1.6) -
Change in Net Position 4.7 0.2
Beginning Net Position 113.0 112.8
Ending Net Position 117.7$ 113.0$
Investment earnings decreased 53% compared to the prior year due to a drop in the balance of inves tible funds,
and federal funds interest rate hikes which caused the District to record unrealized losses of $66 thousand on
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Management’s Discussion and Analysis
Year Ended June 30, 2017
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investments in securities held at year end – the District typically holds investments to maturity. The decrease was
mitigated by earnings on funds deposited with the California Local Agency Investment Fund, which raised the
interest rate paid on deposits by 37 basis points to .92% during fiscal year 2017.
Capital Contributions and Special Item
Contributions received during 2016-17 included $473 thousand in developer capacity fees, and $1.97 million in
grant reimbursements for phase 1 of the District’s Automated Metering Infrastructure implementation. The District
has also recorded a one-time charge of $1.6 million for site-specific costs related to a project that was ultimately
built at a different location. This item is explained further in Note 13 to the financial statements.
Components of Net Position
The District is required to present its net position in three categories: Net In vestment in Capital Assets, Restricted,
and Unrestricted.
Net Investment in Capital Assets
The components of Net Investment in Capital Assets are presented in Note 7 to the accompanying financial
statements. The balance at June 30, 2017 is $105.1 million, an increase of $1.8 million compared to June 30, 2016.
The increase resulted from the acquisition or construction of capital assets for $9.2 million, offset by increases in
outstanding debt of $2.2 million, and a net increase in accumulated depreciation of $5.2 million.
Restricted
Restricted Net Position increased by $571 thousand during the year ended June 30, 2017. This increase includes
$473 thousand in capacity fees collected from developers , and restricted assessments collected from North Fork
Water Company shareholders which are restricted for future capital improvement projects . By law capacity fees are
restricted for use on plant expansion capital projects, or debt service on such projects . Further, under the District’s
Designated Funds Policy, use of restricted funds for a certain capital project must be approved by the Board of
Directors.
Unrestricted
Unrestricted Net Position is the balance after amounts to be classified as Invested in Capital Assets or Restricted
have been determined. Unrestricted Net Position increased $2.3 million to $9.8 million in 2016 -17.
Capital Assets
The District spent approximately $11.9 million for expansion or replacement of property, plant, and equipment during
2016-17. These amounts are reflected in Utility Plant, or as additions to Construction in Progress, in the
accompanying financial statements.
Placed in Service
During the 2016-17 fiscal year, District staff, consultants, and contractors completed work on the following:
• Installation of approximately 6,900 automated, remote-read meters and supporting data collectors
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• Completion of booster and getaway pipeline capacity upgrades at the District’s surface water treatment
plant to efficiently distribute a higher volume of treated water from the recently expanded plant
• Replacement of 2,000 linear feet of 50-year-old 8’ main pipeline on Pumalo Street
• Rehabilitation of 8 deteriorated sewer manholes
• Replacement of 810 linear feet of wastewater main pipeline
Construction in Progress (CIP)
Construction in progress increased $5.3 million to $16.3 million (see note 4) between June 30, 2016 and June 30,
2017. With approximately 25 jobs in progress, additions to CIP totaled $10.8 million, while $5.5 million was
capitalized and transferred to utility plant in service.
Utility Plant in Service – June 30th
(in millions)
Department 2017 2016
Water
Source of Supply 16.6$ 16.5$
Pumping 14.4 13.1
Transmission & Distribution 98.4 95.0
Treatment 25.0 25.0
Wastewater
Collection Lines 27.0 26.9
General
Buildings & Improvements 17.4 17.8
Equipment 9.2 8.1
Total 208.0$ 202.4$
Of the $16.3 million remaining in CIP at June 30, 2017, 85% is related to two projects, including:
1. Conceptual design, environmental, legal and financing package costs related to the Sterling Natural
Resource Center water recycling facility. The facility will capture, treat, and recycle all of the wastewater
flows generated by District customers. Recycled water produced by the plant would be used to recharge
the Bunker Hill Basin from which the District produces groundwater.
Preliminary concepts for the Sterling Natural Resource Center include a first phase with a capacity of 6
million gallons per day (mgd), expandable to 10 mgd in a second phase giving the District the capability to
provide treatment services to significant housing developments being planned within the District’s service
area. The project will also include ancillary pipelines a nd lift stations to deliver wastewater to the plant, and
recycled water pipelines to deliver the treated water to recharge basins.
The District has partnered with the San Bernardino Valley Municipal Water District (Valley District) on the
Project, by entering into an Agreement for the Construction and Operation of Groundwater Replenishment
Facilities. Under terms of the agreement, Valley District will act as lead agency for construction and
operation of the Sterling Natural Resource Center, while East Valley Water District will retain ownership of
the project and the recycled water produced, and will finance the full cost of the project. A financing
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Year Ended June 30, 2017
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application package has been submitted to the State of California Department of Water Resources in order
to utilize grants and/or low interest loans to fund this regionally significant water recycling project.
2. A collaborative effort with the San Bernardino Valley Municipal Water District (Muni) on the construction of
a new state water project turnout at the District’s surface water treatment plant (Plant 134). The turnout will
allow the District to take delivery of more wholesale water from Muni at their Tier 1 water rate, currently
$125 per acre foot. The project also includes hydro-electric generation facilities which will generate power
for the operation of the treatment plant. The project will be completed in fiscal year 2017-18.
Future Capital Improvements - Water
The District’s ability to meet water quality requirements, promote water conservation, and increase efficiencies in
conducting District business are the driving forces by which District management develops long term capital plans.
To meet these objectives, the District’s 5-year Capital Improvement Plan includes the following projects:
• Phases 2 through 5 of implementation of an Automated Metering system that displays water usage on an
hourly basis, and sends out alerts when constant flow through a meter for 24 hours indicates a probable
leak
• Design and construction of additional storage tanks to allow pumping during hours of off-peak demand for
power and to enhance water availability during peak water use and for fire suppression
• Replacement of aging water distribution pipelines that require frequent repair and are suspected of causing
system water losses.
Future Capital Improvements - Wastewater
The District maintains a list of recommended wastewater main replacements / rehabilitations based on assessments
of pipeline condition noted during video logging of the collections system. Pipelines assessed at the highest risk of
structural failure are prioritized on the District’s 5-year Capital Improvement Plan (CIP). The District will also update
its Wastewater Collection System Master Plan in fiscal year 2017 -18 in order to identify wastewater pipelines that
are susceptible to surcharging during heavy rains. Undersized pipelines can impede new development and will be
included in discussions with developers as necessary.
Long Term Debt / Credit
The District’s long-term debt consists of Revenue Bonds issued through the East Valley Water District Financi ng
Authority (Authority), a blended component unit, design and construction loans from the California Department of
Water Resources (DWR), a capital lease purchase with US Bank for construction or installation of energy
conservation measures (ECM), and a loan from the San Bernardino Valley Municipal Water District (SBVMWD).
Outstanding balances as of June 30, 2017 were as follows:
2010 Refunding Bonds 26,150,000$
2013 Refunding Bonds 12,085,000
SBVMWD Loan 4,367,927
AVAD Construction 91,288
EFAD Construction 338,418
Plant 134 Construction 6,535,166
Plant 150 Design 30,000
U.S. Bank Lease Purchase 2,910,551$
Total 52,508,350
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Year Ended June 30, 2017
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As explained in Note 5 to the accompanying financial statements, proceeds from the 2010 and 2013 revenue bonds
were used to retire debt previously issued by the District (2010 bonds only) and to construct water and wast ewater
capital projects.
DWR loans for the Arroyo Verde and Eastwood Farms water company consolidation projects are ultimately the
obligation of property owners within Assessment Districts that replaced these water companies that were previously
operating independently within the District’s service area. Semi- annual loan payments are paid from assessments
on property within the assessment districts.
Other DWR loans include $6,535,168, payable over 28 years at 0% interest, for upgrade of the District’s Plant 134,
and $30,000, payable over the next 2 years at 0%, used to help pay for the design of a new treatment plant in the
District’s lower pressure zone.
The Lease Purchase Agreement with US Bank was entered into in November 2013 to finance the constru ction of
energy conservation projects recommended by an Energy and Operational Efficiency Study prepared by Honeywell.
The lease is payable in semi-annual installments over 10 years at an interest rate of 2.38%.
The loan with SBVMWD was entered into in January 2015 to finance the project discussed previously in the
Construction in Progress section. The loan is payable over 10 years at the Local Agency Investment Fund
apportionment rate, currently 0.92%.
All scheduled debt payments for fiscal year 2016-17 were paid timely.
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2013 Bonds
2010 Bonds
SBVMWD Loan
Inst Purchase
DWR Loans
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Standard & Poor’s and Fitch rated the EVWDFA 2013 Revenue Bonds at the time of issuance. Both agencies gave
the bonds a rating of AA-. Fitch affirmed their rating of AA- in April 2017 after having conducted an agency specific,
review. Dun & Bradstreet, based on audited financial statements and creditor input, also rates the District. The
rating given by D&B is currently 5A1 accompanied by a financial condition assessment of ‘strong’, which is no
change from previous years.
Rate Increases
In March 2015, the District adopted a new Water Budget based rate structure, moving from a uniform rate charged
for every unit (hundred cubic feet or 748 gallons) of water used, to a tiered rate structure in which consumers pay
increasingly higher rates as they use more water during a billing peri od. The District adopted 3 rate tiers, each
supported by the increased cost of supplying water as consumer demands on the water distribution system
increase.
The new rate structure included scheduled rate adjustments to occur on June 1, 2015, and on July 1 of both years
2016 and 2017.
In addition, the City of San Bernardino adopted rate increases for wastewater treatment, to be implemented in three
phases in 2015, 2016, and 2017. As the District currently relies on the City to treat wastewater generated b y District
customers, it is obliged to adopt the City’s rate increases. The District has implemented the first two phases of the
new wastewater rates utilizing the provisions of California AB 2567, which allows the District to treat the increases
as a pass-through of costs it has no control over. The final phase, effective July 1, 2017 was adopted by the District
at a public hearing conducted under the provisions established by California Proposition 218.
Additional information about the District’s Water Budget based rate structure can be found on the District’s website
at www.eastvalley.org.
Contacting the District’s Financial Management
This financial report is designed to give our customers / ratepayers, credi tors, and investors a general overview of
the District’s finances, and to demonstrate the District’s accountability for money it receives, and stewardship over
facilities it maintains.
If you have questions about this report, or need additional information, contact the District’s Finance Department at
31111 Greenspot Road, Highland, California 92346, or call (909) 381 -6463.
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Statement of Net Position
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For Comparative
Purposes Only
2017 2016
ASSETS
Current Assets:
Cash and Cash Equivalents 7,556,013$ 7,844,650$
Investments 4,995,176 4,970,168
Accounts Receivable, Net 4,519,062 3,565,745
Interest Receivable 37,233 27,341
Other Receivables 375,893 589,619
Due from Other Governments 1,401,449 16,145
Inventory 326,023 252,962
Prepaid Expenses 297,408 291,514
Total Current Assets 19,508,257 17,558,144
Non-Current Assets:
Restricted Cash and Cash Equivalents 6,474,787 5,900,620
Assessments Receivable 386,243 413,633
Capital Assets not being Depreciated 27,944,625 24,276,764
Capital Assets, Net (Note 4)131,271,911 131,257,709
Total Non-Current Assets 166,077,566 161,848,726
Total Assets 185,585,823 179,406,870
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 138,482 156,417
Deferred Outflows - Pensions 3,044,585 1,249,997
Total Deferred Outflows Of Resources 3,183,067 1,406,414
Total Assets and Deferred Outflows
of Resources 188,768,890$ 180,813,284$
(Continued)
The accompanying notes are an integral part of this statement.
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Statement of Net Position - Continued
June 30, 2017
29
For Comparative
Purposes Only
2017 2016
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Expenses 2,461,885$ 2,920,380$
Accrued Payroll and Benefits 362,999 606,197
Customer Service Deposits 1,670,446 1,630,380
Construction Advances and Retentions 119,250 109,500
Accrued Interest Payable 469,463 485,974
Current Portion of Compensated Absences 323,638 352,282
Current Portion of Long-Term Debt 2,632,902 2,141,422
Total Current Liabilities 8,040,583 8,246,135
Non-Current Liabilities:
Compensated Absences, Less Current Portion 398,275 417,682
Net Pension Liability 10,024,712 7,928,173
Long-Term Debt, Less Current Portion 52,062,321 50,327,296
Total Non-Current Liabilities 62,485,308 58,673,151
Total Liabilities 70,525,891 66,919,286
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Pensions 519,364 844,078
Total Liabilities and Deferred
Inflows Of Resources 71,045,255 67,763,364
NET POSITION
Net Investment in Capital Assets 105,059,796 103,222,172
Restricted for:
Future Capital Expansion Projects 2,847,924 2,276,695
Unrestricted 9,815,915 7,551,053
Total Net Position 117,723,635$ 113,049,920$
The accompanying notes are an integral part of this statement.
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Statement of Revenues, Expenses, and Changes in Net Position
Year Ended June 30, 2017
30
For Comparative
Purposes Only
2017 2016
OPERATING REVENUES
Water Sales 14,556,339$ 11,927,523$
Wastewater Treatment Charges 8,128,030 7,165,655
System Charges 13,648,091 12,349,671
Other Charges 1,116,089 1,581,233
Total Operating Revenues 37,448,549 33,024,082
OPERATING EXPENSES
Water Department:
Source of Supply 3,401,062 2,442,061
Pumping 646,940 696,432
Treatment 750,052 799,947
Transmission and Distribution 2,222,953 2,327,185
Customer Accounts 1,505,433 1,400,208
Total Water Department 8,526,440 7,665,833
Wastewater Department:
WastewaterTreatment 8,128,030 7,302,389
Wastewater Collection 425,944 407,913
Customer Accounts 372,587 446,249
Total Wastewater Department 8,926,561 8,156,551
Administrative and General 8,329,112 9,689,279
Operating Expenses Before Depreciation 25,782,113 25,511,663
Depreciation 6,517,474 7,144,258
Total Operating Expenses 32,299,587 32,655,921
Operating Income (Loss)5,148,962$ 368,161$
(Continued)
The accompanying notes are an integral part of this statement.
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Statement of Revenues, Expenses, and Changes in Net Position - Continued
Year Ended June 30, 2017
31
For Comparative
Purposes Only
2017 2016
NON-OPERATING REVENUES (EXPENSES)
Investment Income 69,237$ 146,874$
Other Income (Loss)401,323 830,806
Interest Expense (1,776,684) (1,843,440)
Total Non-Operating Revenues (Expenses)(1,306,124) (865,760)
Income Before Contributions and
Special Item 3,842,838 (497,599)
CONTRIBUTIONS
Capacity Charges 473,164 636,717
Contributed Plant - 19,525
Capital Grants 1,972,954 76,400
Total Contributions 2,446,118 732,642
SPECIAL ITEM
Abandoned Project (1,615,241) -
CHANGE IN NET POSITION 4,673,715 235,043
TOTAL NET POSITION, BEGINNING 113,049,920 112,814,877
PRIOR PERIOD ADJUSTMENT - -
TOTAL NET POSITION, ENDING 117,723,635$ 113,049,920$
The accompanying notes are an integral part of this statement.
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Statement of Cashflows
Year Ended June 30, 2017
32
For Comparative
Purposes Only
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 36,545,048$ 32,575,596$
Cash Payments for Employees Services (9,170,392) (8,571,419)
Cash Payments to Suppliers (17,463,184) (15,907,637)
Cash from Other Sources 615,049 381,974
Net Cash Provided (Used) by
Operating Activities 10,526,521 8,478,514
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Grant Funds Received 587,650 1,831,623
Contributed Capital 473,164 636,717
Principal Paid on Capital Debt 2,326,191 (1,960,917)
Interest Paid on Capital Debt (1,874,946) (1,944,230)
Acquisition of Capital Assets (11,814,780) (11,310,545)
Net Cash Used for Capital and
Related Financing Activites (10,302,721) (12,747,352)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received from Investments 126,018 127,336
Acquisition of Investments (3,694,267) (5,058,088)
Proceeds from Sale of Investments 3,602,588 5,274,457
Loan Collections 27,391 20,721
Net Cash Provided (Used) by
Investing Activities 61,730 364,426
Net (Decrease) Increase in Cash
and Cash Equivalents 285,530 (3,904,412)
Cash and Equivalents, Beginning of Year 13,745,270 17,649,682
Cash and Equivalents, End of Year 14,030,800$ 13,745,270$
RECONCILIATION TO STATEMENT OF NET POSITION
Cash and Cash Equivalents 7,556,013$ 7,844,650$
Restricted Cash and Cash Equivalents 6,474,787 5,900,620
Total Cash and Cash Equivalents 14,030,800$ 13,745,270$
(Continued)
The accompanying notes are an integral part of this statement.
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Statements of Cash Flows - Continued
Year Ended June 30, 2017
33
For Comparative
Purposes Only
2017 2016
Reconciliation of Operating Income to Net
Cash Provided by Operating Activities
Operating Income (Loss)5,148,962$ 368,161$
Adjustments to Reconcile Operating
Income to Net Cash Provided by
Operating Activities:
Depreciation 6,517,474 7,144,258
Miscellaneous Income 615,049 830,806
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (953,318) (241,769)
(Increase) Decrease in Other Receivables - (448,832)
(Increase) Decrease in Inventory (73,061) 44,841
(Increase) Decrease in Prepaids (5,895) (206,776)
Decrease in Deferred Outflows of Resrcs (1,794,588) (492,821)
Increase (Decrease) in Accounts Payable (458,495) 959,127
Increase (Decrease) in Accrued Salaries
and Benefits (243,198) 183,497
Increase in Compensated Absences (48,051) 5,300
Decrease in Net Pension Liability 2,096,539 1,312,238
Increase in Deferred Inflows of Resources (324,714) (772,799)
Decrease in Customer Deposits 40,066 (96,906)
Decrease in Developer Deposits 9,750 (109,811)
Total Cash Provided (Used)
by Operating Activities 10,526,520$ 8,478,514$
NON-CASH INVESTING, CAPITAL, AND NONCAPITAL
FINANCING ACTIVITIES:
Contributed Plant -$ (16,599)$
Fair Value Adjustments to Investments (56,183) 19,210
Write off Abandoned Project Costs (1,615,241) -
Capital Assets Contributed by Developers - -
The accompanying notes are an integral part of this statement.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
34
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The East Valley Water District (the District) is a special district formed in 1954, as a result of an election by
local residents who desired water service by a public water agency. Later, as the population increased, a
modern wastewater system was needed to replace the septic tanks used at the time. Citizens voted to give
the District responsibility for that service. The District encompasses an area of approximately 25 square miles
and provides water and wastewater service to the City of Highland, parts of the City of San Bernardino, and
unincorporated parts of the County of San Bernardino, California.
The East Valley Water District Financing Authority (Authority), and the North Fork Water Company (Company)
are component units of the East Valley Water District. A component unit is an entity which is financially
accountable to the primary government, either because the primary government appoints a voting majority of
the component unit's board, or because the component unit will provide a financial benefit or impose a financial
burden on the primary government. The Authority, and Company are blended component units. Only North
Fork Water Company prepares separate financial statements.
The Authority was created in August 2010 by a joint exercise of powers agreement for the purpose of financing
public capital improvements. It is governed by a Board of Directors comprised of the District's Board of
Directors. The Authority issued debt in October 2010 which is secured solely from installment payments under
an installment purchase agreement entered into by the District and the Authority.
The Company was established in February 1885 to deliver water, taken from the Santa Ana River, to its
property owner /shareholders. The Company is governed by a Board of Directors comprised of, and elected
by, Company shareholders. The District has purchased shares of Company stock as they become available
in order to secure rights to the Santa Ana River water and have it delivered to the District's surface water
treatment plant. At June 30, 2017, the District owned 5,904.49 of 7,156 outstanding Company shares.
Due to the number of Company shares owned, the District is able to appoint a majority of the Company’s
governing board and is therefore financially accountable for the Company. In addition management and
staff of the District have complete responsibility for the operations of the Company. As a result, the
Company's financial statements have been included in the accompanying financial statements as a blended
component unit. Copies of the Company's financial statements may be obtained from the District’s Finance
Department at 31111 Greenspot Road, Highland, California 92346. DR
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
35
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
The following condensed combining schedule shows how the District and its component units are blended in the
accompanying financial statements:
Table 1-1
Financing
District NFWC Authority Eliminations Total
Statement of Net Position
Current Assets 19,492,510$ 15,747$ 449,159$ (449,159)$ 19,508,257$
Capital Assets 157,699,521 3,002,897 - (1,485,882) 159,216,536
Other Assets 6,480,169 380,861 38,235,000 (38,235,000) 6,861,030
Deferred Outflows 3,183,067 - - - 3,183,067
Total Assets & Deferred Outflows 186,855,267 3,399,505 38,684,159 (40,170,041) 188,768,890
Current Liabilities 7,990,773 49,810 449,159 (449,159) 8,040,583
Long-Term Liabilities 62,485,308 - 38,235,000 (38,235,000) 62,485,308
Deferred Inflows 519,364 - - - 519,364
Total Liabilities & Deferred Inflows 70,995,445 49,810 38,684,159 (38,684,159) 71,045,255
Net Investment in Capital Assets 103,438,755 3,106,923 - (1,485,882) 105,059,796
Restricted Net Position 2,629,058 218,866 - - 2,847,924
Unrestricted Net Position 9,815,915 - - - 9,815,915
Total Net Position 115,883,728$ 3,325,789$ -$ (1,485,882)$ 117,723,635$
Statement of Changes in Net Position
Sales and Services 36,332,460$ -$ -$ -$ 36,332,460$
Other Operating Revenue 1,116,089 - - - 1,116,089
Operating Expenses (25,625,749) (156,364) - - (25,782,113)
Depreciation (6,462,825) (54,649) - - (6,517,474)
Operating Income 5,359,975 (211,013) - - 5,148,962
Net Non-Operating Revenue
(Expenses)(1,613,832) 307,708 - - (1,306,124)
Capital Contributions 2,446,118 - - - 2,446,118
Special Items (1,615,241) - - - (1,615,241)
Change in Net Position 4,577,020 96,695 - - 4,673,715
Beginning Net Position 109,820,826 1,743,212 - 1,485,882 113,049,920
Ending Net Position 114,397,846$ 1,839,907$ -$ 1,485,882$ 117,723,635$
Statement of Cash Flows
Net Cash from Operating Activities 10,341,729$ 184,792$ -$ -$ 10,526,521$
Net Cash from Capital and Related
Financing Activities (10,271,978) (30,743) 3,178,338 (3,178,338) (10,302,721)
Net Cash from Investing Activities 61,847 (117) (3,178,338) 3,178,338 61,730
Beginning Cash and Equivalents 13,520,252 225,018 - - 13,745,270
Ending Cash & Equivalents 13,651,850$ 378,950$ -$ -$ 14,030,800$
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
36
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation
The accounting and financial reporting treatment is determined by the applicable measurement focus and
basis of accounting. Measurement focus indicates the type of resources being measured su ch as current
financial resources or economic resources. The basis of accounting indicates the timing of transactions or
events for recognition in the financial statements.
The District uses the economic resources measurement focus and the accrual basis o f accounting.
Accordingly, revenues are recognized when they are earned and expenses are recorded when the liability
is incurred.
C) Comparative Data
Prior year data has been included where practical for comparison purposes only. The prior year data does
not represent a complete presentation in accordance with generally accepted accounting principles.
D) Inventory Valuation
Inventories are valued at cost using the average-cost method.
E) Capitalization and Depreciation
Capital assets purchased or constructed by the District are recorded at cost. Donated capital assets received
prior to the implementation of GASB 72 were recorded at fair value on the date of donation. Donated capital
assets received subsequent to the implementation of GASB 72 are recorded at acquisition value as of the
date received. The District has a capitalization threshold of $5,000.
Depreciation is computed using the straight-line method over the estimated useful lives of the various assets.
Water canals, water, and wastewater lines are depreciated over 25 to 50 years; office equipment and vehicles
are depreciated over 5 years.
Water stock and rights contributed to the District are recorded at the same value the District is currently paying
for the purchase of similar stock.
F) Reclassifications
Certain reclassifications have been made to the prior year information to conform to the current year
presentation.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
37
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
G) Restricted Assets
Certain assets of the District are restricted in use by ordinance or debt covenant and accordingly are shown
as restricted assets on the accompanying Statement of Net Position. Unexpended Bond proceeds are set
aside for capital improvements, District deposits into Bond trustee accounts are to be used for debt service,
and utility deposits must be returned to the customers at their request after their account has been paid timely
for 12 consecutive months, or when their account is closed.
H) Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash and cash equivalents have been defined as demand
deposits and highly liquid investments purchased with an original maturity of 3 months or less. The District
invests funds with the Local Agency Investment Fund (LAIF) and Money Market Mutual Funds. Due to the
high liquidity of these investments, these funds are classified as cash equivalents.
I) Investments
The District has adopted the provisions of GASB Statement No. 31, Accounting and Financial Reporting for
Certain Investments and External Pools (GASB 31), which require governmental entities to report certain
investments at fair value in the statement of net position and recognize the corresponding change in the fair
value of investments in the year in which the change occurred.
J) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position includes a separate section for deferred outflows
of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position that applies to f uture periods and so will not be recognized as an outflow of
resources (expense/expenditure) until then. The District has two items which qualify for reporting in this
category; Deferred Charge on Refunding and Deferred Outflows related to Pensions.
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate finanancial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. The District has one item which qualify for reporting in this
category; Deferred Inflows related to Pensions.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
38
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
K) Compensated Absences
The District has a policy whereby an employee can accumulate unused sick leave and vacation. Sick leave
is to be used for extended periods of sickness; however, upon termination or retirement, a portion will be paid
as additional benefits to the employee. At retirement or termination, employees who have accumulated over
ten years of service will be paid between 40 to 70% of their unused sick leave (based upon their balance of
unused sick leave) at their regular payroll rates in effect at the date of termination. Also, employees that obtain
196 unused sick hours can cash out 40 hours at their discretion. The District has provided for these future
costs by accruing a range of the earned and unused sick leave and 100% of the earned and unused vacation.
L) Classification of Revenue
As an enterprise (proprietary) fund, the District classifies its revenues into three classifications: operating
revenue, non-operating revenue, and contributions.
Operating revenues are defined as revenues realized by the District in exchange for providing its primary
services of water distribution and wastewater collection to its customers. Non-operating revenues are those
derived from the investment of cash reserves and from the disposal of excess property, and also include those
resources received from entities other than customers, such as governmental agencies and developers, for
purposes not related to capital improvement. Donated plant and cash received for capital improvement without
the requirement that the District give resources in exchange are recorded as contributions.
M) Use of Restricted Resources
The District uses restricted resources, prior to using unrestricted resources, to pay expenses meeting the
criteria imposed on the use of restricted resources by a third party.
N) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
O) Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the District’s California Public
Employees’ Retirement System (CalPERS) plans (Plans) are additions to/deductions from the Plans’ fiduciary
net position have been determined on the same basis as they are reported by CalPERS. For this purpose,
benefit payments (including refunds of employee contributions) are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
39
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
P) Future Accounting Pronouncements
The applicable GASB Statements listed below will be implemented in future financial statements:
Table 1-2
GASB Statement Description Effective Date
Statement No. 83 Certain Asset Retirement
Obligations
The provisions in Statement 83 are effective for
reporting periods beginning after June 15, 2018.
Earlier application is encouraged.
Statement No. 84 Fiduciary Activities The provisions in Statement 84 are effective for
reporting periods beginning after December 15,
2018. Earlier application is encouraged.
Statement No. 85 Omnibus 2017 The provisions in Statement 85 are effective for
reporting periods beginning after June 15, 2017.
Earlier application is encouraged.
Statement No. 86 Certain Debt
Extinguishment Issues
The provisions in Statement 85 are effective for
reporting periods beginning after June 15, 2017.
Earlier application is encouraged.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
40
2) CASH AND INVESTMENTS
Cash and Investments as of June 30, 2017 are classified in the accompanying financial statements as follows:
Table 2-1
Cash and Cash Equivalents 7,556,013$
Restricted Cash and Cash Equivalents 6,474,787
Investments 4,995,176
Total 19,025,976$
Cash and investments as of June 30, 2017 consist of the following:
Table 2-2
Cash on Hand 5,250$
Deposits with Financial Institutions 1,359,809
Money Market Accounts with Financial Institutions 548,240
Investments with Local Agency Investment Fund 12,117,501
Investment in Debt Securities 4,995,176
Total 19,025,976$
Investments Authorized by the California Government Code and the District’s Investment Policy
The table below identifies the investment types that are authorized by the District's investment policy and in
accordance with Section 52601 of the California Government Code The table also identifies certain provisions
of the District's investment policy that address interest rate risk and concentration of credit risk.
Table 2-3
Authorized Investment Type
Maximum
Maturity
Authorized
Limit
Required
Rating
Bonds and Certificates of Participation by EVWD 5 years None None
U.S. Treasury Bills, Notes, or Bonds 5 years None None
State Registered Warrants, Notes, or Bonds 5 years None None
Notes and Bonds of other Local California Agencies 5 years None None
U.S. Agencies 5 years None None
Negotiable Certificates of Deposits 5 years 30%None
Money Market Mutual Funds and Mutual Funds 5 years 15%2 - AAA
Collateralized Bank Deposits 5 years None None
Local Agency Investment Fund (LAIF)N/A None None
At June 30, 2017, the District had no investments in repurchase agreements and did not utilize this investment
media during the reporting year. As a matter of investment policy, the District does not borrow funds through the
use of reverse repurchase agreements.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
41
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market
interest rates. One of the ways that the District minimizes its exposure to this type of risk is by investing in
investments with laddered maturity dates.
As of June 30, 2017, the District had the following investments and maturities:
Table 2-4
Investment Type Fair Value
Average
Maturity
Fannie Mae 1,178,383$ 3.01 years
Freddie Mac 1,435,224 2.78 years
Federal Home Loan Bank 703,325 2.98 years
US Treasury 1,285,642 3.25 years
Tenn Valley Authority 392,602 2.46 years
LAIF 12,117,501 N/A
Money Market Mutual Funds 548,207 N/A
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investm ent will not fulfill its obligation to the holder of the
investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. Presented below is the minimum rating required by (where applicable) the California Government
Code or the District’s investment policy, and the actual rating as of year end for each investment type.
Table 2-5
Investment Type Fair Value
Minimum
Legal
Rating
Exempt
From
Disclosure
Rating at
Year End
AAA Not Rated
Fannie Mae 1,178,383$ N/A -$ 1,178,383$ -$
Freddie Mac 1,435,224 N/A - 1,435,224 -
Federal Home Loan Bank 703,325 N/A - 703,325 -
US Treasury 1,285,642 N/A 1,285,642 - -
Tenn Valley Authority 392,602 N/A - 392,602 -
LAIF 12,117,501 N/A - - 12,117,501
Money Market Mutual Funds 548,207 N/A - 548,207 -
17,660,884$ 1,285,642$ 4,257,741$ 12,117,501$
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
42
2) CASH AND INVESTMENTS – Continued
Fair Value Measurements
The District categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. These principles recognize a three-tiered fair value hierarchy, as follows:
• Level 1: Investments reflect prices quoted in active markets;
• Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly,
which may include inputs in markets that are not considered to be active; and,
• Level 3: Investments reflect prices based upon unobservable sources.
The District has the following recurring fair value measurements as of June 30, 2017:
Table 2-6
Quoted Prices
in Active
Markets for
Identical
Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Investments by Fair Value Level (Level 1)(Level 2)(Level 3)
Debt Securities
Fannie Mae 1,178,383$ -$ -$
Freddie Mac 1,435,224 - -
Federal Home Loan Bank 703,325 - -
US Treasury 1,285,642 - -
Tenn Valley Authority 392,602 - -
Total Investments Measured at Fair Value 4,995,176$ -$ -$
Investments Measured at Amortized Cost
LAIF 12,117,501
Money Market Mutual Funds 548,207
Total Investments 17,660,884$
Fair Value Measurements Using
Disclosure Related to Concentration of Credit Risk
The District's policy places no limits on amounts invested in any given issuer beyond that stipulated by the
California Government Code. At June 30, 2017, there were no investments (other than external pools, U.S.
Government Securities and Money Market Mutual Funds) that exceeded 5% of the District's total investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a
government will not be able to recover its deposits or will not be able to recover collateral securities that are in the
possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure
of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
43
2) CASH AND INVESTMENTS – Continued
investment or collateral securities that are in the possession of another party. The California Government Code
requires California banks and savings and loan associations to secure deposits by pledging government securities
as collateral. Such collateralization of public funds is accomplished by pooling. As such, collateralized securities
are held by the pledging financial institution's agent on behalf of the District. The fair value of the pledged securities
must equal at least 110% of Districts deposits. California law also allows financial institutions to secure deposits
by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The District
may waive collateral requirements for deposits which are fully insured by Federal depository insurance.
As of June 30, 2017, the District had $1,516,437 deposited with financial institutions that were in excess of federal
depository insurance limits. The federal deposit insurance limit is $250,000.
Investment in State Investment Pool
The management of the State of California Pooled Money Investment Account (generally referred to as LAIF) has
reported to its participating agencies that, as of June 30, 2017, the carrying amount (at amortized cost) of the pool
was $77,559,119,072 and the estimated fair value of the pool was $77,539,216,146. The District's proportionate
share of the fair value (as determined by LAIF) as of June 30, 2017, was $12,117,503. Included in LAIF's
investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed
securities, loans to certain State funds, and floating rate securities issued by federal agencies, government-
sponsored enterprises, and corporations.
3) RESTRICTED CASH AND CASH EQUIVALENTS
Restricted cash and cash equivalents at June 30, 2017 are restricted as follows:
Table 3-1
Held for Debt Service 1,677,083$
Capacity Fees from Developers 2,629,058
Customer Deposits 1,670,446
Construction Advances 119,250
North Fork Water Company 378,950
Total 6,474,787$ DR
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
44
4) CAPITAL ASSETS
A summary of changes in capital assets for the year ended June 30, 2017 is as follows:
Table 4-1
Beginning of End of
Year Additions Deletions Year
Water Fund
Non-Depreciable Assets
Land and Easements 8,563,144$ 2,642,688$ (1,049,907)$ 10,155,925$
Water Rights 738,835 - - 738,835
Construction in Progress 4,608,600 8,054,384 (5,380,050) 7,282,934
Total Non-Depreciable Assets 13,910,579 10,697,072 (6,429,957) 18,177,694
Depreciable Assets
Source of Supply 16,487,898 132,824 (29,873) 16,590,849
Pumping Plant 13,106,027 1,278,798 - 14,384,825
Treatment Plant 25,006,265 23,278 - 25,029,543
Transmission and Distribution Plant 94,982,440 3,912,169 (515,250) 98,379,359
General Plant 16,601,839 835,209 (110,719) 17,326,329
Total Depreciable Assets 166,184,469 6,182,278 (655,842) 171,710,905
Accumulated Depreciation
Source of Supply (5,379,587) (570,599) 29,873 (5,920,313)
Pumping Plant (5,072,641) (539,339) - (5,611,980)
Treatment Plant (7,443,430) (1,225,517) - (8,668,947)
Transmission and Distribution Plant (33,485,830) (2,643,635) 515,250 (35,614,215)
General Plant (3,683,354) (753,757) 110,719 (4,326,392)
Total Accumulated Depreciation (55,064,842) (5,732,847) 655,842 (60,141,847)
Water Fund Capital Assets, Net 125,030,206 11,146,503 (6,429,957) 129,746,752
Wastewater Fund
Non-Depreciable Assets
Land and Easements 3,921,962 - (3,208,022) 713,940
Construction in Progress 6,444,223 2,732,551 (123,783) 9,052,991
Total Non-Depreciable Assets 10,366,185 2,732,551 (3,331,805) 9,766,931
Depreciable Assets
Wastewater Collection Plant 26,923,778 123,783 - 27,047,561
General Plant 9,324,008 225,615 (303,469) 9,246,154
Total Depreciable Assets 36,247,786 349,398 (303,469) 36,293,715
Accumulated Depreciation
Wastewater Collection Plant (13,311,722) (476,169) - (13,787,891)
General Plant (2,797,982) (308,458) 303,469 (2,802,971)
Total Accumulated Depreciation (16,109,704) (784,627) 303,469 (16,590,862)
Wastewater Fund Capital Assets, Net 30,504,267 2,297,322 (3,331,805) 29,469,784
Total Capital Assets, Net 155,534,473$ 13,443,825$ (9,761,762)$ 159,216,536$
DR
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
45
5) LONG-TERM DEBT
The schedule below summarizes changes in long-term debt during the year ended June 30, 2017:
Table 5-1
Beginning
Balance Additions
Retirements/
Payments
Ending
Balance
Current
Portion
Long-Term
Portion
2010 Refunding Bonds 27,530,000$ -$ (1,380,000)$ 26,150,000$ 1,435,000$ 24,715,000$
Unamortized Premium 1,748,802 - (80,741) 1,668,061 80,741 1,587,320
2013 Refunding Bonds 12,085,000 - - 12,085,000 - 12,085,000
Unamortized Premium 574,245 - (20,300) 553,945 20,300 533,645
Unamortized Discount (36,486) - 1,353 (35,133) (1,353) (33,780)
U.S. Bank Lease Purchase 3,299,108 - (388,557) 2,910,551 388,244 2,522,307
SBVMWD Loan - 4,367,927 - 4,367,927 436,793 3,931,134
Dept Water Resources Contracts
AVAD Construction 98,050 - (6,762) 91,288 6,762 84,526
Plant 134 Construction 6,768,565 - (233,399) 6,535,166 233,399 6,301,767
Plant 150 Design 50,000 - (20,000) 30,000 20,000 10,000
EFAD Construction 351,434 - (13,016) 338,418 13,016 325,402
Total 52,468,718$ 4,367,927$ (2,141,422)$ 54,695,223$ 2,632,902$ 52,062,321$
2010 Refunding Revenue Bonds
On October 29, 2010, the District issued $33,545,000 of East Valley Water District Financing Authority
Refunding Revenue Bonds, Series 2010 (2010 Bonds), with interest rates ranging from 2.00% to 5.00%. The
purpose for issuing the 2010 Bonds was to provide $16,000,000 for future capital improvements, and for
refunding virtually all of the Districts outstanding long-term debt. The refunded debt included 1) $5,935,000 in
2001 Certificates of Participation bearing interest rates ranging from 4.25% to 5.00%, 2) a $7,867,528 balance
on a 2004 Installment Sale Note bearing interest at 4.50%, and 3) a $5,109,854 balance on a 2006 Installment
Sale Note bearing interest at 4.95%.
The refunding portion of the 2010 Bonds ($17,170,000) were issued at a premium of $1,63 0,726, and after
paying issuance costs of $318,849, net proceeds were $18,481,877. The net proceeds, combined with a
$920,318 sinking fund for 2001 COP debt service, were sufficient to accomplish the refunding of the existing
debt.
The refunding resulted in a difference between the reacquisition price and the carrying amount of the old debt
of $259,548. This difference is included in the accompanying financial statements as a Deferred Outflows of
Resoures and is being charged to operations through the year 2024 using the straight-line method of
amortization. DR
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
46
5) LONG-TERM DEBT - Continued
2013 Revenue Bonds
On June 19, 2013 the District issued $12,085,000 of East Valley Water District Financing Authority Revenue
Bonds, Series 2013 (2013 Bonds), with interest rates ranging from 4.00% to 5.00%. The purpose for issuing
the 2013 Bonds was to provide financing for water and wastewater capital improvements, primarily construction
of a new administration and operations headquarters complex.
US Bank Lease Purchase
On November 13, 2013 the District entered into a Lease Purchase Agreement with US Bancorp Government
Leasing and Finance, Inc. (US Bank), in order to implement Energy Conservation Measures (ECM) identified
in a comprehensive energy conservation and operational efficiency study prepared by Honeywell International,
Inc. (Honeywell). Honeywell has been contracted to install the facilities necessary to achieve the energy savings
identified in their study, and has guaranteed that the savings will be sufficient to pay the debt service on the
lease with US Bank. Project costs paid to Honeywell, and the amount borrowed from US Bank under the lease
agreement is $3,998,560 with an interest rate of 2.3 8%. Semi-annual payments are $226,398, to commence
on September 2014 through March 2024.
San Bernardino Valley Municipal Water District - City Creek Turnout and Plant 134 Hydroelectric Station
Loan
On January 20, 2015, the District entered into an agreement with the SBVMWD for the construction, financing,
and maintenance of a turnout by which the District’s surface water treatment plant can receive State Project
water. The total amount borrowed for construction of the project is $4,367,927 bearing interest at the State of
California Local Agency Investment Fund (LAIF) apportionment rate, which is 0.92% at June 30, 2017. Debt
service payments are to be made annually on February 1st over ten years.
Department of Water Resources Contract 00C412 - Arroyo Verde Assessment District (AVAD)
On June 30, 2004, the District entered into a Funding Agreement for replacement of distribution pipelines in the
section of the District's service area formerly served by the Arroyo Verde Water Company. The original loan
amount was $169,052 with an annual interest rate of 0%. Semi-annual payments of $3,381 are due through
January 2031 and are secured by annual assessments to property owners within the Arr oyo Verde Assessment
District.
Department of Water Resources Contract 10CX110 - Plant 134
On December 21, 2010, the District entered into a Funding Agreement to upgrade treatment methods utilized
by the District's surface water treatment plant (Plant 134). The amount borrowed under the agreement is
$7,001,964 with an annual interest rate of 0%. Semi-annual payments of $116,699 are due through January
2045, and are secured by a pledge of net revenues of the District's water operating fund.
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
47
5) LONG-TERM DEBT - Continued
Department of Water Resources Contract 10PX102 - Plant 150 Design
On March 11, 2011 the District entered into a Funding Agreement to assist in financing the cost of studies and
planning of treatment facilities to address water quality issues threatening the District's lower zone wells (Plant
150). The amount of the loan is $100,000 with an annual interest rate of 0%. Semi-annual payments of $10,000
are due through July 2018 and are secured by a pledge of net revenues of the District's water operating fund.
Department of Water Resources Contract 11CX101 - Eastwood Farms Assessment District
On June 15, 2011 the District entered into a Funding Agreement for replacement of distribution pipelines in the
section of the District's service area formerly serviced by the Eastwood Farms Water Users Association. The
amount of the loan is $390,482 with an annual interest rate of 0%. Semi -annual payments of $6,508 are due
for 30 years through January 2043. Repayment of the loan is secured by annual assessments to property
owners within the Eastwood Farms Assessment District. The aggregate debt service requirements to maturity
for long-term debt as of June 30, 2016 are as follows:
Table 5-2
Year Ending
June 30,Principal Interest Total
2018 2,533,212$ 1,802,170$ 4,335,382$
2019 2,597,060 1,758,768 4,355,828
2020 2,676,104 1,667,848 4,343,952
2021 2,755,349 1,581,212 4,336,561
2022 2,249,802 1,510,628 3,760,430
2023-2027 9,918,718 6,635,048 16,553,766
2028-2032 6,740,743 5,416,479 12,157,222
2033-2037 8,038,075 4,097,795 12,135,870
2038-2042 9,916,076 2,218,221 12,134,297
2043-2045 5,083,211 227,000 5,310,211
Total 52,508,350$ 26,915,169$ 79,423,519$
Security for debt is as follows:
Table 5-3
Debt Security
2010 and 2013 Refunding
Revenue Bonds and Department
of Water Resources
Construction Loans
The District is required to maintain net revenues, as defined
by the revenue bond trust agreements and State of
California Department of Public Health Funding agreements
of at least 120% of District's annual debt service (principal
and interest). At June 30, 2017, net water revenues
represented 309% of the annual water debt service and net
wastewater revenues represented 654% of the annual
wastewater debt service.
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
48
6) COMPENSATED ABSENCES
Compensated absences are comprised of unused vacation leave and a limited amount of sick leave which is
accrued as earned in accordance with District policy. The District's liability for compensated absences is
determined annually. Current portions are det ermined based on estimates of usage, amounts in excess of 196
hours that will be voluntarily cashed out and amounts that will be cashed out upon termination of employment.
Table 6-1
Beginning
of Year Additions
Usage /
Payments
End of
Year
Current
Portion
Long-
Term
Portion
Accrued Vacation Leave 267,741$ 208,634$ (150,254)$ 326,121$ 193,727$ 132,394$
Accrued Sick Leave 502,223 77,938 (184,369) 395,792$ 129,911 265,881
Total 769,964$ 286,572$ (334,623)$ 721,913$ 323,638$ 398,275$
7) NET INVESTMENT IN CAPITAL ASSETS
Net Investment in capital assets at June 30, 2017 consisted of the following:
Table 7-1
Non-Depreciable Capital Assets 27,944,626$
Depreciable Capital Assets 208,004,618
Accumulated Depreciation (76,332,707)
Loans Payable (14,273,349)
Bonds Payable (40,421,874)
Deferred Amount on Refunding 138,482
Total 105,059,796$
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
49
8) DEFINED BENEFIT PENSION PLAN (PERS)
A) General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the District’s Miscellaneous
Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the
California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are
established by State statue and East Valley Water District resolution. CalPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions, assumptions, and
membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death
benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of
credited service, equal to one year of full time employment. Members with five years of total service are eligible
to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits
after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor
Benefit, or the Optional Settlement 2 W Death Benefit. The cost of living adjustments for each plan are applied
as specified by the Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2017, are summarized as follows:
Table 8-1
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7% @55 2.0% @62
Benefit Vesting Schedule 5 years service 5 years service
Benefit Payments monthly for life monthly for life
Retirement Age 50 - 55 52 - 67
Monthly Benefits, as a % of Eligible Compensation 2.0% to 2.7%1.0% to 2.5%
Required Employee Contribution Rates 8.0%6.5%
Required Employer Contribution Rates 11.348%6.647%
Miscellaneous
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be
effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are
determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is
the estimated amount necessary to finance the costs of benefits earned by employees during the year, w ith
an additional amount to finance any unfunded accrued liability. The District is required to contribute the
difference between the actuarially determined rate and the contribution rate of employees.
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
50
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
For the year ended June 30, 2017, the contributions recognized as part of pension expense for each Plan
were as follows:
Table 8-2
Miscellaneous
Contributions - Employer $ 895,822
B) Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to
Pensions
As of June 30, 2017, the District reported net pension liabilities for its proportionate shares of the net
pension liability of each Plan as follows:
Table 8-3
Proportionate Share
of Net Pension
Liability
Miscellaneous $ 10,024,712
The District’s net pension liability for each Plan is measured as the proportionate share of the net
pension liability. The net pension liability of each of the Plans is measured as of June 30, 2016, and the
total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial
valuation as of June 30, 2015 rolled forward to June 30, 2016 using standard update procedures. The
District’s proportion of the net pension liability was based on a projection of the District’s long-term share
of contributions to the pension plans relative to the projected contributions of all participating employers,
actuarially determined. The District’s proportionate share of the net pension liability for each Plan as of
June 30, 2015 and 2016 was as follows:
Table 8-4
Prior to On or after
January 1, 2013 January 1, 2013
Proportion - June 30, 2015 11.550500%0.000025%
Proportion - June 30, 2016 11.585100%0.000025%
Change - Increase (Decrease)0.034600%0.000000%
Miscellaneous
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
51
8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued
For the year ended June 30, 2017, the District recognized pension expense of $1,012,339. At June 30, 2017,
the District reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
Table 8-5
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Difference between expected and actual
experience $ 32,733 7,500$
Changes in Assumptions - 309,681
Net differences between projected and actual
earnings on plan investments 1,611,789 -
Change in employer's proportion 364,961 -
Difference between the employer's
contributions and the employer's proportionate
share of contributions - 202,183
Pension contributions subsequent to
measurement date 1,035,102 -
Total $ 3,044,585 $ 519,364
$895,822 reported as deferred outflows of resources related to contributions subsequent to the measurement
date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other
amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will
be recognized as pension expense as follows:
Table 8-6
Year
June 30, Amount
2018 $ 155,662
2019 173,262
2020 743,721
2021 417,472
2022 -
Thereafter -
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
52
8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued
Actuarial Assumptions
The total pension liabilities in the June 30, 2015 actuarial valuations were determined using the following
actuarial assumptions:
Table 8-7
Miscellaneous
Valuation Date June 30, 2015
Measurement Date June 30, 2016
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.65%
Inflation 2.75%
Payroll Growth 3.00%
Projected Salary Increase 3.3% - 14.2% (1)
Investment Rate of Return 7.5% (2)
(1) Depending on age; service and type of employment
(2) Net of pension plan investment expenses, including inflation The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2015 valuation
were based on the results of a January 2015 actuarial experience study for the period 1997 to 2007. Further
details of the Experience Study can found on the CalPERS website.
Discount Rate
The discount rate used to measure the total pension liability was changed from 7.50% to 7.65% to correct an
adjustment to exclude administrative expense for each Plan. To determine whether the municipal bond rate
should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would
most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based
on the testing, none of the tested plans run out of assets. Therefore, the current 7.65 % discount rate is
adequate and the use of the municipal bond rate calculation is not necessary. The long term expected
discount rate of 7.65% will be applied to all plans in the Public Employees Retirement Fund (PERF). The
stress test results are presented in a detailed report that can be obtained from the CalPERS website.
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
53
8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued
CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management
(ALM) review cycle that is scheduled to be completed in February 2018. Any changes to the discount rate will
require Board action and proper stakeholder outreach. For these reasons, CalPERS expects to continue using
a discount rate net of administrative expenses for GASB 67 and 68 calculations through at least the 2017-18
fiscal year. CalPERS will continue to check the materiality of the difference in calculation until such time as
we have changed our methodology.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-
term market return expectations as well as the expected pension fund cash flows. Using historical returns of
all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years)
and the long-term (11 – 60 years) using a building-block approach. Using the expected nominal returns for
both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate
of return was set by calculating the single equivalent expected return that arrived at the same present value
of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected
rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the
nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions applied to determine the discount rate and asset allocation.
These rates of return are net of administrative expenses.
Table 8-8
Asset Class
New Strategic
Allocation
Real Return
Years 1 - 10(a)
Real Return
Years 11 + (b)
Global Equity 47.0%5.25%5.71%
Global Fixed Income 19.0%0.99%2.43%
Inflation Sensitive 6.0%0.45%3.36%
Private Equity 12.0%6.83%6.95%
Real Estate 11.0%4.50%5.13%
Infrastructure and Forestland 3.0%4.50%5.09%
Liquidity 2.0%-0.55%-1.05%
Total 100.0%
(a) An expected inflation of 2.5% used for this period
(b) expected inflation of 3.0% used for this period
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
54
8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued
C) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents East Valley Water District’s proportionate share of the net pension liability for each
Plan, calculated using the discount rate for each Plan, as well as what the District’s proportionate share of
the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower
or 1-percentage point higher than the current rate:
Table 8-9
Miscellaneous
1% Decrease 6.65%
Net Pension Liability $ 15,080,658
Current Discount Rate 7.65%
Net Pension Liability $ 10,024,712
1% Increase 8.65%
Net Pension Liability $ 5,846,227
D) Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued
CalPERS financial reports.
E) Payable to the Pension Plan
At June 30, 2017, the District reported a payable of $0 for the outstanding amount of contributions to the
pension plan required for the year ended June 30, 2017.
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
55
9) COMMITMENTS AND CONTINGENCIES
Grant Awards
Grant funds received by the District are subject to audit by the grantor agencies. Such audit could lead to
requests for reimbursements to the grantor agencies for expenditures disallowed under terms of the gran t.
Management of the District believes that such disallowances, if any, would not be significant.
10) RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors
and omission; injuries to employees; and natural disasters. The District participates in a joint powers agreement
(JPA) with the Special District Risk Management Authority (Authority). The Authority is a risk -pooling self-
insurance authority created under the provisions of California Government Code Section 6500 et. sec. The
Authority is governed by a Board consisting of 7 directors that are either a manager or board member of a current
member agency that were elected by members of SDRMA. The Board controls the operations of the Authority
including selection of management and approval of operation budgets. The relationship between the District and
the Authority is such that the Authority is not a component unit of the District for financial reporting purposes.
Settled claims have been immaterial and claims liabilities have not been reported in these financial statements as
of June 30, 2017, or in the previous fiscal year.
The purpose of the Authority is to arrange and administer programs of insurance for the pooling of self -insured
losses and to purchase excess insurance coverage.
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EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2017
56
10) RISK MANAGEMENT - Continued
At June 30, 2017, the District's participation in the self-insurance programs of the Authority was as follows:
Table 10-1
Description Deductible
Personal Injury and Property
Damage Liability Coverage -
General
10,000,000$ Per occurrence / aggregate
where applicable
$500 (property
damage only)
Personal Injury and Property
Damage Liability Coverage -
Auto
10,000,000$ Per accident None
Public Officials and
Employees Errors and
Omissions Liability
10,000,000$ Per wrongful act / annual
member aggregate
None
Employment Practices
Liability
10,000,000$ Per wrongful employment
practice / aggregate limits
per member included with
Public Officials and
Employee Errors and
Omissions Coverage
None up to $10,000,
50% co-insurance
from $10,000 to
$50,000, none for
amounts greater than
$50,000
Employee Benefits Liability 10,000,000$ Per wrongful act / annual
member aggregate
None
Employee Dishonesty
Coverage
1,000,000$ Per loss None
Public Officials Personal
Liability
500,000$ Per occurrence / annual
aggregate per Board
Member
$ 500
Automobile Physical Damage ACV Limits Replacement cost (stated
value adjusted for
depreciation on selected
vehicles)
$250/$500 or
$500/$1,000
comprehensive /
collision (as elected
per vehicle)
Uninsured Motorist Bodily
Injury Coverage
750,000$ Per accident None
Property Coverage 1,000,000,000$ Replacement cost for
scheduled property if
replaced (if not replaced
within two years, actual
cash value basis)
$ 1,000
Boiler and Machinery 100,000,000$ Replacement cost $ 1,000
Limits
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
57
11) POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description
The District contributes to the retiree health coverage of eligible retirees and eligible surviving spouses. As of June
7, 2011, the District is part of the Public Agency portion of the California Employers’ Retiree Benefit Trust Fund
(CERBT), an agent multiple-employer plan administered by California Public Employees’ Retirement System
(CalPERS), which acts as a common investment and administrative agent for participating public employers within
the State of California. A menu of benefit provisions as well as other requirements is established by State statute
within the Public Employees’ Retirement Law. The District selects optional benefit provisions from the benefit
menu by contract with CalPERS and adopts those benefits through District resolution. CalPERS issues a
Comprehensive Annual Financial Report (CAFR). The CAFR is issued in aggregate and includes the sum of all
CalPERS plans. Copies of the CalPERS CAFR may be obtained from the CalPERS Executive Office, 400 P
Street, Sacramento, California 95814.
Funding Policy
The contribution requirements of plan members and the District are established and may be amended by the
Board of Directors. At retirement, the District provides the minimum employer contribution under the CalPERS
Health Program for eligible retirees and surviving spouses in receipt of a pension benefit from CalPERS. An
employee is eligible for this employer contribution provided they are vested in their CalPERS pension benefit and
commence payment of their pension benefit within 120 days of retirement with the District. Vesting requires at
least five years of service. The surviving spouse of an eligible retiree who elected spouse coverage under
CalPERS is eligible for the employer contribution upon death of the retiree.
Employees retiring with at least 20 years of District service will receive an additional District contribution through
attainment of Medicare eligibility age. The additional contribution is based on the negotiated dollar amount at
retirement (currently $650 per month). The surviving spouse of an eligible retiree is eligible for the District's
contribution upon the death of the retiree through the spouse's attainment of Medicare eligibility age.
Directors who were first elected to office on or after July 1, 1994 shall be eligible to continue to receive health
benefits upon termination on a self-pay basis. There are two Directors (in office prior to July 1, 1994) who are
eligible for District-paid health care benefits and any covered spouse or dependents. The benefits are payable for
the lifetime and the lifetime of any covered surviving spouse.
Prior to June 7, 2011, the District contributed 100% of the cost of current year premiums for eligible retired plan
members and their dependents. The District, as part of the CERBT, is required to contribute the annual required
contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of
GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to
cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a closed
27 year period. The current ARC rate is 2.1% of the annual covered payroll.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
58
11) POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS - Continued
Annual OPEB Cost
The District's annual OPEB cost for the current year and the related information for the plan are as follows:
Table 11-1
Annual Required Contribution 144,415$
Interest on Net OPEB Obligation (3,492)
Adjustments to Annual Required Contribution 4,580
Annual OPEB Expense 145,503
Contributions Made (160,865)
Increase (Decrease) in Net OPEB Obligation (15,362)
Net OPEB Obligation - Beginning of Year (51,881)
Net OPEB Obligation / (Asset) - End of Year (67,243)$
For 2017, 2016, and 2015, the District’s annual OPEB costs (expenses) were $145,503, $141,957, and
$82,700, respectively. The District's annual OPEB cost has been recognized as a part of the administrative and
general expenses in the accompanying Statement of Revenue, Expenses and Changes in Net Position. The
District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB
obligation for the 2017 and the two preceding years were as follows:
Table 11-2
Percentage Net OPEB
Fiscal Annual Actual of OPEB Obligation
Year Ended OPEB Cost Contribution Contributed (Asset)
6/30/17 145,503$ 160,865$ 111%(67,243)$
6/30/16 141,957$ 155,381$ 109%(51,881)$
6/30/15 82,700$ 102,991$ 125%(38,457)$
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
59
11) POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS - Continued
Funded Status and Funding Progress
The funded status of the plan as of June 30, 2015, was as follows:
Table 11-3
Actuarial Accrued Liability (AAL)1,547,909$
Actuarial Value of Plan Assets 467,926$
Unfunded Actuarial Accrued Liability (UAAL)1,079,983$
Funded Ratio (Actuarial Value of Plan Assets/AAL)30%
Covered Payroll (Active Plan Members)4,810,000$
UAAL as a Percentage of Covered Payroll 22%
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability
of occurrence of events far into the future. Examples include assumptions about future employment, mortality,
and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. The schedule of funding progress, presented as
required supplementary information following the notes to the financial statements, presents multiyear trend
information that shows whether the actuarial value of the plan assets is increasing or decreasing over time
relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that
point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term
perspective of the calculations.
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Notes to the Basic Financial Statements
Year Ended June 30, 2017
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11) POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS - Continued
The following is a summary of the actuarial assumptions and methods:
Table 11-4
Valuation Date June 30, 2015
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percent of Payroll
Remaining Amortization Period 3 Years Closed Period
Actuarial Assumptions:
Investment Rate of Return 6.73%
Projected Salary Increase 3.00%
2016 - 2017 Health Care Trend Rate 7.00%
2018 - 2021 Health Care Trend Rate 6.00%
2021 - Thereafter Health Care Trend Rate 5.00%
Inflation Rate 2.80%
Post Retirement Benefit Increases 0.00%
12) CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS
The District has one siginiciant active construction project commitment as of June 30, 2017. The contract is related
to the consulting firm the District hired to assist in the evaluation and selection of the design of the Recycled Water
Facility.
Table 12-1
Contractual Commitments Spent to Date
Remaining
Commitment
Wastewater Treatment Plant Design/Build Consulting 48,434$ 326,566$
13) SPECIAL ITEMS – ABANDONED PROJECTS
In August 2007, the District purchased a 22 acre parcel of land (Sterling Avenue) for the purpose of building an
administration and operations headquarters facility. Between 2007 and 2011 the District incurred costs for
preliminary design and studies, and recorded capitalized interest for the “Headquarters Project” for a total of
$1,615,241
As part of the purchase transaction, the District received a credit from the sellers for an avigation easement, held
by a nearby airport, that significantly impaired the use of 7 of the 22 acres. The District tried unsuccessfully to
negotiate the removal of the easement as it no longer serves to preserve the flight path for an active runway.
Litigation to remove the easement was also unsuccessful.
Due to the District’s inability to remove the easement on the Sterling Avenue property, the headquarters facility
was constructed on another site in 2014 and, as a result, the Sterling Avenue property is being marketed for sale.
The costs incurred for preliminary design, studies and capitalized interest at the Sterling property will no longer
result in a Capital Asset and have therefore been written off on the accompanying Statement of Revenues,
Expenses, and Changes in Net Position as a Special Item.
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East Valley Water District
Schedule of Proportionate Share of Net Pension Liability
Year Ended June 30, 2017
Last Ten Years*
62
2017 2016 2015Proportion of the Net Pension
Liability 11.58510%0.11551%10.63230%
Proportionate Share of the Net
Pension Liability $ 10,024,712 $ 7,928,173 $ 6,615,935
Covered - Employee Payroll $ 5,097,156 $ 4,715,712 $ 4,436,236
Proportionate Share of the Net
Pension Liability as Percentage
of Covered-Employee Payroll 196.67%168.12%149.13%
Plan's Fiduciary Net Position $ 27,529,345 $ 28,045,198 $ 29,336,566
Plan's Fiduciary Net Position as
a Percentage of the Total
Pension Liability 74.06%78.40%79.82%
* - Fiscal year 2015 was the first year of implementation, therefore only three years are shown.
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East Valley Water District
Schedule of Contributions
Year Ended June 30, 2017
Last Ten Years*
63
2017 2016 2015
Contractually Required
Contribution (Actuarially
Determined)1,035,102$ 895,822$ 742,546$
Contributions in Relation to the
Actuarially Deteremined
Contributions 1,035,102$ 895,822$ 742,546$
Contribution Deficiency (Excess)-$ -$ -$
Covered-Employee Payroll $ 4,832,160 $ 5,097,156 $ 4,715,712
Contributions as a Percentage of
Covered-Employee Payroll 21.42% 17.57% 15.75%
* - Fiscal year 2015 was the first year of implementation, therefore only three years are shown.
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Schedule of Funding Progress for Retirees Health Coverage
Year Ended June 30, 2017
64
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability (AAL)
Entry Age
Unfunded
AAL (UAAL)
Funded
Ration
Covered
Payroll
UAAL as a
Percentage
of Covered
Payroll
(A)(B)(B - A)(A / B)(C)[(B - A) / C]
06/30/15 467,926$ 1,547,909$ 1,079,983$ 30.23% 4,810,000$ 22.45%
06/30/13 398,241$ 968,388$ 570,147$ 41.12% 4,325,000$ 13.18%
06/30/11 74,958$ 778,688$ 703,730$ 9.63% 4,914,556$ 14.32%
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East Valley Water District
History and Organization
Year Ended June 30, 2017
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Formation of the District
The Board of Supervisors of San Bernardino County approved a petition in writing for the formation of the East Valley
Water District (formerly East San Bernardino County Water District) under Division 12 of the Water Code of the State
of California and ordered an election held January 12, 1954. The formation of the District was voted by the electors.
The Board of Supervisors of San Bernardino County, by action on January 18, 1954, approved the formation of the
District. Incorporation of the "East Valley Water District" was approved by the State of California on February 1, 1954.
East Valley Water District Financing Authority
The East Valley Water District Financing Authority (Authority) is a public body organized and existing under a Joint
Exercise of Powers Agreement, and under the Constitution and laws of the State of California, between East Valley
Water District and the California Municpal Finance Authority. The Authority was formed to assist in the financing and
refinancing of capital improvement projects of the District for the use, benefit, and enjoyment of the public.
Nature of Business
The District has been engaged in the furnishing of water service and wastewater transmission services to its customers
since inception.
Location
The District office is located at 31111 Greenspot Road, Highland, California. The office is situated within the District's
boundaries which encompass an area of approximately 27.7 square miles within the County of San Bernardino,
California.
Directors
Ronald Coats Chairman of the Board
Chris Carrillo Vice-Chairman of the Board
David Smith Governing Board Member
James Morales, Jr.Governing Board Member
Nanette Shelton Governing Board Member
East Valley Water District
Ronald Coats President
Chris Carrillo Vice President
John Mura Secretary/Executive Director
Brian W. Tompkins Director of Finance
East Valley Water District Financing Authority
Management
John Mura General Manager/CEO
Brian W. Tompkins Chief Financial Officer/Treasurer
East Valley Water District
Professional Consultants
The JC Law Firm serves as general counsel for the District. Additionally, the firms Filarsky & Watt LLP and Musick,
Peeler & Garrett LLP, served as special counsel for the District.
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East Valley Water District
Combining Schedule of Net Position
June 30, 2017
68
Water Wastewater Total
ASSETS
Current Assets:
Cash & Cash Equivalents 4,532,551$ 3,023,462$ 7,556,013$
Investments 3,148,251 1,846,925 4,995,176
Accounts Receivable, Net 4,261,610 257,452 4,519,062
Interest Receivable 24,297 12,936 37,233
Other Receivables 375,893 - 375,893
Due from Other Governments 1,401,449 - 1,401,449
Inventory 319,302 6,721 326,023
Prepaid Expenses 262,339 35,069 297,408
Total Current Assets 14,325,692 5,182,565 19,508,257
Non-Current Assets:
Restricted Cash & Cash Equivalents 5,767,808 706,979 6,474,787
Assessments Receivable 386,243 - 386,243
Capital Assets not being Depreciated 18,177,694 9,766,931 27,944,625
Capital Assets, Net (Note 4)111,569,058 19,702,853 131,271,911
Total Non-Current Assets 135,900,803 30,176,763 166,077,566
Total Assets 150,226,495 35,359,328 185,585,823
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 138,482 - 138,482
Deferred Outflows - Pensions 2,374,775 669,810 3,044,585
Total Deferred Outflows 2,513,257 669,810 3,183,067
Total Assets and Deferred
Outflows of Resources 152,739,752$ 36,029,138$ 188,768,890$
(Continued)
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Combining Schedule of Net Position – Continued
June 30, 2017
69
Water Wastewater Total
LIABILITIES
Current Liabilities:
Accounts Payable & Accrued Expenses 2,234,805$ 227,080$ 2,461,885$
Accrued Payroll & Benefits 279,403 83,596 362,999
Customer Service Deposits 1,670,446 - 1,670,446
Construction Advances and Retentions 111,160 8,090 119,250
Accrued Interest Payable 414,532 54,931 469,463
Current Portion of Compensated
Absences 262,723 60,915 323,638
Current Portion of Long-Term Debt 2,519,944 112,958 2,632,902
Total Current Liabilities 7,493,013 547,570 8,040,583
Non-Current Liabilities:
Compensated Absences,
Less Current Portion 321,666 76,609 398,275
Net Pension Liability 7,819,275 2,205,437 10,024,712
Long-Term Debt, Less Current Portion 47,326,623 4,735,698 52,062,321
Total Non-Current Liabilities 55,467,564 7,017,744 62,485,308
Total Liabilities 62,960,577 7,565,314 70,525,891
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Pensions 405,103 114,261 519,364
Total Liabilities and Deferred
Inflows of Resources 63,365,680 7,679,575 71,045,255
NET POSITION
Net Investment in Capital Assets 80,438,668 24,621,128 105,059,796
Restricted for:-
Future Capital Expansion Projects 2,149,035 698,889 2,847,924
Unrestricted 6,786,369 3,029,546 9,815,915
Total Net Position 89,374,072$ 28,349,563$ 117,723,635$
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Combining Schedule of Revenues, Expenses, and Changes in Net Position
Year Ended June 30, 2017
70
Water Wastewater Total
OPERATING REVENUE
Water Sales 14,556,339$ -$ 14,556,339$
Wastewater Treatment Charges - 8,128,030 8,128,030
System Charges 8,944,652 4,703,439 13,648,091
Other Revenue 1,013,470 102,619 1,116,089
Total Operating Revenue 24,514,461 12,934,088 37,448,549
OPERATING EXPENSES
Source of Supply:
Salary & Benefits 531,951 - 531,951
Contract Services 309,399 - 309,399
Utilities 1,096,890 - 1,096,890
Insurance 4,060 - 4,060
Materials & Supplies 27,585 - 27,585
Purchased Water 1,173,521 - 1,173,521
Water Assessments 135,938 - 135,938
Chemicals 92,592 - 92,592
Taxes 29,126 - 29,126
Total Source of Supply 3,401,062 - 3,401,062
Pumping:
Salary & Benefits 122,683 - 122,683
Contract Services 67,657 - 67,657
Utilities 433,612 - 433,612
Materials & Supplies 22,988 - 22,988
Total Pumping 646,940 - 646,940
Water Treatment:
Salary & Benefits 312,714 - 312,714
Contract Services 199,261 - 199,261
Utilities 91,866 - 91,866
Materials & Supplies 16,761 - 16,761
Chemicals 129,450 - 129,450
Total Water Treatment 750,052 - 750,052
Wastewater Treatment:
Treatment Services - 8,128,030 8,128,030
Transmission & Distribution:
Salary & Benefits 1,600,201 - 1,600,201
Contract Services 294,755 - 294,755
Utilities 244,056 - 244,056
Materials & Supplies 39,085 - 39,085
Chemicals 18,728 - 18,728
Permits 26,128 - 26,128
Tools - - -
Total Transmission & Distribution 2,222,953$ -$ 2,222,953$
(Continued)
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Combining Schedule of Revenues, Expenses, and Changes in Net Position - Continued
Year Ended June 30, 2017
71
Water Wastewater Total
OPERATING EXPENSES - Continued
Wastewater Collection:
Salary and Benefits -$ 275,319$ 275,319$
Contract Services - 115,281 115,281
Utilities - 135 135
Materials and Supplies - 28,847 28,847
Tools - 6,362 6,362
Total Wastewater Collection - 425,944 425,944
Customer Accounts:
Salary & Benefits 789,922 224,156 1,014,078
Contract Services 632,998 115,039 748,037
Utilities 628 1,134 1,762
Materials & Supplies 7,012 1,794 8,806
General Office Supplies 3,594 617 4,211
Tools 164 - 164
Printing & Publishing 2,441 1,046 3,487
Professional Development 2,058 251 2,309
Postage 66,616 28,550 95,166
Total Customer Accounts 1,505,433 372,587 1,878,020
General & Administrative:
Salary & Benefits 3,722,152 1,296,958 5,019,110
Contract Services 962,404 376,287 1,338,691
Conservation Rebates 287,837 - 287,837
Utilities 254,602 58,573 313,175
Insurance 136,941 58,689 195,630
Materials & Supplies 167,292 91,224 258,516
General Office Supplies 17,152 21,528 38,680
Legal Services 271,551 118,736 390,287
Permits 83,488 12,832 96,320
Memberships & Dues 77,503 32,089 109,592
Tools 14,495 6,767 21,262
Printing & Publishing 82,316 29,711 112,027
Professional Development 105,639 31,765 137,404
Rents & Leases 7,407 3,174 10,581
Total General & Administrative 6,190,779 2,138,333 8,329,112
OPERATING EXPENSES BEFORE
DEPRECIATION 14,717,219 11,064,894 25,782,113
Depreciation 5,732,847 784,627 6,517,474
Total Operating Expenses 20,450,066 11,849,521 32,299,587
OPERATING INCOME (LOSS)4,064,395$ 1,084,567$ 5,148,962$
(Continued)
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Combining Schedule of Revenues, Expenses, and Changes in Net Position - Continued
Year Ended June 30, 2017
72
Water Wastewater Total
NON-OPERATING REVENUES
Investment Income 73,315$ (4,078)$ 69,237$
Other Income 367,059 34,264 401,323
Total Non-Operating Revenues 440,374 30,186 470,560
NON-OPERATING EXPENSES
Interest Expense 1,573,967 202,717 1,776,684
Total Non-Operating Expenses 1,573,967 202,717 1,776,684
INCOME BEFORE CONTRIBUTIONS 2,930,802 912,036 3,842,838
CONTRIBUTIONS:
Capacity Charges 302,874 170,290 473,164
Contributed Plant - - -
Capital Grants 1,972,954 - 1,972,954
Total Contributions 2,275,828 170,290 2,446,118
SPECIAL ITEM:
Change in Accounting EstimateAbandon Capital Projects (1,049,907) (565,334) (1,615,241)
CHANGE IN NET POSITION 4,156,723 516,992 4,673,715
TOTAL NET POSITION, BEGINNING 85,217,349 27,832,571 113,049,920
TOTAL NET POSITION, ENDING 89,374,072$ 28,349,563$ 117,723,635$
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Combining Schedule of Cash Flows
Year Ended June 30, 2017
74
Water Wastewater Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 23,617,006$ 12,928,042$ 36,545,048$
Cash Payments for Employees Services (7,340,398) (1,829,994) (9,170,392)
Cash Payments to Suppliers (8,388,860) (9,074,324) (17,463,184)
Cash from Other Sources 580,785 34,264 615,049
Net Cash Provided (Used) by
Operating Activities 8,468,533 2,057,988 10,526,521
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Grant Funds Received 587,650 - 587,650
Contributed Capital 302,874 170,290 473,164
Principal Paid on Capital Debt 2,421,191 (95,000) 2,326,191
Interest Paid on Capital Debt (1,653,322) (221,624) (1,874,946)
Acquisition of Capital Assets (11,499,302) (315,478) (11,814,780)
Net Cash Used for Capital
and Related Financing Activities (9,840,909) (461,812) (10,302,721)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received from Investments 112,909 13,109 126,018
Acquisition of Investment Securities (2,630,804) (1,063,463) (3,694,267)
Proceeds from Sales of Investments 2,203,028 1,399,560 3,602,588
Loan Collections 27,391 - 27,391
Net Cash Provided by Investing Activities (287,476) 349,206 61,730
Net (Decrease) Increase in Cash
and Cash Equivalents (1,659,852) 1,945,382 285,530
Cash and Equivalents, Beginning of Year 11,960,211 1,785,059 13,745,270
Cash and Equivalents, End of Year 10,300,359$ 3,730,441$ 14,030,800$
RECONCILIATION TO STATEMENT
OF NET POSITION
Cash and Cash Equivalents 4,532,551$ 3,023,462$ 7,556,013$
Restricted Cash and Cash Equivalents 5,767,808 706,979 6,474,787
Total Cash and Cash Equivalents 10,300,359$ 3,730,441$ 14,030,800$
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Combining Schedule of Cash Flows - Continued
Year Ended June 30, 2017
75
Water Wastewater Total
Reconciliation of Operating Income to Net
Cash Provided by Operating Activities
Operating Income (Loss)4,064,395$ 1,084,567$ 5,148,962$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided by
Operating Activities:
Depreciation 5,732,847 784,627 6,517,474
Miscellaneous Income 580,785 34,264 615,049
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (942,681) (10,637) (953,318)
(Increase) Decrease in Other Receivables - - -
(Increase) Decrease in Inventory (73,061) - (73,061)
(Increase) Decrease in Prepaids (3,122) (2,773) (5,895)
Decrease in Deferred Outflows of Resources (1,399,778) (394,810) (1,794,588)
Increase (Decrease) in Accounts Payable (655,406) 196,911 (458,495)
Increase (Decrease) in Accrued Salaries
and Benefits (240,959) (2,239) (243,198)
Increase in Compensated Absences (21,738) (26,313) (48,051)
Decrease in Net Pension Liability 1,635,301 461,238 2,096,539
Increase in Deferred Inflows of Resources (253,277) (71,437) (324,714)
Decrease in Customer Deposits 40,066 - 40,066
Decrease in Developer Deposits 5,160 4,590 9,750
Total Cash Provided (Used)
by Operating Activities 8,468,532$ 2,057,988$ 10,526,520$
NON-CASH INVESTING, CAPITAL, AND
NON-CAPITAL FINANCING ACTIVITIES:
Contributed PlantWrite-off of Abandoned Project Cost (1,049,907)$ (565,334)$ (1,615,241)$
Fair Value Adjustments to Investments (35,918) (20,265) (56,183) DR
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Principal and Interest Repayment Schedule
Refunding Revenue Bonds – Series 2010
Year Ended June 30, 2017
76
Total
Due Date Principal Interest Payments
10/01/17 1,435,000$ 4.00 % 592,806$ 2,027,806$
04/01/18 - 4.00 556,931 556,931
10/01/18 1,500,000 5.00 556,931 2,056,931
04/01/19 - 5.00 519,431 519,431
10/01/19 1,580,000 5.00 519,431 2,099,431
04/01/20 - 5.00 479,931 479,931
10/01/20 1,650,000 4.00 479,931 2,129,931
04/01/21 - 4.00 446,931 446,931
10/01/21 1,030,000 4.00 446,931 1,476,931
04/01/22 - 4.00 426,331 426,331
10/01/22 1,075,000 4.00 426,331 1,501,331
04/01/23 - 4.00 404,831 404,831
10/01/23 1,120,000 4.00 404,831 1,524,831
04/01/24 - 4.50 382,431 382,431
10/01/24 1,155,000 4.50 382,431 1,537,431
04/01/25 - 4.00 356,444 356,444
10/01/25 700,000 4.00 356,444 1,056,444
04/01/26 - 4.00 342,444 342,444
10/01/26 730,000 4.00 342,444 1,072,444
04/01/27 - 4.00 327,844 327,844
10/01/27 760,000 4.00 327,844 1,087,844
04/01/28 - 4.00 312,644 312,644
10/01/28 790,000 4.00 312,644 1,102,644
04/01/29 - 4.00 296,844 296,844
10/01/29 820,000 4.00 296,844 1,116,844
04/01/30 - 4.00 280,444 280,444
10/01/30 855,000 4.00 280,444 1,135,444
04/01/31 - 4.25 263,344 263,344
10/01/31 885,000 4.25 263,344 1,148,344
04/01/32 - 4.25 244,538 244,538
10/01/32 925,000 4.25 244,538 1,169,538
04/01/33 - 4.25 224,881 224,881
10/01/33 965,000 4.25 224,881 1,189,881
04/01/34 - 5.00 204,375 204,375
10/01/34 1,005,000 5.00 204,375 1,209,375
(Continued)
Interest
Rate %
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Refunding Revenue Bonds – Series 2010 - Continued
Year Ended June 30, 2017
77
Total
Due Date Principal Interest Payments
04/01/35 -$ 5.00 %179,250$ 179,250$
10/01/35 1,055,000 5.00 179,250 1,234,250
04/01/36 - 5.00 152,875 152,875
10/01/36 1,105,000 5.00 152,875 1,257,875
04/01/37 - 5.00 125,250 125,250
10/01/37 1,165,000 5.00 125,250 1,290,250
04/01/38 - 5.00 96,125 96,125
10/01/38 1,220,000 5.00 96,125 1,316,125
04/01/39 - 5.00 65,625 65,625
10/01/39 1,280,000 5.00 65,625 1,345,625
04/01/40 - 5.00 33,626 33,626
10/01/40 1,345,000 5.00 33,626 1,378,626
Totals 26,150,000$ 14,039,546$ 40,189,546$
Interest
Rate %
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Revenue Bonds – Series 2013
Year Ended June 30, 2017
78
Total
Due Date Principal Interest Payments
10/01/17 -$ - % 292,562$ 292,562$
04/01/18 - - 292,563 292,563
10/01/18 - - 292,562 292,562
04/01/19 - - 292,563 292,563
10/01/19 - - 292,562 292,562
04/01/20 - - 292,563 292,563
10/01/20 - - 292,562 292,562
04/01/21 - - 292,563 292,563
10/01/21 105,000 5.00 292,562 397,562
04/01/22 - - 289,938 289,938
10/01/22 110,000 5.00 289,937 399,937
04/01/23 - - 287,188 287,188
10/01/23 115,000 5.00 287,187 402,187
04/01/24 - - 284,313 284,313
10/01/24 120,000 5.00 284,312 404,312
04/01/25 - - 281,313 281,313
10/01/25 225,000 5.00 281,313 506,313
04/01/26 - - 275,688 275,688
10/01/26 240,000 5.00 275,687 515,687
04/01/27 - - 269,688 269,688
10/01/27 250,000 5.00 269,687 519,687
04/01/28 - - 263,438 263,438
10/01/28 260,000 5.00 263,438 523,438
04/01/29 - - 256,938 256,938
10/01/29 275,000 5.00 256,937 531,937
04/01/30 - - 250,063 250,063
10/01/30 285,000 5.00 250,062 535,062
04/01/31 - - 244,363 244,363
10/01/31 305,000 4.00 244,363 549,363
04/01/32 - - 238,263 238,263
10/01/32 315,000 4.00 238,262 553,262
04/01/33 - - 231,963 231,963
10/01/33 325,000 4.00 231,962 556,962
04/01/34 - - 225,463 225,463
(Continued)
Rate %
Interest
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Revenue Bonds – Series 2013 - Continued
Year Ended June 30, 2017
79
Total
Due Date Principal Interest Payments
10/01/34 352,000$ 4.00 %225,462$ 577,462$
04/01/35 - - 217,345 217,345
10/01/35 367,000 5.00 217,345 584,345
04/01/36 - - 208,853 208,853
10/01/36 392,000 5.00 208,852 600,852
04/01/37 - - 199,735 199,735
10/01/37 407,000 5.00 199,735 606,735
04/01/38 - - 190,243 190,243
10/01/38 427,000 5.00 190,242 617,242
04/01/39 - - 180,250 180,250
10/01/39 450,000 5.00 180,250 630,250
04/01/40 - - 169,000 169,000
10/01/40 475,000 5.00 169,000 644,000
04/01/41 - - 157,125 157,125
10/01/41 1,915,000 5.00 157,125 2,072,125
04/01/42 - - 109,250 109,250
10/01/42 2,015,000 5.00 109,250 2,124,250
04/01/43 - - 58,875 58,875
10/01/43 2,355,000 5.00 58,875 2,413,875
Totals 12,085,000$ 12,411,640$ 24,496,640$
Interest
Rate %
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
US Bancorp Installment Purchase Agreement
Year Ended June 30, 2017
80
Total
Due Date Principal Interest Payments
09/01/17 192,968$ 2.38 %34,808$ 227,776$
03/01/18 195,276 2.38 32,500 227,776
09/01/18 197,365 2.38 30,165 227,530
03/01/19 199,725 2.38 27,804 227,529
09/01/19 201,860 2.38 25,416 227,276
03/01/20 204,274 2.38 23,002 227,276
09/01/20 206,455 2.38 20,559 227,014
03/01/21 208,924 2.38 18,090 227,014
09/01/21 211,153 2.38 15,591 226,744
03/01/22 213,679 2.38 13,066 226,745
09/01/22 215,957 2.38 10,511 226,468
03/01/23 218,539 2.38 7,928 226,467
09/01/23 220,867 2.38 5,314 226,181
03/01/24 223,509 2.38 2,671 226,180
Totals 2,910,551$ 267,425$ 3,177,976$
Interest
Rate %
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
San Bernardino Valley Municipal Water District Loan
Year Ended June 30, 2017
81
Total
Due Date Principal Interest Payments
07/01/17 436,793$ 1.00 %-$ 436,793$
07/01/18 436,793 1.00 39,311 476,104
07/01/19 436,793 1.00 34,943 471,736
07/01/20 436,793 1.00 30,575 467,368
07/01/21 436,793 1.00 26,208 463,001
07/01/22 436,793 1.00 21,840 458,633
07/01/23 436,793 1.00 17,472 454,265
07/01/24 436,793 1.00 13,104 449,897
07/01/25 436,793 1.00 8,736 445,529
07/01/26 436,790 1.00 4,371 441,161
Totals 4,367,927$ 196,560$ 4,564,487$
Interest
Rate %
DR
A
F
T
82
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Department of Water Resources Construction Loan – Contract 00C412
Year Ended June 30, 2017
83
Total
Due Date Principal Interest Payments
07/01/17 3,381$ - %-$ 3,381$
01/01/18 3,381 - - 3,381
07/01/18 3,381 - - 3,381
01/01/19 3,381 - - 3,381
07/01/19 3,381 - - 3,381
01/01/20 3,381 - - 3,381
07/01/20 3,381 - - 3,381
01/01/21 3,381 - - 3,381
07/01/21 3,381 - - 3,381
01/01/22 3,381 - - 3,381
07/01/22 3,381 - - 3,381
01/01/23 3,381 - - 3,381
07/01/23 3,381 - - 3,381
01/01/24 3,381 - - 3,381
07/01/24 3,381 - - 3,381
01/01/25 3,381 - - 3,381
07/01/25 3,381 - - 3,381
01/01/26 3,381 - - 3,381
07/01/26 3,381 - - 3,381
01/01/27 3,381 - - 3,381
07/01/27 3,381 - - 3,381
01/01/28 3,381 - - 3,381
07/01/28 3,381 - - 3,381
01/01/29 3,381 - - 3,381
07/01/29 3,381 - - 3,381
01/01/30 3,381 - - 3,381
07/01/30 3,382 - - 3,382
Totals 91,288$ -$ 91,288$
Rate %
Interest
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Department of Water Resources Construction Loan – Contract 10CX110
Year Ended June 30, 2017
84
Total
Due Date Principal Interest Payments
07/01/17 116,700$ - %-$ 116,700$
01/01/18 116,699 - - 116,699
07/01/18 116,700 - - 116,700
01/01/19 116,699 - - 116,699
07/01/19 116,700 - - 116,700
01/01/20 116,699 - - 116,699
07/01/20 116,700 - - 116,700
01/01/21 116,699 - - 116,699
07/01/21 116,700 - - 116,700
01/01/22 116,699 - - 116,699
07/01/22 116,700 - - 116,700
01/01/23 116,699 - - 116,699
07/01/23 116,700 - - 116,700
01/01/24 116,699 - - 116,699
07/01/24 116,700 - - 116,700
01/01/25 116,699 - - 116,699
07/01/25 116,700 - - 116,700
01/01/26 116,699 - - 116,699
07/01/26 116,700 - - 116,700
01/01/27 116,699 - - 116,699
07/01/27 116,700 - - 116,700
01/01/28 116,699 - - 116,699
07/01/28 116,700 - - 116,700
01/01/29 116,699 - - 116,699
07/01/29 116,700 - - 116,700
01/01/30 116,699 - - 116,699
07/01/30 116,700 - - 116,700
01/01/31 116,699 - - 116,699
07/01/31 116,700 - - 116,700
01/01/32 116,699 - - 116,699
07/01/32 116,700 - - 116,700
01/01/33 116,699 - - 116,699
07/01/33 116,700 - - 116,700
01/01/34 116,699 - - 116,699
07/01/34 116,700 - - 116,700
(Continued)
Interest
Rate %
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Department of Water Resources Construction Design Loan – Contract 10CX110 - Continued
Year Ended June 30, 2017
85
Total
Due Date Principal Interest Payments
01/01/35 116,699$ - %-$ 116,699$
07/01/35 116,700 - - 116,700
01/01/36 116,699 - - 116,699
07/01/36 116,700 - - 116,700
01/01/37 116,699 - - 116,699
07/01/37 116,699 - - 116,699
01/01/38 116,699 - - 116,699
07/01/38 116,699 - - 116,699
01/01/39 116,699 - - 116,699
07/01/39 116,699 - - 116,699
01/01/40 116,699 - - 116,699
07/01/40 116,699 - - 116,699
01/01/41 116,699 - - 116,699
07/01/41 116,699 - - 116,699
01/01/42 116,699 - - 116,699
07/01/42 116,699 - - 116,699
01/01/43 116,699 - - 116,699
07/01/43 116,699 - - 116,699
01/01/44 116,699 - - 116,699
07/01/44 116,699 - - 116,699
01/01/45 116,701 - - 116,701
Totals 6,535,166$ -$ 6,535,166$
Rate %
Interest
DR
A
F
T
86
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Department of Water Resources Construction Loan - Contract 10PX102
Year Ended June 30, 2017
87
Total
Due Date Principal Interest Payments
07/01/17 10,000$ - %-$ 10,000$
01/01/18 10,000 - - 10,000
07/01/18 10,000 - - 10,000
Totals 30,000$ -$ 30,000$
Rate %
Interest
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Department of Water Resources Construction Loan - Contract 11CX101
Year Ended June 30, 2017
88
Total
Due Date Principal Interest Payments
07/01/17 6,508$ - %-$ 6,508$
01/01/18 6,508 - - 6,508
07/01/18 6,508 - - 6,508
01/01/19 6,508 - - 6,508
07/01/19 6,508 - - 6,508
01/01/20 6,508 - - 6,508
07/01/20 6,508 - - 6,508
01/01/21 6,508 - - 6,508
07/01/21 6,508 - - 6,508
01/01/22 6,508 - - 6,508
07/01/22 6,508 - - 6,508
01/01/23 6,508 - - 6,508
07/01/23 6,508 - - 6,508
01/01/24 6,508 - - 6,508
07/01/24 6,508 - - 6,508
01/01/25 6,508 - - 6,508
07/01/25 6,508 - - 6,508
01/01/26 6,508 - - 6,508
07/01/26 6,508 - - 6,508
01/01/27 6,508 - - 6,508
07/01/27 6,508 - - 6,508
01/01/28 6,508 - - 6,508
07/01/28 6,508 - - 6,508
01/01/29 6,508 - - 6,508
07/01/29 6,508 - - 6,508
01/01/30 6,508 - - 6,508
07/01/30 6,508 - - 6,508
01/01/31 6,508 - - 6,508
07/01/31 6,508 - - 6,508
01/01/32 6,508 - - 6,508
07/01/32 6,508 - - 6,508
01/01/33 6,508 - - 6,508
07/01/33 6,508 - - 6,508
01/01/34 6,508 - - 6,508
07/01/34 6,508 - - 6,508
(Continued)
Rate %
Interest
DR
A
F
T
East Valley Water District
Principal and Interest Repayment Schedule
Department of Water Resources Construction Loan - Contract 11CX101 - Continued
Year Ended June 30, 2017
89
Total
Due Date Principal Interest Payments
01/01/35 6,508$ - %-$ 6,508$
07/01/35 6,508 - - 6,508
01/01/36 6,508 - - 6,508
07/01/36 6,508 - - 6,508
01/01/37 6,508 - - 6,508
07/01/37 6,508 - - 6,508
01/01/38 6,508 - - 6,508
07/01/38 6,508 - - 6,508
01/01/39 6,508 - - 6,508
07/01/39 6,508 - - 6,508
01/01/40 6,508 - - 6,508
07/01/40 6,508 - - 6,508
01/01/41 6,508 - - 6,508
07/01/41 6,508 - - 6,508
01/01/42 6,509 - - 6,509
07/01/42 6,509 - - 6,509
01/01/43 6,508 - - 6,508
Totals 338,418$ -$ 338,418$
Rate %
Interest
DR
A
F
T
90
DR
A
F
T
91
DR
A
F
T
EAST VALLEY WATER DISTRICT
Changes in Net Position by Component
Last Ten Fiscal Years
92
Year ended June 30,
2008 2009 2010 2011 2012
Change In Net Position
Operating Revenue 23,198,698$ 24,535,251$ 24,427,059$ 25,205,990$ 28,652,017$
Operating Expenses 20,665,623 22,867,601 24,015,104 24,368,478 24,664,829
Operating Income (Loss)2,533,075 1,667,650 411,955 837,512 3,987,188
Non Operating Revenue
(Expenses)
Investment Income 510,361 235,826 61,192 87,589 84,094
Other Income 64,043 138,173 178,515 195,070 137,094
Interest Expense (776,466) (1,094,926) (989,019) (1,286,352) (1,451,516)
Amortization (37,956) (37,956) (36,061) (32,851) (35,284)
Loss on Disposal of Assets (36,983) (110,944) (133,412) (140,301) -
(277,001) (869,827) (918,785) (1,176,845) (1,265,612)
Special Item
Abandoned Projects - - - - -
Capital Contributions 2,806,993 1,737,025 101,233 778,049 3,562,822
Change in Net Position 5,063,067 2,534,848 (405,597) 438,716 6,284,398
Prior Period Adjustment - - - - 2,861,951
Net Position - Beginning 91,844,102 96,907,169 99,442,017 99,036,420 99,475,136
Net Position - Ending 96,907,169$ 99,442,017$ 99,036,420$ 99,475,136$ 108,621,485$
Net Position By Component
Invested in Capital Assets 89,593,423$ 93,342,590$ 93,380,410$ 95,251,762$ 96,919,789$
Restricted - - - 103,029 416,250
Unrestricted 7,313,746 6,099,427 5,656,010 4,120,345 11,285,446
96,907,169$ 99,442,017$ 99,036,420$ 99,475,136$ 108,621,485$
(Continued)
SOURCE: East Valley Water District - Finance Department
DR
A
F
T
EAST VALLEY WATER DISTRICT
Operating Revenue by Source
Last Ten Fiscal Years
93
Year ended June 30,Year ended June 30,
2013 2014 2015 2016 2017
Change In Net Position
Operating Revenue 31,513,194$ 32,620,577$ 30,743,445$ 33,024,082$ 37,448,549$
Operating Expenses 24,859,076 29,191,176 29,146,339 32,655,921 32,299,587
Operating Income (Loss)6,654,118 3,429,401 1,597,106 368,161 5,148,962
Non Operating Revenue
(Expenses)
Investment Income 55,310 49,846 100,830 146,874 69,237
Other Income 397,796 334,700 800,278 830,806 401,323
Interest Expense (1,445,981) (1,917,676) (1,980,062) (1,843,440) (1,776,684)
Amortization (69,038) (99,688) - - -
Loss on Disposal of Assets - (606,085) - - -
(1,061,913) (2,238,903) (1,078,954) (865,760) (1,306,124)
Special Item
Abandoned Projects - - (2,413,478) - (1,615,241)
Capital Contributions 832,515 6,369,890 596,940 732,642 2,446,118
Change in Net Position 6,424,720 7,560,388 (1,298,386) 235,043 4,673,715
Prior Period Adjustment (537,099) - (7,956,231)
Net Position - Beginning 108,621,485 114,509,106 122,069,494 112,814,877 113,049,920
Net Position - Ending 114,509,106$ 122,069,494$ 112,814,877$ 113,049,920$ 117,723,635$
Net Position By Component
Invested in Capital Assets 95,258,164$ 101,757,787$ 98,091,685$ 103,222,160$ 105,059,796$
Restricted 920,554 2,274,769 2,322,238 2,276,695 2,847,924
Unrestricted 18,330,388 18,036,938 12,400,954 7,551,065 9,815,915
114,509,106$ 122,069,494$ 112,814,877$ 113,049,920$ 117,723,635$
SOURCE: East Valley Water District - Finance Department
DR
A
F
T
EAST VALLEY WATER DISTRICT
Operating Revenue by Source
Last Ten Fiscal Years
94
Wastewater Wastewater Total
Year Ended Water Meter System Treatment Operating
June 30, Sales Charges Charges Charges Other Revenue
2008 10,680,971$ 2,763,508$ 2,943,230$ 5,561,830$ 638,446$ 22,587,985$
2009 11,767,683 3,096,902 3,407,900 5,631,258 763,245 24,666,988
2010 11,638,234 3,215,189 3,509,254 5,665,046 399,336 24,427,059
2011 11,625,249 3,695,345 3,708,815 5,761,956 500,831 25,292,196
2012 13,426,700 4,175,522 4,114,621 6,470,322 464,852 28,652,017
2013 14,780,448 4,555,414 4,473,032 6,998,487 705,813 31,513,194
2014 15,351,609 4,704,036 4,649,212 7,197,418 718,302 32,620,577
2015 13,505,159 4,874,581 4,531,355 6,907,828 924,522 30,743,445
2016 11,927,523 8,063,077 4,286,594 7,165,655 1,581,233 33,024,082
2017 14,556,339 8,944,652 4,703,439 8,128,030 1,116,089 37,448,549
SOURCE: East Valley Water District - Finance Department
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Other
Wastewater
Treatement Charges
Wastewater System
Charges
Meter Charges
Water SalesDR
A
F
T
EAST VALLEY WATER DISTRICT
Water Operating Expenses
Last Ten Fiscal Years
95
Transmission Customer Accts,Total
Year Ended Source of Water & General, & Water Oper
June 30, Supply Pumping Treatment Distribution Admin Expenses
2008 438,134$ 3,005,392$ 709,406$ 1,255,931$ 4,662,582$ 10,071,445$
2009 608,742 2,961,727 1,420,962 1,403,076 5,320,152 11,714,659
2010 815,349 2,971,681 1,453,365 1,586,237 5,112,974 11,939,606
2011 853,161 2,853,461 1,080,954 1,514,394 4,923,033 11,225,003
2012 658,481 2,700,867 1,412,079 1,449,491 5,203,981 11,424,899
2013 672,101 2,683,340 874,448 1,469,243 5,323,101 11,022,233
2014 2,875,518 992,555 1,516,412 1,437,831 6,397,534 13,219,850
2015 3,025,714 615,147 743,099 2,120,374 6,785,909 13,290,243
2016 2,442,061 696,432 799,947 2,327,185 8,782,957 15,048,582
2017 3,401,062 646,940 750,052 2,222,953 7,696,211 14,717,218
SOURCES: East Valley Water District - Customer Service, Finance, and Operations Departments
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
Source of Supply Source of Supply
Water Treatment Transmission & Distribution
Customer Accts, General, & Admin
DR
A
F
T
EAST VALLEY WATER DISTRICT
Wastewater Operating Expenses
Last Ten Fiscal Years
96
Customer Accts,Total
Year Ended Wastewater Wastewater General, & Wastewater Oper
June 30, Collections Treatment Admin Expenses
2008 333,588$ 5,561,830$ 1,707,574$ 7,602,992$
2009 449,296 5,631,258 1,932,193 8,012,747
2010 474,244 5,665,046 2,621,931 8,761,221
2011 447,426 5,995,720 2,857,272 9,300,418
2012 310,834 6,800,369 2,389,631 9,500,834
2013 382,197 6,998,487 2,758,848 10,139,532
2014 312,193 7,197,418 2,953,997 10,463,608
2015 448,399 6,907,828 3,356,250 10,712,477
2016 407,913 7,302,389 2,752,779 10,463,081
2017 425,944 8,128,030 2,510,920 11,064,894
SOURCES: East Valley Water District - Customer Service and Finance Departments
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Customer Accts,
General, & Admin
Wastewater
Treatment
Wastewater
CollectionsDR
A
F
T
EAST VALLEY WATER DISTRICT
Water Sales and Production
Last Ten Fiscal Years
97
Water Sales Water Produced
(Acre Feet)(Acre Feet)
2008 21,375 24,144
2009 21,660 23,700
2010 19,803 21,792
2011 18,712 20,605
2012 19,708 20,982
2013 20,036 22,308
2014 19,910 20,665
2015 17,431 18,494
2016 14,999 16,614
2017 16,052 17,922
SOURCES: East Valley Water District - Finance and Operations Departments
Year Ended
June 30,
0
5,000
10,000
15,000
20,000
25,000
30,000
Water Produced
Water SalesDR
A
F
T
EAST VALLEY WATER DISTRICT
Revenue Rates for Water
Last Ten Fiscal Years
98
Year ended June 30,
2008 2009 2010 2011 2012
Year ended June 30,
2008 2009 2010 2011 2012
8.40$ 10.45$ 10.45$ 11.54$ 12.58$
8.40 10.45 10.45 11.54 12.58
15.70 14.63 14.63 17.56 19.14
33.00 18.81 18.81 32.49 35.41
47.60 30.39 30.39 74.47 81.17
83.50 114.94 114.94 137.40 149.77
139.00 146.29 146.29 227.30 247.76
270.00 219.44 219.44 452.06 492.74
405.00 303.04 303.04 721.76 786.72
(Continued)
HCF = Hundred Cubic Feet = 748 gallons
*On June 1, 2015 the District adopted Water Budget Based Rates.
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
3
4
6
8
5/8
3/4
1
1 1/2
2
Meter Size
(inches)
Water Consumption Rates
Water Monthly System Charges
Charge per HCF 1.20$ 1.35$ 1.35$ 1.49$ 1.62$
DR
A
F
T
EAST VALLEY WATER DISTRICT
Revenue Rates for Water - Continued
Last Ten Fiscal Years
99
Year ended June 30,Year ended June 30,
2013 2014 2015*2016 2017
Tier 1-$1.45 Tier 1-$1.45 Tier 1-$1.63
Tier 2-$2.07 Tier 2-$2.07 Tier 2-$2.32
Tier 3-$2.89 Tier 3-$2.89 Tier 3-$3.24
Year ended June 30,Year ended June 30,
2013 2014 2015*2016 2017
13.71$ 13.71$ 20.96$ 20.96$ 23.06$
13.71 13.71 26.61 26.61 29.27
20.87 20.87 37.92 37.92 41.71
38.60 38.60 66.19 66.19 72.81
88.48 88.48 100.12 100.12 110.13
163.25 163.25 207.54 207.54 228.30
270.06 270.06 365.85 365.85 402.44
537.09 537.09 744.67 744.67 819.14
857.52 857.52 1,366.62 1,366.62 1,503.28
HCF = Hundred Cubic Feet = 748 gallons
*On June 1, 2015 the District adopted Water Budget Based Rates.
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Meter Size
(inches)
5/8
3/4
1
1 1/2
2
3
4
6
8
1.77$ 1.77$
Water Consumption Rates
Charge per HCF
Water Monthly System Charges
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EAST VALLEY WATER DISTRICT
Revenue Rates for Wastewater
Last Ten Fiscal Years
100
Year ended June 30,
2008 2009 2010 2011 2012
Residential (1 to 3 units)
Flat Monthly Charge (per unit)7.75$ 9.75$ 10.84$ 12.93$ 14.09$
Commercial
Flat Monthly Charge - - - 3.28 3.58
plus,
Charge per HCF 0.37 0.49 0.55 0.46 0.50
Year ended June 30,
2008 2009 2010 2011 2012
Residential
Flat Monthly Charge
Residential (1 unit)14.50$ 15.25$ 15.25$ 16.00$ 18.50$
Multi-Family (2 units)14.50 15.25 15.25 16.00 37.00
Multi-Family (3 units)14.50 15.25 15.25 16.00 55.50
Commercial
Multi-family (4+ units)2.00 2.00 2.00 2.00 2.40
Non-Residential 2.00 2.00 2.00 2.00 2.40
plus,
Charge per HCF:
Multi-family (4+ units)0.83 0.87 0.87 0.95 1.25
Retail 1.70 1.79 1.79 1.90 2.10
Restaurants/Lounges 1.84 1.93 1.93 2.00 2.70
Laundromats 1.15 1.21 1.21 1.30 1.50
Dry Cleaners 1.70 1.79 1.79 1.90 2.10
Schools/Churches 0.62 0.65 0.65 0.70 1.10
Governments/Municipal 1.32 1.39 1.39 1.50 1.50
Convalescent Homes 0.84 0.88 0.88 0.95 1.35
Hotels 1.84 1.93 1.93 2.00 2.70
Ofc Bldgs/Motels 1.32 1.39 1.39 1.50 1.50
Auto Repair/Svc Stations 1.17 1.23 1.23 1.30 1.30
Car Wash 1.17 1.23 1.23 1.30 1.30
(Continued)
HCF = Hundred Cubic Feet = 748 gallons
*On June 1, 2015 the District adopted Water Budget Based Rates.
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Wastewater Maintenance Charges
Wastewater Treatment Charges
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EAST VALLEY WATER DISTRICT
Revenue Rates for Wastewater - Continued
Last Ten Fiscal Years
101
Year ended June 30,Year ended June 30,
2013 2014 2015*2016 2017
Residential (1 to 3 units)
Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 15.36$ 15.36$
Commercial
Flat Monthly Charge 3.90 3.90 3.90 3.90 3.90
plus,
Charge per HCF 0.55 0.55 0.55 0.55 0.55
Year ended June 30,Year ended June 30,
2013 2014 2015*2016 2017
Residential (Flat Monthly Charge)
Flat Monthly Charge
Residential (1 unit)18.50$ 18.50$ 18.50$ 19.18$ 20.85$
Multi-Family (2 units)37.00 37.00 37.00 38.37 41.72
Multi-Family (3 units)55.50 55.50 55.50 57.55 62.58
Commercial
Multi-family (4+ units)2.40 2.40 2.40 1.71 1.90
Non-Residential 2.40 2.40 2.40 3.18 3.42
plus,
Charge per HCF:
Multi-family (4 + units)1.25 1.25 1.25 1.36 1.48
Retail 2.10 2.10 2.10 2.28 2.47
Restaurants/Lounges 2.70 2.70 2.70 2.93 3.18
Laundromats 1.50 1.50 1.50 1.63 1.77
Dry Cleaners 2.10 2.10 2.10 2.28 2.47
Schools/Churches 1.10 1.10 1.10 1.19 1.29
Governments/Municipal 1.50 1.50 1.50 1.63 1.77
Convalescent Homes 1.35 1.35 1.35 1.46 1.58
Hotels 2.70 2.70 2.70 2.93 3.18
Ofc Bldgs/Motels 1.50 1.50 1.50 1.63 1.77
Auto Repair/Svc Stations 1.30 1.30 1.30 1.41 1.53
Car Wash 1.30 1.30 1.30 1.41 1.53
(Continued)
HCF = Hundred Cubic Feet = 748 gallons
*On June 1, 2015 the District adopted Water Budget Based Rates.
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Wastewater Maintenance Charges
Wastewater Treatment Charges
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EAST VALLEY WATER DISTRICT
Active Services by Type
Last Ten Fiscal Years
102
Year Ended Residential Multi-Family Total
June 30, (1 to 3 units) (4+ units) Commercial Irrigation Fire Svcs Service
2008 18,367 516 1,309 289 1,301 21,782
2009 18,403 508 1,293 306 1,306 21,816
2010 18,562 496 1,277 310 1,324 21,969
2011 18,564 502 1,273 310 1,318 21,967
2012 18,584 497 1,268 313 1,321 21,983
2013 18,584 497 1,268 313 1,321 21,983
2014 18,584 497 1,268 313 1,321 21,983
2015 18,584 497 1,268 313 1,321 21,983
2016 19,500 463 949 275 1,330 22,517
2017 19,526 463 988 275 1,339 22,591
SOURCES: East Valley Water District - Customer Service and Finance Departments
0
5,000
10,000
15,000
20,000
25,000
Fire Svcs
Irrigation
Commercial
Multi-Family
ResidentialDR
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EAST VALLEY WATER DISTRICT
Principal Customers
Current Fiscal Year and Nine Years Ago
103
Water Percentage Water Percentage
Consumed of Total Consumed of Total
Customer (AF)Rank (%)(AF)Rank (%)
San Bernardino City Unified School District 674 1 3.76%490 3 2.03%
Patton State Hospital 380 2 2.12%422 4 1.75%
City of Highland 308 3 1.72%213 8 0.88%
East Highlands Ranch 272 4 1.52%590 2 2.44%
San Manuel Mission Indians 236 5 1.32%264 6 1.09%
San Manuel Indian Bingo & Casino 233 6 1.30%394 5 1.63%
Village Lakes Homeowners Assoc 47 7 0.26%167 9 0.69%
Victoria Village Apts 112 8 0.63%0.00%
Stubblefield Mobile Home Parks & Offices 107 9 0.59%231 7 0.96%
Valencia Lea Mobile Home Park 96 10 0.54%138 10 0.57%
City of San Bernardino Water Dept 602 1 2.49%
Total - Top 10 2,465 13.75%3,510 14.54%
Total - District 17,922 100.00%24,144 100.00%
SOURCES: East Valley Water District - Customer Service and IT Departments
20082017
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EAST VALLEY WATER DISTRICT
Ratio of Outstanding Debt
Last Ten Fiscal Years
104
As a Share of
Outstanding Per Personal
Debt Capita Income
2008 23,049,105 373 1.24%
2009 21,183,730 339 1.16%
2010 19,221,480 302 1.03%
2011 33,545,000 518 1.70%
2012 35,950,760 546 1.76%
2013 50,501,964 540 1.70%
2014 53,285,524 561 1.71%
2015 51,673,813 508 1.43%
2016 49,732,673 476 *
2017 52,078,644 510 *
* Note: This data was not developed in the format required for this fiscal year.
SOURCE: East Valley Water District - Finance Department
Note: Two State Revolving Fund (SRF) loans totaling $429,706, for the Arroyo Verde and Eastwood
Farms Assessment Districts, and which are secured by assessment liens and assessments on
property owners within those districts, are excluded from this schedule.
Year Ended
June 30,
$5,000,000
$15,000,000
$25,000,000
$35,000,000
$45,000,000
$55,000,000
$65,000,000
Outstanding
Debt
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EAST VALLEY WATER DISTRICT
Debt Service Coverage
Last Ten Fiscal Years
105
Gross Operating Net Available
Revenue (1)Expenses(2)Revenue Principal Interest Total
2008 16,187,479$ 10,071,445$ 6,116,034$ 1,774,710$ 1,120,091$ $2,894,801 2.11 %
2009 15,510,043 11,714,619 3,795,424 1,865,373 1,035,456 2,900,829 1.31
2010 16,911,310 11,939,606 4,971,704 1,962,250 845,499 2,807,749 1.77
2011 18,286,850 11,129,387 7,157,463 1,347,250 828,894 2,176,144 3.29
2012 20,225,013 11,424,899 8,800,114 1,048,319 980,000 2,028,319 4.34
2013 27,397,559 11,022,233 16,375,326 1,095,000 1,382,013 2,477,013 6.61
2014 20,662,750 13,219,850 7,442,900 1,167,718 1,840,671 3,008,389 2.47
2015 20,662,750 13,290,243 7,372,507 1,546,490 1,813,348 3,359,838 2.19
2016 22,543,107 15,048,582 7,494,525 1,851,139 1,718,658 3,569,797 2.10
2017 25,565,417 14,506,205 11,059,212 1,926,956 1,653,322 3,580,278 3.09
Gross Operating Net Available
Revenue (1)Expenses(2)Revenue Principal Interest Total
2008 * * * * * * *
2009 * * * * * * *
2010 * * * * * * *
2011 * * * * * * *
2012 10,674,998$ 9,500,834$ 1,174,164$ 75,000$ 36,650$ $ 111,650 10.52 %
2013 11,600,800 10,139,532 1,461,268 80,000 35,100 115,100 12.70
2014 11,974,164 10,463,608 1,510,556 85,000 184,621 269,621 5.60
2015 11,578,742 10,712,477 866,265 85,000 229,725 314,725 2.75
2016 12,095,372 10,463,081 1,632,291 90,000 225,775 315,775 5.17
2017 13,134,564 11,064,894 2,069,670 95,000 221,625 316,625 6.54
(1)
(2)Operating expenses, less depreciation, for the utility fund.
* Not Applicable
SOURCE: East Valley Water District - Finance Department
Year Ended
Gross revenue includes all operating revenue, interest income, other non-operating revenue and connection
fees from the utility fund.
Coverage
Debt Service
June 30,
Wastewater Department
Coverage
Year Ended
June 30,
Debt Service
Water Department
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EAST VALLEY WATER DISTRICT
Demographics and Economic Statistics
Last Ten Calendar / Fiscal Years
106
Personal
Income Personal
District Unemployment (thousands Income
Population(3)Rate (1), (3)Population(2)of dollars)(2)Per Capita (2)
2008 61,855 6.4%2,003,735 60,145,538 30,017
2009 62,455 10.5%2,013,960 58,693,991 29,144
2010 63,567 13.4%2,041,689 59,850,108 29,314
2011 64,698 13.3%2,064,663 62,952,683 30,491
2012 65,850 12.2%2,080,651 64,633,723 31,064
2013 93,500 10.6%2,093,306 66,321,591 31,683
2014 95,000 8.9%2,112,619 69,487,877 32,892
2015 101,733 7.1%2,128,133 75,402,896 35,431
2016 104,457 6.0%***
2017 102,208 5.4%***
*Note: This data was not developed in the format required for this fiscal year.
SOURCES:
(1)U.S. Department of Labor, Bureau of Labor Statistics (BLS)
Census Bureau midyear population estimates.
(2)Bureau of Economic Analysis (BEA)
Computed using midyear population estimates.
(3)Fiscal Year ends on June 30 of the year that is shown.
SOURCE: East Valley Water District - Finance Department
June 30,
County of San Bernardino
Year Ended
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EAST VALLEY WATER DISTRICT
Full-Time Equivalent Employees by Department
Last Ten Fiscal Years
107
Year Ended District Engineering &
June 30,Administration Maintenance Operations Total
2008 20 37 10 67
2009 20 38 10 68
2010 20 38 10 68
2011 21 35 10 66
2012 21 31 11 63
2013 25 27 11 63
2014 25.5 29 11 65.5
2015 27.5 28.5 11 67
2016 27 28 13 68
2017 27 29 12 68
SOURCES: East Valley Water District - Finance and HR Departments
0
10
20
30
40
50
60
70
District Administration
Engineering & Maintenance
Operations
DR
A
F
T
EAST VALLEY WATER DISTRICT
Operating and Capacity Indicators for Water and Wastewater
Last Ten Fiscal Years
108
Annual Average
Miles of Number of Production Production
Water Main Fire Hydrants (MG)(MGD)
2008 284 *6,965 19
2009 286 *7,058 19
2010 287 *6,453 18
2011 294 2,854 6,097 17
2012 297 2,854 6,422 18
2013 303 2,915 6,529 18
2014 297 2,976 6,488 18
2015 316 3,005 5,680 16
2016 316 3,005 4,887 13
2017 316 3,005 5,231 14
Annual Daily
Miles of Service Sewerage Sewerage
Wastewater Connections (MG)(MGD)
2008 *19,115 2,159.17 5.92
2009 205 19,232 2,258.54 6.19
2010 208 19,333 2,129.43 5.83
2011 208 19,435 2,073.09 5.68
2012 224 19,477 2,247.66 6.16
2013 224 19,502 2,285.06 6.26
2014 223 19,504 2,595.08 7.11
2015 224 19,544 2,271.96 6.22
2016 224 19,572 2,167.71 5.94
2017 260 20,290 2,175.40 5.96
* This data was not developed in the format required for this fiscal year.
SOURCE: East Valley Water District - Engineering and IT Departments
Note: The District Wastewater Master Plan was updated in October 2013, providing more accurate
information on wastewater flows.
Year Ended
June 30,
Year Ended
June 30,
Water System
Wastewater System
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B OAR D AG E N D A S TAF F R E P O RT
Agenda Item #7.
Meeting Date: O c tob er 11, 2017
Dis c ussion Item
To: G overning Board Memb ers
From: G eneral Manager/C E O
S ubject: R eview and Ap p rove the Updated P urchas ing/P ro curement P olic y 7.1
R E COMME N D AT IO N:
S taff rec o mmend s that the Board of Direc to rs review and appro ve the up d ated P urc has ing/P rocurement P olic y
7.1.
B AC KG R O UN D / AN ALYS IS :
East Valley Water Dis tric t (Dis tric t) is an organizatio n that s trives fo r trans p arency, and to p rac tic e s o und
s tewards hip over the p ublic funds with whic h it is entrus ted . As s uc h, it is prud ent that the Dis tric t periodically
review key financ ial polic ies that p rovid e guid elines for s taff in performanc e of their d ay to day functio ns . O ne
s uch policy is the Dis trict’s P urc has ing/P rocurement P o lic y (P o lic y).
T he current P olicy was adopted in Augus t 2011. W hen ad opted , the P olicy set new Board exp ectatio ns fo r
c o mp etition and imp artiality in all purc hasing activities, and es tablished autho rity and res p o ns ib ility for staff
p ositio ns througho ut the Dis trict. As a res ult, the Dis tric t has experienc ed a s ignific ant increas e in the number o f
vendors and contrac to rs bid d ing o n p rojec ts , enhancing the value received fo r the inves tment of pub lic funds on
b ehalf of our ratepayers.
In the years s inc e 2011, c hanges in the Dis tric t’s organizatio nal s tructure, adop tion of program-bas ed b ud gets
with go als and objec tives, and changes in the laws go verning District contrac ts , req uire that the Dis tric t make
s ome modificatio ns to its P urchas ing/P ro curement P o licy.T his will ens ure that the p ublic's money will be put to
us e in a way that exceed s regulatory req uirements and enhances p ub lic trust in our o rganizatio n.
AGE N C Y ID E ALS AN D E N DE AVO R S:
Ideals and End eavo r I I - Maintain An Environment C o mmitted To Elevated P ublic S ervic e
(E) - P rac tic e trans p arent & ac countable fis c al management
R E VIE W B Y O T HE R S :
R ec o mmend ed b y:R espec tfully s ubmitted:
John Mura
G eneral Manager/C EO
Brian Tomp kins
C hief F inancial O fficer
R E VIE W B Y O T HE R S :
T his agend a item has been reviewed by Exec utive Management, the F inance and Human R es ourc es S tanding
C o mmittee, and Legal C ouns el.
F IS CAL IMPAC T
T here is no fis cal imp ac t as s oc iated with this agend a item.
ATTAC H M E NTS:
Description Type
P urchasing/P ro cureme nt P olic y 7.1 Backup Material
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
1 of 16
Purpose
The purpose of this policy is to establish procedures for the acquisition of supplies,
materials, equipment and services, including construction and capital improvements, for
East Valley Water District (the District) pursuant to California Government Code (CGC)
Section 54201 et seq.
CGC Section 54202 requires every local agency to adopt policies and procedures,
including bidding regulations, governing purchases of supplies, mat erials, and
equipment and that said purchases shall be in accordance with duly adopted
policies.
CGC Section 54204 requires that if a local agency is other than a city or county,
policies provided for in Section 54202 shall be adopted by means of a written
rule or regulation, copies of which shall be available for public distribution.
Authorization and Delegation
By adoption of this policy, the Board of Directors (Board) is authorizing the General
Manager/Chief Executive Officer (GM/CEO), or his/her authori zed representative to
exercise certain duties and responsibilities that are essential for the day -to-day operation
of the District.
The GM/CEO may delegate the procurement of services and materials, and the provision
of public works contracts to those staf f members given specific authority within this policy.
The GM/CEO delegates the authority to act as the District’s Purchasing Agent to the Chief
Financial Officer (CFO), or their designee.
The GM/CEO delegates the authority to procure engineering, consulti ng and design, and
construction services for Public Works Projects to the Director of Engineering and
Operations (DEO), or their designee.
The GM/CEO delegates to Program Managers and Supervisors the authority to determine
specifications of goods or services needed, to solicit proper bids, and to obtain proper
approvals according to the Authorization Table .
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
2 of 16
Responsibilities
A. Purchasing Agent – the Purchasing Agent’s responsibilities include:
1. Administration of the Purchasing Policy;
2. Update settings / approval paths in the District’s financial software;
3. Creation of Purchase Orders (PO);
4. Review bid documents and bidding procedures;
5. Review all contracts (except Public Works);
6. Recommend revisions to purchasing procedures when necessary and keep
informed of current developments in the field of public purchasing;
7. Conduct internal audits; and
8. Provide training for District staff on this policy.
B. DEO – The Director of Engineering and Operations responsibilities include:
1. Recommend revisions to purchasing procedures with respect to public
contracting; and
2. Review all public works contracts.
C. Program Managers & Supervisors – the responsibilities of managers and supervisors
shall include:
1. Enter into contractual obligations on behalf of the District;
2. Obtain full and open competition in accordance with prescribed policies and
procedures in a manner that presents the best overall value to the District;
3. To anticipate requirements sufficiently in advance to allow adequate time to
obtain goods in accordance with the best purchasing practices;
4. Identify, evaluate, and utilize purchasing methods which best meet the needs of
the District (e.g. cooperative purchases, blanket purchase orders, contractual
agreements, purchasing cards, etc.);
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
3 of 16
5. Provide for the fair and equitable treatment of vendors, suppliers, and
contractors;
6. Supervise the receipt and inspection of all materials, supplies, equipment , and
services purchased to ensure conformance with specifications;
7. To notify vendors of purchase award when authorized by Purchasing Agent; and
8. Obtain approvals according to the Authorization Table below.
D. Authorization Table
Amount Up to Approval Level
$ 5,000 Department Supervisors
$ 10,000 Department Managers
$ 25,000 Department Heads (Executive Staff)
$ 150,000 General Manager / CEO
(CFO or DEO if CEO is absent)
> $ 150,000 Board of Directors
The above authorization levels apply to the procurement of materials and services
that are included in the current year adopted budget.
Procurement Methods
A. Requisition/Purchase Order - Requisitions provide a mechanism for obtaining the
approvals necessary for issuance of a PO. With few exceptions, a PO must be issued
prior to ordering goods or signing contracts for construction or services.
1. In general, POs will be closed at the end of each fiscal year. Purchases are
expensed from the fiscal year budget in which goods are received, not the fiscal
year in which POs are issued.
2. Purchase orders representing multiple year contracts will remain open until
projects are completed and Finance is notified to close the Purchase Order.
3. Procurements that require approval by the Board do not require electronic
requisitions. The Purchasing Agent will create the Purchase Order after the Board
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
4 of 16
of Directors has approved and signed the contract. The Purchase Order will then
be delivered to the related Department.
4. In no case shall a contract be signed and Purchase Order issued unless sufficient
funds have been budgeted and appropriated, or identified in the Capital
Improvement Program reviewed with the Board during the annual budget
process.
B. Check Request - A check request can be used to initiate payment for purchases not
requiring a PO, such as for purchases of less than $5,000, and non -discretionary
purchases/payments.
C. Purchasing Card - Designated full-time employees may be assigned a Cal Card for
miscellaneous purchases. The objective of the Cal Card Program is to reduce
processing costs associated with low dollar expenditures for materials and supplies.
Services are not to be acquired on Cal Cards due to lack of insurance and
indemnification language associated with these purchases.
1. Each cardholder has pre-defined spending limits which may be increased
temporarily or permanently with approval by an authorized manager subject to
the Authorization Limits. Purchases using the Cal Card are subject to the terms
and conditions of the District Cardholder Agreement.
Competitive Selection Process
A. General - All procurements for materials, supplies, equipment, services, and
construction shall employ a competitive selection process whenever practicable. All
procurements of $75,000 and over will require sealed bidding.
1. Bids shall be awarded to the “responsive” and “responsible” bidder who submits
the lowest bid that is most advantageous to the District.
• Responsive shall mean a bidder whose bid is in conformance with the
requirements of the bid solicitation, including specifications and the
District’s terms and conditions. Bidders who substitute terms and conditions
or who qualify their bids in such a manner as to limit their liability may be
considered non-responsive.
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
5 of 16
• Responsible refers to the ability of the bidder to successfully fulfill a
contract. Prospective bidders may be request ed to furnish proof of financial
resources, a list of current of previous customers, and other pertinent data.
Such action may be taken after receipt of bids.
2. In determining the lowest “responsible” bidder, the following elements shall be
considered in addition to price:
a. That the products offered provide the quality, fitness, and capacity for the
required usage;
b. That the bidder has the ability, capacity and skill to perf orm the contract
satisfactorily and within the time required; and
c. That the bidder’s experience(s) regarding past purchases by the District or
other public agencies demonstrates the reliability of the bidder to perform
the contract.
3. When a bid is recommended to be awarded to other than the low bidder, written
justification is required. The written statement, signed by the appropriate
supervisor or manager, or the GM/CEO shall be attached to the purchase
requisition or Board report.
B. Bid Requirements Table
Purchase Amount Requirements PO Required
$ 0 - $5,000 Informal Quotes NO
$ 5,001 - $75,000 Informal Bids YES
$ 75,001 and over RFP/Sealed Bids YES
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
6 of 16
C. Informal Quotes
1. For purchases less than $5,000, quotes may be obtained through an informal
process (e.g. web browsing or phone calls) and documentation of the bids is
recommended but not required. Although bid documents are not required, a
requisition and purchase order may be issued to document the purchase if the
staff member making the purchase wishes to do so.
2. Since the purchase may be initiated without a Purchase Order, the accounts
payable process will require that the invoice be signed by an authorized signor
before payment is released.
D. Informal Bids
1. For all procurement of materials, supplies, equipment , services, and
construction in excess of $5,000 but less than $75,000, at least three vendors
must be contacted for bids/price quotations and the purchase awarded to the
lowest, most responsive bidder.
2. Bids may be solicited from prospective bidders by written request, telephone,
legal advertising or public notice (including District website). Regardless of
solicitation method, all vendors must receive the same information about
specifications and requirements of the product or service, and all bids submitted
must be kept in confidence until the bid is awarded. Bidders may be advised that
they will be notified only if they submitted the successful bid.
3. All bids received must be documented and retained by the requesting
department or scanned into Tyler Content Manager.
E. Formal Bids
1. For all procurement of materials, supplies, equipment, services, and
construction in excess of $75,000, bids or proposals shall be solicited from a
minimum of three vendors. A written Notice Inviting Bids (NIB) or Request for
Proposals (RFP) must be used to document the specification and requirement of
the product or service.
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
7 of 16
2. The NIB or RFP must be made publicly available on the District’s website and, if
practicable, in a newspaper of general circulation. If the NIB/RFP is also sent
directly to prospective vendors, at least three vendors shall receive the notice.
3. Vendor responses (proposals/bids) must be submitted in written form and
retained on file by the manager of the initiating de partment. Contracts shall be
awarded in a manner most beneficial to the District as further explained in the
following sections.
Supplies, Equipment, and Non-Professional Services
The following procedures are applicable to the acquisition of commodities and non-
professional services, and shall be used in conjunction with the Competitive Selection
Processes described above. Non-Professional Services do not require professional
certifications. Examples include: landscape maintenance, janitorial, and unifor m cleaning.
A. Notice Inviting Bids - The initiating department shall prepare the Notice Inviting Bids
(NIB). The notice shall be published once, in a newspaper of general circulation
within the District, at least fourteen calendar days before the date of bid opening.
B. Formal Notice Inviting Bids - The Notice shall contain:
1. A general description of the goods, services, or equipment to be purchased;
2. A statement about where bid plans and specifications may be secured ;
a. For tangible goods and equipment, brand standardization is allowable if
deemed in the best interest of the District;
3. Bonding requirements, if applicable; and
4. A statement of the time and place for opening the bids.
C. Bid Opening – Sealed bids shall be submitted to the Department requesting the bids.
A written record and tabulation shall be made at the time all bids are received. Bids
shall be opened by the department head in public at the date, time, and place
stated in the NIB.
D. Evaluation – A representative of the requesting department shall review all bids
received for compliance with specifications. A ny deviation from the specifications
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
8 of 16
shall be fully documented, and the impact of the deviation on the performance of
the bid item evaluated. The requesting department shall review its finding with the
Purchasing agent.
E. Bid Award – Contracts will be awarded to the lowest responsive and responsible
bidder. Approval of any bid will be in accordance with the Authorization Table. If
the bid is accepted, the Bidder shall execute the contract within the time provided
in the contract documents and shall furnish the necessary certificates of insurance
and bonds required by the contract documents.
1. Project-specific contracts for maintenance and service agreements shall be
issued to expire upon completion of the work unless otherwise specified in the
written agreement. Contracts shall be issued for an initial term of no more than
36 months. The GM/CEO may authorize a maximum of one extension of 24
months for maintenance and service agreements.
2. If an extension to a contract or maintenance agreement causes the total cost for
all years to exceed $150,000 (even though the original total cost of the
agreement was less than $150,000), the extension shall be approved by the
Board.
Professional Services
Professional service providers are those persons or firms specially trained to provide
services in connection with financial, economic, accounting, engineering, administrative,
or other matters involving specialized expertise or unique skills.
When selecting a vendor for professional services, c ost will not be the prominent criterion
in evaluating proposals. Proposals for these services will be evaluated based on a
combination of factors that result in the best overall value to the District.
A. Request for Proposal (RFP) – The department responsible for monitoring the project
shall prepare the RFP. The RFP should contain significant detail about the project
including:
1. A precise description of the objective;
2. The services to be performed;
3. The anticipated project timeline, including:
a. The deadline for submittal of proposals;
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
9 of 16
b. Date of proposal conference, if any;
c. Proposal evaluation;
d. Award of contract; and
e. Projected start and completion dates.
4. Evaluation criteria;
5. Expected content of proposals; and
6. Contractual requirement, including:
a. Prohibition against assignment;
b. Insurance requirements;
c. Compliance with federal, state and local laws, and grant related
requirement, if applicable; and
d. Sample of District contract / agreement.
B. Issuance of RFPs – To allow for sufficient competition, the project manager shall:
1. Post the RFP on the District website, and distribute the RFP to at lea st three
firms engaged in performing the work requested. If deemed appropriate, the RFP
may also be published in a newspaper of general circulation at least 14 days prior
to the designated closing.
2. Allow a reasonable length of time between solicitation and closing dates so
potential respondents have sufficient time to prepare proposals.
3. Post on the District website, any RFP amendments, and responses to any inquiries
from potential respondents to ensure all interested firms have the same
information.
C. Proposal Receipt and Opening – Sealed proposals shall be received by the originating
department, time stamped, and recorded on a list of proposals received. Proposals
shall be opened in the presence of the Department Head from the initiating
department. Proposals received after the time specified shall be returned to the
submitter unopened.
D. Evaluation of Proposals – The project manager shall establish a selection committee
of at least three members, and establish selection criteria and a ranking system.
The selection criteria should include:
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
10 of 16
1. Completeness of the proposal;
2. Demonstrated understanding of the work to be performed;
3. Experience of the firm and its personnel relative to the required services;
4. Qualifications of the personnel to be assigned;
5. References who can be contacted to verify past performance; and
6. If appropriate, pricing for the project .
The selection committee may choose to interview all or some of the respo ndents
to assist in coming to a consensus on the top firm.
E. The initiating department shall recommend the top firm for award of a contract,
which shall be approved in accordance with the Authorization Table .
Public Works Projects
Public Works Projects, hereafter referred to as Capital Improvement Projects (CIP) include
the construction, reconstruction, erection, alteration, renovation, improvement,
demolition, painting or repair of any publicly owned, leased or operated facility.
As required by law, registration with the Department of Industrial Relations for prevailing
wage regulations is required for all CIP bidders. When the CIP is funded through a Federal
Grant, the District must follow Federal procurement standards listed in the Code of Federal
Regulations Sections 200.317 through 200.326 or as required by the grant document.
A. Notice Inviting Bids
1. The initiating department shall prepare the Notice Inviting Bids. The notice shall
be published once, in a newspaper of general circulation within the Di strict, at
least fourteen calendar days before the date of bid opening. The IFB shall also
be mailed to construction trade journals at least 30 days prior to bid opening.
2. Alternately, the GM/CEO, or his/her designee, is authorized to create a
prequalified bidders list. The bidders may be prequalified on an annual basis or
on a project specific basis. Notice inviting sealed bids shall be distributed to
prequalified bidders or other interested parties as may be deemed beneficial by
the GM/CEO, or his/her designee.
B. Form of Notice Inviting Bids: The Notice shall contain:
1. A general description of the Project;
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
11 of 16
2. A statement indicating where plans and specification, and bonding requirement
can be obtained;
3. A statement that the District will receive sealed bids;
4. A statement that the contract or contracts for the CIP will be awarded to the
lowest responsive, responsible bidder or bidders, but that any or all bids may be
rejected;
5. A statement of the time and place for opening the bids; and
6. Such other information as may be required by the District or by law.
C. Submission of Bids
1. Bids shall be submitted on forms supplied by the District and under sealed cover.
Each bid shall be accompanied by cash, a certified or cashier’s check, or bond
secured from a surety company satisfactory to the District in the amount
indicated within the bid documents, made payable to East Valley Water District,
as bid security.
2. If the bid is accepted, the Bidder shall execute the contract within the time
provided in the contract documents and sha ll furnish the necessary certificates
of insurance and bonds required by the contract documents.
D. Opening of Bids – Bids shall be publicly opened at the time and place specified in
the invitation for bids. A minimum of two members of District staff must be present
at all sealed bid openings.
E. Bid Evaluation and Acceptance – Acceptance of any bid shall be by action of the
Board. The Board reserves the right to waive any irregularity, to reject any or all
bids, to re-advertise, or to proceed with the CIP or any part of it using District staff.
F. Bid Award - Contracts shall be awarded to the lowest responsive and responsible
bidder which will be deemed the best value to the District.
G. Relief of Bidders – Bids shall not be relieved of its bid unless by consent of the
District upon a showing by the bidder to the satisfaction of the District that:
• A mistake was made;
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
12 of 16
• The bidder gave the District written notice within five business days after the
opening of bids of the mistake, specifying in the notice in detail how the mistake
occurred;
• The mistake made the bid materially different than the bidder intended it to be;
• The mistake was made in filling out the bid and not due to error in judgment or
carelessness in inspecting the site of the work or in reading the plans or
specifications; or
• A bidder who claims a mistake or forfeits its bid security shall be prohibited from
participating in further bidding on the same project.
H. Performance and Payment Bonds - Any bidder to whom a contract for CIP is awarded
under the District’s formal competitive bidding procedures shall supply on forms
satisfactory to the District, a Faithful Performance Bond in an amount equal to the
total contract price.
1. For any CIP contract in excess of $25,000, the bidder must also supply a Labor
and Material Payment Bond in an amount equal to the total contract price.
2. Each bond shall be secured from a California admitted surety company that
meets all State of California bonding requirements, as defined in California Code
of Civil Procedure Section 995.120, and is authorized by the State of California.
Each bond shall be accompanied, upon request of the District, with all documents
required by California Code of Civil Procedure Section 995.660, to the extent
required by law.
I. Insurance - Before work commences, evidence of insurance as required by the
contract for CIP must be obtained, reviewed, and accepted by the DEO or their
designee. A copy of the certificate of insurance will be provided to the District
HR/Risk Management Department.
Exemptions from Competitive Solicitation
The competitive solicitation / bid process will not be required for the acquisition of
goods and services under the following circumstances:
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
13 of 16
A. Non-Discretionary Purchases - These purchases/payments are not readily adaptable
to the open market and competitive selection process. Non-discretionary purchases
do not require the issuance of a purchase order, and payments in excess of the
GM/CEO authorization limit do not require Board approval. Examples o f non-
discretionary purchases include, but are not limited to:
1. Bank charges and fees;
2. Debt Service payments;
3. Insurance premiums;
4. Memberships, dues, and subscriptions;
5. Pension and OPEB payments;
6. Utilities; and
7. Water purchases.
B. Cooperative Procurement - The District may participate in purchases and contracts
established by other political jurisdictions, provided the cooperative agreement is
established following a competitive bid process. The cooperative purchase may be
authorized according to the authorization table.
C. Inventory Replenishment - Purchases to replenish the District’s warehouse inventory
within established inventory re-order levels require no prior authorization provided
that the vendor being utilized has been selected within the last twelve month s as
the designated vendor for the items, or class of items, to be purchased .
D. Sole Source - Commodities, services, and equipment which can be obtained from
only one vendor are exempt from competitive bidding. Sole source purchases may
include proprietary items sold directly from the manufacturer, equipment which has
been standardized by the District, items that have only one distributor authorized
to sell in this area, agreements for maintenance of computer software the District
owns or a certain product that has been proven to be the only product acceptable.
E. Emergency Purchases - Emergency purchases may be made without competitive
bidding when unforeseen circumstances present an immediate risk of:
1. harm or hazard to the public health, safety, and welfare;
2. damage to District property; or
3. serious interruption of District essential services.
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
14 of 16
Since emergency purchases do not normally provide the District an opportunity to
obtain competitive quotes, sound judgment shall be used in keeping such orders to
an absolute minimum. In addition, the following requirements shall apply:
1. The Finance department shall be contacted as soon as possible to obtain a
purchase order number;
2. A completed, properly approved purchase requisition shall be submitted within
two working days, or as soon as the information is available;
3. Documentation explaining the circumstances and nature of the purcha se shall be
maintained by the Supervisor or Manager; and
4. If the emergency purchase causes any budget line item to exceed the approved
budget, it shall be the responsibility of the department requesting the purchase
to obtain subsequent Board of Directors approval for reserve funding or to make
a budget transfer to cover the purchase. Approvals for a budget transfer must be
given by the appropriate Supervisor or Manager as determined by the
authorization table.
Change Orders
Any substantial change to a purch ase order or contract shall be documented as a change
order.
A. The GM/CEO may approve change orders to contracts for the procurement of
supplies, equipment, contracts for professional services, and other goods and
services provided:
1. The change order is within the scope of the approved contract and the cost of
the changed work does not exceed the adopted budget;
2. The cumulative total of all change orders is within 10% of the original contract
amount; and
3. Taxes, shipping, and handling may cause the purchase order to exceed the
authorized amount. These items do not require a change order, even if they
exceed 10% of the original purchase order amount.
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
15 of 16
B. The GM/CEO or the DEO may approve change orders for Capital Improvement
Projects provided that the changed work is within the scope of the project approved
by the Board and the cost of the changed work does not exceed the budget for the
project approved by the Board and:
1. The cumulative total for all change orders do not exceed 10% of the original
contract amount; and
2. Change orders for CIP in excess of these amounts and change orders for CIP
reflecting a change in the scope of the nature of the project shall be submitted
to the Board for approval.
Conflict of Interest
No member, officer, or employee of the District, or their designees or agents, and no public
official who exercises authority over or responsibility with respect to purchasing during his
or her tenure, or for one year thereafter, shall have any interest, d irect or indirect, in any
purchase, agreement or sub agreement, or the proceeds thereof, for any purchase or
purchase agreement. The full Conflict of Interest Code of the East Valley Water District is
incorporated herein by reference.
Unauthorized Purchases
Purchase orders shall be issued prior to ordering supplies, equipment , and services and not
“after the fact” for work already done or materials already ordered.
Except for emergencies, departmental purchases, or other authorized exemptions stated
in these guidelines, no purchase of supplies, services, or equipment shall be made without
an authorized purchase order. Otherwise:
A. Such purchases are void and not considered an obligation of the District;
B. Invoices without an authorized purchase order may b e returned to the vendor
unpaid; and
C. The person ordering the unauthorized purchase may be held personally liable for
the costs of the purchase or contract and may be subject to disciplinary actions.
EAST VALLEY WATER DISTRICT
Administrative Policies & Programs
Policy Title: Purchasing / Procurement Policy
Original Approval Date:
August 9, 2011
Last Revised:
October 11, 2017
Policy No:
7.1
Page
16 of 16
Review Audits
Compliance with this policy is subject to review at any time, including by external auditors.
It is the responsibility of the District st aff member initiating the purchase to maintain
records of bids, bid procedures followed, contracts, sole source forms, change orders, and
authorization signatures.
Revised: October 11, 2017
Description:
Budgeted Item?Yes No Total Cost:
Choose one of the following:
Proprietary item sold directly from manufacturer
Equipment standardized by the District
Only distributor authorized to sell in this area
Agreement for maintenance of computer software the District owns
Product proven to be the only product acceptable
Justification:
Signature Date
Print Name Title
Department Head Approval Date
CFO or Business Services Manager Approval Date
All requests must be approved by the Chief Financial Officer or Business Services Manager.
Commodities, services, and equipment which can be obtained from only one vendor are exempt from
competitive bidding.
Department Name:Fiscal Year:
FINANCE DEPARTMENT
SOLE SOURCE JUSTIFICATION FORM
R ec o mmend ed b y:R espec tfully s ubmitted:
John M ura
G eneral Manager/C EO
K elly M alloy
P ublic Affairs /C ons ervation Manager
B OAR D AG E N D A S TAF F R E P O RT
Agenda Item #8.
Meeting Date: O c tob er 11, 2017
To: G overning Board Memb ers
From: G eneral Manager/C E O
S ubject: Ad opt R es o lutio n 2017.15 - Imagine a Day Without Water
R E COMME N D AT IO N:
Ad o p t R esolutio n 2017.15 recognizing the Distric t's p articipatio n in Imagine a Day Without Water.
B AC KG R O UN D / AN ALYS IS :
T he Dis trict provides reliable water s ervice to over 100,000 residents each and every day, with the extens ive
o peratio nal effort typ ic ally unseen by community memb ers.
Imagine a Day Witho ut Water 2017 is the third annual day to rais e awareness and educ ate America about the
importance o f c lean water. By simply cons idering ho w a s ingle day would b e imp acted if water were not
availab le, residents have a p ersonal c onnec tio n to the b enefits o f reliab le s ystems. T his effort highlights the
importance o f infrastructure investments and techno lo gic al inno vation to s ustain drinking water and wastewater
s ys tems for generatio ns to c o me.
AGE N C Y ID E ALS AN D E N DE AVO R S:
Ideals and End eavo r I I I - Demo ns trate Vis ionary Leaders hip To Enhanc e Dis tric t Identity
(C ) - Utilize inno vative c o mmunic atio n methods
F IS CAL IMPAC T
T here is no fis cal imp ac t as s oc iated with this ac tion.
ATTAC H M E NTS:
Description Type
Resolution 201 7.15 Resolution Lette r
East Valley Water District
Resolution 2017.15
Page 1 of 1
RESOLUTION 2017.15 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT RECOGNIZING THE “IMAGINE A DAY WITHOUT WATER” CAMPAIGN BEING HELD ON OCTOBER 12, 2017
BE IT HEREBY RESOLVED, by the Board of Directors of the East Valley Water
District (“District”) recognizing the “Imagine a Day Without Water” campaign being held
October 12, 2017 which is an organized effort to highlight the critical importance of reliable
access to clean water in our lives and the investment in infrastructure that is necessary to protect
this valuable resource.
Whereas, the infrastructure that brings water to and from homes and businesses is essential to
the quality of life and economic vitality for the community; and
Whereas, residents on average utilize 55 gallons of water per person, per day; and
Whereas, the District has 299 miles of pipelines and 16 wells; and
Whereas, utilities nationwide are grappling with aging infrastructure and funding to maintain
systems; and
Whereas, managing water responsibly is critical to our nation’s environmental health and to a
high quality of life through economic commerce, power generation, and recreation; and
Whereas, investing in our drinking water and wastewater systems will secure a bright and
prosperous future for generations to come; and
Whereas, innovation in water conservation and water reuse will drive job growth, economic
development, and establish a 21st century paradigm of water management in the United States;
and
Whereas, different regions face different water challenges, so the solutions to strengthen our
drinking water and wastewater systems must be locally driven, but reinvestment in our water
must be a national priority; now; therefore, be it
Whereas, the District recognizes that water is essential to the quality of life and economic
competitiveness and acknowledges the importance of educating the public about the value of
water through the “Imagine a Day Without Water” campaign.
NOW, THEREFORE, BE IT RESOLVED, that the East Valley Water District is dedicated to
investing in water and wastewater infrastructure.
* * * * *
The foregoing resolution was duly adopted at a meeting of the Board of Directors of the
East Valley Water District upon motion duly made, seconded and carried on October 11, 2017.
ADOPTED this 11th day of October 2017.
Ayes: Noes: Absent:
Abstain: ____________________________ Ronald L. Coats Board President
I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2017.15
adopted by the Board of Directors of East Valley Water District at its regular meeting held
October 11, 2017.
__________________________ John Mura
Secretary
B OAR D AG E N D A S TAF F R E P O RT
Agenda Item #9.
Meeting Date: O c tob er 11, 2017
Dis c ussion Item
To: G overning Board Memb ers
From: G eneral Manager/C E O
S ubject: Ap prove recommendatio ns by s taff regard ing Water Q uality Up d ate
R E COMME N D AT IO N:
S taff rec o mmend s that the Board o f Directors d etermine the Total Trihalo methanes (T T HM) exceedanc e at
P lant 134 has b een res o lved and to direct s taff to s end written no tification to all c usto mers ind icating
res o lution.
B AC KG R O UN D / AN ALYS IS :
Early this year the Dis trict was c hallenged with a violatio n of exc eed ing the maximum level o f Total
Trihalo methanes (T T HM) at P lant 134 as des ignated under o ur operating p ermit with the R egional Water Q uality
C ontrol Bo ard . Due to this violation, the R egional Board required that all Distric t cus tomers receive written
no tific atio n of this violatio n. Altho ugh nothing further was required, the District chose to hold a public
info rmatio n worksho p to ad dress any cus to mer concerns as well as pos ting weekly water s amp le information on
the Dis trict website. T he Distric t realized the imp o rtanc e o f addres s ing any p ublic concerns s urro und ing the
vio lation and p rovid ing as s uranc e that the is s ue would b e q uic kly remed ied.
As a res ult of the T T HM violation and the des ire to quic kly c o rrec t, fund ing in the amount o f 2.35 million
d ollars was includ ed in the C apital Imp ro vement P rogram to fo r an add itional treatment p ro ces s tho ught to b e
need ed at P lant 134 to mitigate the T T HM c o nc ern. As s taff s tarted evaluating the vario us opportunities
availab le at the treatment plant to minimize the p ro d uctio n o f T T HM’s, staff identified s everal operational
measures that c o uld b e imp lemented that c o uld help minimize formation o f T T HM’s .
During the six month p eriod fo llo wing the T T HM vio lation, the measures implemented s ucc es s fully reduc ed
T T HM levels . Additionally, real time Total O rganic C arb on (TO C ) mo nitoring eq uipment has b een ad d ed to the
treatment plant which will allo w staff to have b etter knowled ge of when T T HM formation is mo re pro b ab le. As
s ho wn in the table below, the Dis trict has rep o rted two c o ns ecutive q uarters of T T HM c omplianc e to the S tate
b elow the 80 p p b Maximum C ontaminant Level (MC L) thresho ld . T he Dis tric t is well within c o mp liance at this
p oint and exp ec ted to be in even b etter p o s itio n at the next reporting q uarter.
R ec o mmend ed b y:R espec tfully s ubmitted:
John Mura
G eneral Manager/C EO
S teven Nix
Direc tor of Engineering & O perations
3rd Q tr 4th Q tr 1st Q tr 2nd Q tr 3rd Q tr
R ep o rting R ep orting R ep o rting R eporting R eporting
S amp le Date 7/21/2016 11/17/2016 2/24/2017 5/12/2017 8/24/2017
6600 S ummit 127.1 83.3 95.8 8.7 16.0
(Rolling Avg)76.0 78.0 92.0 78.7 51.0
28530 O ak R idge R d 104.6 70.4 87.2 5.5 13.4
(Rolling Avg)56.0 57.0 73.0 66.9 44.1
3713 Lynwo o d 72.0 132.3 92.0 6.0 25.0
(Rolling Avg)61.0 75.0 87.0 75.6 63.8
6534 C hurch S t 116.7 86.7 77.8 8.8 25.6
(Rolling Avg)69 74 84.0 72.5 49.7
Although $2.35M was set aside in the C apital Imp ro vement P rogram fo r treatment p lant up grad es , very little o f
this mo ney was ac tually needed to remed y the issue. To date approximately $150,000 has b een us ed fo r
up grades and an ad d itio nal $250,000 will be used to enhance slud ge hand ling c ap ab ilities . T he remaining $1.95M
will mo s t likely no t be needed at this s ite and will be reallo cated to o ther needed pro jects in a q uarterly b ud get
adjus tment at a future Board meeting.
AGE N C Y ID E ALS AN D E N DE AVO R S:
Id eals and Endeavor I - Enc o urage Inno vative Investments To P romote S ustainab le Benefits
(A) - Develop projec ts and pro grams to ens ure safe and reliab le s ervic es
R E VIE W B Y O T HE R S :
T his agend a item has been reviewed b y O perations and Ad minis tratio n staff.
F IS CAL IMPAC T
T here is no fis cal imp ac t as s oc iated with this agend a item at this time.