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HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 11/25/2020REGULAR BOARD MEETING 31111 Greenspot Road, Highland, CA 92346 November 25, 2020 - 5:30 PM In an effort to prevent the spread of COVID-19 and in accordance with Governor Newsom's Executive Order N-25-20 and N-29-20, this meeting is being conducted via teleconference. There will be no public location for attending this meeting in person. Members of the public may listen and provide public comment telephonically. Anyone wishing to join the meeting may do so using the following information: DIAL: 1-209-425-5876 and enter CONFERENCE ID: 807 769 713# You may also join by clicking HERE to join the meeting via Microsoft Teams. AGENDA "In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk 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". CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS 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 Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. AGENDA - This 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 2.APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There 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 Consent Calendar. a.Approve the October 14, 2020 regular board meeting minutes b.Approve Directors' fees and expenses for October 2020 c.FY 2020-21 Financial Statements for Quarter Ended September 30, 2020 d.October 2020 Disbursements: Accounts payable disbursements for the period include check numbers 256817 through 256930, bank drafts, and ACH Payments in the amount of $7,011,060.58 and $624,133.62 for payroll. DISCUSSION AND POSSIBLE ACTION ITEMS 3.Review and Consider Approval of Comprehensive Annual Financial Report for Year Ended June 30, 2020 4.Consider Adoption of Resolution 2020.27 Participation in the Great California ShakeOut 5.Consider Adoption of Resolution 2020.32 Authorizing and Approving 2021 Bureau of Reclamation Watersmart Drought Response Program: Drought Contingency Planning REPORTS 6.Board of Directors' Reports 7.General Manager/CEO Report 8.Legal Counsel Report 9.Board of Directors' Comments ADJOURN PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after d istribution of the agenda packet are available for pub lic inspection in the District's office located at 31111 Greenspot Rd., Highland, during normal bus iness hours. Also, such documents are available on the District's website at www.eastvalley.org subject to staff's ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disability-related modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above-agendized public meeting should be directed to the District Clerk at (909) 885-4900 at least 72 hours prior to said meeting. 1 Minutes 10/14/2020 sma Draft pending approval EAST VALLEY WATER DISTRICT October 14, 2020 REGULAR BOARD MEETING VIA TELECONFERENCE MINUTES The Chairman of the Board called the meeting to order at 4:31 p.m. PRESENT: Directors: Carrillo, Coats, Goodrich, Morales, Smith ABSENT: None STAFF: John Mura, General Manager/CEO; Brian Tompkins, Chief Financial Officer; Jeff Noelte, Director of Engineering and Operations; Kelly Malloy, Director of Strategic Services; Justine Hendricksen, District Clerk; Shayla Antrim, Senior Administrative Assistant LEGAL COUNSEL: Jean Cihigoyenetche GUEST(s): Members of the public PUBLIC COMMENTS Chairman Smith declared the public participation section of the meeting open at 4:32 p.m. There being no written or verbal comments, the public participation section was closed. APPROVAL OF AGENDA M/S/C (Coats-Goodrich) by unanimous roll call vote that the October 14, 2020 agenda be approved as submitted. CLOSED SESSION The Board entered into Closed Session at 4:33 p.m. as provided in the Ralph M. Brown Act Government Code Sections 54957(a) to discuss the item(s) listed on the agenda. THE BOARD RECONVENED THE MEETING AT 5:30 P.M. Vice Chairman Goodrich led the flag salute. ROLL CALL PRESENT: Directors: Carrillo, Coats, Goodrich, Morales, Smith ABSENT: None 2 Minutes 10/14/2020 sma ANNOUNCEMENT OF CLOSED SESSION ACTIONS With respect to Item #2: Legal Counsel stated that in closed session the Hazard Mitigation Plan was discussed pursuant to government code section 54957(a); and that no reportable action was taken. PUBLIC COMMENTS Chairman Smith declared the public participation section of the meeting open at 5:32 p.m. There being no written or verbal comments, the public participation section was closed. APPROVE THE SEPTEMBER 9, 2020 REGULAR BOARD MEETING MINUTES M/S/C (Morales-Goodrich) by unanimous roll call vote that the Board approve the September 9, 2020 regular board meeting minutes as submitted. APPROVE THE SEPTEMBER 23, 2020 REGULAR BOARD MEETING MINUTES M/S/C (Morales-Goodrich) by unanimous roll call vote that the Board approve the September 23, 2020 regular board meeting minutes as submitted. DIRECTORS’ FEES AND EXPENSES FOR SEPTEMBER 2020 M/S/C (Morales-Goodrich) by unanimous roll call vote that the Board approve the Directors’ fees and expenses for September 2020 as submitted. LEGISLATIVE UPDATE The District’s lobbyists, Mrs. Pilar Oñate-Quintana, Mr. David Quintana, and Mr. Jarrell Cook provided a legislative update to the Board. Items discussed included, but were not limited, to the following: the effects that COVID-19 has had on the legislative session and legislation; COVID-19 impacts to the water industry and the State Budget; bond proposals, bills & legislative outreach; dynamics of the 2020 General Elections; and general legislative updates. Information only. ADOPTION OF RESOLUTION 2020.28 – ESTABLISHING THE NUMBER OF COMMISSIONERS OF THE COMMUNITY ADVISORY COMMISSION AND APPROVE APPOINTMENT OF RECOMMENDED COMMISSIONERS The Director of Strategic Services gave a brief overview of the formation of the Community Advisory Commission (CAC), the purpose it serves and proposed changes. She stated that currently there are two vacant seats on the CAC. Two applications were received to fill the vacancies and the General Manager/CEO and staff conducted virtual 3 Minutes 10/14/2020 sma interviews with the candidates. That as a result of the process, staff is recommending the following actions: Reappointment of Current Commissioners: Vincent Laster Dr. Pamela Miller Fred Yauger Appointment of New Commissioners: Dr. Alan Kay Gail Shelton The Director of Strategic Services stated that staff is requesting the number of commissioners be reduced from seven to five in order to increase the opportunity to fulfill a quorum. Ms. Gail Shelton thanked the Board for their support and stated that she looks forward to her new role as Commissioner. Dr. Alan Kay thanked the Board and stated that he looks for to serving on the Commission. M/S/C (Carrillo-Goodrich) by unanimous roll call that the Board adopt Resolution 2020.28 as submitted. APPROVE MATERIALS TESTING AND INSPECTION SERVICES CONTRACT AMENDMENT FOR THE STERLING NATURAL RESOURCE CENTER The Director of Engineering and Operations provided information regarding a contract amendment with Group Delta Consultants. He stated that when the contract for material testing and inspection services for the Sterling Natural Resources Center was first approved, the project did not include the anerobic digestion system. With this inclusion, additional materials and inspection services will be needed to ensure that those elements of the project conform with the specified requirements of construction. He reviewed the additional scope of work and requested that the Board approve the amendment value of $350,000. M/S/C (Coats-Goodrich) by unanimous roll call vote that the Board authorize the General Manager/CEO to execute a contract amendment with Group Delta Consultants to provide Material Testing and Inspection Services for the Sterling Natural Resource Center project for a not-to-exceed amount of $350,000. ADOPT RESOLUTION 2020.26 – HAZARD MITIGATION PLAN The Director of Strategic Services provided information regarding updates to the Hazard Mitigation Plan (HMP). She stated that the plan is updated every five years. She explained that with this document, the District becomes eligible for Federal Emergency Management Agency (FEMA) mitigation grants or reimbursement funds should an 4 Minutes 10/14/2020 sma emergency impact the service area. That the final version of this document was reviewed by (FEMA) and the California Offices of Emergency Services (CalOES). The final step in the five-year process requires formal approval by the Board. M/S/C (Morales-Goodrich) by unanimous roll call vote that the Board adopt Resolution 2020.26 – Adopting the 2020 Hazard Mitigation Plan as submitted. BOARD MEETING CANCELLATIONS M/S/C (Carrillo-Goodrich) by unanimous roll call vote that the Board approve the cancellation of the November 11, 2020 and the December 23, 2020 regular board meetings. BOARD OF DIRECTORS’ REPORTS Director Carrillo reported on the following: October 7 he participated in the City of San Bernardino City Council meeting where he received an election update from the San Bernardino County Registrar of Voters office; and October 13 he participated in the Inland Action meeting. Director Coats reported on the following: September 28 he participated in the Engineering & Operations Committee meeting; October 6 he participated in the San Bernardino Valley Municipal Water District Board meeting; October 8 he participated in the San Bernardino Valley Municipal Water District’s Board Workshop where Congressman Pete Aguilar was the speaker; and October 13 he attended a site tour of the Sterling Natural Resource Center. Director Morales reported on the following: October 13 he participated in the San Bernardino Board of Water Commissioners meeting where they discussed COVID-19 related issues; and October 13 he participated in the Finance & Human Resources Committee meeting. Vice Chairman Goodrich reported on the following: October 7 he met with the General Manager/CEO to discuss District business; October 8 he met with the General Manager/CEO to review the agenda; October 8 he participated in the Legislative & Public Outreach Committee meeting; and October 13 he participated in the Finance & Human Resources Committee meeting. Chairman Smith reported on the following: September 28 he participated in the Engineering & Operations Committee meeting; October 8 he met with the General Manager/CEO to review the agenda; October 8 he participated in the Legislative & Public Outreach Committee meeting; and October 14 he participated in the San Bernardino Valley Water Conservation District Board meeting. Information only. 5 Minutes 10/14/2020 sma GENERAL MANAGER/CEO REPORT The General Manager/CEO stated that last Thursday staff participated in an Inland Empire Economic Partnership State of the Region’s Economy virtual meeting; the region’s economic status was broken down into employment sectors. The General Manager/CEO provided a COVID-19 update. He stated that every county in California is assigned to a tier based on its rate of new cases and positivity. At a minimum, counties must remain in a tier for at least three weeks before moving forward. Data is reviewed weekly and tiers are updated every Tuesday. As of October 6, San Bernardino County new daily cases is considered “wide-spread” and the positive rate is now listed as “substantial”. The General Manager/CEO welcomed the two new commissioners to the Community Advisory Commission. The General Manager/CEO announced upcoming meetings and events: • October 15 at 10:15 a.m. National Great Shakeout Drill, staff will practice their “Drop, Cover, and Hold On” skills. The annual drill focus on earthquake preparedness and safety. • October 20 from 2–3:30 p.m. the District will be hosting a “Kona Ice Event” at the Sterling Natural Resource Center to celebrate the 2-year anniversary of the SNRC groundbreaking. • October 21, the District will commemorate “Imagine a Day Without Water” a national event with special social media posts to raise awareness of the importance of water. The General Manager/CEO thanked the public for their continued support during these trying times and for participating in the District’s teleconferencing meetings; and stated that the District will continue to hold meetings via teleconference until further notice. Information only. LEGAL COUNSEL REPORT No report at this time. BOARD OF DIRECTORS’ COMMENTS Director Morales commended the District for co-presenting with the San Bernardino City Unified School District at the virtual Association of California School Administrators 6 Minutes 10/14/2020 sma Leadership Summit; that it’s a great testament to the District, and its commitment to partnership and leadership. Chairman Smith welcomed Dr. Alan Kay and Ms. Gail Shelton to the Community Advisory Commission. Information only. ADJOURN The meeting adjourned at 7:02 p.m. ___________________________ David E. Smith, Board President __________________________ John Mura, Secretary R ecommended b y: Jo hn Mura G eneral Manager/C EO R espec tfully sub mitted: Jus tine Hendric ksen District C lerk B O AR D AGE N D A S TAF F R E P ORT Agenda Item #2.b . Meeting Date: Novemb er 25, 2020 C ons ent Item To: G o verning Board Memb ers F rom: G eneral Manager/C EO Subject: Approve Directo rs ' fees and expens es for O cto b er 2020 R E C O MME N D AT IO N: S taff rec ommend s that the Bo ard ap p ro ve the G overning Bo ard Members' F ees and Expenses fo r O c tober 2020. B AC KGR O UN D / AN ALYS IS : T he Board has ins truc ted s taff to lis t all d irecto r fees and expenses as a s ep arate agenda item to s how full fis c al trans p arency. O nly after Board review and approval will the c o mp ens ation and expens es be paid. AG E N C Y G O ALS AN D OB J E C T IVE S : G o al and O bjec tives I I - Maintain a C ommitment to S us tainab ility, Transparenc y, and Ac c o untability a) P rac tice Trans parent and Ac countab le F is cal Management R E VIE W B Y O T HE R S : T his agenda item has been reviewed by the Ad minis tratio n d ep artment. F IS C AL IMPAC T T he fis c al impac t as soc iated with this agenda item is $6,304.50 whic h is includ ed in the c urrent fis c al b udget. ATTACH M E N TS: Description Type Directors' Expense Reports October 2020 Backup Material R ecommended b y: Jo hn Mura G eneral Manager/C EO R espec tfully sub mitted: Brian Tomp kins C hief F inancial O ffic er B O AR D AGE N D A S TAF F R E P ORT Agend a Item #2.c . Meeting Date: Novemb er 25, 2020 C ons ent Item To: G o verning Board Memb ers F rom: G eneral Manager/C EO Subject: F Y 2020-21 F inanc ial S tatements fo r Q uarter Ended S eptemb er 30, 2020 R E C O MME N D AT IO N: S taff rec o mmends that the Board of Directo rs (Bo ard ) ac cept and file the attac hed financial s tatements as of, and for the q uarter ended, S eptember 30, 2020. B AC KGR O UN D / AN ALYS IS : Includ ed herewith fo r the Board’s review is a s ummary o f Eas t Valley Water District’s financ ial results , as of S ep tember 30, 2020. AG E N C Y G O ALS AN D OB J E C T IVE S : G o al and O bjec tives I I - Maintain a C ommitment to S us tainab ility, Transparenc y, and Ac c o untability a) P rac tice Trans parent and Ac countab le F is cal Management R E VIE W B Y O T HE R S : T his agenda item has been reviewed by the F inanc e Dep artment. F IS C AL IMPAC T T here is no fis cal impac t as s o c iated with this agend a item. ATTACH M E N TS: Description Type Financial Statements M onthly Review for Quarter Ended September 30, 20 20 Backup Material Financial Statements for Quarter Ended September 30, 2020 Backup Material FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 1 FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 2 FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 3 FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 4 FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 5 FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 6 FINANCIAL STATEMENTS QUARTERLY REVIEW QUARTER ENDING SEPTEMBER 30, 2020 page | 7 WATER WASTEWATER DISTRICT TOTAL Assets: Current Assets: 01 Cash and Cash Equivalents 19,315,930.60$ -$ 19,315,930.60$ 02 Investments 3,658,968.00 2,024,125.00 5,683,093.00 03 Accounts Receivable, Net 5,107,726.71 272,217.82 5,379,944.53 04 ‐ Interest Receivable - 3,377.19 3,377.19 14*05 Other Receivables 420,687.08 3,826,055.78 4,246,742.86 07 Due from Sewer Fund - - - 06 Due from Other Governments 58,144.57 2,682,831.30 2,740,975.87 08 Inventory 427,785.36 6,721.16 434,506.52 09 Prepaid Expenses 195,788.53 46,587.31 242,375.84 29,185,030.85 8,861,915.56 38,046,946.41 Non-Current Assets: 10 Restricted Cash and Cash Equivalents 3,584,982.35 5,642,247.48 9,227,229.83 11 Capital Assets not being Depreciated 10,072,175.58 96,564,443.41 106,636,618.99 13 Capital Assets, Net 104,921,568.97 18,770,558.02 123,692,126.99 118,578,726.90 120,977,248.91 239,555,975.81 Total Assets:147,763,757.75 129,839,164.47 277,602,922.22 Deferred Outflow Of Resources 24*Deferred Charge on Refunding 84,674.77 - 84,674.77 25 Deferred Outflows - Pensions 3,021,838.35 947,122.44 3,968,960.79 150,870,270.87 130,786,286.91 281,656,557.78 Current Liabilities: 22 Accounts Payable and Accrued Expenses 241,049.61 6,355,815.21 6,596,864.82 29 Due to Water Fund - - - 23 Accrued Payroll and Benefits - - - 15 Customer Service Deposits 1,523,335.89 - 1,523,335.89 16 Construction Advances and Retentions 106,000.00 4,592,987.75 4,698,987.75 17 Accrued Interest Payable 369,819.91 51,181.25 421,001.16 18 Current Portion of Compensated Absences 413,999.70 120,469.30 534,469.00 19 Current Portion of Long-Term Debt 954,952.71 7,499.15 962,451.86 3,609,157.82 11,127,952.66 14,737,110.48 Non-Current Liabilities: 20 Compensated Absences, less current portion 279,614.85 79,236.99 358,851.84 28 Net Pension Liability 9,065,574.49 2,739,565.75 11,805,140.24 21 Long Term Debt, Less Current Portion 38,463,032.09 77,106,820.83 115,569,852.92 27 Other Liabilities 1,173.64 - 1,173.64 Deferred Inflows Of Resources 26 Deferred Inflows - Pensions 563,194.25 182,013.87 745,208.12 48,372,589.32 80,107,637.44 128,480,226.76 51,981,747.14 91,235,590.10 143,217,337.24 31 Equity 96,596,133.72 38,072,157.37 134,668,291.09 96,596,133.72 38,072,157.37 134,668,291.09 Tot Total Revenue 8,593,505.41 3,476,007.43 12,069,512.84 Tot Total Expense 6,301,115.40 1,997,467.99 8,298,583.39 2,292,390.01 1,478,539.44 3,770,929.45 98,888,523.73 39,550,696.81 138,439,220.54 150,870,270.87$ 130,786,286.91$ 281,656,557.78$ Unaudited As of Quarter Ending September 30, 2020 Combining Schedule of Net Position Total Equity and Current Surplus (Deficit): Total Assets and Deferred Outflows of Resources: Total Current Assets: Total Non-Current Assets: Total Liabilities, Equity and Current Surplus (Deficit): Total Total Beginning Equity: Equity: Revenues Over/Under Expenses Total Current Liabilities: Total Non-Current and Deferred Inflows of Resources: Total Liabilities and Deferred Inflows of Resources: Page 1 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 2,029,634.95$ 6,207,690.88$ 17,068,000.00$ -$ -$ -$ 17,068,000.00$ 10,860,309.12$ 42 Meter Charges 755,826.89 2,266,002.92 9,020,000.00 - - - 9,020,000.00 6,753,997.08 43 Penalties 12,585.33 34,686.54 195,000.00 5,520.94 15,394.46 130,000.00 325,000.00 274,919.00 44 Wastewater System Charges - - - 401,308.28 1,202,980.78 4,656,000.00 4,656,000.00 3,453,019.22 45 Wastewater Treatment Charges - - - 745,323.24 2,237,914.47 8,586,000.00 8,586,000.00 6,348,085.53 46 Other Operating Revenue 10,095.18 73,046.74 56,000.00 3,300.00 19,717.72 65,000.00 121,000.00 28,235.54 47 Non Operating Revenue 2,543.01 12,078.33 259,000.00 - - 30,000.00 289,000.00 276,921.67 48 Gain or Loss on Disposition - - - - - - - - 56 Benefits (582.00) - - (223.15) - - - - 68 Depreciation - - - - - - - - Revenue Total: 2,810,685.36 8,593,505.41 26,598,000.00 1,155,452.46 3,476,007.43 13,467,000.00 40,065,000.00 27,995,487.16 - - - - - Expense by Category 51 Labor 369,991.91 956,428.21 5,334,400.00 104,735.11 267,904.05 1,542,600.00 6,877,000.00 5,652,667.74 56 Benefits 133,624.94 1,314,865.02 2,893,400.00 34,979.61 365,633.47 750,600.00 3,644,000.00 1,963,501.51 63 Contract Services 407,733.61 869,927.50 4,093,950.00 76,940.88 974,366.88 9,508,050.00 13,602,000.00 11,557,705.62 65 Professional Development 12,878.25 32,356.57 300,650.00 5,388.36 13,485.21 107,350.00 408,000.00 362,158.22 53 Overtime 28,147.80 77,941.01 357,100.00 370.33 2,138.05 27,900.00 385,000.00 304,920.94 62 Materials and Supplies 164,468.07 332,220.14 1,189,200.00 8,113.47 13,204.27 115,800.00 1,305,000.00 959,575.59 64 Utilities 311,792.27 851,711.88 2,570,900.00 9,571.19 25,242.12 193,100.00 2,764,000.00 1,887,046.00 52 Temporary Labor - - - - - - - - 67 Other 7,350.03 302,276.72 672,600.00 3,150.01 129,244.36 72,400.00 745,000.00 313,478.92 54 Standby 2,555.34 6,608.43 33,000.00 732.82 1,524.58 2,000.00 35,000.00 26,866.99 61 Water Supply 3,014.00 195,963.29 826,000.00 - - - 826,000.00 630,036.71 71 -Debt Service 1,360,816.63 1,360,816.63 4,066,000.00 204,725.00 204,725.00 313,000.00 4,379,000.00 2,813,458.37 81 -Capital Improvement (96,158.93) (97,530.00) 3,070,000.00 (16,099,670.55) (22,780,209.55) 395,000.00 3,465,000.00 26,342,739.55 82 -Capital Outlay 33,920.49 168,069.40 1,195,000.00 101,336.93 134,874.16 435,000.00 1,630,000.00 1,327,056.44 83 -Accounting Income Add back 62,238.44 (70,539.40) - 15,998,333.62 22,645,335.39 - - (22,574,795.99) Expense Total: 2,802,372.85 6,301,115.40 26,602,200.00 448,706.78 1,997,467.99 13,462,800.00 40,065,000.00 31,566,416.61 Total Surplus (Deficit): 8,312.51$ 2,292,390.01$ -$ 706,745.68$ 1,478,539.44$ -$ -$ -$ Unaudited Revenue and Expense Budget-to-Actual by Category Quarter Ending September 30, 2020 WATER WASTEWATER DISTRICT WIDE Page 2 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 2,029,634.95$ 6,207,690.88$ 17,068,000.00$ -$ -$ -$ 17,068,000.00$ 10,860,309.12$ 42 Meter Charges 755,826.89 2,266,002.92 9,020,000.00 - - - 9,020,000.00 6,753,997.08 43 Penalties 12,585.33 34,686.54 195,000.00 5,520.94 15,394.46 130,000.00 325,000.00 274,919.00 44 Wastewater System Charges - - - 401,308.28 1,202,980.78 4,656,000.00 4,656,000.00 3,453,019.22 45 Wastewater Treatment Charges - - - 745,323.24 2,237,914.47 8,586,000.00 8,586,000.00 6,348,085.53 46 Other Operating Revenue 10,095.18 73,046.74 56,000.00 3,300.00 19,717.72 65,000.00 121,000.00 28,235.54 47 Non Operating Revenue 2,543.01 12,078.33 259,000.00 - - 30,000.00 289,000.00 276,921.67 Revenue Total: 2,810,685.36 8,593,505.41 26,598,000.00 1,155,452.46 3,476,007.43 13,467,000.00 40,065,000.00 27,995,487.16 - - - - - Program1000 - Board of Directors 8,887.18 31,132.09 179,900.00 3,583.71 13,327.96 77,100.00 257,000.00 212,539.95 Program2000 - General Administration 58,191.73 220,394.38 912,600.00 23,166.16 89,532.32 389,400.00 1,302,000.00 992,073.30 Program2100 - Human Resources 33,512.05 404,783.60 1,079,500.00 13,637.38 172,733.61 245,500.00 1,325,000.00 747,482.79 Program2200 - Public Affairs 49,083.81 167,176.67 1,162,400.00 24,695.05 136,360.19 426,600.00 1,589,000.00 1,285,463.14 Program2300 - Conservation 29,212.51 45,366.53 624,000.00 - - - 624,000.00 578,633.47 Program3000 - Finance 49,903.65 243,313.39 890,700.00 21,367.92 104,210.78 381,300.00 1,272,000.00 924,475.83 Program3200 - Information Technology 65,104.68 131,603.35 711,100.00 31,330.67 65,116.39 261,900.00 973,000.00 776,280.26 Program3300 - Customer Service 73,331.59 246,578.65 1,112,100.00 33,105.76 109,647.13 394,900.00 1,507,000.00 1,150,774.22 Program3400 - Meter Service 17,831.62 68,075.10 290,000.00 - (9.97) - 290,000.00 221,934.87 Program4000 - Engineering 58,438.41 226,646.24 1,080,800.00 20,606.91 88,015.57 463,200.00 1,544,000.00 1,229,338.19 Program5000 - Water Production 528,169.24 1,626,511.50 4,493,000.00 - - - 4,493,000.00 2,866,488.50 Program5100 - Water Treatment 72,927.51 249,865.36 905,000.00 - - - 905,000.00 655,134.64 Program5200 - Water Quality 26,499.89 135,028.53 480,000.00 - - - 480,000.00 344,971.47 Program6000 - Field Maintenance Administration 21,123.54 192,318.17 390,600.00 3,076.50 12,568.95 43,400.00 434,000.00 229,112.88 Program6100 - Water Maintenance 200,550.43 551,325.64 2,635,000.00 - - - 2,485,000.00 1,933,674.36 Program6200 - Wastewater Maintenance - - - 44,353.73 930,005.58 9,389,000.00 9,389,000.00 8,458,994.42 Program7000 - Facilities Maintenance 95,090.13 242,993.12 824,500.00 18,242.00 55,119.79 197,500.00 1,022,000.00 723,887.09 Program7100 - Fleet Maintenance 54,280.25 157,186.45 500,000.00 6,815.99 16,114.69 50,000.00 500,000.00 326,698.86 Program8000 - Capital 1,360,816.63 1,360,816.63 8,331,000.00 204,725.00 204,725.00 1,143,000.00 9,474,000.00 30,483,254.36 Total Surplus (Deficit):7,730.51$ 2,292,390.01$ -$ 706,745.68$ 1,478,539.44$ -$ -$ -$ Revenue and Expense Budget-to-Actual by Program Quarter Ending September 30, 2020 Unaudited WATER WASTEWATER DISTRICT WIDE Page 3 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 2,029,634.95$ 6,207,690.88$ 17,068,000.00$ -$ -$ -$ 17,068,000.00$ 10,860,309.12$ 42 Meter Charges 755,826.89 2,266,002.92 9,020,000.00 - - - 9,020,000.00 6,753,997.08 43 Penalties 12,585.33 34,686.54 195,000.00 5,520.94 15,394.46 130,000.00 325,000.00 274,919.00 44 Wastewater System Charges - - - 401,308.28 1,202,980.78 4,656,000.00 4,656,000.00 3,453,019.22 45 Wastewater Treatment Charges - - - 745,323.24 2,237,914.47 8,586,000.00 8,586,000.00 6,348,085.53 46 Other Operating Revenue 10,095.18 73,046.74 56,000.00 3,300.00 19,717.72 65,000.00 121,000.00 28,235.54 47 Non Operating Revenue 2,543.01 12,078.33 259,000.00 - - 30,000.00 289,000.00 276,921.67 48 Gain or Loss on Disposition - - - - - - - - 56 Benefits (582.00) - - (223.15) - - - - 68 Depreciation - - - - - - - - Revenue Total: 2,810,685.36 8,593,505.41 26,598,000.00 1,155,452.46 3,476,007.43 13,467,000.00 40,065,000.00 27,995,487.16 Program: 1000 - Board of Directors - - - 51 Labor 4,777.50$ 14,332.50$ 73,500.00$ 2,047.50$ 6,142.50$ 31,500.00$ 105,000.00$ 84,525.00$ 56 Benefits 3,438.72 16,607.41 56,000.00 1,500.01 7,117.46 24,000.00 80,000.00 56,275.13 62 Materials and Supplies 31.96 31.96 700.00 13.70 13.70 300.00 1,000.00 954.34 63 Contract Services - - 21,700.00 - - 9,300.00 31,000.00 31,000.00 65 Professional Development 57.00 160.22 28,000.00 22.50 54.30 12,000.00 40,000.00 39,785.48 Program: 1000 - Board of Directors Total: 8,305.18 31,132.09 179,900.00 3,583.71 13,327.96 77,100.00 257,000.00 212,539.95 Program: 2000 - General Administration - - - 51 Labor 25,812.36 67,270.97 367,500.00 11,062.45 28,525.38 157,500.00 525,000.00 429,203.65 53 Overtime 126.30 202.47 2,100.00 54.13 86.78 900.00 3,000.00 2,710.75 56 Benefits 10,575.79 108,722.45 232,400.00 2,759.32 41,977.96 99,600.00 332,000.00 181,299.59 62 Materials and Supplies 125.64 290.21 3,500.00 53.85 124.37 1,500.00 5,000.00 4,585.42 63 Contract Services 10,470.60 18,590.60 215,600.00 4,487.40 7,967.40 92,400.00 308,000.00 281,442.00 64 Utilities 153.44 313.08 2,100.00 65.76 134.18 900.00 3,000.00 2,552.74 65 Professional Development 10,927.60 25,004.60 89,400.00 4,683.25 10,716.25 36,600.00 126,000.00 90,279.15 Program: 2000 - General Administration Total: 58,191.73 220,394.38 912,600.00 23,166.16 89,532.32 389,400.00 1,302,000.00 992,073.30 Program: 2100 - Human Resources - - - - 51 Labor 11,704.83 30,314.29 170,100.00 5,016.37 12,979.22 72,900.00 243,000.00 199,706.49 52 Temporary Labor - - - - - - - - 53 Overtime - - 2,100.00 - - 900.00 3,000.00 3,000.00 56 Benefits 4,132.97 52,808.86 105,700.00 1,771.21 22,632.16 45,300.00 151,000.00 75,558.98 62 Materials and Supplies 341.85 651.09 7,000.00 32.36 157.51 3,000.00 10,000.00 9,191.40 63 Contract Services 8,514.72 15,130.41 104,700.00 3,038.43 5,873.74 36,300.00 141,000.00 119,995.85 64 Utilities 45.86 135.77 700.00 19.66 58.19 300.00 1,000.00 806.04 65 Professional Development 1,421.79 4,173.01 33,600.00 609.34 1,788.43 14,400.00 48,000.00 42,038.56 67 Other 7,350.03 301,570.17 655,600.00 3,150.01 129,244.36 72,400.00 728,000.00 297,185.47 Program: 2100 - Human Resources Total: 33,512.05 404,783.60 1,079,500.00 13,637.38 172,733.61 245,500.00 1,325,000.00 747,482.79 Quarter Ending September 30, 2020 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDE Page 4 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Quarter Ending September 30, 2020 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDE Program: 2200 - Public Affairs - - - - 51 Labor 25,395.75 66,684.63 372,500.00 10,328.84 26,890.16 159,500.00 532,000.00 438,425.21 52 Temporary Labor - - - - - - - - 53 Overtime - 82.56 11,900.00 - 35.38 5,100.00 17,000.00 16,882.06 56 Benefits 7,137.00 55,141.12 188,300.00 2,909.63 42,218.56 80,700.00 269,000.00 171,640.32 62 Materials and Supplies 1,625.28 2,178.64 81,200.00 2,244.87 2,519.34 34,800.00 116,000.00 111,302.02 63 Contract Services 14,666.73 41,798.16 442,700.00 9,100.69 63,143.31 118,300.00 561,000.00 456,058.53 64 Utilities 146.35 391.36 38,500.00 62.72 1,167.64 16,500.00 55,000.00 53,441.00 65 Professional Development 112.70 900.20 27,300.00 48.30 385.80 11,700.00 39,000.00 37,714.00 Program: 2200 - Public Affairs Total: 49,083.81 167,176.67 1,162,400.00 24,695.05 136,360.19 426,600.00 1,589,000.00 1,285,463.14 Program: 2300 - Conservation - - - - 51 Labor 9,790.40 25,459.79 107,000.00 - - - 107,000.00 81,540.21 52 Temporary Labor - - - - - - - - 53 Overtime - - 7,000.00 - - - 7,000.00 7,000.00 56 Benefits 2,570.35 7,488.42 36,000.00 - - - 36,000.00 28,511.58 62 Materials and Supplies 16,808.90 (843.52) 167,000.00 - - - 167,000.00 167,843.52 63 Contract Services - 13,000.31 258,000.00 - - - 258,000.00 244,999.69 64 Utilities 42.86 261.53 39,000.00 - - - 39,000.00 38,738.47 65 Professional Development - - 10,000.00 - - - 10,000.00 10,000.00 Program: 2300 - Conservation Total: 29,212.51 45,366.53 624,000.00 - - - 624,000.00 578,633.47 Program: 3000 - Finance - - - - 51 Labor 37,106.76 95,767.40 501,200.00 15,902.84 41,000.97 214,800.00 716,000.00 579,231.63 52 Temporary Labor - - - - - - - - 53 Overtime 180.39 428.98 9,100.00 77.31 183.83 3,900.00 13,000.00 12,387.19 56 Benefits 11,750.00 138,130.19 269,500.00 5,035.69 59,193.75 115,500.00 385,000.00 187,676.06 62 Materials and Supplies 17.19 481.04 7,700.00 7.37 206.16 3,300.00 11,000.00 10,312.80 63 Contract Services 535.00 6,718.49 77,000.00 210.00 2,860.07 33,000.00 110,000.00 100,421.44 64 Utilities 314.31 633.56 2,800.00 134.71 271.54 1,200.00 4,000.00 3,094.90 65 Professional Development - 1,153.73 22,400.00 - 494.46 9,600.00 32,000.00 30,351.81 67 Other - - 1,000.00 - - - 1,000.00 1,000.00 Program: 3000 - Finance Total: 49,903.65 243,313.39 890,700.00 21,367.92 104,210.78 381,300.00 1,272,000.00 924,475.83 Program: 3200 - Information Technology - - - - 51 Labor 14,116.49 36,685.03 236,600.00 8,561.91 22,259.60 101,400.00 338,000.00 279,055.37 52 Temporary Labor - - - - - - - - 53 Overtime - - - - - - - - 56 Benefits 3,276.58 25,284.35 84,000.00 2,320.91 13,013.67 36,000.00 120,000.00 81,701.98 62 Materials and Supplies 6,341.74 6,343.71 30,100.00 2,717.89 2,718.73 12,900.00 43,000.00 33,937.56 63 Contract Services 40,907.74 61,827.47 345,000.00 17,531.90 26,497.48 105,000.00 450,000.00 361,675.05 64 Utilities 462.13 1,413.79 4,200.00 198.06 605.91 1,800.00 6,000.00 3,980.30 65 Professional Development - 49.00 11,200.00 - 21.00 4,800.00 16,000.00 15,930.00 Program: 3200 - Information Technology Total: 65,104.68 131,603.35 711,100.00 31,330.67 65,116.39 261,900.00 973,000.00 776,280.26 Page 5 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Quarter Ending September 30, 2020 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDE Program: 3300 - Customer Service - - - - 51 Labor 17,225.53 45,113.90 236,500.00 8,609.28 22,477.03 178,500.00 415,000.00 347,409.07 52 Temporary Labor - - - - - - - - 53 Overtime - - 4,900.00 - - 2,100.00 7,000.00 7,000.00 56 Benefits 7,836.20 93,414.55 194,300.00 3,809.34 41,165.67 47,700.00 242,000.00 107,419.78 62 Materials and Supplies 12.74 721.69 6,300.00 5.46 309.29 2,700.00 9,000.00 7,969.02 63 Contract Services 40,126.35 97,072.93 525,800.00 17,197.06 41,602.69 113,200.00 639,000.00 500,324.38 64 Utilities 8,130.77 9,549.03 115,100.00 3,484.62 4,092.45 45,900.00 161,000.00 147,358.52 65 Professional Development - - 13,200.00 - - 4,800.00 18,000.00 18,000.00 67 Other - 706.55 16,000.00 - - - 16,000.00 15,293.45 Program: 3300 - Customer Service Total: 73,331.59 246,578.65 1,112,100.00 33,105.76 109,647.13 394,900.00 1,507,000.00 1,150,774.22 Program: 3400 - Meter Service - - - - 51 Labor 13,333.93 36,913.52 197,000.00 - (22.10) - 197,000.00 160,108.58 53 Overtime - 0.66 6,000.00 - - - 6,000.00 5,999.34 56 Benefits 4,140.08 30,399.63 72,000.00 - 12.13 - 72,000.00 41,588.24 62 Materials and Supplies - - 5,000.00 - - - 5,000.00 5,000.00 63 Contract Services 134.20 324.04 8,000.00 - - - 8,000.00 7,675.96 64 Utilities 223.41 437.25 2,000.00 - - - 2,000.00 1,562.75 65 Professional Development - - - - - - - - Program: 3400 - Meter Service Total: 17,831.62 68,075.10 290,000.00 - (9.97) - 290,000.00 221,934.87 Program: 4000 - Engineering - - - - 51 Labor 35,348.91 80,305.39 514,500.00 15,149.49 34,403.90 220,500.00 735,000.00 620,290.71 52 Temporary Labor - - - - - - - - 53 Overtime - - 2,100.00 - - 900.00 3,000.00 3,000.00 56 Benefits 10,184.24 118,443.53 184,100.00 4,229.40 50,626.16 78,900.00 263,000.00 93,930.31 62 Materials and Supplies 612.37 768.10 16,100.00 262.45 285.61 6,900.00 23,000.00 21,946.29 63 Contract Services 6,419.82 8,546.07 202,300.00 746.07 1,657.32 86,700.00 289,000.00 278,796.61 64 Utilities 5,873.07 18,583.15 137,200.00 219.50 1,042.58 58,800.00 196,000.00 176,374.27 65 Professional Development - - 24,500.00 - - 10,500.00 35,000.00 35,000.00 Program: 4000 - Engineering Total: 58,438.41 226,646.24 1,080,800.00 20,606.91 88,015.57 463,200.00 1,544,000.00 1,229,338.19 Program: 5000 - Water Production - - - - 51 Labor 50,276.56 130,978.69 723,000.00 - - - 723,000.00 592,021.31 53 Overtime 5,032.92 11,187.02 22,000.00 - - - 22,000.00 10,812.98 54 Standby 1,200.00 3,146.00 15,000.00 - - - 15,000.00 11,854.00 56 Benefits 16,690.97 223,252.93 452,000.00 - - - 452,000.00 228,747.07 61 Water Supply 3,014.00 195,963.29 826,000.00 - - - 826,000.00 630,036.71 62 Materials and Supplies 37,684.33 58,496.18 300,000.00 - - - 300,000.00 241,503.82 63 Contract Services 164,342.50 304,340.64 381,000.00 - - - 381,000.00 76,659.36 64 Utilities 249,687.06 698,529.56 1,764,000.00 - - - 1,764,000.00 1,065,470.44 65 Professional Development 240.90 617.19 10,000.00 - - - 10,000.00 9,382.81 Program: 5000 - Water Production Total: 528,169.24 1,626,511.50 4,493,000.00 - - - 4,493,000.00 2,866,488.50 Page 6 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Quarter Ending September 30, 2020 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDE Program: 5100 - Water Treatment - - - - 51 Labor 17,272.00 44,906.67 252,000.00 - - - 252,000.00 207,093.33 53 Overtime 2,510.52 8,013.98 39,000.00 - - - 39,000.00 30,986.02 56 Benefits 6,501.25 74,115.58 150,000.00 - - - 150,000.00 75,884.42 62 Materials and Supplies 25,326.08 82,251.89 165,000.00 - - - 165,000.00 82,748.11 63 Contract Services 2,588.36 4,948.57 149,000.00 - - - 149,000.00 144,051.43 64 Utilities 18,729.30 35,628.67 150,000.00 - - - 150,000.00 114,371.33 Program: 5100 - Water Treatment Total: 72,927.51 249,865.36 905,000.00 - - - 905,000.00 655,134.64 Program: 5200 - Water Quality - - - - 51 Labor 13,224.00 34,346.50 184,000.00 - - - 184,000.00 149,653.50 53 Overtime 25.15 25.15 13,000.00 - - - 13,000.00 12,974.85 56 Benefits 3,852.70 85,151.35 90,000.00 - - - 90,000.00 4,848.65 62 Materials and Supplies 2,955.99 3,463.11 18,000.00 - - - 18,000.00 14,536.89 63 Contract Services 6,442.05 11,907.42 167,000.00 - - - 167,000.00 155,092.58 64 Utilities - - 2,000.00 - - - 2,000.00 2,000.00 65 Professional Development - 135.00 6,000.00 - - - 6,000.00 5,865.00 Program: 5200 - Water Quality Total: 26,499.89 135,028.53 480,000.00 - - - 480,000.00 344,971.47 Program: 6000 - Field Maintenance Administration - - - - 51 Labor 12,181.19 32,233.19 180,000.00 1,341.83 3,538.87 20,000.00 200,000.00 164,227.94 52 Temporary Labor - - - - - - - - 53 Overtime - - 1,800.00 - - 200.00 2,000.00 2,000.00 54 Standby 1,355.34 3,462.43 18,000.00 732.82 1,524.58 2,000.00 20,000.00 15,012.99 56 Benefits 5,004.65 140,500.94 129,600.00 703.08 6,746.65 14,400.00 144,000.00 (3,247.59) 62 Materials and Supplies - 9,353.31 2,700.00 - - 300.00 3,000.00 (6,353.31) 63 Contract Services 128.60 308.64 900.00 14.30 34.32 100.00 1,000.00 657.04 64 Utilities 2,335.50 6,296.04 36,900.00 259.50 699.56 4,100.00 41,000.00 34,004.40 65 Professional Development 118.26 163.62 20,700.00 24.97 24.97 2,300.00 23,000.00 22,811.41 Program: 6000 - Field Maintenance Administration Total: 21,123.54 192,318.17 390,600.00 3,076.50 12,568.95 43,400.00 434,000.00 229,112.88 Program: 6100 - Water Maintenance - - - - 51 Labor 67,900.50 177,362.96 1,012,000.00 - - - 1,012,000.00 834,637.04 53 Overtime 19,603.77 57,165.10 219,000.00 - - - 219,000.00 161,834.90 56 Benefits 30,851.18 89,992.80 516,000.00 - - - 516,000.00 426,007.20 62 Materials and Supplies 57,737.97 128,065.81 301,000.00 - - - 301,000.00 172,934.19 63 Contract Services 24,457.01 89,693.97 587,000.00 - - - 587,000.00 497,306.03 64 Utilities - 9,045.00 - - - - - (9,045.00) Program: 6100 - Water Maintenance Total: 200,550.43 551,325.64 2,635,000.00 - - - 2,635,000.00 2,083,674.36 Program: 6200 - Wastewater Maintenance - - - - 51 Labor - - - 23,110.62 60,363.29 335,000.00 335,000.00 274,636.71 53 Overtime - - - 56.60 1,617.54 9,000.00 9,000.00 7,382.46 56 Benefits - - - 8,412.19 66,377.93 176,000.00 176,000.00 109,622.07 62 Materials and Supplies - - - 28.64 28.64 36,000.00 36,000.00 35,971.36 Wastewater Treatment - - - 745,323.24 2,237,914.47 7,610,000.00 7,610,000.00 5,372,085.53 63 Contract Services - - - (732,577.56) (1,436,296.29) 1,223,000.00 1,223,000.00 2,659,296.29 Program: 6200 - Wastewater Maintenance Total:- - - 44,353.73 930,005.58 9,389,000.00 9,389,000.00 8,458,994.42 Page 7 of 8 AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Quarter Ending September 30, 2020 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDE Program: 7000 - Facilities Maintenance - - - - 51 Labor 8,955.52 23,243.77 126,000.00 2,985.12 7,733.08 42,000.00 168,000.00 137,023.15 53 Overtime 485.98 547.88 16,500.00 161.99 182.62 5,500.00 22,000.00 21,269.50 56 Benefits 4,039.49 29,836.27 76,500.00 1,346.35 11,709.81 25,500.00 102,000.00 60,453.92 62 Materials and Supplies 4,599.10 11,261.73 45,500.00 1,484.53 3,527.65 10,500.00 56,000.00 41,210.62 63 Contract Services 61,885.07 125,765.05 396,250.00 8,306.59 16,813.85 62,750.00 459,000.00 316,421.10 64 Utilities 15,124.97 52,338.42 163,000.00 3,957.42 15,152.78 51,000.00 214,000.00 146,508.80 65 Professional Development - - 750.00 - - 250.00 1,000.00 1,000.00 Program: 7000 - Facilities Maintenance Total: 95,090.13 242,993.12 824,500.00 18,242.00 55,119.79 197,500.00 1,022,000.00 723,887.09 - - Program: 7100 - Fleet Maintenance - - - - 51 Labor 5,569.68 14,509.01 81,000.00 618.86 1,612.15 9,000.00 90,000.00 73,878.84 53 Overtime 182.77 287.21 2,700.00 20.30 31.90 300.00 3,000.00 2,680.89 56 Benefits 1,642.77 25,574.64 54,900.00 182.48 2,841.56 6,100.00 61,000.00 32,583.80 62 Materials and Supplies 10,246.93 28,705.19 32,400.00 1,262.35 3,313.27 3,600.00 36,000.00 3,981.54 63 Contract Services 26,114.86 69,954.73 212,000.00 3,562.76 6,298.52 18,000.00 230,000.00 153,746.75 64 Utilities 10,523.24 18,155.67 113,400.00 1,169.24 2,017.29 12,600.00 126,000.00 105,827.04 65 Professional Development - - 3,600.00 - - 400.00 4,000.00 4,000.00 Program: 7100 - Fleet Maintenance Total: 54,280.25 157,186.45 500,000.00 6,815.99 16,114.69 50,000.00 550,000.00 376,698.86 - - Program: 8000 - Capital - - - 71 -Debt Service 1,360,816.63 1,360,816.63 4,066,000.00 204,725.00 204,725.00 313,000.00 4,379,000.00 2,813,458.37 81 -Capital Improvement (96,158.93) (97,530.00) 3,070,000.00 (16,099,670.55) (22,780,209.55) 395,000.00 3,465,000.00 26,342,739.55 82 -Capital Outlay 33,920.49 168,069.40 1,195,000.00 101,336.93 134,874.16 435,000.00 1,630,000.00 1,327,056.44 83 -Accounting Income Add back 62,238.44 (70,539.40) - 15,998,333.62 22,645,335.39 - - (22,574,795.99) Program: 8000 - Capital Total: 1,360,816.63 1,360,816.63 8,331,000.00 204,725.00 204,725.00 1,143,000.00 9,474,000.00 7,908,458.37 Total Surplus (Deficit): 8,312.51$ 2,292,390.01$ -$ 706,745.68$ 1,478,539.44$ -$ -$ -$ Page 8 of 8 B O AR D AGE N D A S TAF F R E P ORT Agenda Item #2.d . Meeting Date: Novemb er 25, 2020 C ons ent Item To: G o verning Board Memb ers F rom: G eneral Manager/C EO Subject: O cto b er 2020 Dis bursements : Acc o unts p ayab le dis bursements fo r the period includ e c heck numbers 256817 through 256930, b ank drafts, and AC H P ayments in the amo unt of $7,011,060.58 and $624,133.62 fo r p ayroll. R E C O MME N D AT IO N: S taff recommends that the Board of Direc tors (Bo ard ) review and appro ve the District’s expens e disburs ements fo r the period O cto b er 1, 2020 thro ugh O cto b er 31, 2020 in the amount of $7,635,194.20. B AC KGR O UN D / AN ALYS IS : In the continued effo rt to b e fis cally trans p arent, the p ayment register fo r s upplies , materials , services , and p ayroll for O c tober 2020 is attached fo r review and ap p ro val. T his process p ro vid es the Bo ard and the pub lic an opportunity to review the exp ens es o f the District. Acc o unts P ayable is p ro ces s ed weekly, while p ayroll is p ro ces s ed bi-weekly. Info rmation to justify eac h expenditure is available thro ugh the F inanc e Department. Acc o unts payab le d is b urs ements for the p erio d inc lude c hec k numbers 256817 thro ugh 256930, bank drafts , and AC H P ayments in the amo unt of $7,011,060.58 and $624,133.62, for payro ll. S ignificant exp enses greater than o r equal to $50,000 are further exp lained below: R ecommended b y: Jo hn Mura G eneral Manager/C EO R espec tfully sub mitted: Brian Tomp kins C hief F inancial O ffic er AG E N C Y G O ALS AN D OB J E C T IVE S : G o al and O bjec tives I I - Maintain a C ommitment to S us tainab ility, Transparenc y, and Ac c o untability a) P rac tice Trans parent and Ac countab le F is cal Management R E VIE W B Y O T HE R S : T his agenda item has been reviewed by the F inanc e Dep artment. F IS C AL IMPAC T S ufficient funds have b een b udgeted in the adopted F Y 2020-21 Bud get. ATTACH M E N TS: Description Type Octo ber 2020 P ayme nt Register Backup Material PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 10/8/2020 256824 HATFIELD BUICK 27.65 10/8/2020 256823 CULLIGAN OF ONTARIO 129.60 10/8/2020 256826 SOUTHERN CALIFORNIA EDISON COMPANY 23.27 10/8/2020 256828 VALLEY OFFICE EQUIPMENT 1.02 10/8/2020 256827 UNIFIRST CORPORATION 474.15 10/8/2020 256825 K & L HARDWARE 39.58 10/8/2020 256817 BURRTEC WASTE (GROUP) INDUSTRIES, INC.153.39 10/8/2020 256819 BURRTEC WASTE (GROUP) INDUSTRIES, INC.153.39 10/8/2020 256818 BURRTEC WASTE (GROUP) INDUSTRIES, INC.395.63 10/8/2020 256821 CITY OF SAN BERNARDINO, PUBLIC WORKS DEPT 5,609.80 10/8/2020 256820 CITY OF HIGHLAND 4,560.00 10/8/2020 256822 CLIFTONLARSONALLEN LLP 840.00 10/14/2020 256829 ALARIC ALBISO 200.00 10/14/2020 256830 JODY SCOTT 350.00 10/14/2020 256835 US BANCORP SERVICE CENTER 18,606.29 10/14/2020 256841 AMERICAN FIDELITY ASSURANCE COMPANY (FSA)1,035.83 10/14/2020 256850 INLAND WATER WORKS SUPPLY CO 1,805.91 10/14/2020 256849 HATFIELD BUICK 293.67 10/14/2020 256856 UNITED OF OMAHA LIFE INSURANCE COMPANY 6,040.01 10/14/2020 256840 AMERICAN FIDELITY ASSURANCE COMPANY 2,632.90 10/14/2020 256852 SAN BERNARDINO MUNICIPAL WATER DEPARTMENT 10,103.54 10/14/2020 256853 SOUTHERN CALIFORNIA EDISON COMPANY 286,952.73 10/14/2020 256843 COUNTY OF SAN BERNARDINO/TAX COLLECTOR 879.54 10/14/2020 256848 HARPER & ASSOCIATES ENGINEERING, INC 6,480.00 10/14/2020 256851 KONICA MINOLTA 404.27 10/14/2020 256855 UNIFIRST CORPORATION 410.04 10/14/2020 256845 EYE MED VISION CARE 1,466.84 10/14/2020 256842 BURRTEC WASTE (GROUP) INDUSTRIES, INC.1,437.31 10/14/2020 256857 V.I.P. DOORS & GATES INC 270.00 10/14/2020 256846 FIELDMAN, ROLAPP & ASSOCIATES 1,992.50 10/14/2020 256839 ACS SUPPORT 26.00 10/14/2020 256844 DIB'S SAFE & LOCK SERVICE 17.82 10/14/2020 256847 FLEET MANAGEMENT DEPARTMENT 2,102.16 10/14/2020 256833 NOHO CONTRUCTORS 1,084.73 10/14/2020 256832 BLUE WAVE INVESTMENTS INC 2.94 10/14/2020 256834 D.M. CONTRACTING INC 1,084.52 10/14/2020 256831 REGINA MARCIAL 161.05 10/15/2020 256858 C CASPER TERRY 36.81 10/15/2020 256859 ANDRES CASTANEDA RENTERIA 62.84 10/15/2020 256860 ALGHUNAIM ENAM 228.16 10/22/2020 256881 VALERO FLEET, WEX BANK 13,157.56 10/22/2020 256871 INLAND WATER WORKS SUPPLY CO 18,163.65 10/22/2020 256863 CAL VALVE 9,999.52 10/22/2020 256880 UNITED SITE SERVICES OF CALIFORNIA, INC 320.46 PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 Page 1 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 10/22/2020 256876 SO CAL GAS 14.79 10/22/2020 256861 AT&T 577.94 10/22/2020 256867 FEDERAL EXPRESS CORPORATION 77.02 10/22/2020 256877 SOUTHERN CALIFORNIA EDISON COMPANY 15,088.26 10/22/2020 256872 MUFG UNION BANK, N.A. TRUST DEPARTMENT- FEES 490.00 10/22/2020 256870 INLAND DESERT SECURITY & COMMUNICATIONS, INC 625.20 10/22/2020 256868 FIRST CHOICE SERVICES 347.68 10/22/2020 256865 COUNTY OF SAN BERNARDINO/TAX COLLECTOR 11.71 10/22/2020 256866 DENTAL HEALTH SERVICES 295.50 10/22/2020 256879 UNIFIRST CORPORATION 410.04 10/22/2020 256873 PETAS CAR CARE- KEVIN KOHRELL 1,498.72 10/22/2020 256878 STREET DECOR, INC 2,584.39 10/22/2020 256862 BURRTEC WASTE (GROUP) INDUSTRIES, INC.1,423.90 10/22/2020 256875 POWER PLUS AUTO GLASS 193.25 10/22/2020 256874 PILAR ONATE 18,900.00 10/22/2020 256864 CITY OF SAN BERNARDINO, PUBLIC WORKS DEPT 2,243.92 10/22/2020 256869 HONEYWELL BUILDING SOLUTIONS 18,107.86 10/22/2020 256882 CARLOS RODRIGUEZ 363.06 10/22/2020 256883 Sharon R Williams 193.98 10/27/2020 256896 COLLEEN LYON 150.00 10/27/2020 256899 MARTIN KEANE 150.00 10/27/2020 256898 JOSE MORA 150.00 10/27/2020 256894 AISHA BARKER 100.00 10/27/2020 256893 AAIYSHA VALENTIN 100.00 10/27/2020 256907 VERONICA MEDINA 150.00 10/27/2020 256897 DIANA CASTILLO 257.96 10/27/2020 256902 PAUL MARQUIS 200.00 10/27/2020 256904 SONYA CREAMER 99.00 10/27/2020 256901 NHUT TRUONG 100.00 10/27/2020 256905 TAM NGUYEN 100.00 10/27/2020 256903 PAUL RINCK 150.00 10/27/2020 256895 ANDREW SOLARES 100.00 10/27/2020 256900 NGUY NGUYEN 300.00 10/27/2020 256906 TINA GARLAND-MITCHELL 150.00 10/27/2020 256925 SWRCB-DWOCP 80.00 10/27/2020 256915 DINO PERUGINO, COMMERCIAL TRANSPORTATION SERVICES 12,015.64 10/27/2020 256917 HIGHLAND COMMUNITY NEWS/PUBLISHING INC 2,070.50 10/27/2020 256912 CAL VALVE 165.50 10/27/2020 256919 INLAND WATER WORKS SUPPLY CO 23,586.20 10/27/2020 256924 SO CAL GAS 46.14 10/27/2020 256916 HATFIELD BUICK 368.57 10/27/2020 256914 COLONIAL LIFE, PREMIUM 547.00 10/27/2020 256910 AT&T 1,108.45 10/27/2020 256913 CHEM-TECH INTERNATIONAL INC 6,644.50 10/27/2020 256927 VERIZON 1,311.30 10/27/2020 256923 SAN BERNARDINO COUNTY FIRE PROTECTION DISTRICT 874.00 10/27/2020 256911 BALFOUR BEATTY INFRASTRUCTURE, INC 5,263,466.45 10/27/2020 256921 METROPOLITAN LIFE INS CO 93.30 10/27/2020 256920 K & L HARDWARE 129.11 10/27/2020 256926 UNIFIRST CORPORATION 828.45 10/27/2020 256918 INLAND LIGHTING SUPPLIES, INC 432.89 10/27/2020 256909 ALTERNATIVE HOSE INC 212.32 10/27/2020 256908 ACS SUPPORT 26.00 PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 Page 2 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 10/27/2020 256922 RUHNAU CLARKE ARCHITECTS 895.50 10/28/2020 256928 SARA BOGDAN 479.99 10/28/2020 256888 IVAN MAGNAYE 71.21 10/28/2020 256890 ANTHONY COE 25.85 10/28/2020 256891 MICHAEL CRAIG 72.88 10/28/2020 256885 DAN YE 150.00 10/28/2020 256889 ASHLEY RICHARD 141.08 10/28/2020 256884 DONG WANG 68.65 10/28/2020 256886 ANGEL B. SANTOS 30.22 10/28/2020 256892 HORIZON 2010 ENTERPRISE 75.13 10/28/2020 256887 YOUSEF IHMUD 74.45 10/29/2020 256929 SWRCB-DWOCP 120.00 10/29/2020 256930 CLAASIC, LLC 79.50 BANK DRAFTS 10/1/2020 DFT0003950 CALPERS/ DEFERRED COMPENSATION 19,977.06 10/1/2020 DFT0003951 CALPERS/ RETIREMENT 46,252.12 10/2/2020 DFT0003954 Social Security 251.34 10/2/2020 DFT0003956 State Payroll Tax 14,514.77 10/2/2020 DFT0003949 CA SDI Tax 2,583.37 10/2/2020 DFT0003952 Federal Payroll Tax 32,948.75 10/2/2020 DFT0003953 Medicare 9,217.02 10/2/2020 DFT0003959 CALPERS/ MEDICAL 102,427.55 10/2/2020 DFT0003960 AUTHNET GATEWAY BILLING 15.00 10/2/2020 DFT0003961 GLOBAL PAYMENTS 12,830.07 10/5/2020 DFT0003962 MERCHANT BANKCD 581.10 10/8/2020 DFT0003965 PayNearMe, Inc.232.83 10/8/2020 DFT0003986 EAST VALLEY WATER DISTRICT 100.00 10/13/2020 DFT0003978 FORTE, ACH DIRECT INC, ACH FEES 4,518.22 10/13/2020 DFT0003981 TRANSFIRST DISCOUNT 107.80 10/14/2020 DFT0003970 CALPERS/ DEFERRED COMPENSATION 20,305.35 10/14/2020 DFT0003971 CALPERS/ RETIREMENT 45,773.93 10/14/2020 DFT0003976 STATE DISBURSEMENT UNIT 2,678.62 10/14/2020 DFT0003979 PayNearMe, Inc.195.02 10/15/2020 DFT0003980 PayNearMe, Inc.39.80 10/16/2020 DFT0003974 Social Security 219.24 10/16/2020 DFT0003975 State Payroll Tax 11,258.81 10/16/2020 DFT0003972 Federal Payroll Tax 28,769.69 10/16/2020 DFT0003969 CA SDI Tax 2,211.65 10/16/2020 DFT0003973 Medicare 8,203.76 10/21/2020 DFT0003982 PayNearMe, Inc.169.15 10/23/2020 DFT0003983 CBB 2,348.92 10/28/2020 DFT0003988 CALPERS/ DEFERRED COMPENSATION 20,038.56 10/28/2020 DFT0003989 CALPERS/ RETIREMENT 45,783.05 10/28/2020 DFT0003993 STATE DISBURSEMENT UNIT 2,678.62 10/28/2020 DFT0003996 PayNearMe, Inc.149.25 10/29/2020 DFT0003997 PayNearMe, Inc.17.91 10/30/2020 DFT0003992 Social Security 933.78 10/30/2020 DFT0003994 State Payroll Tax 13,574.96 10/30/2020 DFT0003990 Federal Payroll Tax 34,182.89 10/30/2020 DFT0003987 CA SDI Tax 2,236.09 10/30/2020 DFT0003991 Medicare 9,497.56 10/30/2020 DFT0003998 PayNearMe, Inc.15.92 PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 Page 3 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT ACH PAYMENTS 10/8/2020 10008069 DANIEL DAVIS 545.90 10/8/2020 10008059 ACWA, ASSOC OF CALIF WATER AGENCIES 26,275.00 10/8/2020 10008080 MANAGED MOBILE, INC.1,228.31 10/8/2020 10008089 SUPERIOR AUTOMOTIVE WAREHOUSE, INC.481.78 10/8/2020 10008084 PLUS 1 PERFORMANCE 374.48 10/8/2020 10008067 CLEARFLY COMMUNATIONS 1,349.97 10/8/2020 10008070 DAVID HERNANDEZ 431.95 10/8/2020 10008095 VULCAN MATERIALS CO/ CALMAT CO 716.44 10/8/2020 10008060 ADVANTAGE FLEET WASH, INC 300.00 10/8/2020 10008079 MANAGED HEALTH NETWORK 225.12 10/8/2020 10008088 SUEZ WTS ANALYTICAL INSTRUMENTS, INC 7,404.58 10/8/2020 10008068 CLINICAL LAB OF S B 4,768.25 10/8/2020 10008066 CINTAS CORPORATION (FIRST AID)324.69 10/8/2020 10008074 GORDON GRANT 568.10 10/8/2020 10008093 VERIZON WIRELESS 6,538.44 10/8/2020 10008090 TESCO CONTROLS, INC.2,295.80 10/8/2020 10008073 GARY STURDIVAN 656.56 10/8/2020 10008085 REBECCA KASTEN 529.31 10/8/2020 10008062 ALLEN WILLIAMS 648.60 10/8/2020 10008092 UNDERGROUND SERVICE ALERT 189.85 10/8/2020 10008076 JEREMY SUBRIAR 305.00 10/8/2020 10008064 BARRY'S SECURITY SERVICES, INC 4,708.30 10/8/2020 10008072 FLEET SERVICES /COLTON TRUCK 37.60 10/8/2020 10008091 TROY ALARM, INC.264.00 10/8/2020 10008082 PARKHOUSE TIRE, INC 227.33 10/8/2020 10008061 AIRGAS, USA LLC 66.74 10/8/2020 10008065 CAROL CALES 642.87 10/8/2020 10008086 ROBERT MARTIN 750.00 10/8/2020 10008078 LINCOLN NATIONAL LIFE INS CO.2,276.78 10/8/2020 10008071 ELISEO OCHOA 649.61 10/8/2020 10008081 MICHAEL HENDERSON 641.44 10/8/2020 10008077 JESUS FABIAN VALENZUELA 72.58 10/8/2020 10008063 APPLIED MAINTENANCE SUPPLIES & SOLUTIONS 502.27 10/8/2020 10008075 INFOSEND, INC 15,974.13 10/8/2020 10008083 PLUMBERS DEPOT INC.1,330.84 10/8/2020 10008087 SHRED-IT US JV LLC 136.24 10/14/2020 10008118 WOODARD & CURRAN INC.3,581.65 10/14/2020 10008111 MCMASTER-CARR 154.38 10/14/2020 10008107 FLEET SERVICES /COLTON TRUCK 202.05 10/14/2020 10008117 WATEREUSE ASSOCIATION 3,852.00 10/14/2020 10008100 B&A BLAIS & ASSOCIATES INC 1,675.00 10/14/2020 10008112 MINUTEMAN PRESS OF RANCHO CUCAMONGA 917.57 10/14/2020 10008096 ANTHESIS 3,083.50 10/14/2020 10008115 SDRMA, SPECIAL DISTRICT RISK MGMT 6,270.22 10/14/2020 10008097 ANTHONY POOL SERVICE, JAMES ANTHONY LOGSDON 225.00 10/14/2020 10008114 RESOLUTE 4,200.00 10/14/2020 10008102 BOOT BARN, INC 526.79 10/14/2020 10008099 APPLIED MAINTENANCE SUPPLIES & SOLUTIONS 51.27 10/14/2020 10008110 LANDS END INC 154.96 10/14/2020 10008106 FERGUSON ENTERPRISES, INC.85,963.48 10/14/2020 10008116 STEPHANIE MICHELE GUIDA 3,787.50 10/14/2020 10008105 EVWD EMPLOYEES EVENTS ASSOC 367.42 PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 Page 4 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 10/14/2020 10008109 JC LAW FIRM 12,510.00 10/14/2020 10008113 NATIONAL CONSTRUCTION RENTALS 158.49 10/14/2020 10008104 DALE BRENDT MARSDEN, dba TOMORROW'S TALENT, LLC 1,721.88 10/14/2020 10008101 BARRY'S SECURITY SERVICES, INC 4,673.49 10/14/2020 10008108 HUB CONSTRUCTION SPECIALTIES, INC.598.54 10/14/2020 10008098 ANTHONY'S IRRIGATION 12,055.00 10/14/2020 10008103 BURGESS MOVING & STORAGE 1,239.15 10/22/2020 10008134 FRONTIER COMMUNICATIONS 1,904.69 10/22/2020 10008141 MANAGED MOBILE, INC.2,261.46 10/22/2020 10008150 SUPERIOR AUTOMOTIVE WAREHOUSE, INC.43.06 10/22/2020 10008143 ORION SYSTEMS INTEGRATORS LLC 2,000.00 10/22/2020 10008152 VULCAN MATERIALS CO/ CALMAT CO 718.11 10/22/2020 10008142 MERLIN JOHNSON CONSTRUCTION 15,237.06 10/22/2020 10008145 PLUS 1 PERFORMANCE 709.79 10/22/2020 10008133 FERGUSON ENTERPRISES, INC.9,642.57 10/22/2020 10008149 STAPLES BUSINESS ADVANTAGE 440.73 10/22/2020 10008132 EXCEL LANDSCAPE, INC 122.22 10/22/2020 10008129 CINTAS CORPORATION (FIRST AID)168.12 10/22/2020 10008127 CALIFORNIA SPECIAL DISTRICTS 7,805.00 10/22/2020 10008136 HARRINGTON INDUSTRIAL PLASTIC 6,185.09 10/22/2020 10008146 QUADIENT FINANCE USA, INC.407.62 10/22/2020 10008148 SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT 210,785.20 10/22/2020 10008135 GENESIS INDUSTRIAL SUPPLY, INC 1,531.83 10/22/2020 10008138 J COMM, INC.5,685.00 10/22/2020 10008119 ACI PAYMENTS INC.55.55 10/22/2020 10008147 REDLINE MOBILE FLEET SERVICE & REPAIR 1,667.71 10/22/2020 10008126 BARRY'S SECURITY SERVICES, INC 4,734.41 10/22/2020 10008125 ASHOK K. DHINGRA, AKD CONSULTING 15,100.00 10/22/2020 10008128 CHEMSEARCH 205.55 10/22/2020 10008144 PARKHOUSE TIRE, INC 4,560.16 10/22/2020 10008121 AIRGAS, USA LLC 348.61 10/22/2020 10008122 AMERICAN RENTALS, INC 31.78 10/22/2020 10008131 ENERGAGE, LLC 2,000.00 10/22/2020 10008130 CORELOGIC SOLUTIONS, LLC 360.50 10/22/2020 10008151 TYLER TECHNOLOGIES, INC 596.73 10/22/2020 10008139 KRIEGER & STEWART, INCORPORATED 10,205.50 10/22/2020 10008123 ANTHESIS 4,546.50 10/22/2020 10008140 LEGEND PUMP AND WELL 8,366.50 10/22/2020 10008120 ADCOMP SYSTEMS 319.29 10/22/2020 10008124 APPLIED MAINTENANCE SUPPLIES & SOLUTIONS 1,421.52 10/22/2020 10008137 INFOSEND, INC 300.00 10/27/2020 10008163 FRONTIER COMMUNICATIONS 61.90 10/27/2020 10008162 FERGUSON ENTERPRISES, INC.6,053.40 10/27/2020 10008170 PRINCIPAL FINANCIAL GROUP 11,072.80 10/27/2020 10008159 CORE & MAIN LP 470.70 10/27/2020 10008155 B&A BLAIS & ASSOCIATES INC 1,175.00 10/27/2020 10008171 SCN, SECURITY COMMUNICATION NETWORK, INC 285.00 10/27/2020 10008157 BOOT BARN, INC 387.80 10/27/2020 10008172 STUBBIES PROMOTIONS INC 2,314.84 10/27/2020 10008168 MINUTEMAN PRESS OF RANCHO CUCAMONGA 2,624.12 10/27/2020 10008176 ZENON ENVIRONMENTAL CORP.73,969.30 10/27/2020 10008156 BARRY'S SECURITY SERVICES, INC 4,682.19 10/27/2020 10008158 CLARK PEST CONTROL 475.00 PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 Page 5 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 10/27/2020 10008167 MIKE J. ROQUET CONSTRUCTION INC 44,696.60 10/27/2020 10008166 MCMASTER-CARR 254.28 10/27/2020 10008174 THE GRANT FARM (MOMENTUM)499.75 10/27/2020 10008175 VULCAN MATERIALS CO/ CALMAT CO 2,125.10 10/27/2020 10008153 ALLISON MECHANICAL, INC 2,780.00 10/27/2020 10008154 ASPEN ENVIRONMENTAL GROUP 442.50 10/27/2020 10008169 MOBILE OCCUPATIONAL SERVICES, INC 100.00 10/27/2020 10008161 EXCEL LANDSCAPE, INC 13,760.25 10/27/2020 10008173 TESCO CONTROLS, INC.435.00 10/27/2020 10008164 iWATER, INC 6,000.00 10/27/2020 10008165 JOSE MILLAN 3,050.00 10/27/2020 10008160 EVWD EMPLOYEES EVENTS ASSOC 417.42 TOTAL 7,011,060.58 PAYMENT REGISTER OCTOBER 1, 2020 - OCTOBER 31, 2020 Page 6 of 6 B O AR D AGE N D A S TAF F R E P ORT Agenda Item #3. Meeting Date: Novemb er 25, 2020 Dis c ussion Item To: G o verning Board Memb ers F rom: G eneral Manager/C EO Subject: R eview and C ons id er Approval o f C omprehens ive Annual F inanc ial R eport fo r Year End ed June 30, 2020 R E C O MME N D AT IO N: S taff rec o mmend s that the Board o f Direc tors (Board ) review and ap p ro ve the attac hed d raft C o mprehens ive Annual F inancial R eport (C AF R ) and aud it reports for fisc al year 2019-20. B AC KGR O UN D / AN ALYS IS : Attached is the Eas t Valley Water Dis tric t C AF R fo r fis c al year ended June 30, 2020. T he C AF R includ es the Dis tric t’s annual financial s tatements with acc o mp anying no te d is clos ures, Management Dis c ussion and Analys is , and s tatistical information c o mp iled by s taff. T he C AF R is acc o mpanied by an aud it o p inion letter is s ued b y the District’s C PA firm C liftonLarsonAllen LLP (C LA), whic h cond uc ted an audit in ac cordanc e with aud iting s tand ard s generally acc ep ted in the United S tates of America and guid elines es tablis hed b y the C alifo rnia S tate C o ntroller fo r S p ecial Dis tricts . Als o in this year ’s C AF R is a c op y of the C ertific ate of Achievement fo r Exc ellence in F inanc ial R ep o rting received fo r las t year ’s report. T his year’s rep o rt is in d raft form, b ut will be finalized upon ac c ep tance and ap p ro val by the Board . AG E N C Y G O ALS AN D OB J E C T IVE S : G o al and O bjec tives I I - Maintain a C ommitment to S us tainab ility, Transparenc y, and Ac c o untability a) P rac tice Trans parent and Ac countab le F is cal Management R E VIE W B Y O T HE R S : T his agend a item has been reviewed by the F inanc e Department and F inanc e and Human R es o urc es C ommittee. R ecommended b y: Jo hn Mura G eneral Manager/C EO R espec tfully sub mitted: Brian Tomp kins C hief F inancial O ffic er F IS C AL IMPAC T T here is no fis cal impac t as s o c iated with this agend a item. ATTACH M E N TS: Description Type E VW D P resentatio n P resentation C L A P re sentation P resentation C AFR 2 020 Backup Material 2020 Single Audit Report Backup Material November 25, 2020 COMPREHENSIVE ANNUAL FINANCIAL REPORT FY 2019-20 •Financial Condition •$887 Thousand Increase in Current Assets •$6.98 Million Increase in Current Liabilities •$35.99 Million Increase in Non-Current Liabilities •$12.6 Million Increase to Net Position •$304 Thousand Increase in Water Operating Revenue •$153 Thousand Decrease in Wastewater Operating Revenue •$1.8 Million Decrease in Unrestricted Reserves •Significant Investment in Capital Assets •Spent $88.95 Million on Asset Acquisition / Construction •Completed AMI Phase 4 & Continued Construction of SNRC •Continued to Meet Debt Service Coverage Requirements 2 REPORT HIGHLIGHTS 3 PRIOR YEAR COMPARISON DESCRIPTION FY 2019-20 FY 2018-19 Operating Revenue 39,812,912$ 39,309,298$ Operating Expenses (36,250,010) (35,898,073) Operating Income 3,562,902 3,411,225 Non-Operating Revenue 646,638 1,574,166 Non-Operating Expenses (1,579,104) (1,684,986) Contributions 9,961,882 611,673 Increase in Net Position 12,592,318$ 3,912,078$ 4 FINANCIAL CONDITION: WATER SALES PROJECTION 1,473,208 2,132,102 1,814,397 1,545,697 1,833,604 1,045,251 965,978 975,535 1,018,912 862,785 1,231,259 2,003,642 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Tier 3 Tier 2 Tier 1 FY 2019-20 Projection 5 FY 2019-20 EXPENDITURES 12% 16% 5% 67% Employee Services Payments to Suppliers Debt Service Payments Capital Assets 6 FINANCIAL CONDITION: QUICK RATIO 1.46 1.73 2.45 2.83 1.79 - 0.50 1.00 1.50 2.00 2.50 3.00 2016 2017 2018 2019 2020 RA T I O FISCAL YEAR 7 FINANCIAL CONDITION: DAYS CASH ON HAND 183 178 233 234 178 0 50 100 150 200 250 2016 2017 2018 2019 2020 DA Y S FISCAL YEAR 8 FINANCIAL CONDITION: UNRESTRICTED RESERVES 7.6 10.2 12.8 24.4 22.5 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 2016 2017 2018 2019 2020 MI L L I O N D O L L A R S FISCAL YEAR 9 OUTSTANDING DEBT $21,635,000 $12,085,000 $1,719,082 $2,576,022 $63,360,062 $6,205,342 2010 Refunding Bonds 2013 Refunding Bonds U.S. Bank Lease Purchase SBVMWD Loan SRF Loan - SNRC DWR Loans LAST FIVE YEARS 10 DEBT SERVICE COVERAGE 2.10 3.09 2.89 2.53 2.66 5.17 6.54 3.01 5.22 34.48 - 5 10 15 20 25 30 35 40 2016 2017 2018 2019 2020 CO V E R A G E R A T I O FISCAL YEAR Water Wastewater Bond Requirement ©2 0 1 8  Cl i f t o n L a r s o n A l l e n  LL P Create Opportunities WEALTH ADVISORY  |  OUTSOURCING  |  AUDIT, TAX, AND CONSULTING Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC‐registered investment advisor ©2 0 1 8  Cl i f t o n L a r s o n A l l e n  LL P East Valley Water District 2020 Board Meeting Presentation November 25, 2020 ©2 0 1 8 C l i f t o n L a r s o n A l l e n L L P Create Opportunities Independent Auditor’s Reports Financial Statements •Unmodified opinion which is the highest level of assurance a CPA firm can provide for a financial statement audit •Supplementary information is fairly stated in relation to the financial statements as a whole Internal Control and Compliance •No significant or material deficiencies in the design or operation of internal controls over financial reporting noted •No instances of non- compliance with laws and regulations that could have a direct and material effect on the financial statements noted Single Audit •The District complied, in all material respects, with the compliance requirements of the US Environmental Protection Agency •The District maintained effective internal control over compliance requirements of the US Environmental Protection Agency Required Communication No difficulties encountered •No disagreements with management •No findings reported No corrected or uncorrected misstatements 1 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 East Valley Water District Prepared by: Finance Department 31111 Greenspot Road Highland, CA 92346 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 Table of Contents 1 Page No. Introductory Section Letter of Transmittal .....................................................................................................................6 Organizational Structure ............................................................................................................10 Principal Officials .......................................................................................................................11 GFOA Certificate .......................................................................................................................12 Financial Section Independent Auditors’ Report .............................................................................................. 15-17 Management’s Discussion and Analysis .............................................................................. 18-28 Basic Financial Statements Statement of Net Position ................................................................................................. 31-32 Statement of Revenues, Expenses, and Changes in Net Position ................................... 33-34 Statement of Cash Flows .................................................................................................. 35-36 Notes to the Basic Financial Statements .......................................................................... 37-66 Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability ................................................68 Schedule of Contributions .......................................................................................................69 Schedule of Changes in the Net OPEB Liability .....................................................................70 Schedule of OPEB Contributions ............................................................................................71 Notes to the Required Supplementary Information .................................................................72 Supplementary Information History and Organization ........................................................................................................76 Combining Schedule of Net Position................................................................................. 77-78 Combining Schedule of Revenues, Expenses, and Changes in Net Position .................. 79-80 Combining Schedule of Cash Flows ................................................................................. 83-84 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 Table of Contents 2 Page No. Statistical Information Section Financial Trends Changes in Net Position by Component – Last Ten Fiscal Years .................................... 89-90 Operating Revenue by Source – Last Ten Fiscal Years .........................................................91 Water Operating Expenses – Last Ten Fiscal Years ..............................................................92 Wastewater Operating Expenses – Last Ten Fiscal Years .....................................................93 Revenue Capacity Water Sales and Production – Last Ten Fiscal Years.............................................................94 Revenue Rates for Water – Last Ten Fiscal Years ........................................................... 95-96 Revenue Rates for Wastewater – Last Ten Fiscal Years ................................................. 97-98 Active Services by Type – Last Ten Fiscal Years ...................................................................99 Principal Customers – Current Fiscal Year and Nine Years Ago ..........................................100 Debt Capacity Ratio of Outstanding Debt – Last Ten Fiscal Years ..............................................................101 Debt Service Coverage – Last Ten Fiscal Years ..................................................................102 Demographic Information Demographic and Economic Statistics – Last Ten Calendar / Fiscal Years .........................103 Operating Information Full-Time Equivalent Employees by Department – Last Ten Fiscal Years ...........................104 Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ......105 Other Information Capacity Charge Funds ................................................................................................... 107-109 3 4 5 6 November 10, 2020 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, 2020. 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’s 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 2020, 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 (the 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 30.1 square miles. The District directly serves treated water to approximately 103,000 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, 2020, the District had 21,507 water connections and 19,679 wastewater connections. Water Supply and Reliability The District’s water supply for the year ended June 30, 2020 includes groundwater (78.2 percent), surface water (2.4 percent), and imported water (19.4 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. 7 Local Economy East Valley Water District is located within San Bernardino County in a metropolitan area referred to as the “Inland Empire”. Since 2011, the District’s population has grown by more than 59 percent and currently, comprised of mostly residential and commercial customers, with no major industrial users. Large consumers remain consistent year to year with the San Bernardino City Unified School District, Patton State Hospital, San Manuel Mission Indians, East Highlands Ranch, and the City of Highland, forming the list of top five users. In 2020, the average household income within the District’s service area was $47,000, approximately 21% lower than the County of San Bernardino. Customers who reside in the City of Highland account for approximately 65% of the District’s customer base. These customers had an average household income of $55,000, approximately 17% higher than the overall District average. 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 (CIFP), comprehensive reviews of water and wastewater rates, and the annual budget process. The CIFP provides a comprehensive view of infrastructure investments necessary over a seven-year period 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 CIFP is reviewed annually by the District’s Board of Directors (the 78.2% 2.4% 19.4% Water Supply Sources Groundwater Surface Water Imported 8 Board) during the budget 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 Federal Emergency Management Agency (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 safeguarded 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 adopt 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 objectives, and budget adjustments, if necessary, are requested at the mid-year budget review in February. 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 US Bancorp, the State Revolving Fund, and the San Bernardino Valley Municipal Water District. 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 July 2020. 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. 9 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, 2019. This was the seventh year that the District has achieved this prestigious award. To be awarded a Certificate of Achievement, a governmental entity must publish an easily readable and 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 EAST VALLEY WATER DISTRICT Organizational Structure Year Ended June 30, 2020 10 EAST VALLEY WATER DISTRICT Principal Officials Year Ended June 30, 2020 11 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, 2020 Name Title Elected / Appointed Current Term David E. Smith Chairman of the Board Elected 2015 - 2020 Phillip R. Goodrich Vice-Chairman of the Board Elected 2018 - 2022 Ronald L. Coats Governing Board Member Elected 2018 - 2022 James Morales, Jr.Governing Board Member Elected 2018 - 2022 Chris Carrillo Governing Board Member Elected 2015 - 2020 Contact Information East Valley Water District John Mura, General Manager/CEO 31111 Greenspot Road Highland, CA 92346 (909) 889-9501 www.eastvalley.org EAST VALLEY WATER DISTRICT GFOA Certificate Year Ended June 30, 2019 12 13 14 EAST VALLEY WATER DISTRICT Independent Auditor’s Report Year Ended June 30, 2020 15 EAST VALLEY WATER DISTRICT Independent Auditor’s Report Year Ended June 30, 2020 16 EAST VALLEY WATER DISTRICT Independent Auditor’s Report Year Ended June 30, 2020 17 EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 18 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 and County of San Bernardino in California. The Basic Financial Statements East Valley Water District is a special-purpose government agency, engaged in activities that are supported exclusively by user charges. As such, the District’s financial statements are presented in the format prescribed for proprietary funds by the Governmental Accounting Standards Board (GASB). The following financial statements for the year ended June 30, 2020 (2019 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 Revenues, 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 used 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, 2020, the District’s total assets increased by $55.2 million, to $272.1 million, and included increases to Current, Restricted, and Capital asset categories. Current assets increased 2% to $39.5 million. The increase is almost entirely in a single line item – Due From Other Governments. This receivable is related to a funding agreement with the California State Water Resources Control Board (SWRCB) for the District’s Sterling Natural Resource Center (SNRC) recycled water project. The receivable balance of $18.9 million is accumulated construction costs paid by the District but not yet reimbursed by the SWRCB. District staff is working with staff at the SWRCB to minimize the turnaround time for reimbursement claims. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 19 Restricted Asset balances increased from $8.2 to $10.2 million. The increase is the result of developer capacity fees received, primarily from a large hotel being built within the District’s service area. The nature of Restricted Cash balances at June 30, 2020 are further detailed in Note 3 of the financial statements. 2020 2019 Current Assets 39.5$ 38.6$ Restricted Assets 10.2 8.2 Other Assets 0.3 0.3 Capital Assets - Net 222.0 169.7 Total Assets 272.0 216.8 Total Deferred Outflow of Resources 4.1 3.6 Current Liabilities 18.5 11.5 Non-Current Liabilities 121.0 85.0 Total Liabilities 139.5 96.5 Total Deferred Inflows of Resources 0.7 0.7 Net Position Net Investment in Capital Assets 106.7 95.4 Restricted 6.7 3.5 Unrestricted 22.5 24.3 Total Net Position 135.9$ 123.2$ Capital Assets increased by $52.3 million during the 2019-20 fiscal year. This amount is a net between capital additions of $56.9 million, less $6.6 million in charges for depreciation during the year. Capital additions during the year were primarily construction in progress on the SNRC. A more detailed description of capital spending is in the Capital Assets section of this analysis. Total Deferred Outflow of Resources consists of pension contributions made after the most recent pension plan actuarial valuation, as well as differences between projected and actual earnings on pension plan investments and changes in assumptions. Deferred outflows increased as of June 30, 2020 because the District has adopted a plan to increase voluntary contributions against outstanding post-employment benefit obligations. While current assets increased by $1.0 million, current liabilities also increased by $7.0 million, the result of a significant contractor invoice and retentions payable at year-end. The impact of these increases caused the District’s current ratio to fall from 3.4:1 to 2.1:1. The large receivable from the SWRCB at year end also dropped the District’s liquidity ratio from 1.6:1 at June 30, 2019, to 0.8:1 at June 30, 2020. Non-Current Liabilities increased by $36 million, the net effect of: • $37.9 million in new State Revolving Fund loans; less • $2.9 million in principal payments on outstanding debt; and • $1.0 million increase in employee post-retirement benefit obligations calculated in accordance with GASB statements number 68 (pensions) and 75 (retiree medical). Pensions and OPEB (Other Post Employment Benefits) are further discussed in Notes 8 and 11 of the accompanying financial statements. Compensated absences and Long-term debt are further explained in financial statement Notes 6 and 5, respectively. The District’s total Net Position was $135.9 million at the end of fiscal year 2020, a $12.7 million increase compared to the end of the previous fiscal year. Of the $135.9 million Net Position balance, $106.7 million is categorized as EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 20 Net Investment in Capital Assets, $6.7 million is Restricted for Capital Expansion Projects, and $22.5 million is Unrestricted. The calculation of Net Investment in Capital Assets is included in Note 7 of the accompanying financial statements. Looking at longer term results, the District’s total Net Position has increased $22.9 million and $36.5 million over five and ten year periods, respectively. Activities and Changes in Net Position Water Operations California emerged from four years of severe drought in the winter of 2017 with the Governor lifting a ‘state of emergency’ and declaring an end to the drought on April 7, 2017. The total volume of water sold by the District in 2016-17, the final year of the drought, was 16,223 acre-feet. In the ensuing 2017-18 fiscal year, consumption by District customers reached its highest levels since 2014 when water sales increased 13% to 18,361 acre-feet, likely because of the lifting of the state of emergency. However, though the drought had ended, conservation measures remained, as did the District’s water budget based, tiered rates which were adopted in March 2015 and are designed to make inefficient use of water more expensive. As a result, water consumption dropped significantly in fiscal year 2018-19 to 16,167 acre-feet.to billed as inefficient use at the District’s highest rates totaled $4.4 million. Water sales for fiscal year 2019-20 increased slightly, 3.2% to 17,037 acre-feet, or $16.9 million in water sales revenue. Total water produced by the District during the year was 17,596 acre feet, with the difference between water produced and water sold of 904 acre feet being the result of District flushing programs, water use at District facilities, and system leaks. The COVID-19 pandemic was likely a factor in the small increase in consumption as students and many employees within the District’s service area were asked to work from home for the last four months of the fiscal year. With 94.1% of the District’s customer accounts being residential, making up 79.1% of sales, extra time at home resulted in more indoor water use. To accommodate this, the District Board acted to temporarily increase residential customer water budgets, from 60 gallons per capita per day (gpcd) to 75 gallons, recognizing that customers spending more time at home would result in a higher need for Tier 1 (indoor health and safety) water use. This action gave residential customers 25% more water billed at the cheapest priced rate tier for the months April through June. Water System, or Meter Charge revenue increased by only 0.15% to finish at $9 million for fiscal year 2019-20. These are fixed charges assessed to each account, and no rate adjustments were effective for these charges during the year, so revenue was relatively the same as the prior year as was projected. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 21 $- $5 $10 $15 $20 $25 $30 2016 2017 2018 2019 2020 Mi l l i o n s Water Department Operating Revenue versus Expenses Revenue Expenses Water Department operating expenses increased 3.2% to $23.2 million for fiscal year 2019-20. Overall, water operations were affected by an increase in purchases of State water for delivery at its surface water treatment plant to utilize a newly commissioned hydro-electric generation facility. In addition, the District increased voluntary contributions toward post employment benefit obligations which affected costs across all programs and departments. Specific cost fluctuations included: • Source of Supply: purchased water costs increased 101.5% to $816 thousand for state project water delivered to the District’s surface water treatment plant. • Pumping: power costs for boosting water to higher pressure zones continued to decrease as water more water production was shifted to the surface water treatment plant from wells. • Transmission & Distribution (T&D): costs increased 22.7% because of two line items – Labor and Contract Services. Labor increased because two field staff, previously meter reader positions, transitioned to maintenance as the automated metering project nears completion. Contract Services increased due to a higher number of main leaks that required assistance from on-call contractors. Wastewater Operations Wastewater operating revenues consist of System Charges and Treatment Charges, and Other Operating Revenue. 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. Other Operating Revenue includes inspections, plan checking, and other development related fees, and also periodic reimbursements from other public agencies or utilities for shared costs or participation in conservation programs. In fiscal year 2018-19, Other Operating Revenue included a $453 thousand reimbursement for costs EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 22 incurred on a joint project, the reason prior year Other Operating Revenue were significantly higher than in the 2019-20 fiscal year. Rate related wastewater revenue during the 2019-20 fiscal year decreased $93 thousand (0.7%), from $13.2 to $13.1 million. This result is a net effect between an increase in system charges, and a decrease in treatment charges. System charges, assessed by the District for maintenance of wastewater collection mains, increased by 0.07% as a result of an increase in water usage by commercial customers. Commercial customers, which include multi-family residential complexes larger than three units, are billed for wastewater charges based on water consumption. The rate charged to commercial customers is the same for all customer types at $0.55 per hundred cubic feet. As discussed above, increased usage was generally residential, so multi-family complexes had the greatest effect on system charge revenue. Wastewater treatment revenues and costs, both fell 1.1% to $8.5 million in fiscal year 2019-20. As with billing for system charges, commercial customer bills have a component based on water consumption, but the consumptions based rates vary, based on customer types - charges to multi-family complexes being the lowest, and restaurants and hotels being the highest due to the nature of wastewater discharged. Restaurants were forced to limit operations with the outbreak of COVID 19, therefore, decreased treatment charge revenue from restaurants and other high discharge businesses led to decreased wastewater treatment revenue. Wastewater collection line maintenance costs increased by 9.5% compared to the prior year. This change is the result of higher Labor costs as the District increase the number of full-time employees charged to the program from two to four. $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 2016 2017 2018 2019 2020 Mi l l i o n s Wastewater Department Operating Revenue versus Expenses Revenue Expenses Shared Customer Account & Administrative Costs Costs related to Customer Accounts (Water & Wastewater Operations) decreased $201 thousand, or 10.4%, due primarily to the elimination of a position in the Customer Service Department and a significant reduction in the number of costly final notices to delinquent customers delivered. The number of notices was reduced, not because EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 23 of a reduction in the number of delinquent customers, but because of legislation (SB998) and an Executive Order by the Governor of California prohibiting the disconnection of delinquent customers during the COVID 19 pandemic. Administrative and general costs for the District decreased by 1.5% to $10.6 million. The primary reasons for the decrease were a significant reduction in engineering contract services due to completion of water and sewer master plan updates and a transition to in-house project management with increasing staff capabilities. The District also ended turf replacement as one of its conservation programs which significantly reduced the cost of conservation programs. Other significant changes in general and administrative costs included: 1. Legal Services decreased 31% as the District nears the end of negotiations to acquire shares in the North Fork Water Company from other shareholders. 2. Insurance costs increased 25.2%; an industry wide result of the costly California wildfires in 2019. 3. Labor and Contract Services in Public Affairs increased 24.7% as a Public Affairs manager position was created and filled, and consultants were hired to help staff update the District’s Emergency Response and Business Continuity plans. Non-Operating Activities The District’s non-operating revenue of $647 thousand includes investment earnings of $525 thousand, and $122 thousand in miscellaneous income and reimbursements. Non-operating expenses is $1.58 million in interest on District long-term obligations. East Valley Water District Changes in Net Position (in millions) 2020 2019 Water Revenues 26.6$ 25.5$ Water Operating Expenses (23.1) (22.5) Wastewater Services 13.3 13.8 Wastewater Operating Expenses (13.0) (13.4) Non-Operating Revenues 0.6 1.6 Non-Operating Expenses (1.6) (1.7) Income Before Contributions & Special Item 2.8 3.3 Developer Contributions 3.2 0.6 Grant Funds Contributed 6.7 - Change in Net Position 12.7 3.9 Beginning Net Position, as Previously Reported 123.2 119.3 Ending Net Position 135.9$ 123.2$ Investment earnings decreased 8.2% compared to the prior year due to the use of investible funds to prepay contractor costs on the SNRC project, costs which are being reimbursed under a State Water Resources Control Board (SWRCB) funding agreement. Earnings were also hampered by a decreasing interest rate paid by the California Local Agency Investment Fund, which dropped from 2.57% to 1.47% during fiscal year 2019-20. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 24 Capital Contributions Contributions received during fiscal year 2019-20 included $3.2 million in developer capacity fees, and a $6.8 million capital grant received from the SWRCB as part of the funding agreement mentioned above. Components of Net Position The District is required to present its net position in three categories: Net Investment in Capital Assets, Restricted, and Unrestricted. Net Investment in Capital Assets The components comprising Net Investment in Capital Assets are presented in Note 7 of the accompanying financial statements. The balance at June 30, 2020 is $106.7 million, an increase of $11.2 million compared to June 30, 2019. The increase is the net result of the acquisition or construction of capital assets for $58 million, offset by a $40.9 million increase in outstanding debt, and a net increase in accumulated depreciation of $5.9 million. Restricted Restricted Net Position consists of unexpended development impact fees which may only be appropriated by approval of the Board of Directors for a project included in the District’s Capital Improvement Program. A summary of the collection and use of these funds is presented as Other Information in this document. Unrestricted Unrestricted Net Position is the balance after amounts to be classified as Net Investment in Capital Assets or Restricted have been determined. Unrestricted Net Position decreased $1.8 million to $22.5 million in fiscal year 2019-20. Capital Assets The District spent approximately $58 million for expansion or replacement of property, plant, and equipment during the 2019-20 fiscal year. These amounts are reflected in Utility Plant, or as additions to Construction in Progress, in the accompanying financial statements. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 25 Placed in Service During the 2019-20 fiscal year, District staff, consultants, and contractors completed work on the following: • Installed Tank Mixers at Plant 108; • Removed and replaced perimeter fence at Plant 134; • Replaced third complete train of filtration membranes in Plant 134; • Rehabilitated equipment and well at Plant 39A; • Installed 4,685 new automated meters; • Replaced 2,526 linear feet of water main; and • Replaced 7,530 linear feet of sewer main. Utility Plant in Service – June 30th (in millions) Department 2020 2019 Water Source of Supply 19.1$ 18.9$ Pumping 14.6 14.4 Transmission & Distribution 101.8 100.1 Treatment 28.5 28.2 Wastewater Collection Lines 27.6 27.5 General Buildings & Improvements 19.1 18.1 Equipment 9.8 9.8 Total 220.5$ 217.0$ Construction in Progress (CIP) Construction in progress increased $51.21 million to $88.95 million (see note 4) between June 30, 2019 and June 30, 2020. With approximately 17 projects in progress, additions to CIP totaled $56.84 million, while $2.13 million was capitalized and transferred to Utility Plant in Service. Of the $88.95 million balance in Construction in Progress at June 30, 2020, 85% is related to a single project, the Sterling Natural Resource Center. The SNRC is a water recycling plant capable of converting six million gallons per day (mgd) of wastewater into recycled water that can be recharged into the local groundwater basin. Future phases will increase capacity of the plant to 10 mgd. The SNRC project includes new interceptor mains to divert wastewater flows, treatment plant and administration facilities, solid waste digesters, and a recycled water pipeline for delivering water to recharge ponds. The total cost to build the project is approximately $181 million. Through June 30, 2020, project costs totaled $75 million. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 26 Funding for the project will include a grant and low interest loan from the SWRCB totaling $157 million, an $18 million contribution for the basin water master for the recycled water pipeline, $4.5 million from anticipated sales tax exclusions / Edison rebates, and $1.5 million from District development impact fees or other reserves. One other very important project is the installation of automated metering infrastructure (AMI). Five of seven phases of a plan to convert all District meters to remote read capability are completed and approximately three-quarters of the District’s 22 thousand accounts have been converted. The District plans to complete the remaining phases by June of 2021. 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: • Rehabilitation of District water storage tanks. • Replacement of aging water distribution pipelines that require frequent repair and are suspected of causing system water losses. Additional water storage capacity was identified in a water system master plan update as a top priority over the next five years. To address this issue, land has been purchased for a reservoir site, and discussions with developers include upsizing on their plans to provide storage for their project. The master plan also discussed the feasibility of building a new surface water treatment plant in the District’s east end, closest to the source of surface water and to the largest areas of undeveloped land in the District’s service area. 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 also completed an update to its Wastewater Collection System Master Plan in fiscal year 2018-19 which identified three 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 at June 30, 2020 consists of Revenue Bonds issued through the East Valley Water District Financing Authority (Authority), a blended component unit, loans from the California Department of Water Resources (DWR), a capital lease purchase with US Bank, and a loan from the San Bernardino Valley Municipal Water District (SBVMWD). Outstanding balances as of June 30, 2020 were as follows: EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 27 2010 Refunding Bonds 21,635,000$ 2013 Refunding Bonds 12,085,000 SBVMWD Loan 2,576,022 AVAD Construction 71,002 EFAD Construction 299,370 Plant 134 Construction 5,834,970 SNRC Construction 63,360,062 U.S. Bank Lease Purchase 1,719,082 Total 107,580,508$ On September 10, 2020 the District refinanced both the 2010 Revenue Bonds, in a current refunding, and the 2013 Revenue Bonds, in an advanced refunding, to take advantage of lower interest rates. The favorable pricing received through the refunding transaction will save the District approximately $385,000 annually over the next 20 years. Note 5 to the accompanying financial statements explains the purposes for issuing all debt scheduled above. The funding agreement with the State Water Resources Control Board for the SNRC construction consists of a $150.3 million loan at 1.8% and a $6.7 million grant, was finalized on November 21, 2019. Debt service of $6.8 million and plant operating expenses will be paid with $8.7 million currently paid to the City of San Bernardino Water Department for wastewater treatment, Additional revenue streams will include Local Resource Investment Program payments received from the San Bernardino Valley Municipal Water Department for the use of recycled water produced by the plant for groundwater recharge, tipping fees from waste haulers who dispose of liquid waste at the District digesters, and energy cost avoidance through use of power produced by the digesters. The loan balance as of June 30,2020 is $63.4 million; loan payments will begin one year after the Notice of Completion is filed for the SNRC. All scheduled debt payments for fiscal year 2019-20 were paid timely. $- $20 $40 $60 $80 $100 $120 2016 2017 2018 2019 2020 Mi l l i o n s Outstanding Long-Term Debt June 30th 2013 Bonds 2010 Bonds SBVMWD Loan Inst Purchase SFR Loan DWR Loans EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2020 28 Standard & Poor’s and Fitch rated the District’s 2020 Series A and B Revenue Bonds at AA- at the time of issuance. Dun & Bradstreet (D&B), based on audited financial statements and creditor input, also rated the District. The rating given by D&B is currently 5A1 accompanied by a financial condition assessment of ‘strong’, which is no change from previous years. Rate Increases The District has contracted with IB Consulting, LLC to perform water and wastewater utility Cost of Service Analysis’. The analysis’ has determined the need for rate adjustments to current District water and wastewater rates, and will propose wastewater treatment rates to be established for the SNRC. Additional information about the District’s Water Budget based rate structure can be found on the District’s website at www.eastvalley.org. Contacting the District’s Financial Management This financial report is designed to give our customers / ratepayers, creditors, and investors a general overview of the District’s finances, and to demonstrate the District’s accountability for money it receives, and stewardship over facilities it maintains. If you have questions about this report, or need additional information, contact the District’s Finance Department at 31111 Greenspot Road, Highland, California 92346, or call (909) 381-6463. 29 30 EAST VALLEY WATER DISTRICT Statement of Net Position June 30, 2020 The accompanying notes are an integral part of this statement. 31 For Comparative Purposes Only 2020 2019 ASSETS Current Assets: Cash and Cash Equivalents 8,777,977$ 13,377,049$ Investments 5,683,093 5,328,361 Accounts Receivable, Net 4,800,438 4,129,816 Interest Receivable 59,283 103,867 Other Receivables 567,882 822,525 Due from Other Governments 18,906,857 14,268,673 Inventory 486,971 345,634 Prepaid Expenses 250,403 269,864 Total Current Assets 39,532,904 38,645,789 Non-Current Assets: Restricted Cash and Cash Equivalents 10,195,046 8,171,966 Assessments Receivable 335,820 341,939 Capital Assets not being Depreciated 96,479,313 41,770,736 Capital Assets, Net 125,558,372 127,952,243 Total Non-Current Assets 232,568,551 178,236,884 Total Assets 272,101,455 216,882,673 DEFERRED OUTFLOWS OF RESOURCES Deferred Charge on Refunding 84,675 102,610 Deferred Outflows - Pensions 3,532,373 3,355,284 Deferred Outflows - OPEB 436,587 183,404 Total Deferred Outflows Of Resources 4,053,635 3,641,298 Total Assets and Deferred Outflows of Resources 276,155,090$ 220,523,971$ (Continued) EAST VALLEY WATER DISTRICT Statement of Net Position - Continued June 30, 2020 The accompanying notes are an integral part of this statement. 32 For Comparative Purposes Only 2020 2019 LIABILITIES Current Liabilities: Accounts Payable and Accrued Expenses 8,660,260$ 4,570,788$ Accrued Payroll and Benefits 598,055 493,278 Customer Service Deposits 1,563,518 1,550,338 Construction Advances and Retentions 3,908,876 1,276,212 Accrued Interest Payable 421,001 462,550 Current Portion of Compensated Absences 534,469 422,964 Current Portion of Long-Term Debt 2,838,685 2,769,898 Total Current Liabilities 18,524,864 11,546,028 Non-Current Liabilities: Compensated Absences, Less Current Portion 454,521 534,314 Net Pension Liability 11,805,140 10,846,955 Net OPEB Liability 2,096,677 2,016,418 Long-Term Debt, Less Current Portion 106,620,683 71,590,954 Total Non-Current Liabilities 120,977,021 84,988,641 Total Liabilities 139,501,885 96,534,669 DEFERRED INFLOWS OF RESOURCES Deferred Inflows - Pensions 682,596 672,725 Deferred Inflows - OPEB 62,612 918 Total Deferred Inflows Of Resources 745,208 673,643 Total Liabilities and Deferred Inflows Of Resources 140,247,093 97,208,312 NET POSITION Net Investment in Capital Assets 106,708,555 95,468,735 Restricted for: Future Capital Expansion Projects 6,659,487 3,460,835 Unrestricted 22,539,955 24,386,089 Total Net Position 135,907,997$ 123,315,659$ EAST VALLEY WATER DISTRICT Statement of Revenues, Expenses, and Changes in Net Position Year Ended June 30, 2020 The accompanying notes are an integral part of this statement. 33 For Comparative Purposes Only 2020 2019 OPERATING REVENUES Water Sales 16,902,370$ 15,746,654$ Wastewater Treatment Charges 8,496,012 8,592,950 System Charges 13,670,614 13,653,613 Other Charges 743,916 1,316,081 Total Operating Revenues 39,812,912 39,309,298 OPERATING EXPENSES Water Department: Source of Supply 3,263,403 2,975,348 Pumping 457,846 585,585 Treatment 891,127 840,623 Transmission and Distribution 3,460,642 2,819,288 Customer Accounts 1,356,840 1,535,681 Total Water Department 9,429,858 8,756,525 Wastewater Department: Wastewater Treatment 8,496,012 8,592,950 Wastewater Collection 767,448 700,507 Customer Accounts 367,097 388,914 Total Wastewater Department 9,630,557 9,682,371 Administrative and General 10,613,414 10,778,943 Operating Expenses Before Depreciation 29,673,829 29,217,839 Depreciation 6,575,821 6,680,234 Total Operating Expenses 36,249,650 35,898,073 Operating Income 3,563,262$ 3,411,225$ (Continued) EAST VALLEY WATER DISTRICT Statement of Revenues, Expenses, and Changes in Net Position - Continued Year Ended June 30, 2020 The accompanying notes are an integral part of this statement. 34 For Comparative Purposes Only 2020 2019 NON-OPERATING REVENUES (EXPENSES) Investment Income 524,675$ 571,549$ Gain on Disposal - 705,285 Other Income 121,983 307,247 Interest Expense (1,579,104) (1,684,986) Total Non-Operating Revenues (Expenses)(932,446) (100,905) Income Before Contributions 2,630,816 3,310,320 CONTRIBUTIONS Capacity Charges 3,219,397 611,673 Capital Grants 6,742,125 - Total Contributions 9,961,522 611,673 CHANGE IN NET POSITION 12,592,338 3,921,993 TOTAL NET POSITION, BEGINNING (AS PREVIOUSLY REPORTED)123,315,659 119,393,666 TOTAL NET POSITION, ENDING 135,907,997$ 123,315,659$ EAST VALLEY WATER DISTRICT Statement of Cash Flows Year Ended June 30, 2020 The accompanying notes are an integral part of this statement. 35 For Comparative Purposes Only 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers 41,788,133$ 40,848,979$ Cash Payments for Employees Services (10,822,584) (9,986,866) Cash Payments to Suppliers (14,067,425) (16,089,708) Cash to/(from) Other Sources 254,644 (401,490) Net Cash Provided by Operating Activities 17,152,768 14,370,915 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Grant Funds Received 6,742,125 - Gain on Disposal 51,722 705,286 Contributed Capital 3,219,397 918,919 Proceeds from Loan of Capital Debt 33,232,846 11,236,504 Principal Paid on Capital Debt (2,669,311) (3,024,244) Interest Paid on Capital Debt (1,705,919) (1,805,656) Acquisition of Capital Assets (58,934,799) (21,329,743) Net Cash Used for Capital and Related Financing Activites (20,063,939) (13,298,934) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received from Investments 550,141 508,352 Acquisition of Investments (5,819,234) (703,195) Proceeds from Sale of Investments 5,598,153 774,255 Loan Collections 6,119 13,791 Net Cash Provided (Used) by Investing Activities 335,179 593,203 Net Increase (Decrease) in Cash and Cash Equivalents (2,575,992) 1,665,184 Cash and Equivalents, Beginning of Year 21,549,015 19,883,831 Cash and Equivalents, End of Year 18,973,023$ 21,549,015$ RECONCILIATION TO STATEMENT OF NET POSITION Cash and Cash Equivalents 8,777,977$ 13,377,049$ Restricted Cash and Cash Equivalents 10,195,046 8,171,966 Total Cash and Cash Equivalents 18,973,023$ 21,549,015$ (Continued) EAST VALLEY WATER DISTRICT Statement of Cash Flows - Continued Year Ended June 30, 2020 The accompanying notes are an integral part of this statement. 36 For Comparative Purposes Only 2020 2019 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income 3,563,262$ 3,411,225$ Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation 6,575,821 6,680,234 Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable (670,622) 411,553 (Increase) Decrease in Other Receivables 254,644 (401,490) (Increase) Decrease in Inventory (141,338) (60,416) (Increase) Decrease in Prepaids 19,459 (65,993) (Increase) in Deferred Outflows of Resources - Pensions (430,273) 851,042 Increase (Decrease) in Accounts Payable 4,089,472 2,950,379 Increase (Decrease) in Accrued Salaries and Benefits 104,777 21,888 Increase (Decrease) in Compensated Absences 31,711 5,032 Increase (Decrease) in Net Pension Liability 958,186 (754,843) Increase in Net OPEB Liability 80,259 84,048 Decrease in Deferred Inflows of Resources 71,566 110,124 Increase (Decrease) in Customer Deposits 13,180 (38,580) Increase (Decrease) in Developer Deposits 2,632,664 1,166,712 Total Cash Provided by Operating Activities 17,152,768$ 14,370,915$ NON-CASH INVESTING, CAPITAL, AND NON-CAPITAL FINANCING ACTIVITIES: Fair Value Adjustments to Investments 130,129$ 48,874$ 10,093,412 1,490,842 Capital Assets Acquired by Assuming Liabilities, Including Retainage Payable EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 37 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A) Reporting Entity The East Valley Water District is a special district that was 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 30.1 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, 2020, the District owned 6,613.15 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 38 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 39,515,793$ 17,111$ 386,247$ (386,247)$ 39,532,904$ Capital Assets 221,073,816 2,834,868 - (1,870,999) 222,037,685 Other Assets 10,235,449 295,417 33,720,000 (33,720,000) 10,530,866 Deferred Outflows 4,053,635 - - 4,053,635 Total Assets & Deferred Outflows 274,878,693 3,147,396 34,106,247 (35,977,246) 276,155,090 Current Liabilities 18,514,507 10,357 386,247 (386,247) 18,524,864 Long-Term Liabilities 120,977,021 - 33,720,000 (33,720,000) 120,977,021 Deferred Inflows 745,208 - - - 745,208 Total Liabilities & Deferred Inflows 140,236,736 10,357 34,106,247 (34,106,247) 140,247,093 Net Investment in Capital Assets 105,602,650 2,976,904 - (1,870,999) 106,708,555 Restricted Net Position 6,499,352 160,135 - - 6,659,487 Unrestricted Net Position 22,539,955 - - - 22,539,955 Total Net Position 134,641,957 3,137,039 - (1,870,999) 135,907,997 Statement of Changes in Net Position Sales and Services 39,068,996$ -$ -$ -$ 39,068,996$ Other Operating Revenue 743,916 - - - 743,916 Operating Expenses 29,824,041 (149,852) - - 29,674,189 Depreciation 6,631,658 (55,837) - - 6,575,821 Operating Income 3,357,213 205,689 - - 3,562,902 Net Non-Operating Revenue (Expenses)(1,046,978) 114,532 - - (932,446) Capital Contributions 9,961,882 - - - 9,961,882 Special Items - - - - - Change in Net Position 12,272,117 320,221 - - 12,592,338 Beginning Net Position 122,369,840 2,816,818 - (1,870,999) 123,315,659 Ending Net Position 134,641,957$ 3,137,039$ -$ (1,870,999)$ 135,907,997$ - - - - - Net Cash from Operating Activities 17,205,086$ (52,678) -$ -$ 17,152,408$ Net Cash from Capital and Related Financing Activities (20,040,191) (23,388) 3,161,488 (3,161,488) (20,063,579) Net Cash from Investing Activities 335,332 (153) (3,161,488) 3,161,488 335,179 Beginning Cash and Equivalents 21,170,065 378,950 - - 21,549,015 Ending Cash & Equivalents 18,670,292$ 302,731$ -$ -$ 18,973,023$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 39 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 such 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 of 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 accounting principles generally accepted in the United States of America. 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 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) 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 40 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued G) 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. H) Investments The District has adopted the provisions of GASB Statement No. 72, Fair Value Measurement and Application. The objective of this Statement is to enhance comparability of financial statements among governments by measurement of certain assets and liabilities at their fair value using a consistent and more detailed definition of fair value and accepted valuation techniques. The definition of fair value is the price that would be received to sell and asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Statement establishes a hierarchy of inputs to valuation techniques used to measure fair value. I) 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 future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District has three items which qualify for reporting in this category; Deferred Outflows Charge on Refunding, Deferred Outflows Related to Pensions, and Deferred Outflows Related to OPEB. In addition to liabilities, the statement of financial position includes a separate section for deferred inflows of resources. This separate financial 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 two items which qualify for reporting in this category: Deferred Inflows related to Pensions and Deferred Inflows related to OPEB. J) 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 50 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 can cash out up to 300 hours of unused sick time, per calendar year, provided that a minimum of 160 hours is retained after said cash-out. 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 41 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued K) 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. L) 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. M) 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. N) 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 and 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. O) Postemployment Benefits Other Than Pensions (OPEB) For purposes of measuring the District’s OPEB liability related to the California Employer’s Retirement Benefits Trust (CERBT), deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the CERBT and additions to/deductions from the CERBT fiduciary net position have been determined on the same basis as they are reported by the CERBT. For this purpose, the CERBT recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 42 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. 84 Fiduciary Activities The statement improves guidance regarding the recognition of fiduciary activities for accounting and financial reporting purposes by establishing criteria for identifying fiduciary activities of all state and local governments. The statement is effective for reporting periods beginning after December 15, 2018. Earlier application is encouraged. Statement No. 87 Leases The statement addresses accounting and financial reporting for leases by governments. This statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. The statement is effective for reporting periods beginning after December 15, 2019. Earlier application is encouraged. Statement No. 89 Accounting for Interest Cost Incurred before the End of a Construction Period The statement requires that interest costs incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest costs incurred before the end of a construction period will not be included in the historical costs of a capital asset reported in a business-type activity or enterprise fund. The statement is effective for reporting periods beginning after December 15, 2019. Earlier application is encouraged. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 43 REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued P) Future Accounting Pronouncements Table 1-2 - Continued GASB Statement Description Effective Date Statement No. 90 Majority Equity Interests - an amendment of GASB Statements No. 14 and No. 61 The statement modifies previous guidance for reporting a majority equity interest in a legally separate organization and provides guidance for reporting a component unit if 100 percent equity interest is acquired in that component unit. The statement is effective for reporting periods beginning after December 15, 2018. Earlier application is encouraged. Statement No. 91 Conduit Debt Obligations The statement provides a single method of reporting conduit debt to eliminate diversity in reporting and the related note disclosures. The statement also addresses arrangements - often characterized as leases - that are associated with conduit debt obligations. The statement is effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged. Statement No. 95 Postponement of the effective Dates of Certain Authoritative Guidance Provides temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in Statementsx and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, and later. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 44 2) CASH AND INVESTMENTS Cash and Investments as of June 30, 2020 are classified in the accompanying financial statements as follows: Table 2-1 Cash and Cash Equivalents 8,777,977$ Restricted Cash and Cash Equivalents 10,195,046 Investments 5,683,093 Total 24,656,116$ Cash and investments as of June 30, 2020 consist of the following: Table 2-2 Cash on Hand 5,250$ Deposits with Financial Institutions 3,424,484 Money Market Accounts with Financial Institutions 222,002 Investments with Local Agency Investment Fund 15,321,287 Investment in Debt Securities 5,683,093 Total 24,656,116$ 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, 2020, 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 45 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, 2020, the District had the following investments and maturities: Table 2-4 Investment Type Fair Value Average Maturity Fannie Mae 554,164$ 2.01 years Freddie Mac 601,595 3.19 years Federal Home Loan Bank 858,367 1.31 years Federal Farm Credit Bank 1,300,697 2.19 years US Treasury 1,923,867 1.49 years Tenn Valley Authority 444,403 2.42 years LAIF 15,321,287 N/A Money Market Mutual Funds 222,002 N/A 21,226,382 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment 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 554,164$ N/A -$ 554,164$ -$ Freddie Mac 601,595 N/A - 601,595 - Federal Home Loan Bank 858,367 N/A - 858,367 - Federal Farm Credit Bank 1,300,697 1,300,697 US Treasury 1,923,867 N/A 1,923,867 - - Tenn Valley Authority 444,403 N/A - 444,403 - LAIF 15,321,287 N/A - - 15,321,287 Money Market Mutual Funds 222,002 N/A - 222,002 - 21,226,382$ 1,923,867$ 3,981,228$ 15,321,287$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 46 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. Valuation Technique: Level 2 Investments use the Market Approach which uses prices generated for identical or similar assets or liabilities. The District has the following recurring fair value measurements as of June 30, 2020: 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)Total Debt Securities Fannie Mae -$ 554,164$ -$ 554,164$ Freddie Mac - 601,595 - 601,595 Federal Home Loan Bank - 858,367 - 858,367 Federal Farm Credit Bank - 1,300,697 - 1,300,697 US Treasury 1,923,867 - - 1,923,867 Tenn Valley Authority - 444,403 - 444,403 Total Investments Measured at Fair Value 1,923,867$ 3,759,226$ -$ 5,683,093$ Investments Measured at Amortized Cost LAIF 15,321,287 Money Market Mutual Funds 222,002 Total Investments 21,226,382$ 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, 2020, 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 47 2) CASH AND INVESTMENTS – Continued 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 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, 2020, the District had $9,285,794 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, 2020, the carrying amount (at amortized cost) of the pool was $101,607,078,218 and the estimated fair value of the pool was $101,607,078,218. The District's proportionate share of the fair value (as determined by LAIF) as of June 30, 2020, was $15,321,287. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain State funds, and floating rate securities issued by federal agencies, government- sponsored enterprises, and corporations. 3) RESTRICTED CASH AND CASH EQUIVALENTS Restricted cash and cash equivalents at June 30, 2020 are restricted as follows: Table 3-1 Held for Debt Service 1,659,286$ Capacity Fees from Developers 6,499,353 Customer Deposits 1,563,518 Construction Advances 186,663 North Fork Water Company 286,226 Total 10,195,046$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 48 4) CAPITAL ASSETS A summary of changes in capital assets for the year ended June 30, 2020 is as follows: Table 4-1 Beginning of End of Year Additions Deletions Year Water Fund Non-Depreciable Assets Land and Easements 2,583,057$ 3,494,704$ -$ 6,077,761$ Water Rights 732,835 - - 732,835 Construction in Progress 3,519,720 4,027,002 (5,576,364) 1,970,358 Total Non-Depreciable Assets 6,835,612 7,521,706 (5,576,364) 8,780,954 Depreciable Assets Source of Supply 18,874,920 255,774 - 19,130,694 Pumping Plant 14,422,348 192,869 - 14,615,217 Treatment Plant 28,162,779 364,076 - 28,526,855 Transmission and Distribution Plant 100,147,622 2,234,532 (578,591) 101,803,563 General Plant 18,581,118 610,689 (58,472) 19,133,335 Total Depreciable Assets 180,188,787 3,657,940 (637,063) 183,209,664 Accumulated Depreciation Source of Supply (7,134,348) (653,743) - (7,788,091) Pumping Plant (6,699,128) (435,408) - (7,134,536) Treatment Plant (11,151,647) (1,170,474) - (12,322,121) Transmission and Distribution Plant (40,196,081) (2,628,234) 534,321 (42,289,994) General Plant (5,945,666) (865,040) 58,472 (6,752,234) Total Accumulated Depreciation (71,126,870) (5,752,899) 592,793 (76,286,976) Water Fund Capital Assets, Net 115,897,529 5,426,747 (5,620,634) 115,703,642 Wastewater Fund Non-Depreciable Assets Land and Easements 713,940 - - 713,940 Construction in Progress 34,221,184 52,812,005 (48,770) 86,984,419 Total Non-Depreciable Assets 34,935,124 52,812,005 (48,770) 87,698,359 Depreciable Assets Wastewater Collection Plant 27,510,245 48,770 - 27,559,015 General Plant 9,357,806 519,511 (58,472) 9,818,845 Total Depreciable Assets 36,868,051 568,281 (58,472) 37,377,860 Accumulated Depreciation Wastewater Collection Plant (14,581,277) (462,634) - (15,043,911) General Plant (3,396,448) (360,289) 58,472 (3,698,265) Total Accumulated Depreciation (17,977,725) (822,923) 58,472 (18,742,176) Wastewater Fund Capital Assets, Net 53,825,450 52,557,363 (48,770) 106,334,043 Total Capital Assets, Net 169,722,979$ 57,984,110$ (5,669,404)$ 222,037,685$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 49 5) LONG-TERM DEBT The schedule below summarizes changes in long-term debt during the year ended June 30, 2020: Table 5-1 Beginning Balance Additions Retirements/ Payments Ending Balance Current Portion Long-Term Portion Direct Placement: 2010 Refunding Bonds 23,215,000$ -$ (1,580,000)$ 21,635,000$ 1,650,000$ 19,985,000$ Unamortized Premium 1,506,579 - (80,741) 1,425,838 80,741 1,345,097 2013 Revenue Bonds 12,085,000 - - 12,085,000 - 12,085,000 Unamortized Premium 507,912 - (21,202) 486,710 21,200 465,510 Unamortized Discount (32,427) - 1,354 (31,073) (1,354) (29,719) Subtotal Direct Placement 37,282,064 - (1,680,589) 35,601,475 1,750,587 33,850,888 Direct Borrowing: U.S. Bank Lease Purchase 2,125,215 - (406,133) 1,719,082 415,379 1,303,703 SBVMWD Loan 3,006,022 - (430,000) 2,576,022 430,000 2,146,022 DWR Contracts - AVAD Construction 77,764 - (6,762) 71,002 6,762 64,240 Plant 134 Construction 6,068,369 - (233,399) 5,834,970 233,399 5,601,571 EFAD Construction 312,386 - (13,016) 299,370 13,016 286,354 SNRC 25,489,032 37,871,030 - 63,360,062 - 63,360,062 Subtotal Direct Borrowing 37,078,788 37,871,030 (1,089,310) 73,860,508 1,098,556 72,761,952 Total 74,360,852$ 37,871,030$ (2,769,899)$ 109,461,983$ 2,849,143$ 106,612,840$ 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 the District’s 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 $1,630,726, 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. All refunded debt has been retired leaving $0 of outstanding in-substance defeased 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 Resources and is being charged to operations through the year 2024 using the straight-line method of amortization. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 50 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. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon. 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 2.38%. Semi-annual payments are $226,398, to commence on September 2014 through March 2024. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon. 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 1.47% at June 30, 2020. 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 Arroyo Verde Assessment District. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon. 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. The indenture authorizes, upon default, the State to declare immediate due and payable the total unpaid principal of the debt EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 51 5) LONG-TERM DEBT - Continued and accrued interest thereon. 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 $6,508 are due for 30 years through January 2043. Repayment of the loan is secured by annual assessments to property owners within the Eastwood Farms Assessment District. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon. The aggregate debt service requirements to maturity for long-term debt as of June 30, 2020 are as follows (excludes unamortized premiums/discounts and the California State Water Resource Control Board Contract C-06-8106-110): Table 5-2 Year Ending June 30,Principal Interest Total 2021 2,748,555$ 1,609,845$ 4,358,400$ 2022 2,243,008 1,529,485 3,772,493 2023 2,302,672 1,468,447 3,771,119 2024 2,362,550 1,405,128 3,767,678 2025 1,958,176 1,342,223 3,300,399 2026-2030 6,741,902 5,970,934 12,712,836 2031-2035 7,100,452 4,815,388 11,915,840 2036-2040 9,002,070 3,231,100 12,233,170 2041-2045 9,761,060 1,055,750 10,816,810 44,220,445$ 22,428,300$ 66,648,745$ California State Water Resources Control Board Contract C-06-8106-110 – Sterling Natural Resource Center On June 26, 2018 the District entered into a Funding Agreement for the construction of a 6 million gallon per day (mgd) water recycling plant with the State Water Resources Control Board. The initial agreement approves $11.5 million for design cost reimbursement, with a revised agreement covering design and construction costs EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 52 5) LONG-TERM DEBT - Continued totaling $157 million executed on December 2, 2019. The revised Agreement includes a $6.7 million grant and a low interest (1.8%) loan for the balance of $150.3 million. As of June 30, 2020 the District has incurred $70.4 million in design and construction cost, the District has drawn approximately $51.5 million, $18.9 million is awaiting reimbursement (Due From Other Governments) of the $150.3 million in loan financing available. Repayment on the loan will begin one year after the completion of construction and annual installment payments of principal and interest are projected to be approximately $6.8 million. The District has pledged available water and wastewater revenue for the repayment of the loan, including the following new revenue streams: • Wastewater treatment charges (previously paid to the City of San Bernardino) • Sale of electrical energy produced by plant digesters (beyond energy used on site) • Local Resource Investment Program fees for recycled water delivered for groundwater recharge • Tipping fees from waste haulers Estimated debt service on this loan is not included in the Table 5-2 above. Security for debt is as follows: Table 5-3 Debt Security 2010 and 2013 Refunding Revenue Bonds and Department of Water Resources Construction Loans The District is required to maintain net revenues, as defined by the revenue bond trust agreements and State of California Department of Public Health Funding agreements of at least 120% of District's annual debt service (principal and interest). At June 30, 2020, net water revenues represented 266% of the annual water debt service and net wastewater revenues represented 3,448% of the annual wastewater debt service. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 53 6) COMPENSATED ABSENCES Compensated absences are comprised of unused vacation leave and a limited amount of sick leave which is accrued as earned in accordance with District policy. The District's liability for compensated absences is determined annually. Current portions are determined based on estimates of usage, amounts in excess of 196 hours that will be voluntarily cashed out and amounts that will be cashed out upon termination of employment. Table 6-1 Beginning of Year Additions Usage / Payments End of Year Current Portion Long-Term Portion Accrued Vacation Leave 486,255$ 555,413$ (332,837)$ 708,831$ 359,043$ 349,788$ Accrued Sick Leave 471,023 408,181 (599,045) 280,159 175,426 104,733 Total 957,278$ 963,594$ (931,882)$ 988,990$ 534,469$ 454,521$ 7) NET INVESTMENT IN CAPITAL ASSETS Net Investment in capital assets at June 30, 2020 consisted of the following: Table 7-1 Non-Depreciable Capital Assets 96,255,683$ Depreciable Capital Assets 220,587,523 Accumulated Depreciation (95,029,151) Loans Payable (79,613,249) Bonds Payable (35,598,861) Deferred Amount on Refunding 106,610 Total 106,708,555$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 54 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, 2020, 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 12.805%7.026% Miscellaneous EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 55 8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued 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, with 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. For the year ended June 30, 2020, the contributions recognized as part of pension expense for the Plans were as follows: Table 8-2 Miscellaneous Contributions - Employer $ 1,798,495 B) Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2020, the District reported net pension liabilities for its proportionate shares of the net pension liability of the Plans as follows: Table 8-3 Proportionate Share of Net Pension Liability Miscellaneous $ 11,805,140 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, 2019, 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, 2018 rolled forward to June 30, 2019 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, 2018 and 2019 was as follows: Table 8-4 Prior to January 1, 2013 Proportion - June 30, 2018 0.287816% Proportion - June 30, 2019 0.294797% Change - Increase (Decrease)0.006981% Miscellaneous EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 56 8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued For the year ended June 30, 2020, the District recognized pension expense of $1,361,184. At June 30, 2020, 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 $ 819,917 63,527$ Changes in Assumptions 562,924 199,552 Net differences between projected and actual earnings on plan investments - 206,390 Change in employer's proportion 168,426 79,580 Difference between the employer's contributions and the employer's proportionate share of contributions 182,612 133,547 Pension contributions subsequent to measurement date 1,798,495 - Total $ 3,532,374 $ 682,596 $1,798,495 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, 2021. 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 Ended June 30,Amount 2021 $ 868,636 2022 (17,128) 2023 148,104 2024 51,671 $ 1,051,283 EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 57 8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued Actuarial Assumptions The total pension liabilities in the June 30, 2018 actuarial valuations were determined using the following actuarial assumptions: Table 8-7 Miscellaneous Valuation Date June 30, 2018 Measurement Date June 30, 2019 Entry Age Normal Market Value of Assets 7.15% 2.50% Annual increase vary by Category, entry age and duration of service 2.5 7.15% Derived using CalPERS' membership data for all Funds (1) (2) Payroll Growth Actuarial Cost Method Asset Valuation Method Actuarial Assumptions: Discount Rate Inflation Net of pension plan investment expenses and administative expeneses; including inflation The Mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scales 90% of scale MP2016. For more details on this table, please refer to the December 2017 experience study report (based on Cal PERS demographic data from 1997 to 2015) that can be found on the CalPERS website. Mortality Rate Table (2) Projected Salary Increase Investment Rate of Return (1) Discount Rate The discount rate used to measure the total pension liability remained the same at 7.15%. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the 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 7.15% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15% 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. CalPERS continues the Asset Liability Management (ALM) process to expand its review of assets and liabilities to ensure financial risks to the System are better understood, communicated, and mitigated. To establish appropriate levels of risk, ALM is focused on investment and actuarial policies. These policies include key decision factors and intend to drive optimum asset allocations, while stabilizing employer contribution rates, and the volatility of those rates year to year. Additionally, to better manage risks arising from terminating agencies, CalPERS has enhanced its oversight of contracting public agencies' financial health through its development of a standardized review criteria. These improvements include streamlining the collection and termination process to reduce the timeframe, accelerating notifications to the Board and EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 58 8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued members, and adopting a risk oversight process to improve early detection of financial hardship issues. The long-term expected rate of return on pension plan investments was determined using a building-block method in which 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 considered both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long term (11+ 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 rounded 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 equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. 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 50.0%4.80%5.98% Global Fixed Income 28.0%1.00%2.62% Inflation Sensitive 0.0%0.77%1.81% Private Equity 8.0%6.30%7.23% Real Assets 13.0%3.75%4.93% Liquidity 1.0%0.00%-0.92% Total 100.0% (a) An expected inflation of 2.0 % used for this period (b) An expected inflation of 2.92 % used for this period 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 the Plan, calculated using the current discount rate, 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 one-percentage point lower or one-percentage point higher than the current rate: EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 59 8) DEFINED BENEFIT PENSION PLAN (PERS) – Continued Table 8-9 Miscellaneous 1% Decrease 6.15% Net Pension Liability $ 17,968,327 Current Discount Rate 7.15% Net Pension Liability $ 11,805,140 1% Increase 8.15% Net Pension Liability $ 6,717,865 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, 2020, the District reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2020. 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 grant. 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, 2020, or in the previous two fiscal years. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 60 10) RISK MANAGEMENT - Continued 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. At June 30, 2020, 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 EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 61 11) POST EMPLOYMENT HEALTHCARE BENEFITS The District provides post employment healthcare benefits for retired employees and eligible surviving spouses in accordance with the plan as established by the District. As of June 30, 2020, the District’s total liability for post-employment healthcare benefits and details of the plan are explained below: Table 11-1 OPEB Plan Net OPEB Liability Deferred Outflows of Resources Deferred Inflows of Resources OPEB Expense Retiree Benefits Plan 2,096,677$ 436,587$ 62,612$ 247,849$ Plan Description and Eligibility 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. Membership in the health benefit plan consisted of the following at July 1, 2019, the date of the latest actuarial valuation: Table 11-2 Participant Type: 26 0 Active employees 65 91 Inactive participants currently receiving benefits Inactive participants entitled to but not yet receiving benefit Total Number of Participants 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 10 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 $700 per month). The surviving spouse of an eligible retiree is eligible for the District's EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 62 11) POST EMPLOYMENT HEALTHCARE BENEFITS - Continued contribution upon the death of the retiree through the spouse's attainment of Medicare eligibility age. The District’s funding policy is to contribute the Annual Determined Contribution (ADC) to their account within the CERBT. For fiscal year ended June 30, 2019, the District paid $278,539 to the plan including the implicit rate subsidy. The District contributed $436,587 including the implicit rate subsidy for retiree health benefits to the Trust during the fiscal year ended June 30, 2020. Net OPEB Liability The table herein shows the components of the net OPEB liability of the District: Table 11-3 Balance June 30, 2020 Total OPEB Liability $ 2,896,822 Plan Fiduciary Net Position 800,145 District's Net OPEB Liability (Asset) $ 2,096,677 Investments As described above, at June 30, 2020, all Plan investments are held in the CERBT through CalPERS. Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2020, the District reported deferred outlflows of resources and deferred inflows of resources related to pensions from the sources as follows: Table 11-4 Deferred Outflows and Inflows of Resources Deferred Outflows of Resources Deferred Inflows of Resources Contributions subsequent to measurement date 262,358$ -$ Differences between expected and actuarial experience 173,038 - Changes of assumptions - 59,216 Differences between projected and actual earnings on 1,191 3,396 Total 436,587$ 62,612$ The deferred outflow of resources results from a change of assumptions and is amortized over the expected average remaining service life (EARSL) of the plan participants. The EARSL for the OPEB plan for June 30, 2020 is five years. The year of amortization is recognized in OPEB expense for the year the gain or loss occurs. The remaining amount is deferred and will be amortized over the remaining periods not to exceed four years. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 63 11) POST EMPLOYMENT HEALTHCARE BENEFITS - Continued The deferred inflows of resources related to OPEB resulting from the net differences between projected and actual earnings on the plan investents is amortized over a five year period on a straight-line basis. One-fifth is recognized in pension expense during the measurement period and the remaining amount is deferred and will be amortized over the remaining four-year period. The deferred inflows of resources related to OPEB resulting from the net differences between projected and actual earnings on the plan investments is amortized over a five year period on a straight-line basis. One-fifth is recognized in pension expense during the measurement period and the remaining amount is deferred and will be amortized over the remaining four-year period. Deferred inflows and outflows will be amortized as follow: Table 11-5 Year Ending June 30, Amortization 2021 $ 12,042 2022 12,040 2023 12,348 2024 11,953 2025 12,647 Thereafter 50,587 Total $ 111,617 Actuarial Methods and Assumptions The District’s net OPEB liability was measured as of June 30, 2019, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2019. Liabilities in this report were calculated as of the valuation date. The total OPEB liability was determined by an actuarial valuation as of June 30, 2019, using the actuarial assumptions shown herein, applied to all periods included in the measurement, unless otherwise specified. Table 11-6 Actuarial Methods and Assumptions Valuation Date June 30, 2019 Measurement Date June 30, 2019 Inflation 2.50% Salary Increases 2.75% Investment Rate of Return 6.50% Health Care Trend Rate 6.50% HMO / 6.50% PPO Mortality rates were based upon the rates under the CalPERS pensions plan updated to reflect the most recent experience study. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 64 11) POST EMPLOYMENT HEALTHCARE BENEFITS - Continued The long-term expected rate of return on 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 OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation at June 30, 2019 are shown herein: Table 11-7 Asset Class Global Equity 40%5.50% Global Debt Securities 43%2.35% Inflation Assets 5%1.50% Commodities 4%1.75% REITs 8%3.65% Assumed Gross Return Percentage of Portfolio The discount rate used to measure the total OPEB liability was 6.50 percent. The discount rate assumes the District continues to fully fund for its retiree health benefits through the CERBT under its investment allocation strategy 2. The rate reflects the CERBT published median interest rate for strategy 2 with an additional margin for adverse deviation. Changes in the Net OPEB Liability Table 11-8 Total OPEB Liability (a) Plan Fiduciary Net Position (b) Net OPEB Liability (Asset) (a) - (b) Balances at June 30, 2019 $ 2,658,612 $ 642,194 $ 2,016,418 Changes for the year: Service Cost 106,297 - 106,297 Interest 174,233 - 174,233 Differences between expected and actual experience 192,265 - 192,265 Employer Contributions 278,539 (278,539) Net Investment Income 48,769 (48,769) Change of assumptions (65,798) - (65,798) Benefit Payments (168,787) (168,787) - Administrative Expenses (330) 330 Other Expenses (240) 240 Net Changes 238,210 157,951 80,259 Balances at June 30, 2020 $ 2,896,822 $ 800,145 $ 2,096,677 Increase (Decrease) EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 65 11) POST EMPLOYMENT HEALTHCARE BENEFITS - Continued The following presents the District’s net OPEB liability calculated using the discount rate of 6.50 percent, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.5 percent) or 1-percentage-point higher (7.5 percent) than the current rate: Table 11-9 Discount Rate Net OPEB Liability (Asset) 2,389,112$ 2,096,677$ 1,842,889$ 1% Decrease (5.50%) Current Discount Rate (6.50%) 1% Increase (7.50%) The following presents the District’s net OPEB liability calculated using the current healthcare cost trend rate of 6.5 percent, as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (5.5 percent) or 1-percentage-point higher (7.5 percent) than the current rate: Table 11-10 Healthcare Trend Rate Net OPEB Liability (Asset) 1% Decrease (5.50%HMO/5.50%PPO decreasing to 4.00%HMO/4.00%PPO)1,791,125$ Current Healthcare Cost Trend Rates (6.50%HMO/6.50%PPO decreasing to 5.00%HMO/5.00%PPO)2,096,677$ 1% Increase (7.50%HMO/7.50%PPO decreasing to 6.00%HMP/6.00%PPO)2,464,016$ OPEB Expense For the year ended June 30, 2020, the District recognized OPEB expense of $247,849 and recorded deferred outflows of resources of $436,587 for contributions made during fiscal year 2020 after the measurement date. The deferred outflows will be recognized in OPEB expense for the period ending June 30, 2021. The District recorded $62,612 of deferred inflows of resources resulting from the differences between projected and actual earnings on OPEB plan investments for the period ending June 30, 2019. The deferred inflows of resources will be amortized and recognized in OPEB expense over three remaining periods ending June 30, 2023. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2020 66 12) SUBSEQUENT EVENTS On September 10, 2020 the District issued $16,885,000 Refunding Revenue Bonds, Series 2020A and $13,615,000 Refunding Revenue Bonds, Series 2020B (Federally Taxable). The issuance is for refunding the East Valley Water District Financing Authority Refunding Revenue Bonds, Series 2010, and 2013 in full; and to pay costs of issuance associated with the 2020A and 2020B Bonds while saving the District a potential $9 million in debt service payments. Table 12-1 Year Ended June 30, Prior Debt Service Refunding Debt Service Savings 2021 739,494$ 590,738$ 148,756$ 2022 2,590,763 2,205,086 385,677 2023 2,593,288 2,207,878 385,410 2024 2,593,763 2,207,962 385,801 2025-2044 44,250,542 36,489,201 7,761,341 Total 52,767,850$ 43,700,865$ 9,066,985$ 13) CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS The District has three significant active construction project commitments as of June 30, 2020. The following contracts are related to the construction of the Recycled Water Facility. Table 13-1 Contractual Commitments Spent to Date Remaining Commitment Project Management & Labor Compliance for the Recycled Water Facility 1,387,087$ 279,502$ Design-Build Services of the Recycled Water Facility 58,751,011$ 106,878,073$ Design-Build Services of the Digester 10,586,079$ 9,642,776$ 67 East Valley Water District Schedule of Proportionate Share of the Net Pension Liability Year Ended June 30, 2020 Last Ten Years* 68 Schedule of Proportionate Share of the Net Pension Liability The schedule presents information on the District’s proportionate share of the net pension liability, the plans’ fiduciary net position and, when applicable, the proportionate share of the net pension liability associated with the District. In the future, as data becomes available, 10 years of information will be presented. 2020 Proportion of the Net Pension Liability 0.29480% Proportionate Share of the Net Pension Liability $11,805,140 Covered Payroll $ 5,888,338 Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll 200.48% Plan's Fiduciary Net Position $34,016,773 Plan's Fiduciary Net Position as a Percentage of the Total Pension Liability 77.73% 2019 2018 2017 2016 2015 Proportion of the Net Pension Liability 0.28782%0.11699%0.11585%0.11551%0.10632% Proportionate Share of the Net Pension Liability $10,846,955 $11,601,798 $10,024,712 $ 7,928,173 $ 6,615,935 Covered Payroll $ 5,447,702 $ 4,489,575 $ 5,097,156 $ 4,715,712 $ 4,436,236 Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll 199.11%258.42%196.67%168.12%149.13% Plan's Fiduciary Net Position $33,563,265 $27,706,747 $27,529,345 $28,045,198 $29,336,566 Plan's Fiduciary Net Position as a Percentage of the Total Pension Liability 77.69%71.37%74.06%78.40%79.82% Note: Fiscal year 2015 was the first year of implementation, therefore only six years are shown. East Valley Water District Schedule of Contributions Year Ended June 30, 2020 Last Ten Years* 69 Schedule of Contributions The schedule presents information on the District’s required contribution, the amounts actually contributed and any excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of information will be presented. 2020 Contractually Required Contribution (Actuarially Determined)1,798,495$ Contributions in Relation to the Actuarially Determined Contributions 1,798,495$ Contribution Deficiency (Excess)-$ Covered Payroll $ 5,888,338 Contributions as a Percentage of Covered Payroll 30.54% 2019 2018 2017 2016 2015 Contractually Required Contribution (Actuarially Determined)1,228,277$ 1,579,268$ 1,035,102$ 895,822$ 742,546$ Contributions in Relation to the Actuarially Determined Contributions 1,228,277$ 1,579,268$ 1,035,102$ 895,822$ 742,546$ Contribution Deficiency (Excess)-$ -$ -$ -$ -$ Covered Payroll $ 5,658,626 $ 5,447,702 $ 4,489,575 $ 5,097,156 $ 4,715,712 Contributions as a Percentage of Covered Payroll 21.71%28.99%23.06%17.57%15.75% Note: Fiscal year 2015 was the first year of implementation, therefore only six years are shown. East Valley Water District Schedule of Changes in the Net OPEB Liability Year Ended June 30, 2020 70 Schedule of Changes in the Net OPEB Liability Accounting standards require presentation of 10 years of information. However, the information in this schedule is not required to be presented retroactively. Years will be added to this schedule as future data becomes available. Total OPEB Liability 2020 2019 2018 Service Cost 106,297$ 103,452$ 97,138$ Interest 174,233 166,826 160,043 Differences bewteen exptected and actual experience 192,265 Changes of assumptions (65,796) Benefit Payments, including refunds of member contributions (168,787) (149,550) (168,724) Net Change in Total OPEB Liability 238,212 120,728 88,457 Total OPEB Liability - Beginning 2,658,610 2,537,882 2,449,425 Total OPEB Liability - Ending (a)2,896,822$ 2,658,610$ 2,537,882$ Plan Fiduciary Net Position 2020 2019 2018 Contributions - Employer 278,539$ 149,548$ 218,724$ Net Investment Income 48,769 37,365 36,877 Benefit Payments (168,787) (149,548) (168,724) Administrative Expense (330) - (261) Other Expense (240) (683) - Net Change in Plan Fiduciary Net Position 157,951$ 36,682$ 86,616$ Plan Fiduciary Net Position - Beginning 642,194 605,512 518,896 Plan Fiduciary Net Position - Ending (b)800,145$ 642,194$ 605,512$ Net OPEB Liability (Asset) - Ending (a) - (b)2,096,677$ 2,016,416$ 1,932,370$ Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 27.62%24.16%23.86% Covered-Employee Payroll 5,744,627$ 5,495,000$ 5,495,000$ Net OPEB Liability (Asset) as a Percentage of Covered-Employee Payroll 36.50%36.70%35.17% Note: Fiscal year 2018 was the first year of implementation, therefore only three years are shown. East Valley Water District Schedule of OPEB Contributions Year Ended June 30, 2020 71 Schedule of OPEB Contributions Accounting standards require presentation of 10 years of information. However, the information in this schedule is not required to be presented retroactively. Years will be added to this schedule as future data becomes available. OPEB Contributions 2020 2019 2018 Actuarially Determined Contribution (ADC)362,533$ 285,551$ 144,415$ Contributions in Relation to the ADC (278,539) (149,548) (218,724) Contribution Deficiency (Excess)83,994 136,003 (74,309) District's Covered-Employee Payroll 5,744,627$ 5,495,000$ 5,495,000$ Contributions as a Percentage of Covered-Employee Payroll 6.31%5.20%2.63% Note: Fiscal year 2018 was the first year of implementation, therefore only three years are shown. East Valley Water District Notes to the Required Supplementary Information Purpose of Schedules Year Ended June 30, 2020 72 Schedule of Changes in Net OPEB Liability The schedule is intended to show the funded status of the District’s actuarially determind liability for postemployment benefits other than pensions. In the future, as data becomes available, 10 years of information will be presented. Schedule of Postemployment Healthcare Contributions The schedule presents information on the District’s required contribution, the amounts actually contributed and any excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of information will be presented. Schedule of District’s Proportionate Share of the Net Pension Liability The schedule presents information on the District’s proportionate share of the net pension liability, the plans’ fiduciary net position and, when applicable, the State’s proportionate share of the net pension liability associated with the District. In the future, as data becomes available, 10 years of information will be presented. Schedule of District’s Contributions The schedule presents information on the District’s required contribution, the amounts actually contributed and any excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of information will be presented. 73 74 75 East Valley Water District History and Organization Year Ended June 30, 2020 76 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 Municipal 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 30.1 square miles within the County of San Bernardino, California. Directors David E. Smith Chairman of the Board Phillip R. Goodrich Vice-Chairman of the Board Ronald L. Coats Governing Board Member James Morales, Jr.Governing Board Member Chris Carrillo Governing Board Member East Valley Water District David E. Smith President Phillip R. Goodrich 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 District General Counsel Jean Cihigoyenetche JC Law Firm East Valley Water District East Valley Water District Combining Schedule of Net Position June 30, 2020 77 Water Wastewater Eliminations Total ASSETS Current Assets: Cash & Cash Equivalents 8,777,977$ -$ 8,777,977$ Investments 3,658,968 2,024,125 5,683,093 Accounts Receivable, Net 4,528,220 272,218 4,800,438 Interest Receivable 55,906 3,377 59,283 Other Receivables 567,882 - 567,882 Due From Sewer Fund 12,918,463 - 12,918,463 - Due from Other Governments 16,145 18,890,712 18,906,857 Inventory 480,250 6,721 486,971 Prepaid Expenses 203,816 46,587 250,403 Total Current Assets 31,207,627 21,243,740 12,918,463 39,532,904 Non-Current Assets: Restricted Cash & Cash Equivalents 5,765,371 4,429,675 10,195,046 Assessments Receivable 335,820 - 335,820 Capital Assets not being Depreciated 8,780,954 87,698,359 96,479,313 Capital Assets, Net (Note 4)106,922,688 18,635,684 125,558,372 Total Non-Current Assets 121,804,833 110,763,718 - 232,568,551 Total Assets 153,012,460 132,007,458 12,918,463 272,101,455 DEFERRED OUTFLOWS OF RESOURCES Deferred Charge on Refunding 84,675 - 84,675 Deferred Outflows - Pensions 2,716,227 816,146 3,532,373 305,611 130,976 436,587 Total Deferred Outflows 3,106,513 947,122 - 4,053,635 Total Assets and Deferred Outflows of Resources 156,118,973$ 132,954,580$ 12,918,463$ 276,155,090$ (Continued) East Valley Water District Combining Schedule of Net Position – Continued June 30, 2020 78 Water Wastewater Eliminations Total LIABILITIES Current Liabilities: Accounts Payable & Accrued Expenses 2,304,545$ 6,355,715$ -$ 8,660,260$ Accrued Payroll & Benefits 464,104 133,951 598,055 Customer Service Deposits 1,563,518 - 1,563,518 Construction Advances and Retentions 106,000 3,802,876 3,908,876 Accrued Interest Payable 369,820 51,181 421,001 Current Portion of Compensated Absences 414,000 120,469 534,469 Current Portion of Long-Term Debt 2,721,186 117,499 2,838,685 Due To Water Fund - 12,918,463 12,918,463 - Total Current Liabilities 7,943,173 23,500,154 12,918,463 18,524,864 Non-Current Liabilities: Compensated Absences, Less Current Portion 353,887 100,634 454,521 Net Pension Liability 9,065,574 2,739,566 11,805,140 Net OPEB Liability 1,467,674 629,003 2,096,677 Long-Term Debt, Less Current Portion 38,885,951 67,734,732 106,620,683 Total Non-Current Liabilities 49,773,086 71,203,935 - 120,977,021 Total Liabilities 57,716,259 94,704,089 12,918,463 139,501,885 DEFERRED INFLOWS OF RESOURCES Deferred Inflows - Pensions 519,366 163,230 682,596 Deferred Inflows - OPEB 43,828 18,784 62,612 Total Deferred Inflows 563,194 182,014 - 745,208 Total Liabilities and Deferred Inflows of Resources 58,279,453 94,886,103 12,918,463 140,247,093 NET POSITION Net Investment in Capital Assets 75,166,983 31,541,572 106,708,555 Restricted for: Future Capital Expansion Projects 2,444,157 4,215,330 6,659,487 Unrestricted 20,228,380 2,311,575 22,539,955 Total Net Position 97,839,520$ 38,068,477$ -$ 135,907,997$ East Valley Water District Combining Schedule of Revenues, Expenses, and Changes in Net Position Year Ended June 30, 2020 79 Water Wastewater Total OPERATING REVENUE Water Sales 16,902,370$ -$ 16,902,370$ Wastewater Treatment Charges - 8,496,012 8,496,012 System Charges 9,023,267 4,647,347 13,670,614 Other Revenue 657,697 86,219 743,916 Total Operating Revenue 26,583,334 13,229,578 39,812,912 OPERATING EXPENSES Source of Supply: Salary & Benefits 603,432 - 603,432 Contract Services 447,085 - 447,085 Utilities 1,196,961 - 1,196,961 Insurance 3,674 - 3,674 Materials & Supplies 52,945 - 52,945 Purchased Water 816,085 - 816,085 Water Assessments 16,811 - 16,811 Chemicals 94,902 - 94,902 Professional Development 443 - 443 Taxes 31,065 - 31,065 Total Source of Supply 3,263,403 - 3,263,403 Pumping: Salary & Benefits 58,241 - 58,241 Contract Services 39,594 - 39,594 Utilities 349,651 - 349,651 Materials & Supplies 10,360 - 10,360 Total Pumping 457,846 - 457,846 Water Treatment: Salary & Benefits 447,308 - 447,308 Contract Services 143,971 - 143,971 Utilities 133,445 - 133,445 Materials & Supplies 27,710 - 27,710 Chemicals 138,693 - 138,693 Total Water Treatment 891,127 - 891,127 Wastewater Treatment: Treatment Services - 8,496,012 8,496,012 Transmission & Distribution: Salary & Benefits 2,290,630 - 2,290,630 Contract Services 802,162 - 802,162 Materials & Supplies 290,847 - 290,847 Chemicals 23,300 - 23,300 Permits 18,132 - 18,132 Tools 35,571 - 35,571 Total Transmission & Distribution 3,460,642$ -$ 3,460,642$ (Continued) East Valley Water District Combining Schedule of Revenues, Expenses, and Changes in Net Position - Continued Year Ended June 30, 2020 80 Water Wastewater Total OPERATING EXPENSES - Continued Wastewater Collection: Salary & Benefits -$ 462,308$ 462,308$ Contract Services - 283,436 283,436 Materials & Supplies - 21,009 21,009 Tools - 695 695 Total Wastewater Collection - 767,448 767,448 Customer Accounts: Salary & Benefits 668,749 180,781 849,530 Contract Services 576,065 145,278 721,343 Utilities 11,650 2,009 13,659 Materials & Supplies 4,206 745 4,951 General Office Supplies 5,935 827 6,762 Tools 1,752 - 1,752 Printing & Publishing 4,175 1,789 5,964 Postage 82,782 35,478 118,260 Professional Development 1,526 190 1,716 Total Customer Accounts 1,356,840 367,097 1,723,937 General & Administrative: Salary & Benefits 5,205,279 1,722,084 6,927,363 Contract Services 1,541,941 437,887 1,979,828 Conservation Rebates 144,259 - 144,259 Utilities 263,738 40,966 304,704 Insurance 213,136 91,344 304,480 Materials & Supplies 201,911 87,294 289,205 General Office Supplies 15,354 12,404 27,758 Legal Services 117,255 48,828 166,083 Permits 63,707 2,459 66,166 Memberships & Dues 70,122 28,774 98,896 Tools 17,725 6,546 24,271 Printing & Publishing 87,447 44,647 132,094 Professional Development 102,666 27,798 130,464 Rents & Leases 13,382 4,461 17,843 Total General & Administrative 8,057,922 2,555,492 10,613,414 OPERATING EXPENSES BEFORE DEPRECIATION 17,487,780 12,186,049 29,673,829 Depreciation 5,752,899 822,922 6,575,821 Total Operating Expenses 23,240,679 13,008,971 36,249,650 OPERATING INCOME (LOSS)3,342,655$ 220,607$ 3,563,262$ (Continued) East Valley Water District Combining Schedule of Revenues, Expenses, and Changes in Net Position - Continued Year Ended June 30, 2020 81 Water Wastewater Total NON-OPERATING REVENUES Investment Income 476,514$ 48,161$ 524,675$ Other Income 119,215 2,768 121,983 Total Non-Operating Revenues 595,729 50,929 646,658 NON-OPERATING EXPENSES Interest Expense 1,393,639 185,465 1,579,104 Total Non-Operating Expenses 1,393,639 185,465 1,579,104 INCOME BEFORE CONTRIBUTIONS 2,544,745 86,071 2,630,816 CONTRIBUTIONS: Capacity Charges 287,644 2,931,753 3,219,397 Capital Grants - 6,742,125 6,742,125 Total Contributions 287,644 9,673,878 9,961,522 CHANGE IN NET POSITION 2,832,389 9,759,949 12,592,338 TOTAL NET POSITION, BEGINNING (AS PREVIOUSLY REPORTED)95,007,131 28,308,528 123,315,659 TOTAL NET POSITION, ENDING 97,839,520$ 38,068,477$ 135,907,997$ 82 East Valley Water District Combining Schedule of Cash Flows Year Ended June 30, 2020 83 Water Wastewater Eliminations Total CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers 25,927,296$ 15,860,837$ -$ 41,788,133$ Cash Payments for Employees Services (8,751,204) (2,071,380) (10,822,584) Cash Payments to Suppliers (10,194,169) (3,873,256) (14,067,425) Cash from Other Sources 254,644 - 254,644 Net Cash Provided by Operating Activities 7,236,567 9,916,201 - 17,152,768 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Grant Funds Received - 6,742,125 6,742,125 Gain on Disposal 48,954 2,768 51,722 Contributed Capital 287,644 2,931,753 3,219,397 Proceeds from Loan of Capital Debt - 33,232,846 33,232,846 Due To Water Fund - 2,736,361 (2,736,361) - Due From Sewer Fund (2,736,361) - 2,736,361 - Principal Paid on Capital Debt (2,564,311) (105,000) (2,669,311) Interest Paid on Capital Debt (1,498,569) (207,350) (1,705,919) Acquisition of Capital Assets (5,603,282) (53,331,517) (58,934,799) Net Cash Used for Capital and Related Financing Activities (12,065,925) (7,998,014) - (20,063,939) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received from Investments 522,252 27,889 550,141 Acquisition of Investment Securities (4,819,634) (999,600) (5,819,234) Proceeds from Sales of Investments 4,699,988 898,165 5,598,153 Loan Proceeds 6,119 - 6,119 Net Cash Provided (Used) by Investing Activities 402,606 (73,546) 329,060 Net (Decrease) Increase in Cash and Cash Equivalents (4,426,752) 1,844,641 (2,582,111) Cash and Equivalents, Beginning of Year 18,963,981 2,585,034 21,549,015 Cash and Equivalents, End of Year 14,537,229$ 4,429,675$ -$ 18,966,904$ RECONCILIATION TO STATEMENT OF NET POSITION Cash and Cash Equivalents 8,777,977$ -$ -$ 8,777,977$ Restricted Cash and Cash Equivalents 5,765,371 4,429,675 10,195,046 Total Cash and Cash Equivalents 14,543,348$ 4,429,675$ -$ 18,973,023$ (Continued) East Valley Water District Combining Schedule of Cash Flows - Continued Year Ended June 30, 2020 84 Water Wastewater Eliminations Total Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss)3,342,655$ 220,607$ -$ 3,563,262$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities: Depreciation 5,752,899 822,922 6,575,821 Change in Assets and Liabilities: Customer Receivables (669,218) (1,404) (670,622) Other operating receivables 254,644 - 254,644 Inventory (141,338) - (141,338) Prepaids 36,698 (17,239) 19,459 Deferred Outflow of Resources (301,191) (129,082) (430,273) Accounts Payable - Supplier (1,875,391) 5,964,863 4,089,472 Salaries & Benefits Payable 77,355 27,422 104,777 Compensated absences (30,733) 62,444 31,711 Net Pension Liability 670,730 287,456 958,186 Net OPEB Liability 56,181 24,078 80,259 Deferred Inflows of Resources 50,096 21,470 71,566 Customer Deposits 13,180 - 13,180 Developer Deposits - 2,632,664 2,632,664 7,236,567$ 9,916,201$ -$ 17,152,768$ NON-CASH INVESTING, CAPITAL, AND NON-CAPITAL FINANCING ACTIVITIES: Fair Value Adjustments to Investments 109,857$ 20,272$ -$ 130,129$ 45,326 10,048,086 10,093,412 Capital Assets Acquired by Assuming Liabilities, Including Retainage Payable 85 86 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 Table of Contents 87 Page No. Statistical Information Section Financial Trends .................................................................................................................. 89-93 These schedules contain information to help the reader understand how the District’s financial performance and well-being have changed over time. Changes in Net Position by Component – Last Ten Fiscal Years .................................... 89-90 Operating Revenue by Source – Last Ten Fiscal Years .........................................................91 Water Operating Expenses – Last Ten Fiscal Years ..............................................................92 Wastewater Operating Expenses – Last Ten Fiscal Years .....................................................93 Revenue Capacity ............................................................................................................. 94-100 These schedules contain information to help the reader assess the District’s most significant sources of revenue, water sales, meter charges, wastewater system charges, wastewater treatment charges, and other charges. Water Sales and Production – Last Ten Fiscal Years.............................................................94 Revenue Rates for Water – Last Ten Fiscal Years ........................................................... 95-96 Revenue Rates for Wastewater – Last Ten Fiscal Years ................................................. 97-98 Active Services by Type – Last Ten Fiscal Years ...................................................................99 Principal Customers – Current Fiscal Year and Nine Years Ago ..........................................100 Debt Capacity ................................................................................................................. 101-102 These schedules present information to help the reader assess the affordability of the District’s current levels of outstanding debt and the District’s ability to issue additional debt in the future. Ratio of Outstanding Debt – Last Ten Fiscal Years ..............................................................101 Debt Service Coverage – Last Ten Fiscal Years ..................................................................102 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2020 Table of Contents 88 Page No. Statistical Information Section - Continued Demographic Information ......................................................................................................103 These schedules offer demographic indicators to help the reader understand the environment within which the District’s financial activities take place. Demographic and Economic Statistics – Last Ten Calendar / Fiscal Years .........................103 Operating Information .................................................................................................... 104-105 These schedules contain service and infrastructure data to help the reader understand how the information in the District’s financial report relates to the service provided by the District. Full-Time Equivalent Employees by Department – Last Ten Fiscal Years ...........................104 Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ......105 EAST VALLEY WATER DISTRICT Changes in Net Position by Component Last Ten Fiscal Years 89 Year ended June 30, 2011 2012 2013 2014 2015 Change In Net Position Operating Revenue 25,205,990$ 28,652,017$ 31,513,194$ 32,620,577$ 30,743,445$ Operating Expenses 24,368,478 24,664,829 24,859,076 29,191,176 29,146,339 Operating Income (Loss)837,512 3,987,188 6,654,118 3,429,401 1,597,106 Non Operating Revenue (Expenses) Investment Income 87,589 84,094 55,310 49,846 100,830 Other Income 195,070 137,094 397,796 334,700 800,278 Interest Expense (1,286,352) (1,451,516) (1,445,981) (1,917,676) (1,980,062) Amortization (32,851) (35,284) (69,038) (99,688) - Gain (Loss) on Disposal of Assets (140,301) - - (606,085) - (1,176,845) (1,265,612) (1,061,913) (2,238,903) (1,078,954) Special Item Abandoned Projects - - - - (2,413,478) Hazard Mitigation - - - - - Capital Contributions 778,049 3,562,822 832,515 6,369,890 596,940 Change in Net Position 438,716 6,284,398 6,424,720 7,560,388 (1,298,386) Prior Period Adjustment - 2,861,951 (537,099) - (7,956,231) Cumulative Effect of Change in Accounting Principles - - - - - Net Position - Beginning 99,036,420 99,475,136 108,621,485 114,509,106 122,069,494 Net Position - Ending 99,475,136$ 108,621,485$ 114,509,106$ 122,069,494$ 112,814,877$ Net Position By Component Net Investment in Capital Assets 95,251,762 96,919,789 95,258,164 101,757,787 98,091,685 Restricted 103,029 416,250 920,554 2,274,769 2,322,238 Unrestricted 4,120,345 11,285,446 18,330,388 18,036,938 12,400,954 99,475,136$ 108,621,485$ 114,509,106$ 122,069,494$ 112,814,877$ (Continued) EAST VALLEY WATER DISTRICT Changes in Net Position by Component - Continued Last Ten Fiscal Years 90 Year ended June 30,Year ended June 30, 2016 2017 2018 2019 2020 Change In Net Position Operating Revenue 33,024,082$ 37,448,549$ 40,291,125$ 39,309,298$ 39,812,912$ Operating Expenses 32,655,921 32,299,587 35,980,099 35,898,073 36,249,650 Operating Income (Loss)368,161 5,148,962 4,311,026 3,411,225 3,563,262 Non Operating Revenue (Expenses) Investment Income 146,874 69,237 221,359 571,549 524,675 Other Income 830,806 401,323 258,560 307,247 121,983 Interest Expense (1,843,440) (1,776,684) (1,777,852) (1,684,986) (1,579,104) Amortization - - - - - Gain (Loss) on Disposal of Assets - - - 705,285 - (865,760) (1,306,124) (1,297,933) (100,905) (932,446) Special Item Abandoned Projects - (1,615,241) - - - Hazard Mitigation - - (155,177) - - Capital Contributions 732,642 2,446,118 523,918 611,673 9,961,522 Change in Net Position 235,043 4,673,715 3,381,834 3,921,993 12,592,338 Prior Period Adjustment - - - - Cumulative Effect of Change in Accounting Principles - - (1,711,803) - - Net Position - Beginning 112,814,877 113,049,920 117,723,635 119,393,666 123,315,659 Net Position - Ending 113,049,920$ 117,723,635$ 119,393,666$ 123,315,659$ 135,907,997$ Net Position By Component Net Investment in Capital Assets 103,222,160 104,659,796 103,210,762 95,468,735 106,708,555 Restricted 2,276,695 2,847,924 3,334,940 3,460,835 6,659,487 Unrestricted 7,551,065 10,215,915 12,847,964 24,386,089 22,539,955 113,049,920$ 117,723,635$ 119,393,666$ 123,315,659$ 135,907,997$ EAST VALLEY WATER DISTRICT Operating Revenue by Source Last Ten Fiscal Years 91 Wastewater Wastewater Total Year Ended Water Meter System Treatment Operating June 30,Sales Charges Charges Charges Other Revenue 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 2018 17,063,891 8,999,756 4,668,923 8,697,671 860,884 40,291,125 2019 15,746,654 9,009,881 4,643,732 8,592,950 1,316,081 39,309,298 2020 16,902,370 9,023,267 4,647,347 8,496,012 743,916 39,812,912 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 45,000,000 Other Wastewater Treatement Charges Wastewater System Charges Meter Charges Water Sales EAST VALLEY WATER DISTRICT Water Operating Expenses Last Ten Fiscal Years 92 Trans Customer Accts,Total Year Ended Source of Water &General, &Water Oper June 30,Supply Pumping Treatment Distribution Admin Expenses 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 2018 2,595,071 683,296 969,460 2,538,910 9,347,724 16,134,461 2019 2,975,348 585,585 840,623 2,819,288 9,393,555 16,614,399 2020 3,263,403 457,846 891,127 3,460,642 9,414,762 17,487,780 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 18,000,000 20,000,000 Source of Supply Pumping Water Treatment Trans & Distribution Customer Accts, General, & Admin EAST VALLEY WATER DISTRICT Wastewater Operating Expenses Last Ten Fiscal Years 93 Customer Accts,Total Year Ended Wastewater Wastewater General, &Wastewater Oper June 30,Collections Treatment Admin Expenses 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 2018 753,000 8,697,671 3,367,091 12,817,762 2019 700,507 8,592,950 3,309,983 12,603,440 2020 767,448 8,496,012 2,922,949 12,186,409 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 14,000,000 Customer Accts, General, & Admin Wastewater Treatment Wastewater Collections EAST VALLEY WATER DISTRICT Water Sales and Production Last Ten Fiscal Years 94 Water Sales Water Produced (Acre Feet)(Acre Feet) 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 16,223 17,922 2018 18,361 18,997 2019 16,167 17,397 2020 17,037 17,596 SOURCES: East Valley Water District - Finance and Operations Departments Year Ended June 30, 0 5,000 10,000 15,000 20,000 25,000 Water Produced Water Sales EAST VALLEY WATER DISTRICT Revenue Rates for Water Last Ten Fiscal Years 95 Year ended June 30, 2011 2012 2013 2014 2015* Tier 1-$1.45 Tier 2-$2.07 Tier 3-$2.89 Year ended June 30, 2011 2012 2013 2014 2015* 11.54$ 12.58$ 13.71$ 13.71$ 20.96$ 11.54 12.58 13.71 13.71 26.61 17.56 19.14 20.87 20.87 37.92 32.49 35.41 38.60 38.60 66.19 74.47 81.17 88.48 88.48 100.12 137.40 149.77 163.25 163.25 207.54 227.30 247.76 270.06 270.06 365.85 452.06 492.74 537.09 537.09 744.67 721.76 786.72 857.52 857.52 1,366.62 (Continued) NOTES: HCF = Hundred Cubic Feet = 748 gallons *On June 1, 2015 the District adopted Water Budget Based Rates. **On January 1, 2020 the District Adopted New Water Rates. SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions Meter Size Charge per HCF 1.49$ 1.62$ 1.77$ 1.77$ 2 (inches) 5/8 3/4 Water Consumption Rates Water Monthly System Charges 8 3 4 6 1 1 1/2 EAST VALLEY WATER DISTRICT Revenue Rates for Water - Continued Last Ten Fiscal Years 96 Year ended June 30,Year ended June 30, 2016 2017 2018 2019 2020** Tier 1-$1.45 Tier 1-$1.63 Tier 1-$1.73 Tier 1-$1.73 Tier 1-$1.83 Tier 2-$2.07 Tier 2-$2.32 Tier 2-$2.46 Tier 2-$2.46 Tier 2-$2.61 Tier 3-$2.89 Tier 3-$3.24 Tier 3-$3.44 Tier 3-$3.44 Tier 3-$3.64 Year ended June 30,Year ended June 30, 2016 2017 2018 2019 2020 20.96$ 23.06$ 23.06$ 23.06$ 23.06$ 26.61 29.27 29.27 29.27 29.27 37.92 41.71 41.71 41.71 41.71 66.19 72.81 72.81 72.81 72.81 100.12 110.13 110.13 110.13 110.13 207.54 228.30 228.30 228.30 228.30 365.85 402.44 402.44 402.44 402.44 744.67 819.14 819.14 819.14 819.14 1,366.62 1,503.28 1,503.28 1,503.28 1,503.28 NOTES: HCF = Hundred Cubic Feet = 748 gallons *On June 1, 2015 the District adopted Water Budget Based Rates. **On January 1, 2020 the District Adopted New Water Rates. SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions Charge per HCF Meter Size 2 (inches) 5/8 3/4 Water Monthly System Charges 8 Water Consumption Rates 3 4 6 1 1 1/2 EAST VALLEY WATER DISTRICT Revenue Rates for Wastewater Last Ten Fiscal Years 97 Year ended June 30, 2011 2012 2013 2014 2015* Residential (1 to 3 units) Flat Monthly Charge (per unit)12.93$ 14.09$ 15.36$ 15.36$ 15.36$ Commercial Flat Monthly Charge 3.28 3.58 3.90 3.90 3.90 plus, Charge per HCF 0.46 0.50 0.55 0.55 0.55 Year ended June 30, 2011 2012 2013 2014 2015* Residential (Flat Monthly Charge) Flat Monthly Charge Residential (1 unit)16.00$ 18.50$ 18.50$ 18.50$ 18.50$ Multi-Family (2 units)16.00 37.00 37.00 37.00 37.00 Multi-Family (3 units)16.00 55.50 55.50 55.50 55.50 Commercial Multi-family (4+ units)2.00 2.40 2.40 2.40 2.40 Non-Residential 2.00 2.40 2.40 2.40 2.40 plus, Charge per HCF: Multi-family (4+ units)0.95 1.25 1.25 1.25 1.25 Retail 1.90 2.10 2.10 2.10 2.10 Restaurants/Lounges 2.00 2.70 2.70 2.70 2.70 Laundromats 1.30 1.50 1.50 1.50 1.50 Dry Cleaners 1.90 2.10 2.10 2.10 2.10 Schools/Churches 0.70 1.10 1.10 1.10 1.10 Governments/Municipal 1.50 1.50 1.50 1.50 1.50 Convalescent Homes 0.95 1.35 1.35 1.35 1.35 Hotels 2.00 2.70 2.70 2.70 2.70 Ofc Bldgs/Motels 1.50 1.50 1.50 1.50 1.50 Auto Repair/Svc Stations 1.30 1.30 1.30 1.30 1.30 Car Wash 1.30 1.30 1.30 1.30 1.30 NOTES:(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 EAST VALLEY WATER DISTRICT Revenue Rates for Wastewater - Continued Last Ten Fiscal Years 98 Year ended June 30,Year ended June 30, 2016 2017 2018 2019 2020 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, 2016 2017 2018 2019 2020 Residential (Flat Monthly Charge) Flat Monthly Charge Residential (1 unit)19.18$ 20.85$ 21.55$ 21.55$ 21.55$ Multi-Family (2 units)38.37 41.72 43.10 43.10 43.10 Multi-Family (3 units)57.55 62.58 64.64 64.64 64.64 Commercial Multi-family (4+ units)1.71 1.90 1.97 1.97 1.97 Non-Residential 3.18 3.42 3.52 3.52 3.52 plus, Charge per HCF: Multi-family (4 + units)1.36 1.48 1.53 1.53 1.53 Retail 2.28 2.47 2.55 2.55 2.55 Restaurants/Lounges 2.93 3.18 3.28 3.28 3.28 Laundromats 1.63 1.77 1.83 1.83 1.83 Dry Cleaners 2.28 2.47 2.55 2.55 2.55 Schools/Churches 1.19 1.29 1.33 1.33 1.33 Governments/Municipal 1.63 1.77 1.83 1.83 1.83 Convalescent Homes 1.46 1.58 1.63 1.63 1.63 Hotels 2.93 3.18 3.28 3.28 3.28 Ofc Bldgs/Motels 1.63 1.77 1.83 1.83 1.83 Auto Repair/Svc Stations 1.41 1.53 1.58 1.58 1.58 Car Wash 1.41 1.53 1.58 1.58 1.58 NOTES: 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 EAST VALLEY WATER DISTRICT Active Services by Type Last Ten Fiscal Years 99 Year Ended Residential Multi-Family Total June 30,(1 to 3 units)(4+ units)Commercial Irrigation Fire Svcs Service 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 2018 19,526 463 988 275 361 21,613 2019 19,883 474 681 322 252 21,612 2020 19,526 463 988 275 255 21,507 SOURCES: East Valley Water District - Customer Service and Finance Departments 0 5,000 10,000 15,000 20,000 25,000 Residential Multi-Family Commercial Irrigation Fire Svcs EAST VALLEY WATER DISTRICT Principal Customers Current Fiscal Year and Nine Years Ago 100 Water Percentage Water Percentage Consumed of Total Consumed of Total Customer (AF)Rank (%)(AF)Rank (%) San Bernardino City Unified School District 590 1 3.35%449 2 2.18% Patton State Hospital 419 2 2.38%793 1 3.85% San Manuel Mission Indians 287 3 1.63%248 5 1.20% East Highlands Ranch 258 4 1.47%434 3 2.11% City of Highland 253 5 1.44%243 6 1.18% San Manuel Indian Bingo & Casino 213 6 1.21%386 4 1.87% Village Lakes Homeowners Association 162 7 0.92%150 8 0.73% Tuscany Apartments 145 8 0.82% Valencia Lea Mobile Home Park 119 9 0.68%129 9 0.63% Woodman Realty Inc 118 10 0.67% Stubblefield Mobile Home Parks & Offices 215 7 1.04% Victoria Village Apartments 113 10 0.55% Total - Top 10 2,564 14.57%3,160 15.34% Total - District 17,596 100.00%20,605 100.00% SOURCES: East Valley Water District - Customer Service and IT Departments 20112020 EAST VALLEY WATER DISTRICT Ratio of Outstanding Debt Last Ten Fiscal Years 101 Fiscal Year Revenue Bonds DWR Loans Capital Lease and Loan Certificates of Particaption Installment Note Outstanding Debt $ Per Capita As a Share of Personal Income 2011 33,545,000 - - - - 33,545,000 518 1.67% 2012 32,490,000 3,460,760 - - - 35,950,760 546 1.72% 2013 43,400,000 7,101,964 - - - 50,501,964 540 1.66% 2014 42,195,000 7,091,964 3,998,560 - - 53,285,524 561 1.63% 2015 40,930,000 7,071,964 3,671,849 - - 51,673,813 508 1.40% 2016 39,615,000 6,818,565 3,299,108 - - 49,732,673 476 * 2017 38,235,000 6,565,166 7,278,478 - - 52,078,644 510 * 2018 36,800,000 6,721,695 6,392,308 - - 49,914,003 489 * 2019 35,300,000 31,947,551 5,131,238 - - 72,378,789 710 * 2020 33,720,000 69,565,404 4,295,104 - - 107,580,508 1,044 * NOTE: ** This data was not developed in the format required for this fiscal year. SOURCE: East Valley Water District - Finance Department $0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 Revenue Bonds DWR Loans Capital Lease and Loan Certificates of Particaption Installment Note EAST VALLEY WATER DISTRICT Debt Service Coverage Last Ten Fiscal Years 102 Gross Operating Net Available Revenue (1)Expenses(2)Revenue Principal(3)Interest Total 2011 16,911,310 11,129,387 5,781,923 1,347,250 828,894 2,176,144 2.66 2012 18,286,850 11,424,899 6,861,951 1,048,319 980,000 2,028,319 3.38 2013 20,225,013 11,022,233 9,202,780 1,095,000 1,382,013 2,477,013 3.72 2014 27,397,559 13,219,850 14,177,709 1,167,718 1,840,671 3,008,389 4.71 2015 20,662,750 12,915,690 7,747,060 1,546,490 1,813,348 3,359,838 2.31 2016 22,543,107 15,048,582 7,494,525 1,851,139 1,718,658 3,569,797 2.10 2017 25,257,709 14,717,219 10,540,490 1,926,956 1,653,322 3,580,278 2.94 2018 27,537,072 16,134,461 11,402,611 2,479,570 1,584,820 4,064,390 2.81 2019 27,071,082 16,614,399 10,456,683 2,904,466 1,593,181 4,497,647 2.32 2020 27,466,707 17,487,780 9,978,927 2,564,310 1,456,842 4,021,152 2.48 Gross Operating Net Available Revenue (1)Expenses(2)Revenue Principal Interest Total 2011 * * * * * * * 2012 10,674,998$ 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 10,606,751 971,991 85,000 229,725 314,725 3.09 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 2018 13,758,976 12,817,762 941,214 95,000 217,350 312,350 3.01 2019 14,433,970 12,603,440 1,830,530 100,000 212,475 312,475 5.86 2020 22,954,385 12,186,049 10,768,336 105,000 207,350 312,350 34.48 NOTES: (1) (2)Operating expenses, less depreciation, for the utility fund. (3)Excludes Debt Service for Assessment Districts' Arroyo Verde and Eastwood Farms. *Not Applicable SOURCE: East Valley Water District - Finance Department Wastewater Department Coverage Year Ended June 30, Debt Service Water 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, EAST VALLEY WATER DISTRICT Demographics and Economic Statistics Last Ten Calendar / Fiscal Years 103 Personal Personal Income Income District Unemployment (thousands Per Capita Population(3)Rate (1), (3)Population(2), +of dollars)(2), +(dollars)(2), + 2011 64,698 13.3%2,061,040 64,031,994 31,068 2012 65,850 12.2%2,074,195 65,821,308 31,733 2013 93,500 10.6%2,083,871 67,628,367 32,453 2014 95,000 8.9%2,100,776 72,097,622 34,320 2015 101,733 7.2%2,117,311 76,881,147 36,311 2016 104,457 6.0%2,134,174 80,228,377 37,592 2017 102,208 5.5%2,153,203 83,217,749 38,648 2018 102,000 4.4%2,171,603 87,550,004 40,316 2019 102,000 4.0%*** 2020 103,000 6.4%*** NOTES: +This data was revised in 2020 (2) *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 EAST VALLEY WATER DISTRICT Full-Time Equivalent Employees by Department Last Ten Fiscal Years 104 Year Ended District Engineering & June 30,Administration Maintenance Operations Total 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* 2018 26.5 29 13 68.5* 2019 27.5 32 11 70.5* 2020 26 30 11 67.0 NOTES: * - Includes Part-Time Employees (PTEs) SOURCES: East Valley Water District - Finance and HR Departments 0 10 20 30 40 50 60 70 80 District Administration Engineering & Maintenance Operations EAST VALLEY WATER DISTRICT Operating and Capacity Indicators for Water and Wastewater Last Ten Fiscal Years 105 Annual Average Miles of Number of Production Production Water Main Fire Hydrants (MG)(MGD) 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 5,286 14 2018 300 3,018 5,983 16 2019 300 3,025 5,268 14 2020 300 3,025 5,552 15 Annual Daily Miles of Service Sewerage Sewerage Wastewater Connections (MG)(MGD) 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 2018 225 20,581 2,149.85 5.89 2019 214 20,563 2,091.45 5.73 2020 214 19,679 2,220.61 6.08 NOTES: *This data was not developed in the format required for this fiscal year. SOURCE: East Valley Water District - Engineering and IT Departments Water System Wastewater System Year Ended June 30, Year Ended June 30, 106 EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2020 107 Capacity Charge Funds Government Code Section 66013 requires local agencies that collect capacity charges to deposit and account for these fees in a separate capital facilities fund. In addition, local agencies are required to annual provide the information in this report to the public upon request. Government Code Section 66013 (b) (3) defines "Capacity charge" means a charge for public facilities at the time the charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense related to its use of the use of existing or new public facilities. " Government Code Section 66013 (d) outlines the reporting requirements on the capital facilities funds and expenditures. Government Code Section 66013 (f) (2) exempts capacity charges that are used to pay existing debt service from the reporting requirements of Section 66013 (d). Two of the District's capacity charges are used to pay existing debt service; therefore, they are exempt from the reporting requirements. For the purpose of enhancing transparency, the District has provided the reporting information on its capacity charges that are exempt from Section 66013 (d). The District has the following capacity charge funds: Water Capacity Fee Fund. This fund collects System Capacity Charges for new water service connections to pay for proportionate shares of the District equipment replacements and facility improvements. Wastewater Capacity Fee Fund. This fund collects a fee for the capacity used by new wastewater connections and the funds are used to pay for equipment replacements and facility improvements. A summary of changes in Water Fund Capacity Fees collected for the year ended June 30, 2020 is as follows: Beginning of End of Categories Year Contributions Usage Year Storage 68,459$ $ 62,936 $ - $ 131,395 Treatment 658,061 143,042 801,103 Supply 390,868 37,274 428,142 Transmission 297,403 1,061 298,464 Distribution 446,932 30,781 477,713 Operations 134,656 12,550 147,206 1,996,379$ 287,644$ -$ 2,284,023$ EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2020 108 A summary of Projects Funded by Capacity Fees for the year ended June 30, 2020: Categories CIP Project FY 2019-20 Expended % Funded by Capacity Total Capacity Fees Usage Storage -$ 0%-$ Treatment 0% Supply 0% Transmission 0% Distribution 0% Operations 0% -$ -$ A summary of Projects Funded by Capacity Fees for the year ended June 30, 2021: Categories CIP Project * FY 2020-21 Expended % Funded by Capacity Total Capacity Fees Usage Storage -$ 0%-$ Treatment 0% Supply 0% Transmission 0% Distribution 0% Operations 0% -$ -$ Note: * The District did not have any CIP projects utilizing Capacity Fee funds for the year ended June 30, 2021. EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2020 109 A summary of changes in Wastewater Fund Capacity Fees collected for the year ended June 30, 2020 is as follows: Beginning of End of Categories Year Contributions Usage Year Collection $ 550,754 $ 916,266 $ 1,467,020 Transmission 158,406 263,534 421,940 Recharge 129,405 215,287 344,692 Operations 86,241 143,475 229,716 Treatment 358,772 1,393,191 1,751,963 1,283,578$ 2,931,753$ -$ 4,215,331$ A summary Project Funded by Capacity Fees for the year ended June 30, 2020: Categories CIP Project* FY 2019-20 Expended % Funded by Capacity Total Capacity Fees Usage Collection -$ -$ Transmission Recharge Operations Treatment -$ -$ Note: * The District did not have any CIP projects utilizing Capacity Fee funds for the year ended June 30, 2020. A summary of Projects Funded by Capacity Fees for the year ended June 30, 2021: Categories CIP Project ** FY 2020-21 Expended % Funded by Capacity Total Capacity Fees Usage Collection -$ Transmission Recharge Operations Treatment -$ -$ Note: ** The District did not have any CIP projects utilizing Capacity Fee funds for the year ended June 30, 2021. CLAconnect.com WEALTH ADVISORY OUTSOURCING AUDIT, TAX, AND CONSULTING EAST VALLEY WATER DISTRICT SINGLE AUDIT REPORT ON FEDERAL AWARDS YEAR ENDED JUNE 30, 2020 EAST VALLEY WATER DISTRICT TABLE OF CONTENTS YEAR ENDED JUNE 30, 2020 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1  INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE 3  SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6  NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 7  SCHEDULE OF FINDINGS AND QUESTIONED COSTS 8  STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 10  (1) INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors East Valley Water District Highland, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of East Valley Water District (the District), as of and for the year ended June 30, 2020 and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 10, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Board of Directors East Valley Water District (2) Compliance and Other Matters As part of obtaining reasonable assurance about whether District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Glendora, California November 10, 2020 (3) INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Board of Directors East Valley Water District Highland, California Report on Compliance for Each Major Federal Program We have audited East Valley Water District’s (the District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of District’s major federal programs for the year ended June 30, 2020. The District’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of District’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of District’s compliance. Board of Directors East Valley Water District (4) Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020. Report on Internal Control over Compliance Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered District’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance, for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of District’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the District as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise District’s basic financial statements. We issued our report thereon dated November 10, 2020 which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the Board of Directors East Valley Water District (5) basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of Uniform Guidance. Accordingly, this report is not suitable for any other purpose. CliftonLarsonAllen LLP Glendora, California November 10, 2020 EAST VALLEY WATER DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2020 (6) Federal Grantor/Pass‐Federal CFDA Federal Through Grantor Program Title Number Contract No. Contracting Agency Expenditures US Environmental Protection Drinking Water State 66.468 D1701042 State of California Department of    Agency   Revolving Fund   Public Health 11,838,527$       Total Federal Programs Expenditures 11,838,527$       Reconciliation to Federal Revenue Total Federal Programs Expenditures 11,838,527$       Federal Loan Program Drinking Water State 66.468 D1701042 State of California Department of    Revolving Fund   Public Health (5,096,402)           Total Federal Program Revenue 6,742,125$          EAST VALLEY WATER DISTRICT NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2020 (7) NOTE 1 BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the District under programs of the federal government for the year ended June 30, 2020. The information in this schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets or cash flows of the District. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. NOTE 3 INDIRECT COST RATE A nonfederal entity may have a federally negotiated indirect cost rate that is being used for federal awards. In general, under 2 CFR 200.414(f), if an entity has never received a negotiated indirect cost rate, the entity may elect to use a 10 percent de minimis indirect cost rate. The entity has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NOTE 4 FEDERAL LOAN PROGRAM The federal loan program listed subsequently is administered by the California State Water Resources Control Board, and balances and transactions relating to the program are included in the District’s basic financial statements. The loan made during the year is included in the federal expenditures presented in the Schedule. The balance of the loan outstanding at June 30, 2020 consist of: Outstanding Federal CFDA Balance at Federal Loan Program Loan No. Number Contract No. Contracting Agency 30‐Jun‐20 Prop 1 Loan C‐06‐8106‐110 66.468 D1701042 State of California Department of    Public Health 5,096,402$          EAST VALLEY WATER DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2020 (8) Section I – Summary of Auditors’ Results Financial Statements 1. Type of auditors’ report issued: Unmodified 2. Internal control over financial reporting:  Material weakness(es) identified? yes x no  Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes x none reported 3. Noncompliance material to financial statements noted? yes x no Federal Awards 1. Internal control over major federal programs:  Material weakness(es) identified? yes x no  Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes x none reported 2. Type of auditors’ report issued on compliance for major federal programs: Unmodified 3. Any audit findings disclosed that are required to be reported in accordance with section 2 CFR 200.516(a)? yes x no Identification of Major Federal Programs CFDA Number(s) Name of Federal Program or Cluster 66.468 Drinking Water State Revolving Fund Dollar threshold used to distinguish between Type A and Type B programs: $ 750,000 Auditee qualified as low-risk auditee pursuant? yes x no* * East Valley Water District cannot qualify to be a low-risk auditee until two years of single audits have been completed. EAST VALLEY WATER DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2020 (9) Section II – Financial Statement Findings There were no findings and questioned costs related to the basic financial statements for the year ended June 30, 2020. Section III – Findings and Questioned Costs – Major Federal Programs There were no findings and questioned costs related to federal awards for the year ended June 30, 2020. EAST VALLEY WATER DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2020 (10) There were no findings and questioned costs related to the basic financial statements for the prior year; the District did not receive federal awards in the prior year. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. | CliftonLarsonAllen LLP R ecommended b y: Jo hn Mura G eneral Manager/C EO R espec tfully sub mitted: Kelly Malloy Direc tor o f S trategic S ervic es B O AR D AGE N D A S TAF F R E P ORT Agenda Item #4. Meeting Date: Novemb er 25, 2020 Dis c ussion Item To: G o verning Board Memb ers F rom: G eneral Manager/C EO Subject: C ons id er Adoptio n of R es o lution 2020.27 P artic ip ation in the G reat C alifornia S hakeO ut R E C O MME N D AT IO N: S taff recommends that the Board Ad o p t R es olutio n 2020.27 recognizing the Dis tric t's participation in the G reat C alifornia S hakeO ut. B AC KGR O UN D / AN ALYS IS : O n O c tober 15, 2020 at 10:15 a.m. the District p artic ipated in the G reat C alifo rnia S hakeo ut. T he G reat S hakeO ut is an annual opportunity to prac tic e ho w to res p o nd d uring a major earthq uake, this year highlighted the uniq ue c o nsiderations c aus ed by the C O VID-19 respons e. T he 2020 event had o ver 6.5 millio n participants in C alifornia includ ing residents , communities , and o rganizations. T his is an opportunity to review emergenc y p rep ared nes s p lans , improve respons e skills , and take s teps to minimize damage and injuries during an earthq uake event. T his s tatewide event is inc o rp o rated in the Dis tric t's quarterly emergenc y d rill s ched ule for staff. T he event facilitated an earthquake drill, tes ted the audible alarm s ys tem, utilized the telepho ne interc o m sys tem, evaluated the visito r check in p roc ed ure, tested the s atellite p hones , and evac uated the facility to the s econd ary staging area. As a result of this event, minor adjus tments are being made to thes e procedures to s treamline emergenc y res p o ns es . S taff is recommend ing that the Bo ard ad o p t R es o lutio n 2020.27 rec o gnizing the Dis tric t's partic ip ation in the G reat C alifo rnia S hakeO ut. AG E N C Y G O ALS AN D OB J E C T IVE S : G o al and O bjec tives I I I - Deliver P ublic S ervic e with P urpose W hile Emb rac ing C ontinuo us G rowth a) Ad vanc e Emergency P repared ness Effo rts G eneral Manager/C EO Direc tor o f S trategic S ervic es ATTACH M E N TS: Description Type Resolution 2020.27 Cover M e mo East Valley Water District Resolution 2020.27 Page 1 of 2 RESOLUTION NO. 2020.27 A RESOLUTION OF PARTICIPATION IN THE GREAT CALIFORNIA SHAKEOUT AND WORK TOWARD BECOMING A SAFER COMMUNITY WHEREAS, the Board of Directors of the East Valley Water District (the “District”) recognizes that no community is immune from natural hazards whether it be earthquake, wildfire, flood, winter storms, drought, or heat wave and recognizes the importance enhancing its ability to withstand natural hazards as well as the importance of reducing human suffering, property damage, interruption of public services and economic losses caused by those hazards; and WHEREAS, major earthquakes pose a particular, significant, and ongoing threat within the service area of the District; and WHEREAS, the District has a responsibility to promote earthquake preparedness internally as well as with the public and plan appropriately for earthquake-related disasters; and WHEREAS, the protection of District employees will allow them to facilitate the continuity of government and assist the public following a major earthquake event; and WHEREAS, community resiliency to earthquakes and other disasters depends on the preparedness levels of all stakeholders in the community – individuals, families, schools, community organizations, faith-based organizations, non-profits, businesses, and government; and WHEREAS, by participating in The Great California ShakeOut on October 15, 2020, the District had the opportunity to join and support all Californians in strengthening community and regional resiliency; and WHEREAS, by supporting The Great California ShakeOut, the District can utilize the event information to educate its residents regarding actions to protect life and property, including mitigating structural and non-structural hazards and participating in earthquake drills; and WHEREAS, by officially registering for the Great California ShakeOut, District employees participated in the ShakeOut “Drop Cover and Hold on” earthquake drill on October 15 at 10:15 a.m. BE IT FURTHER RESOLVED that this Resolution approves participation in the Great California Shakeout hereto by taking time to recognize and acknowledge the importance of preparing our District for the purposes of building a safer community and reducing the loss of lives and property from a major earthquake event by taking proactive steps today. ADOPTED this 25th day of November, 2020 Ayes: Noes: Absent: Abstain: David E. Smith, Board President East Valley Water District Resolution 2020.27 Page 2 of 2 November 25, 2020 I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2020.XX adopted by the Board of Directors of East Valley Water District as its Regular Meeting held November 25, 2020. John Mura, Secretary, Board of Directors B O AR D AGE N D A S TAF F R E P ORT Agenda Item #5. Meeting Date: Novemb er 25, 2020 Dis c ussion Item To: G o verning Board Memb ers F rom: G eneral Manager/C EO Subject: C ons id er Adoptio n of R es o lution 2020.32 Autho rizing and Approving 2021 Bureau o f R eclamatio n Waters mart Dro ught R es p o ns e P rogram: Dro ught C ontingenc y P lanning R E C O MME N D AT IO N: S taff rec ommend s that the Bo ard ad o p t R esolution 2020.23, Authorizing and Ap p ro ving 2021 Bureau of R ec lamatio n Waters mart Drought R espons e P ro gram: Drought C ontingency P lanning. B AC KGR O UN D / AN ALYS IS : Eas t Valley Water District c o ntinues to integrate exis ting p lanning effo rts with new analys is to id entify potential imp ro vements that will s upport ad d itional s ystem effic iencies. With the id entific ation of these p ro jec ts the Dis tric t c an fo cus better asses s availab le grant fund ing s o urc es with p ro gram o bjec tives . O ne s uc h p lanning do cument is a a drought c o ntingenc y plan. T his d o cument b uilds o n the res ults of the mas ter p lans and urb an water management p lan to identify res ilienc y p ro jec ts that can mitigate the negative imp acts of d ry years and increas e the effic ienc y o f c urrent water us e. T he Bureau o f R ec lamatio n (BO R ) has is s ued a call fo r grant ap p licatio ns for this plan with a maximum request of $200,000. T his planning p roc es s wo uld c o nsist o f a collab o rative informatio n gathering process with s takeho ld ers , quantitative analysis , and the development o f a projec t list. In the future, this plan will b e a c ritic al requirement fo r future fed eral water efficient infras tructure p ro ject fund ing, with additio nal points awarded to agencies that have completed this planning proc es s thro ugh the B O R grant program. T his p articular grant ap p lication period c lo s es in early January 2021. T he Bureau o f R ec lamatio n is a federal agenc y that as s ist in meeting the increas ing water demand s of the western s tates while protecting the environment and the p ublic 's inves tment in these s truc tures . In Eas t Valley Water Dis tric t's c as e, we are connec ted through the S tate Water P ro ject. If awarded the grant, the Distric t would wo rk with a c onsultant to fac ilitate the proc es s and as s is t with the d evelopment of the do cument in a manner that in c o ns is tent with b oth S tate and F ed eral c ons ervatio n go als and req uirements . G iven the timing o f this proc ess, the fo rmal req ues t fo r funds would b e inc luded in the F Y 2021- 22 or F Y 2022-23 b ud get proc ess. AG E N C Y G O ALS AN D OB J E C T IVE S : G oal and O b jectives I - Implement Effec tive S o lutio ns T hrough Visionary Leadership a) Identify O pportunities to O p timize Natural R esourc es R ecommended b y: Jo hn Mura G eneral Manager/C EO R espec tfully sub mitted: Kelly Malloy Direc tor o f S trategic S ervic es a) Identify O pportunities to O p timize Natural R esourc es c ) S trengthen R egio nal, S tate and National P artners hips F IS C AL IMPAC T If award ed the grant, the Dis tric t wo uld have a c o s t match obligation eq ual to the grant award of $200,000. ATTACH M E N TS: Description Type Resolution 2020.32 BO R Dro ught Contingency P lan Resolutio n Letter RESOLUTION NO. 2020.32 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT AUTHORIZING AND APPROVING 2021 BUREAU OF RECLAMATION WATERSMART DROUGHT RESPONSE PROGRAM: DROUGHT CONTINGENCY PLANNING WHEREAS, the U.S. Bureau of Reclamation (USBR) released a Funding Opportunity Announcement (FOA) WaterSMART Drought Response Program: Drought Contingency Planning Grants for Fiscal Years 2020 and 2021; WHEREAS, East Valley Water District (the “District”) has the authority to construct, operate, and maintain the service area water distribution system; and WHEREAS, the funding application requires the adoption of an authorizing resolution designating a representative of the District to sign and file a financial assistance application and all necessary documents related to a financing agreement with the United States Department of the Interior, Bureau of Reclamation; and WHEREAS, the applicant, if selected, will enter into an agreement with the United States Department of the Interior, Bureau of Reclamation to carry out the Project. BE IT RESOLVED by the Board of Directors of the District, as follows: Section 1. The General Manager/CEO is hereby authorized and directed to sign and file, for and on behalf of the District, an application for a grant agreement from the United States Department of the Interior, Bureau of Reclamation for the development of a Drought Contingency Plan. Section 2. The General Manager/CEO, or his designee, is designated to provide the assurances, certifications, and commitment required for the financial assistance application, including executing a financial assistance agreement with the United States Department of the Interior, Bureau of Reclamation and any amendments or changes thereto. Section 3. Certifies that the District is capable of providing the funding and/or in-kind contributions specified in the grant application funding plan. Section 4. Certifies that it has reviewed and supports the application to be submitted to the United States Department of the Interior, Bureau of Reclamation. Section 5. Certifies that the District will work with the United States Department of the Interior, Bureau of Reclamation to meet established deadlines for entering into a grant or cooperative agreement, and Section 6. The General Manager/CEO, or his designee, is designated to represent the District in carrying out the District’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the District and compliance with applicable state and federal laws. PASSED, APPROVED and ADOPTED this 25th day of November 2020. ROLL CALL: Ayes: Noes: Abstain: Absent: David E. Smith Board President ATTEST: _____________________________ John Mura Secretary, Board of Directors November 25, 2020 I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2020.32 adopted by the Board of Directors of East Valley Water District at its Regular Meeting held November 25, 2020. _____________________________ John Mura Secretary, Board of Directors