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Agenda Packet - EVWD Board of Directors - 10/25/2023
BOARD OF DIRECTORS OCTOBER 25, 2023 East Valley Water District was formed in 1954 and provides water and wastewater services to 104,000 residents within the cities of San Bernardino and Highland, and portions of San Bernardino County. EVWD operates under the direction of a 5member elected Board. GOVERNING BOARD EXECUTIVE MANAGEMENT Phillip R. Goodrich Chairman of the Board Michael Moore General Manager/CEO James Morales, Jr. ViceChairman Brian W. Tompkins Chief Financial Officer Chris Carrillo Governing Board Member Jeff Noelte Director of Engineering & Operations Ronald L. Coats Governing Board Member Kerrie Bryan Director of Administrative Services David E. Smith Governing Board Member Patrick Milroy Operations Manager Rocky Welborn Water Reclamation Manager Justine Hendricksen District Clerk Board of Directors Regular Meeting October 25, 2023 5:30 PM 31111 Greenspot Road, Highland, CA 92346 www.eastvalley.org PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection in the District’s office located at 31111 Greenspot Rd., Highland, during normal business hours. Also, such documents are available on the District’s website at eastvalley.org and are subject to staff’s ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelated 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) 8854900 at least 72 hours prior to said meeting. 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. 1.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. a.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 October11, 2023 Regular Board Meeting Minutes b.Accept and File Investment Report for Quarter Ended September 30, 2023 c.Accept and File Financial Statements for July 2023 d.Accept and File Financial Statements for August 2023 e.Approve Board Meeting Cancellations 3.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Approval of the Annual Comprehensive Financial Report for Year Ended June 30, 2023 b.Consider Approval of Conservation and Public Affairs Design Services Contract with SG Creative and We The Creative c.Consider Approval of Amendments to the Memorandum of Understanding and Cost Share Agreement for the Bunker Hill Basin Regional Recycled Water Feasibility Study 4.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN BOARD OF DIRECTORSOCTOBER 25, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to104,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.GOVERNING BOARD EXECUTIVE MANAGEMENTPhillip R. GoodrichChairman of the Board Michael MooreGeneral Manager/CEOJames Morales, Jr.ViceChairman Brian W. TompkinsChief Financial OfficerChris CarrilloGoverning Board Member Jeff NoelteDirector of Engineering & OperationsRonald L. CoatsGoverning Board Member Kerrie BryanDirector of Administrative ServicesDavid E. SmithGoverning Board Member Patrick Milroy Operations ManagerRocky Welborn Water Reclamation ManagerJustine Hendricksen District Clerk Board of Directors Regular Meeting October 25, 2023 5:30 PM 31111 Greenspot Road, Highland, CA 92346 www.eastvalley.org PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection in the District’s office located at 31111 Greenspot Rd., Highland, during normal business hours. Also, such documents are available on the District’s website at eastvalley.org and are subject to staff’s ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelated 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) 8854900 at least 72 hours prior to said meeting. 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. 1.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. a.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 October11, 2023 Regular Board Meeting Minutes b.Accept and File Investment Report for Quarter Ended September 30, 2023 c.Accept and File Financial Statements for July 2023 d.Accept and File Financial Statements for August 2023 e.Approve Board Meeting Cancellations 3.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Approval of the Annual Comprehensive Financial Report for Year Ended June 30, 2023 b.Consider Approval of Conservation and Public Affairs Design Services Contract with SG Creative and We The Creative c.Consider Approval of Amendments to the Memorandum of Understanding and Cost Share Agreement for the Bunker Hill Basin Regional Recycled Water Feasibility Study 4.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN BOARD OF DIRECTORSOCTOBER 25, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to104,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.GOVERNING BOARD EXECUTIVE MANAGEMENTPhillip R. GoodrichChairman of the Board Michael MooreGeneral Manager/CEOJames Morales, Jr.ViceChairman Brian W. TompkinsChief Financial OfficerChris CarrilloGoverning Board Member Jeff NoelteDirector of Engineering & OperationsRonald L. CoatsGoverning Board Member Kerrie BryanDirector of Administrative ServicesDavid E. SmithGoverning Board Member Patrick Milroy Operations ManagerRocky Welborn Water Reclamation ManagerJustine HendricksenDistrict ClerkBoard of Directors Regular MeetingOctober 25, 2023 5:30 PM31111 Greenspot Road, Highland, CA 92346www.eastvalley.orgPLEASE NOTE:Materials related to an item on this agenda submitted to the Board after distribution of theagenda packet are available for public inspection in the District’s office located at 31111Greenspot Rd., Highland, during normal business hours. Also, such documents are availableon the District’s website at eastvalley.org and are subject to staff’s ability to post thedocuments before the meeting.Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelatedmodification or accommodation, including auxiliary aids or services, that is sought in orderto participate in the above agendized public meeting should be directed to the District Clerkat (909) 8854900 at least 72 hours prior to said meeting. 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. 1.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. a.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 October11, 2023 Regular Board Meeting Minutes b.Accept and File Investment Report for Quarter Ended September 30, 2023 c.Accept and File Financial Statements for July 2023 d.Accept and File Financial Statements for August 2023 e.Approve Board Meeting Cancellations 3.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Approval of the Annual Comprehensive Financial Report for Year Ended June 30, 2023 b.Consider Approval of Conservation and Public Affairs Design Services Contract with SG Creative and We The Creative c.Consider Approval of Amendments to the Memorandum of Understanding and Cost Share Agreement for the Bunker Hill Basin Regional Recycled Water Feasibility Study 4.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN BOARD OF DIRECTORSOCTOBER 25, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to104,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.GOVERNING BOARD EXECUTIVE MANAGEMENTPhillip R. GoodrichChairman of the Board Michael MooreGeneral Manager/CEOJames Morales, Jr.ViceChairman Brian W. TompkinsChief Financial OfficerChris CarrilloGoverning Board Member Jeff NoelteDirector of Engineering & OperationsRonald L. CoatsGoverning Board Member Kerrie BryanDirector of Administrative ServicesDavid E. SmithGoverning Board Member Patrick Milroy Operations ManagerRocky Welborn Water Reclamation ManagerJustine HendricksenDistrict ClerkBoard of Directors Regular MeetingOctober 25, 2023 5:30 PM31111 Greenspot Road, Highland, CA 92346www.eastvalley.orgPLEASE NOTE:Materials related to an item on this agenda submitted to the Board after distribution of theagenda packet are available for public inspection in the District’s office located at 31111Greenspot Rd., Highland, during normal business hours. Also, such documents are availableon the District’s website at eastvalley.org and are subject to staff’s ability to post thedocuments before the meeting.Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelatedmodification or accommodation, including auxiliary aids or services, that is sought in orderto participate in the above agendized public meeting should be directed to the District Clerkat (909) 8854900 at least 72 hours prior to said meeting.In order to comply with legal requirements for posting of agenda, only those items filedwith the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesdaymeeting not requiring departmental investigation, will be considered by the Board ofDirectors.CALL TO ORDERPLEDGE OF ALLEGIANCEROLL CALL OF BOARD MEMBERSPUBLIC COMMENTSAny person wishing to speak to the Board of Directors is asked to complete a SpeakerCard and submit it to the District Clerk prior to the start of the meeting. Each speaker islimited to three (3) minutes, unless waived by the Chairman of the Board. Under the Stateof California Brown Act, the Board of Directors is prohibited from discussing or takingaction on any item not listed on the posted agenda. The matter will automatically bereferred to staff for an appropriate response or action and may appear on the agenda at afuture meeting.1.AGENDAThis 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 notappearing on the following agenda unless the Board of Directors makes adetermination that an emergency exists or that a need to take immediate action onthe item came to the attention of the District subsequent to the posting of theagenda.a.Approval of Agenda2.APPROVAL OF CONSENT CALENDARAll matters listed under the Consent Calendar are considered by the Board ofDirectors to be routine and will be enacted in one motion. There will be nodiscussion of these items prior to the time the board considers the motion unlessmembers of the board, the administrative staff, or the public request specific itemsto be discussed and/or removed from the Consent Calendar.a.Approve the October11, 2023 Regular Board Meeting Minutesb.Accept and File Investment Report for Quarter Ended September 30, 2023c.Accept and File Financial Statements for July 2023d.Accept and File Financial Statements for August 2023 e.Approve Board Meeting Cancellations 3.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Approval of the Annual Comprehensive Financial Report for Year Ended June 30, 2023 b.Consider Approval of Conservation and Public Affairs Design Services Contract with SG Creative and We The Creative c.Consider Approval of Amendments to the Memorandum of Understanding and Cost Share Agreement for the Bunker Hill Basin Regional Recycled Water Feasibility Study 4.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN Agenda Item #2a October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #2a Consent Item Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Approve the October11, 2023 Regular Board Meeting Minutes RECOMMENDATION That the Board of Directors approve the October11, 2023 regular Board meeting minutes as submitted. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability B. Utilize Effective Communication Methods REVIEW BY OTHERS This agenda item has been reviewed by Administration. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Justine Hendricksen District Clerk ATTACHMENTS Draft October 11, 2023 Regular Board Meeting Minutes Regular Board Meeting Meeting Date: October 11, 2023 CALL TO ORDER The Chairman of the Board called the meeting to order at 5:30 p.m. PLEDGE OF ALLEGIANCE Chairman Goodrich led the flag salute. ROLL CALL OF BOARD MEMBERS PRESENT Directors: Carrillo, Coats, Goodrich, Morales, Smith ABSENT None STAFF Michael Moore, General Manager/CEO; Brian Tompkins, Chief Financial Officer; Jeff Noelte, Director of Engineering and Operations; Kerrie Bryan, Director of Administrative Services; Patrick Milroy, Operations Manager; Rocky Welborn, Water Reclamation Manager; Justine Hendricksen, District Clerk; Shayla Antrim, Administrative Specialist LEGAL COUNSEL Jean Cihigoyenetche GUESTS Members of the public PUBLIC COMMENTS Chairman Goodrich declared the public participation section of the meeting open at 5:31 p.m. Draft pending approval 1 3 0 9 Ms. Sheri Rojo expressed her opposition to the pipeline work taking place on Highland Avenue. She recounted the events that led to the meeting and mentioned that she is a friend of the Silverias and Silsbees. She also expressed her concerns for the health, welfare, and safety of her friends and requested relevant documents. She emphasized that the pipeline work is not a simple maintenance project. The General Manager/CEO clarified that the District has already responded to homeowners and addressed their concerns. He suggested that if there are any further questions, Ms. Rojo should contact the District to discuss the matter and ensure that everything is clear regarding the work being performed. He also assured Ms. Rojo that the pipeline has been in use for years, sending river water to the surface water treatment plant. There being no further written or verbal comments, the public participation section was closed at 5:39 p.m. 1.APPROVAL OF AGENDA a.Approval of Agenda A motion was made by Director Coats, seconded by Director Carrillo, that the Board approve the October 11, 2023 agenda as submitted. The motion carried by the following: Ayes: Carrillo, Coats, Goodrich, Morales, Smith Noes: None Absent: None 2.APPROVAL OF CONSENT CALENDAR a.Approve the September 18, 2023 Special Board Meeting Minutes b.Approve the September 27, 2023 Regular Board Meeting Minutes c.Approval of Directors’ Fees and Expenses for September 2023 d.Adopt Resolution 2023.14 Recognizing Matthew Armitage’s 25 Years of Service A motion was made by Director Coats, seconded by Vice Chairman Morales, that the Board approve the Consent Calendar items as submitted. The motion carried by the following: Ayes: Carrillo, Coats, Goodrich, Morales, Smith Noes: None Absent: None 3.DISCUSSION AND POSSIBLE ACTION ITEMS a.Reject Proposal and Consider Approval of Laboratory Services for Wastewater Analysis Agreement with Eurofins Eaton Analytical, LLC 1 3 0 9 The Water Reclamation Manager stated that the Sterling Natural Resource Center (SNRC) must adhere to regulations that involve sampling and analyzing water quality parameters to ensure compliance with Waste Discharge Requirements and the Master Recycling Permit. He stated that an appropriately certified laboratory is required for this analytical work, as SNRC's limited equipment is insufficient for the necessary permit testing and data adjustments. He noted that the District has been collaborating with state and regional water authorities to establish the permit requirements, considering various environmental laws and policies. In preparation for the permits, a Request for Proposals (RFP) was issued in May 2023, but the initial proposal received did not meet the requirements. On August 1, 2023, the District received a Conditional Acceptance Letter from the State Water Resources Control Board, which led to a modification of the RFP. Two proposals were submitted, and Eurofins Eaton Analytical was selected as the laboratory to provide the required services due to their qualifications, references, proposal quality, and cost-effectiveness. Eurofins is a state-certified laboratory with experience serving various entities, including the District. A motion was made by Vice Chairman Morales, seconded by Director Coats, that the Board reject the proposal received in June of 2023 and approve a Professional Services Agreement with Eurofins Eaton Analytical, LLC for Wastewater Analysis for up to $300,000 per year as submitted. The motion was carried by the following vote: Ayes: Morales, Carrillo, Coats, Smith, Goodrich Noes: None Absent: None b.Consider Adoption of Resolution 2023.15 – Updating Water Capacity Fees; Public Hearing The Chief Financial Officer discussed the periodic review of fees within the District to align them with District policies. In 2019, IB Consulting presented a study proposing adjustments to capacity fees for new development, which were adopted and became effective in January 2020. These fees are for new meter connections to ensure that new developments contribute their fair share to the water system. He stated that since the fee update, the District has upgraded its meters by replacing large meters with Ultrasonic technology, increasing flow capacity significantly. This invalidates the cost allocation assumptions made in the 2019 Capacity Fee Study. As a result, IB Consulting revised the calculations for capacity fees, taking into account the improved flow capacity and construction cost index increases since 2019. The Chief Financial Officer stated that the purpose of these adjustments is to ensure that the fees accurately reflect the higher flow capacities of the new meters, ensuring that developers pay for the increased volume needed for their projects. These changes 1 3 0 9 apply primarily to meters 2 inches and larger. A comprehensive capacity fee study is planned for 2024, considering new facilities and development costs, after updates to the Water Master Plan. The Chief Financial Officer pointed out that there was an error on page 15 of Exhibit A, which is the Schedule of Wastewater Rates and Charges. The page has been replaced to update the capacity charge column. He also mentioned that the correction is reflected in the water capacity fee in the technical memorandum. Chairman Goodrich declared the public hearing open at 5:58 p.m. Mr. Wayne Brown inquired about the new apartment complex being constructed and whether they requested two four-inch meters. The Chief Financial Officer responded that two meters were installed and are subject to the old cost structure. However, if additional meters are ordered, they will be subject to the new cost structure. There were no further written or verbal public comments. Chairman Goodrich declared the public hearing closed at 6:00 p.m. A motion was made by Director Coats, seconded by Vice Chairman Morales, that the Board adopt Resolution 2023.15 as submitted. The motion was carried by the following vote: Ayes: Morales, Carrillo, Coats, Smith, Goodrich Noes: None Absent: None 4.REPORTS a.Board of Directors’ Reports Director Coats reported on the following: September 28 he attended San Bernardino Valley Municipal Water District’s Water Forum entitled “ Climate Resilience: Moving from Ideas to Action”; October 6 he attended the California Special Districts Association’s (CSDA) Member Services and Professional Development committee meetings where they discussed accomplishments for CSDA in 2023 and objectives for 2024; October 10 he attended the City of San Bernardino Water Department Board meeting where they approved capacity fee increases and change orders for construction projects; and October 10 he attended the Finance & Human Resources Committee meeting where they reviewed the draft Annual Comprehensive Financial Report and water capacity fee updates. Director Carrillo reported on the following: October 4 he attended the City of San Bernardino City Council meeting where he reported that they are searching for a permanent city manager; and October 6 he met with the General Manager/CEO to discuss District business and reviewed the agenda. 1 3 0 9 Director Smith reported on the following: October 10 he attended the Finance & Human Resources Committee meeting where they discussed water capacity fees, the health fair and emergency preparedness; October 11 he attended the attended San Bernardino Valley Water Conservation District’s Board meeting with nothing to report. He commented that on Saturday the Highland Chamber of Commerce held its annual 5k/10k Run and thanked Vice Chairman Morales for his contribution to sound equipment and to the District for providing water fountains. Vice Chairman Morales reported on the following: October 3 he attended San Bernardino Valley Municipal Water District’s Board (Valley District) meeting where they approved a second amendment to grant services agreement and approved a cost share agreement; October 5 he met with the General Manager/CEO to review the agenda and was provided District updates; October 10 he attended Valley District’s Workshop where they discussed the health of the Santa Ana River, provided a status update of the Bunker Hill Basin Regional Recycled Water Coalition, and discussed a Memorandum of Understanding for mitigation of salt loading. Chairman Goodrich reported on the following: October 5 he met with the General Manager/CEO to review the agenda and to discuss District business; and October 10 he attended the City of Highland Council meeting with nothing to report. For information only. a.General Manager/CEO Report The General Manager/CEO reported the following: •October 7-14 is Water Professionals Appreciation Week - Join us in recognizing the importance of water workers and their role in providing safe, reliable water to the community. The District will celebrate by highlighting staff on social media. •October 12 at 1:00 p.m. - Legislative & Public Outreach Committee meeting •On October 17 the District will be hosting a Community Facility Tour to provide a behind-the-scenes look at EVWD’s operations and facilities. •On October 19 at 11:30 a.m. the Employee Events Association is hosting a Jacket Drive and luncheon for staff at District headquarters. •October 21 from 10:00 a.m. to 11:30 a.m. a free Conservation workshop will be held at the Sterling Natural Resource Center to provide information and tips on water-efficient yard maintenance. •The General Manager/CEO will be out of the office October 23-25 attending the California Special Districts Association’s Special District Leadership Academy and 1 3 0 9 will not be attending the October 25 Board meeting. He will ensure that all responsibilities are properly delegated during his absence. If there are any critical matters that require his attention, he will be available via email and phone. The Director of Engineering and Operations provided a Water Supply Update. For information only. b.Legal Counsel Report No report at this time. c.Board of Directors’ Comments Director Carrillo acknowledged the passing of Senator Dianne Feinstein. Vice Chairman Morales offered his appreciation to staff for organizing the upcoming District tour and appreciates their efforts in educating the public about the water system. He also mentioned that the executive director of Association of California Water Agencies has invited the District to apply for a feature in an upcoming publication for the Sterling Natural Resource Center project. He further commended the District for successfully overcoming hurdles and managing the project to its current stage. Chairman Goodrich expressed appreciation for the public's engagement and attendance at Board meetings. For information only. ADJOURN Chairman Goodrich adjourned the meeting at 6:24 p.m. Phillip R. Goodrich, Board President Michael Moore, Board Secretary Agenda Item #2b October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #2b Consent Item 8 9 8 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Accept and File Investment Report for Quarter Ended September 30, 2023 RECOMMENDATION That the Board of Directors accept and file the attached Investment Report for the quarter ended September 30, 2023. BACKGROUND / ANALYSIS California Government Code §53646(b) requires the Treasurer or CFO of a local agency to submit a quarterly report on the agency’s investments to the legislative body of the agency within 30 days of the end of each quarter. The attached Investment Report shows all the District’s cash and investments, restricted and unrestricted, as of September 30, 2023. Attachment A presents the investment securities purchased and retired during the quarter July to September 2023. Increases and decreases in highly liquid funds, such as LAIF, are explained in the narrative below. Unrestricted Investments LAIF The balance held in the Local Agency Investment Fund at the beginning of the quarter was $13,722,155. Interest earned during the previous quarter of $73,544 was posted to the account in July and the District made one withdrawal from LAIF in August for $2,000,000. As a result, the balance in the account was $11,795,699 at the end of September. LAIF earnings for the quarter ended September 30, 2023, were $114,439, calculated at an apportionment rate of 3.59%; up from 3.36% which had been in effect for the previous quarter. The earnings were posted to the District’s account on October 13, 2023. Citizen’s Business Bank (CBB) Wealth Management The total (book) value of the assets held with CBB increased from $21,776 to $6,031,760 during the quarter ended September 30, 2023. The balance in this account Agenda Item #2b October 25, 20232 Meeting Date: October 25, 2023 Agenda Item #2b Consent Item 8 9 8 is held both in a money market account, $330,289, and in a $5,701,471 portfolio of Treasury and federal agency securities shown on Attachment A. Net interest payments received on securities in the District’s portfolio were $16,067 and funds held in money market accounts earned dividends of $3,424. Investment manager fees paid during the quarter were $2,767, and amortization on premiums / accretion of discounts taken at time of purchase of certain securities increased the value of the portfolio by $5,051. There were no District transfers to or from this investment account during the quarter. The following schedule summarizes the activity for Unrestricted Investments during the Quarter ended September 30, 2023: A cco unt Beg Bal Depo sit s/ (Wit hd rawals)Earning s Fees Disc / Prem A mo rt izat ion Ending Balance LA IF 1 3 ,7 2 2 ,1 5 5$(2 ,00 0 ,00 0 )$ 7 3 ,5 4 4$ -$ -$ 11,795,699$ CBB W e alt h Mgt 6 ,0 0 9 ,9 8 4 -1 9 ,4 9 1 (2 ,766 )5 ,051 6,031,760 Restricted Investments Accounts opened with US Bank are used to receive District deposits, from which the Trustee (US Bank) pays District bondholders. Semiannual bond payment dates are April 1st and October 1st. The District made deposits to the Payment funds on August 16th in order for the Trustee to make payments to bondholders on October 2nd, 2023. Summary Schedule of US Bank Trustee Accounts The following schedule summarizes activity in the US Bank accounts for the Quarter ended September 30, 2023: 202 0 A A cco unt s Beg Bal Dist rict Depo sit s Earning s Transf ers Wit hdrawals/ Payment s End ing Balance P ayme nt Fd -$ 1 ,3 1 0,1 75$ 4,120$ (1,314 ,29 5 )$-$ -$ Int e re st A c c t 617 --324 ,29 5 -32 4 ,9 1 2 P rinc ipal A c c t ---990 ,00 0 -99 0 ,0 0 0 202 0 B A cco unt s Beg Bal Dist rict Depo sit s Earning s Transf ers Wit hdrawals/ Payment s End ing Balance P ayme nt Fd -$ 4 4 1,6 36$ -$ (441 ,63 6 )$ -$ -$ Int e re st A c c t ---161 ,63 6 -16 1 ,6 3 6 P rinc ipal A c c t ---280 ,00 0 -28 0 ,0 0 0 Agenda Item #2b October 25, 20233 Meeting Date: October 25, 2023 Agenda Item #2b Consent Item 8 9 8 AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS 1. Investment Report for the Quarter Ended September 30 2023 2. Attachment A - CBB Investment Activity Report for Quarter Ended September 30 2023 EAST VALLEY WATER DISTRICT Investment Activity Quarter Ended September 30, 2023 Activity (Book Value) Purch Date Units / Face Value Maturity Date Amort Cost Adjustment Adjusted Cost 7/1/2023 Matured / Called Adjusted Cost 9/30/2023 Market ValueIssuerCUSIPYield7/1/2023 Purchases Total Water Sewer 10/19/21 03/31/21 01/21/20 08/31/22 05/22/23 06/15/23 09/07/23 07/30/20 08/06/20 09/30/21 03/30/21 03/30/21 03/30/21 09/20/21 09/30/21 10/18/21 10/26/21 10/27/21 10/28/21 11/24/21 11/30/21 11/30/21 08/30/22 11/23/21 US Treasury Note US Treasury Note Tenn Valley Authority US Treasury N/B US Treasury Note US Treasury Bill US Treasury Bill Federal Home Loan Bank Freddie Mac Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Farm Credit Bank 91282CAZ4 9128CBT7 0.375% 0.750% 2.875% 3.125% 3.875% 5.110% 5.537% 0.550% 0.625% 1.030% 1.000% 0.800% 0.750% 0.250% 1.020% 0.550% 1.250% 0.480% 0.850% 0.600% 1.000% 1.050% 3.700% 1.430% 500,000 11/30/25 03/31/26 09/15/24 08/31/24 04/30/25 12/14/23 03/07/24 07/30/24 08/19/25 09/30/26 03/30/26 05/30/25 06/30/25 12/28/23 09/30/26 10/29/25 10/26/26 09/01/23 10/28/24 11/24/23 02/28/25 11/25/24 02/28/24 11/23/26 495,306.53 497,434.83 301,927.97 299,838.00 298,048.18 292,848.16 - 249,982.85 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,978.88 400,000.00 198,743.92 299,997.00 100,000.37 100,000.00 200,000.00 200,000.00 99,992.67 250,000.00 200,000.00 484.25 195.79 (392.78) 35.69 261.14 3,963.67 353.33 3.84 495,790.78 497,630.62 301,535.19 299,873.69 298,309.32 296,811.83 353.33 249,986.69 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,989.56 400,000.00 198,877.75 299,997.44 100,000.00 100,000.00 200,000.00 200,000.00 99,993.86 250,000.00 200,000.00 495,790.78 497,630.62 301,535.19 299,873.69 298,309.32 296,811.83 97,673.89 249,986.69 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,989.56 400,000.00 198,877.75 299,997.44 - 495,790.78 497,630.62 301,535.19 299,873.69 298,309.32 296,811.83 453,030.00 452,150.00 292,572.00 294,036.00 293,895.00 296,775.00 97,681.00 239,817.50 91,699.00 177,544.00 270,657.00 278,262.00 184,744.00 113,587.80 354,980.00 181,688.00 267,465.00 - 500,000 300,000 300,000 300,000 300,000 100,000 250,000 100,000 200,000 300,000 300,000 200,000 115,000 400,000 200,000 300,000 - 880591ER9 91282CFG1 91282CGX3 912797FU6 912797GQ4 3130AJUN7 3134GWMY9 3030APAZ8 3130ALUF9 3130ALPB4 3130ALU93 3130AKL79 3130AP6M2 3130AKC95 3130APJ55 3130AJK24 3130APLB9 3130APWP6 3130APUY9 3130AQ2H5 3130AT2N6 3133ENEM8 97,320.56 97,673.89 249,986.69 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,989.56 400,000.00 10.68 133.83 0.44 (0.37) 198,877.75 299,997.44 - 100,000.00 200,000.00 200,000.00 99,993.86 250,000.00 200,000.00 100,000.00 100,000.00 100,000 200,000 200,000 100,000 250,000 200,000 100,000.00 200,000.00 200,000.00 99,993.86 250,000.00 200,000.00 95,112.00 198,558.00 187,776.00 95,014.00 248,117.50 178,804.00 1.19 5,715,000.00 5,699,099.36 5,050.70 5,704,150.06 97,320.56 5,701,470.62 3,854,927.68 1,846,542.94 5,343,964.80 Attachment A Agenda Item #2c October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #2c Consent Item 8 9 9 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Accept and File Financial Statements for July 2023 RECOMMENDATION That the Board of Directors accept and file the attached financial statements as of, and for the period ended, July 31, 2023. BACKGROUND / ANALYSIS The East Valley Water District adopted an annual budget on June 28, 2023 for fiscal year 2023-24. In accordance with District Administrative Policy 7.7, the Chief Financial Officer provides regular budget updates to the Board of Directors (Board). Included herewith for the Board’s review is a summary of the District’s financial results, as of July 31, 2023. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer Agenda Item #2c October 25, 20232 Meeting Date: October 25, 2023 Agenda Item #2c Consent Item 8 9 9 ATTACHMENTS 1. July 2023 Financial Statement Monthly Review 2. July 2023 Financial Statements FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 1 The following is a highlight summary of the District’s financial results as of July 31, 2023. Please note all values presented are in millions (unless otherwise noted). Statement of Net Position Total assets at July 31, 2023 are $409.11 million. CLASSIFICATION WATER WASTEWATER RECLAMATION DISTRICT TOTAL Cash and Investments $ 16.96 $ 6.09 $ 2.75 $ 25.80 Utility Plant, Net 96.95 17.00 - 113.95 Other Assets 50.51 31.00 187.85 269.36 Current Liabilities 11.99 7.15 31.88 51.02 Long Term Liabilities 44.67 8.18 155.84 208.69 Beginning Net Position 105.34 38.68 3.01 147.03 Change in Equity 0.82 (0.26) (0.13) 0.43 TOTAL NET $ 106.16 $ 38.42 $ 2.88 $ 147.46 Cash and Investments Cash and Investments are $25.80 million for the month of July, a decrease of $2.35 million from the prior month. In July the District paid $1.3 million for Property/Liability Insurance as well as Workers’ Compensation insurance and $957K for the CalPERS Annual Unfunded Accrued Liability payment. The District’s Due from Other Governments includes a receivable for work performed on the Recycled Water Pipeline from June through July and Grants Receivable from the State of California bringing the ending balance as of July 31, 2023 to $21.20 million. $0 $5 $10 $15 $20 $25 $30 Mi l l i o n s CASH & INVESTMENTS Restricted Unrestricted FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 2 Statement of Revenues & Expenses Total Revenues & Expenses through July 31, 2023 are summarized below (in millions): Column1 WATER WASTEWATER RECLAMATION DISTRICT TOTAL Revenue $ 2.58 $ 0.49 $ 0.86 $ 3.93 Expense 1.76 0.75 0.99 3.50 Water Sales by Tier Water Sales for the month ending July 31, 2023 were $1.62M; $76K under staff projections for the month and $76K under projections year-to-date. $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 Mi l l i o n s WATER SALES BY TIER Tier 1 Tier 2 Tier 3 FY 2023-24 Projection For a more detailed presentation, operating results are presented in three ways on pages 2 through 6 of the attached financial statements for the period ending July 31, 2023. First is a one-page summary with monthly and year-to-date totals for revenue and expenses, presented by Expense Category. Second is a one-page summary with monthly and year- to-date totals for Revenues and Expense by Program. Third is a Budget -to-Actual presentation of program expense detail. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 3 Water Sales by Customer Class The table below shows the District’s water sales for the month of July 2023 by customer class. The following icons are to compliment the graph below: positive change, no change, negative change when comparing actuals versus projections. CUSTOMER CLASS ACTUAL PROJECTION $ VARIANCE % VARIANCE Residential 958,598$ 970,000$ (11,402)$ -1% Multi-Family 289,910 329,000 (39,090) -12% Commercial 128,616 133,000 (4,384) -3% Irrigation 245,524 267,000 (21,476) -8% TOTAL $ 1,622,648 $ 1,699,000 $ (76,352)-4% The following table displays customer class by tier for the month of July 2023: CUSTOMER CLASS TIER ACTUAL PROJECTION $ VARIANCE % VARIANCE Residential Tier 1 349,544$ 369,000$ (19,456)$ -5% Residential Tier 2 506,789 479,000 27,789 6% Residential Tier 3 102,265 122,000 (19,735) -16% Multi-Family Tier 1 142,982 157,000 (14,018) -9% Multi-Family Tier 2 88,543 115,000 (26,457) -23% Multi-Family Tier 3 58,385 57,000 1,385 2% Commercial Tier 1 95,927 96,000 (73) 0% Commercial Tier 2 8,077 9,000 (923) -10% Commercial Tier 3 24,612 28,000 (3,388) -12% Irrigation Tier 2 139,442 170,000 (30,558) -18% Irrigation Tier 3 106,082 97,000 9,082 9% TOTAL $ 1,622,648 $ 1,699,000 $ (76,352)-4% Legend - Positive Change in Actuals - Neutral Change in Actuals - Negative Change in Actuals FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 4 The chart below is a comparative illustration of Water Revenue year -to-date compared to last year’s Water Revenue year-to-date as of July. As noted in the graph, Water Revenue experienced a minor decrease over last year. Water consumption decreased 8.80 million gallons (11.7K HCF) compared to July of 2022. $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 7/31/2022 7/31/2023 Mi l l i o n s COMPARATIVE MONTHLY WATER REVENUE (WATER SALES & METER CHARGES) Meter Tier 1 Tier 2 Tier 3 Total -$2,456,817 Total -$2,454,842 FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 5 Water Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Water Fund operating cost centers for FY 2022-23 and FY 2023-24. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 6 Wastewater Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Wastewater Fund operating cost centers for FY 2022-23 and FY 2023-24. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING JULY 31, 2023 page | 7 Water Reclamation Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Water Reclamation Fund operating cost centers for FY 2022-23 and FY 2023-24. WATER WASTEWATER RECLAMATION DISTRICT TOTAL Assets: Current Assets: 01 Cash and Cash Equivalents 7,320,495.62$ 738,504.19$ 2,750,000.00$ 10,808,999.81$ 02 Investments 3,309,627.32 2,019,618.14 - 5,329,245.46 03 Accounts Receivable, Net 4,512,164.93 311,471.64 548,409.10 5,372,045.67 04 - Interest Receivable - - - - 14*05 Other Receivables 2,164,399.72 - - 2,164,399.72 07 Due from Sewer Fund 3,770,000.00 - - 3,770,000.00 07. Due from Reclamation Fund 11,755,906.87 11,380,604.27 - 23,136,511.14 06 Due from Other Governments (95,690.71) - 21,294,667.78 21,198,977.07 08 Inventory 953,853.13 6,721.16 - 960,574.29 09 Prepaid Expenses 212,514.89 32,079.63 - 244,594.52 33,903,271.77 14,488,999.03 24,593,076.88 72,985,347.68 Non-Current Assets: 10 Restricted Cash and Cash Equivalents 6,328,129.11 3,331,081.42 - 9,659,210.53 11 Capital Assets not being Depreciated 21,695,668.86 17,446,948.24 166,002,371.96 205,144,989.06 13 Capital Assets, Net 96,948,239.29 16,997,047.78 - 113,945,287.07 124,972,037.26 37,775,077.44 166,002,371.96 328,749,486.66 Total Assets:158,875,309.03 52,264,076.47 190,595,448.84 401,734,834.34 Deferred Outflow Of Resources 24*Deferred Charge on Refunding 581,826.53 272,820.05 - 854,646.58 25 Deferred Outflows - Pensions 4,954,821.80 1,546,575.07 - 6,501,396.87 164,411,957.36 54,083,471.59 190,595,448.84 409,090,877.79 Current Liabilities: 22 Accounts Payable and Accrued Expenses 7,023,613.98 29,842.00 - 7,053,455.98 29 Due to Water Fund - 3,770,000.00 11,755,906.87 15,525,906.87 29. Due to Sewer Fund - - 11,380,604.27 11,380,604.27 23 Accrued Payroll and Benefits - - - - 15 Customer Service Deposits 1,414,945.97 - - 1,414,945.97 16 Construction Advances and Retentions 498,101.40 3,010,696.98 8,676,978.15 12,185,776.53 17 Accrued Interest Payable 239,066.72 24,710.75 - 263,777.47 18 Current Portion of Compensated Absences 449,527.20 137,616.80 65,033.00 652,177.00 19 Current Portion of Long-Term Debt 2,360,875.55 175,000.00 - 2,535,875.55 11,986,130.82 7,147,866.53 31,878,522.29 51,012,519.64 Non-Current Liabilities: 20 Compensated Absences, less current portion 513,775.49 120,648.47 117,403.00 751,826.96 28 Net Pension Liability 10,600,994.28 3,254,141.95 - 13,855,136.23 21 Long Term Debt, Less Current Portion 33,555,886.89 4,800,908.00 155,723,918.00 194,080,712.89 27 Other Liabilities 1,173.64 - - 1,173.64 44,671,830.30 8,175,698.42 155,841,321.00 208,688,849.72 Total Liabilities:56,657,961.12 15,323,564.95 187,719,843.29 259,701,369.36 Deferred Inflows Of Resources 26 Deferred Inflows - Pensions 1,589,671.06 336,902.07 - 1,926,573.13 58,247,632.18 15,660,467.02 187,719,843.29 261,627,942.49 31 Equity 105,340,469.37 38,679,547.28 3,008,522.25 147,028,538.90 105,340,469.37 38,679,547.28 3,008,522.25 147,028,538.90 Tot Total Revenue 2,579,008.15 491,644.65 858,793.03 3,929,445.83 Tot Total Expense 1,755,152.34 748,187.36 991,709.73 3,495,049.43 823,855.81 (256,542.71) (132,916.70) 434,396.40 106,164,325.18 38,423,004.57 2,875,605.55 147,462,935.30 164,411,957.36$ 54,083,471.59$ 190,595,448.84$ 409,090,877.79$ Total Liabilities, Equity and Current Surplus (Deficit): Total Beginning Equity: Equity: Revenues Over/Under Expenses Total Current Liabilities: Total Liabilities and Deferred Inflows of Resources: Total Non-Current Liabilities: Unaudited As of July 31, 2023 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: Page 1 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 1,622,647.73$ 1,622,647.73$ 18,345,000.00$ -$ -$ -$ -$ -$ 692,000.00$ 19,037,000.00$ 17,414,352.27$ 42 Meter Charges 832,246.01 832,246.01 9,996,000.00 - - - - - - 9,996,000.00 9,163,753.99 43 Penalties 42,519.70 42,519.70 450,000.00 4,670.86 4,670.86 60,000.00 - - - 510,000.00 462,809.44 44 Wastewater System Charges - - - 486,973.79 486,973.79 5,968,000.00 - - - 5,968,000.00 5,481,026.21 45 Wastewater Treatment Charges - - - - - - 858,793.03 858,793.03 10,279,000.00 10,279,000.00 9,420,206.97 46 Other Operating Revenue 79,184.05 79,184.05 42,000.00 - - - - - 1,252,000.00 1,294,000.00 1,214,815.95 47 Non Operating Revenue 2,410.66 2,410.66 220,000.00 - - 20,000.00 - - 100,000.00 340,000.00 337,589.34 48 Gain or Loss on Disposition - - - - - - - - - - - 56 Benefits - - - - - - - - - - - 68 Depreciation - - - - - - - - - - - Revenue Total:2,579,008.15 2,579,008.15 29,053,000.00 491,644.65 491,644.65 6,048,000.00 858,793.03 858,793.03 12,323,000.00 47,424,000.00 43,494,554.17 - - - - - - - - Expense by Category 51 Labor 215,171.46 215,171.46 5,596,200.00 60,229.44 60,229.44 1,627,100.00 30,817.67 30,817.67 1,004,700.00 8,228,000.00 7,921,781.43 52 Temporary Labor 793.38 793.38 32,900.00 340.02 340.02 14,100.00 - - - 47,000.00 45,866.60 56 Benefits 730,820.40 730,820.40 2,915,800.00 168,557.87 168,557.87 756,300.00 109,799.51 109,799.51 492,900.00 4,165,000.00 3,155,822.22 63 Contract Services (141,954.67) (141,954.67) 5,048,000.00 87,728.48 87,728.48 1,582,100.00 820,666.60 820,666.60 6,018,900.00 12,649,000.00 11,882,559.59 65 Professional Development 21,296.37 21,296.37 291,000.00 4,394.49 4,394.49 104,000.00 1,099.00 1,099.00 21,000.00 416,000.00 389,210.14 53 Overtime 10,775.12 10,775.12 371,000.00 1,322.19 1,322.19 25,800.00 1,270.67 1,270.67 29,200.00 426,000.00 412,632.02 62 Materials and Supplies 113,437.18 113,437.18 1,331,500.00 9,002.64 9,002.64 133,100.00 6,115.28 6,115.28 751,400.00 2,216,000.00 2,087,444.90 64 Utilities (121,457.41) (121,457.41) 4,013,800.00 2,438.82 2,438.82 250,300.00 21,941.00 21,941.00 2,129,900.00 6,394,000.00 6,491,077.59 52 Temporary Labor 793.38 793.38 32,900.00 340.02 340.02 14,100.00 - - - 47,000.00 45,866.60 67 Other 923,426.64 923,426.64 1,300,900.00 413,801.19 413,801.19 341,100.00 - - 590,000.00 2,232,000.00 894,772.17 54 Standby 2,050.49 2,050.49 33,000.00 32.20 32.20 2,000.00 - - 55,000.00 90,000.00 87,917.31 61 Water Supply - - 768,000.00 - - - - - - 768,000.00 768,000.00 71 Debt Service - - 3,103,000.00 - - 273,000.00 - - - 3,376,000.00 3,376,000.00 81 Capital Improvement - - 3,425,000.00 - - 300,000.00 - - - 3,725,000.00 3,725,000.00 82 Capital Outlay - - 695,000.00 - - 260,000.00 - - 210,000.00 1,165,000.00 1,165,000.00 83 Accounting Income Add back - - - - - - - - - - - 88 Transfer to Reserves - - 95,000.00 - - 365,000.00 - - 1,020,000.00 1,480,000.00 1,480,000.00 99 Transfer from Reserves - - - - - - - - - - - Expense Total:1,755,152.34 1,755,152.34 29,053,000.00 748,187.36 748,187.36 6,048,000.00 991,709.73 991,709.73 12,323,000.00 47,424,000.00 43,928,950.57 Total Surplus (Deficit):823,855.81$ 823,855.81$ -$ (256,542.71)$ (256,542.71)$ -$ (132,916.70)$ (132,916.70)$ -$ -$ (434,396.40)$ Unaudited Revenue and Expense Budget-to-Actual by Category Month Ended July 31, 2023 WATER WASTEWATER DISTRICT WIDERECLAMATION Page 2 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 1,622,647.73$ 1,622,647.73$ 18,345,000.00$ -$ -$ -$ -$ -$ 692,000.00$ 19,037,000.00$ 17,414,352.27$ 42 Meter Charges 832,246.01 832,246.01 9,996,000.00 - - - - - - 9,996,000.00 9,163,753.99 43 Penalties 42,519.70 42,519.70 450,000.00 4,670.86 4,670.86 60,000.00 - - - 510,000.00 462,809.44 44 Wastewater System Charges - - - 486,973.79 486,973.79 5,968,000.00 - - - 5,968,000.00 5,481,026.21 45 Wastewater Treatment Charges - - - - - - 858,793.03 858,793.03 10,279,000.00 10,279,000.00 9,420,206.97 46 Other Operating Revenue 79,184.05 79,184.05 42,000.00 - - - - - 1,252,000.00 1,294,000.00 1,214,815.95 47 Non Operating Revenue 2,410.66 2,410.66 220,000.00 - - 20,000.00 - - 100,000.00 340,000.00 337,589.34 Revenue Total:2,579,008.15 2,579,008.15 29,053,000.00 491,644.65 491,644.65 6,048,000.00 858,793.03 858,793.03 12,323,000.00 47,424,000.00 43,494,554.17 Progra 1000 - Board of Directors (26,817.35) (26,817.35) 254,800.00 (11,532.75) (11,532.75) 109,200.00 - - - 364,000.00 402,350.10 Progra 2000 - General Administration 49,966.09 49,966.09 959,000.00 21,414.03 21,414.03 411,000.00 - - - 1,370,000.00 1,298,619.88 Progra 2100 - Human Resources 1,050,601.00 1,050,601.00 1,702,400.00 449,620.56 449,620.56 564,600.00 - - 590,000.00 2,857,000.00 1,356,778.44 Progra 2200 - Public Affairs 44,706.69 44,706.69 904,400.00 (5,976.24) (5,976.24) 387,600.00 - - - 1,292,000.00 1,253,269.55 Progra 2300 - Conservation (363,118.99) (363,118.99) 689,000.00 - - - - - - 689,000.00 1,052,118.99 Progra 3000 - Finance 47,511.72 47,511.72 940,800.00 20,362.07 20,362.07 403,200.00 - - - 1,344,000.00 1,276,126.21 Progra 3200 - Information Technology 103,020.31 103,020.31 1,205,400.00 44,151.40 44,151.40 516,600.00 - - - 1,722,000.00 1,574,828.29 Progra 3300 - Customer Service 124,467.91 124,467.91 1,304,100.00 53,128.05 53,128.05 558,900.00 - - - 1,863,000.00 1,685,404.04 Progra 3400 - Meter Service 27,545.16 27,545.16 292,000.00 - - - - - - 292,000.00 264,454.84 Progra 4000 - Engineering 28,872.11 28,872.11 999,600.00 4,892.13 4,892.13 428,400.00 - - - 1,428,000.00 1,394,235.76 Progra 5000 - Water Production (14,212.33) (14,212.33) 5,992,000.00 - - - - - - 5,992,000.00 6,006,212.33 Progra 5100 - Water Treatment 115,734.83 115,734.83 1,082,000.00 - - - - - - 1,082,000.00 966,265.17 Progra 5200 - Water Quality 30,558.85 30,558.85 546,000.00 - - - - - - 546,000.00 515,441.15 Progra 6000 - Field Maintenance Administration 69,686.23 69,686.23 418,500.00 7,590.90 7,590.90 46,500.00 - - - 465,000.00 387,722.87 Progra 6100 - Water Maintenance 231,566.97 231,566.97 2,826,000.00 - - - - - - 2,826,000.00 2,594,433.03 Progra 6200 - Wastewater Maintenance - - - 41,866.78 41,866.78 867,000.00 - - - 867,000.00 825,133.22 Progra 6300 - Water Reclamation - - - - - - 838,718.62 838,718.62 9,896,000.00 9,896,000.00 9,057,281.38 Progra 7000 - Facilities Maintenance 180,986.91 180,986.91 1,011,000.00 116,385.36 116,385.36 405,000.00 152,991.11 152,991.11 607,000.00 2,023,000.00 1,572,636.62 Progra 7100 - Fleet Maintenance 54,076.23 54,076.23 608,000.00 6,285.07 6,285.07 152,000.00 - - - 760,000.00 699,638.70 Progra 8000 - Capital - - 7,318,000.00 - - 1,198,000.00 - - 1,230,000.00 9,746,000.00 9,746,000.00 Total Surplus (Deficit):823,855.81$ 823,855.81$ -$ (256,542.71)$ (256,542.71)$ -$ (132,916.70)$ (132,916.70)$ -$ -$ (434,396.40)$ . WATER WASTEWATER DISTRICT WIDE Revenue and Expense Budget-to-Actual by Program Month Ended July 31, 2023 Unaudited RECLAMATION Page 3 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 1,622,647.73$ 1,622,647.73$ 18,345,000.00$ -$ -$ -$ -$ -$ 692,000.00$ 19,037,000.00$ 17,414,352.27$ 42 Meter Charges 832,246.01 832,246.01 9,996,000.00 - - - - - - 9,996,000.00 9,163,753.99 43 Penalties 42,519.70 42,519.70 450,000.00 4,670.86 4,670.86 60,000.00 - - - 510,000.00 462,809.44 44 Wastewater System Charges - - - 486,973.79 486,973.79 5,968,000.00 - - - 5,968,000.00 5,481,026.21 45 Wastewater Treatment Charges - - - - - - 858,793.03 858,793.03 10,279,000.00 10,279,000.00 9,420,206.97 46 Other Operating Revenue 79,184.05 79,184.05 42,000.00 - - - - - 1,252,000.00 1,294,000.00 1,214,815.95 47 Non Operating Revenue 2,410.66 2,410.66 220,000.00 - - 20,000.00 - - 100,000.00 340,000.00 337,589.34 48 Gain or Loss on Disposition - - - - - - - - - - - 56 Benefits - - - - - - - - - - - 68 Depreciation - - - - - - - - - - - Revenue Total:2,579,008.15 2,579,008.15 29,053,000.00 491,644.65 491,644.65 6,048,000.00 858,793.03 858,793.03 12,323,000.00 47,424,000.00 43,494,554.17 - - - - - - - - Program: 1000 - Board of Directors - - - - - 51 Labor 6,772.50$ 6,772.50$ 98,000.00$ 2,902.50$ 2,902.50$ 42,000.00$ -$ -$ -$ 140,000.00$ 130,325.00$ 56 Benefits 4,145.50 4,145.50 63,000.00 1,776.63 1,776.63 27,000.00 - - - 90,000.00 84,077.87 62 Materials and Supplies - - 2,100.00 - - 900.00 - - - 3,000.00 3,000.00 63 Contract Services (39,728.62) (39,728.62) 77,700.00 (17,026.55) (17,026.55) 33,300.00 - - - 111,000.00 167,755.17 65 Professional Development 1,993.27 1,993.27 14,000.00 814.67 814.67 6,000.00 - - - 20,000.00 17,192.06 Program: 1000 - Board of Directors Total:(26,817.35) (26,817.35) 254,800.00 (11,532.75) (11,532.75) 109,200.00 - - - 364,000.00 402,350.10 - - - - - - Program: 2000 - General Administration - - - - - 51 Labor 14,849.08 14,849.08 417,900.00 6,363.92 6,363.92 179,100.00 - - - 597,000.00 575,787.00 52 Temporary Labor 793.38 793.38 21,000.00 340.02 340.02 9,000.00 - - - 30,000.00 28,866.60 53 Overtime 100.25 100.25 2,800.00 42.97 42.97 1,200.00 - - - 4,000.00 3,856.78 56 Benefits 28,797.42 28,797.42 184,800.00 12,341.70 12,341.70 79,200.00 - - - 264,000.00 222,860.88 62 Materials and Supplies - - 4,900.00 - - 2,100.00 - - - 7,000.00 7,000.00 63 Contract Services 3,932.25 3,932.25 217,000.00 1,685.25 1,685.25 93,000.00 - - - 310,000.00 304,382.50 64 Utilities 117.27 117.27 2,800.00 50.26 50.26 1,200.00 - - - 4,000.00 3,832.47 65 Professional Development 1,376.44 1,376.44 107,800.00 589.91 589.91 46,200.00 - - - 154,000.00 152,033.65 Program: 2000 - General Administration Total:49,966.09 49,966.09 959,000.00 21,414.03 21,414.03 411,000.00 - - - 1,370,000.00 1,298,619.88 - - - - - - Program: 2100 - Human Resources - - - - - - 51 Labor 8,813.00 8,813.00 230,300.00 3,777.00 3,777.00 98,700.00 - - - 329,000.00 316,410.00 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 2,100.00 - - 900.00 - - - 3,000.00 3,000.00 56 Benefits 54,385.58 54,385.58 139,300.00 23,308.11 23,308.11 59,700.00 - - - 199,000.00 121,306.31 62 Materials and Supplies 127.03 127.03 4,900.00 54.44 54.44 2,100.00 - - - 7,000.00 6,818.53 63 Contract Services 17,012.37 17,012.37 109,200.00 7,291.01 7,291.01 46,800.00 - - - 156,000.00 131,696.62 64 Utilities 42.27 42.27 700.00 18.11 18.11 300.00 - - - 1,000.00 939.62 65 Professional Development 4,684.65 4,684.65 39,200.00 1,370.70 1,370.70 16,800.00 - - - 56,000.00 49,944.65 67 Other 965,536.10 965,536.10 1,176,700.00 413,801.19 413,801.19 339,300.00 - - 590,000.00 2,106,000.00 726,662.71 Program: 2100 - Human Resources Total:1,050,601.00 1,050,601.00 1,702,400.00 449,620.56 449,620.56 564,600.00 - - 590,000.00 2,857,000.00 1,356,778.44 - - - - - - Program: 2200 - Public Affairs - - - - - - 51 Labor 12,833.53 12,833.53 300,300.00 5,500.07 5,500.07 128,700.00 - - - 429,000.00 410,666.40 52 Temporary Labor - - - - - - - - - - - 53 Overtime 157.31 157.31 11,900.00 67.41 67.41 5,100.00 - - - 17,000.00 16,775.28 56 Benefits 18,102.71 18,102.71 88,900.00 7,758.22 7,758.22 38,100.00 - - - 127,000.00 101,139.07 62 Materials and Supplies 754.81 754.81 58,800.00 323.49 323.49 25,200.00 - - - 84,000.00 82,921.70 63 Contract Services 12,111.32 12,111.32 385,700.00 (19,945.58) (19,945.58) 165,300.00 - - - 551,000.00 558,834.26 64 Utilities 194.50 194.50 33,600.00 83.35 83.35 14,400.00 - - - 48,000.00 47,722.15 65 Professional Development 552.51 552.51 25,200.00 236.80 236.80 10,800.00 - - - 36,000.00 35,210.69 Program: 2200 - Public Affairs Total:44,706.69 44,706.69 904,400.00 (5,976.24) (5,976.24) 387,600.00 - - - 1,292,000.00 1,253,269.55 - - - - - - Program: 2300 - Conservation - - - - - - 51 Labor 4,256.00 4,256.00 107,000.00 - - - - - - 107,000.00 102,744.00 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 7,000.00 - - - - - - 7,000.00 7,000.00 56 Benefits 483.12 483.12 42,000.00 - - - - - - 42,000.00 41,516.88 62 Materials and Supplies - - 26,000.00 - - - - - - 26,000.00 26,000.00 63 Contract Services (325,893.56) (325,893.56) 346,000.00 - - - - - - 346,000.00 671,893.56 64 Utilities 31.95 31.95 26,000.00 - - - - - - 26,000.00 25,968.05 65 Professional Development - - 15,000.00 - - - - - - 15,000.00 15,000.00 67 Other (41,996.50) (41,996.50) 120,000.00 - - - - - - 120,000.00 161,996.50 Program: 2300 - Conservation Total:(363,118.99) (363,118.99) 689,000.00 - - - - - - 689,000.00 1,052,118.99 Program: 3000 - Finance - - - - - - 51 Labor 15,822.54 15,822.54 542,500.00 6,781.06 6,781.06 232,500.00 - - - 775,000.00 752,396.40 52 Temporary Labor - - - - - - - - - - - 53 Overtime 105.45 105.45 9,100.00 45.19 45.19 3,900.00 - - - 13,000.00 12,849.36 56 Benefits 74,486.65 74,486.65 261,800.00 31,922.78 31,922.78 112,200.00 - - - 374,000.00 267,590.57 62 Materials and Supplies - - 4,900.00 - - 2,100.00 - - - 7,000.00 7,000.00 63 Contract Services (43,340.20) (43,340.20) 98,700.00 (18,574.37) (18,574.37) 42,300.00 - - - 141,000.00 202,914.57 64 Utilities 83.01 83.01 2,800.00 35.58 35.58 1,200.00 - - - 4,000.00 3,881.41 65 Professional Development 354.27 354.27 21,000.00 151.83 151.83 9,000.00 - - - 30,000.00 29,493.90 67 Other - - - - - - - - - - - Program: 3000 - Finance Total:47,511.72 47,511.72 940,800.00 20,362.07 20,362.07 403,200.00 - - - 1,344,000.00 1,276,126.21 - - - - - - Month Ended July 31, 2023 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDERECLAMATION Page 4 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Month Ended July 31, 2023 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDERECLAMATION Program: 3200 - Information Technology - - - - - - 51 Labor 11,607.71 11,607.71 303,100.00 4,974.69 4,974.69 129,900.00 - - - 433,000.00 416,417.60 52 Temporary Labor - - 11,900.00 - - 5,100.00 - - - 17,000.00 17,000.00 53 Overtime - - - - - - - - - - - 56 Benefits 71,464.78 71,464.78 181,300.00 30,627.65 30,627.65 77,700.00 - - - 259,000.00 156,907.57 62 Materials and Supplies 7,644.77 7,644.77 49,000.00 3,276.31 3,276.31 21,000.00 - - - 70,000.00 59,078.92 63 Contract Services 11,389.41 11,389.41 648,200.00 4,881.18 4,881.18 277,800.00 - - - 926,000.00 909,729.41 64 Utilities 844.30 844.30 8,400.00 361.85 361.85 3,600.00 - - - 12,000.00 10,793.85 65 Professional Development 69.34 69.34 3,500.00 29.72 29.72 1,500.00 - - - 5,000.00 4,900.94 Program: 3200 - Information Technology Total:103,020.31 103,020.31 1,205,400.00 44,151.40 44,151.40 516,600.00 - - - 1,722,000.00 1,574,828.29 - - - - - - Program: 3300 - Customer Service - - - - - - 51 Labor 16,417.38 16,417.38 433,300.00 7,035.98 7,035.98 185,700.00 - - - 619,000.00 595,546.64 52 Temporary Labor - - - - - - - - - - - 53 Overtime 281.48 281.48 4,900.00 120.64 120.64 2,100.00 - - - 7,000.00 6,597.88 56 Benefits 50,680.71 50,680.71 217,000.00 21,720.31 21,720.31 93,000.00 - - - 310,000.00 237,598.98 62 Materials and Supplies - - 4,900.00 - - 2,100.00 - - - 7,000.00 7,000.00 63 Contract Services 56,585.97 56,585.97 515,200.00 24,251.12 24,251.12 220,800.00 - - - 736,000.00 655,162.91 64 Utilities 615.33 615.33 112,700.00 - - 48,300.00 - - - 161,000.00 160,384.67 65 Professional Development - - 11,900.00 - - 5,100.00 - - - 17,000.00 17,000.00 67 Other (112.96) (112.96) 4,200.00 - - 1,800.00 - - - 6,000.00 6,112.96 Program: 3300 - Customer Service Total:124,467.91 124,467.91 1,304,100.00 53,128.05 53,128.05 558,900.00 - - - 1,863,000.00 1,685,404.04 - - - - - - Program: 3400 - Meter Service - - - - - - 51 Labor 6,270.40 6,270.40 173,000.00 - - - - - - 173,000.00 166,729.60 53 Overtime - - 6,000.00 - - - - - - 6,000.00 6,000.00 56 Benefits 21,254.05 21,254.05 101,000.00 - - - - - - 101,000.00 79,745.95 62 Materials and Supplies - - 4,000.00 - - - - - - 4,000.00 4,000.00 63 Contract Services 20.71 20.71 7,000.00 - - - - - - 7,000.00 6,979.29 64 Utilities - - 1,000.00 - - - - - - 1,000.00 1,000.00 65 Professional Development - - - - - - - - - - - Program: 3400 - Meter Service Total:27,545.16 27,545.16 292,000.00 - - - - - - 292,000.00 264,454.84 - - - - - - Program: 4000 - Engineering - - - - - - 51 Labor 15,503.88 15,503.88 438,900.00 6,644.52 6,644.52 188,100.00 - - - 627,000.00 604,851.60 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 2,100.00 - - 900.00 - - - 3,000.00 3,000.00 56 Benefits 1,681.90 1,681.90 107,100.00 720.80 720.80 45,900.00 - - - 153,000.00 150,597.30 62 Materials and Supplies - - 13,300.00 - - 5,700.00 - - - 19,000.00 19,000.00 63 Contract Services 1,733.00 1,733.00 296,100.00 (3,061.00) (3,061.00) 126,900.00 - - - 423,000.00 424,328.00 64 Utilities 9,953.33 9,953.33 131,600.00 587.81 587.81 56,400.00 - - - 188,000.00 177,458.86 65 Professional Development - - 10,500.00 - - 4,500.00 - - - 15,000.00 15,000.00 Program: 4000 - Engineering Total:28,872.11 28,872.11 999,600.00 4,892.13 4,892.13 428,400.00 - - - 1,428,000.00 1,394,235.76 - - - - - - Program: 5000 - Water Production - - - - - - 51 Labor 29,668.96 29,668.96 790,000.00 - - - - - - 790,000.00 760,331.04 53 Overtime 5,841.05 5,841.05 46,000.00 - - - - - - 46,000.00 40,158.95 54 Standby 1,480.12 1,480.12 15,000.00 - - - - - - 15,000.00 13,519.88 56 Benefits 124,293.08 124,293.08 400,000.00 - - - - - - 400,000.00 275,706.92 61 Water Supply - - 768,000.00 - - - - - - 768,000.00 768,000.00 62 Materials and Supplies 15,491.25 15,491.25 335,000.00 - - - - - - 335,000.00 319,508.75 63 Contract Services (12,024.24) (12,024.24) 528,000.00 - - - - - - 528,000.00 540,024.24 64 Utilities (179,424.72) (179,424.72) 3,099,000.00 - - - - - - 3,099,000.00 3,278,424.72 65 Professional Development 462.17 462.17 11,000.00 - - - - - - 11,000.00 10,537.83 Program: 5000 - Water Production Total:(14,212.33) (14,212.33) 5,992,000.00 - - - - - - 5,992,000.00 6,006,212.33 - - - - - - Program: 5100 - Water Treatment - - - - - - 51 Labor 10,510.40 10,510.40 273,000.00 - - - - - - 273,000.00 262,489.60 53 Overtime 364.80 364.80 39,000.00 - - - - - - 39,000.00 38,635.20 56 Benefits 66,231.69 66,231.69 164,000.00 - - - - - - 164,000.00 97,768.31 62 Materials and Supplies 18,262.25 18,262.25 200,000.00 - - - - - - 200,000.00 181,737.75 63 Contract Services (7,596.14) (7,596.14) 224,000.00 - - - - - - 224,000.00 231,596.14 64 Utilities 27,961.83 27,961.83 182,000.00 - - - - - - 182,000.00 154,038.17 Program: 5100 - Water Treatment Total:115,734.83 115,734.83 1,082,000.00 - - - - - - 1,082,000.00 966,265.17 - - - - - - Program: 5200 - Water Quality - - - - - - 51 Labor 6,123.20 6,123.20 223,000.00 - - - - - - 223,000.00 216,876.80 53 Overtime - - 12,000.00 - - - - - - 12,000.00 12,000.00 56 Benefits 30,331.60 30,331.60 107,000.00 - - - - - - 107,000.00 76,668.40 62 Materials and Supplies 435.54 435.54 25,000.00 - - - - - - 25,000.00 24,564.46 63 Contract Services (6,331.49) (6,331.49) 170,000.00 - - - - - - 170,000.00 176,331.49 64 Utilities - - 2,000.00 - - - - - - 2,000.00 2,000.00 65 Professional Development - - 7,000.00 - - - - - - 7,000.00 7,000.00 Program: 5200 - Water Quality Total:30,558.85 30,558.85 546,000.00 - - - - - - 546,000.00 515,441.15 - - - - - - Page 5 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Month Ended July 31, 2023 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDERECLAMATION Program: 6000 - Field Maintenance Administration - - - - - - 51 Labor 7,370.94 7,370.94 195,300.00 812.03 812.03 21,700.00 - - - 217,000.00 208,817.03 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 1,800.00 - - 200.00 - - - 2,000.00 2,000.00 54 Standby 570.37 570.37 18,000.00 32.20 32.20 2,000.00 - - - 20,000.00 19,397.43 56 Benefits 47,518.36 47,518.36 142,200.00 5,276.60 5,276.60 15,800.00 - - - 158,000.00 105,205.04 62 Materials and Supplies 55.25 55.25 2,700.00 6.14 6.14 300.00 - - - 3,000.00 2,938.61 63 Contract Services 95.99 95.99 900.00 10.67 10.67 100.00 - - - 1,000.00 893.34 64 Utilities 2,271.60 2,271.60 36,900.00 252.40 252.40 4,100.00 - - - 41,000.00 38,476.00 65 Professional Development 11,803.72 11,803.72 20,700.00 1,200.86 1,200.86 2,300.00 - - - 23,000.00 9,995.42 Program: 6000 - Field Maintenance Administration Total 69,686.23 69,686.23 418,500.00 7,590.90 7,590.90 46,500.00 - - - 465,000.00 387,722.87 - - - - - - Program: 6100 - Water Maintenance - - - - - - 51 Labor 41,927.64 41,927.64 914,000.00 - - - - - - 914,000.00 872,072.36 53 Overtime 3,207.80 3,207.80 219,000.00 - - - - - - 219,000.00 215,792.20 56 Benefits 120,510.53 120,510.53 620,000.00 - - - - - - 620,000.00 499,489.47 62 Materials and Supplies 42,677.86 42,677.86 471,000.00 - - - - - - 471,000.00 428,322.14 63 Contract Services 23,243.14 23,243.14 602,000.00 - - - - - - 602,000.00 578,756.86 64 Utilities - - - - - - - - - - - Program: 6100 - Water Maintenance Total:231,566.97 231,566.97 2,826,000.00 - - - - - - 2,826,000.00 2,594,433.03 - - - - - - Program: 6200 - Wastewater Maintenance - - - - - - 51 Labor - - - 13,791.48 13,791.48 371,000.00 - - - 371,000.00 357,208.52 53 Overtime - - - 860.54 860.54 9,000.00 - - - 9,000.00 8,139.46 56 Benefits - - - 26,623.33 26,623.33 174,000.00 - - - 174,000.00 147,376.67 62 Materials and Supplies - - - 396.43 396.43 36,000.00 - - - 36,000.00 35,603.57 Wastewater Treatment - - - - - 7,610,000.00 - - - 7,610,000.00 7,610,000.00 63 Contract Services - - - 195.00 195.00 (7,333,000.00) - - - (7,333,000.00) (7,333,195.00) Program: 6200 - Wastewater Maintenance Total:- - - 41,866.78 41,866.78 867,000.00 - - - 867,000.00 825,133.22 - - - - - - Program: 6300 - Water Reclamation - - - - - - 51 Labor - - - - - - 28,358.09 28,358.09 939,000.00 939,000.00 910,641.91 53 Overtime - - - - - - 1,050.98 1,050.98 25,000.00 25,000.00 23,949.02 54 Standby - - - - - - - - 55,000.00 55,000.00 55,000.00 56 Benefits - - - - - - 100,134.11 100,134.11 456,000.00 456,000.00 355,865.89 62 Materials and Supplies - - - - - - - - 734,000.00 734,000.00 734,000.00 63 Contract Services - - - - - - 691,236.31 691,236.31 5,646,000.00 5,646,000.00 4,954,763.69 64 Utilities - - - - - - 16,840.13 16,840.13 2,021,000.00 2,021,000.00 2,004,159.87 65 Professional Development - - - - - - 1,099.00 1,099.00 20,000.00 20,000.00 18,901.00 Program: 6300 - Water Reclamation Total:- - - - - - 838,718.62 838,718.62 9,896,000.00 9,896,000.00 9,057,281.38 - - - - - - Program: 7000 - Facilities Maintenance - - - - - - 51 Labor 4,099.36 4,099.36 109,500.00 1,639.73 1,639.73 43,800.00 2,459.58 2,459.58 65,700.00 219,000.00 210,801.33 53 Overtime 366.17 366.17 7,000.00 146.46 146.46 2,800.00 219.69 219.69 4,200.00 14,000.00 13,267.68 56 Benefits 16,109.17 16,109.17 61,500.00 6,443.60 6,443.60 24,600.00 9,665.40 9,665.40 36,900.00 123,000.00 90,781.83 62 Materials and Supplies 4,870.70 4,870.70 29,000.00 1,711.10 1,711.10 11,600.00 6,115.28 6,115.28 17,400.00 58,000.00 45,302.92 63 Contract Services 153,762.10 153,762.10 621,500.00 106,958.63 106,958.63 248,600.00 129,430.29 129,430.29 372,900.00 1,243,000.00 852,848.98 64 Utilities 1,779.41 1,779.41 181,500.00 (514.16) (514.16) 72,600.00 5,100.87 5,100.87 108,900.00 363,000.00 356,633.88 65 Professional Development - - 1,000.00 - - 1,000.00 - - 1,000.00 3,000.00 3,000.00 Program: 7000 - Facilities Maintenance Total:180,986.91 180,986.91 1,011,000.00 116,385.36 116,385.36 405,000.00 152,991.11 152,991.11 607,000.00 2,023,000.00 1,572,636.62 - - - Program: 7100 - Fleet Maintenance - - - - - - 51 Labor 3,118.32 3,118.32 80,000.00 346.48 346.48 20,000.00 - - - 100,000.00 96,535.20 53 Overtime 350.81 350.81 2,400.00 38.98 38.98 600.00 - - - 3,000.00 2,610.21 56 Benefits 343.55 343.55 32,800.00 38.14 38.14 8,200.00 - - - 41,000.00 40,618.31 62 Materials and Supplies 23,117.72 23,117.72 96,000.00 3,234.73 3,234.73 24,000.00 - - - 120,000.00 93,647.55 63 Contract Services 13,073.32 13,073.32 200,800.00 1,063.12 1,063.12 50,200.00 - - - 251,000.00 236,863.56 64 Utilities 14,072.51 14,072.51 192,800.00 1,563.62 1,563.62 48,200.00 - - - 241,000.00 225,363.87 65 Professional Development - - 3,200.00 - - 800.00 - - - 4,000.00 4,000.00 Program: 7100 - Fleet Maintenance Total:54,076.23 54,076.23 608,000.00 6,285.07 6,285.07 152,000.00 - - - 760,000.00 699,638.70 - - - Program: 8000 - Capital - - - - - 71 Debt Service - - 3,103,000.00 - - 273,000.00 - - - 3,376,000.00 3,376,000.00 81 Capital Improvement - - 3,425,000.00 - - 300,000.00 - - - 3,725,000.00 3,725,000.00 82 Capital Outlay - - 695,000.00 - - 260,000.00 - - 210,000.00 1,165,000.00 1,165,000.00 83 Accounting Income Add back - - - - - - - - - - - 88 Transfer to Reserves - - 95,000.00 - - 365,000.00 - - 1,020,000.00 1,480,000.00 1,480,000.00 99 Transfer from Reserves - - - - - - - - - - - Program: 8000 - Capital Total:- - 7,318,000.00 - - 1,198,000.00 - - 1,230,000.00 9,746,000.00 9,746,000.00 Total Surplus (Deficit):823,855.81$ 823,855.81$ -$ (256,542.71)$ (256,542.71)$ -$ (132,916.70)$ (132,916.70)$ -$ -$ (434,396.40)$ Page 6 of 6 Agenda Item #2d October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #2d Consent Item 9 0 6 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Accept and File Financial Statements for August 2023 RECOMMENDATION That the Board of Directors accept and file the attached financial statements as of, and for the period ended, August 31, 2023. BACKGROUND / ANALYSIS The East Valley Water District adopted an annual budget on June 28, 2023 for fiscal year 2023-24. In accordance with District Administrative Policy 7.7, the Chief Financial Officer provides regular budget updates to the Board of Directors (Board). Included herewith for the Board’s review is a summary of the District’s financial results, as of August 31, 2023. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer Agenda Item #2d October 25, 20232 Meeting Date: October 25, 2023 Agenda Item #2d Consent Item 9 0 6 ATTACHMENTS 1. August 2023 Financial Statement Monthly Review 2. August 2023 Financial Statements FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 1 The following is a highlight summary of the District’s financial results as of August 31, 2023. Please note all values presented are in millions (unless otherwise noted). Statement of Net Position Total assets at August 31, 2023 are $408.46 million. CLASSIFICATION WATER WASTEWATER RECLAMATION DISTRICT TOTAL Cash and Investments $ 14.09 $ 6.31 $ 2.75 $ 23.15 Utility Plant, Net 96.95 17.00 - 113.95 Other Assets 51.69 30.92 188.75 271.36 Current Liabilities 9.12 7.15 32.82 49.09 Long Term Liabilities 44.65 8.17 155.84 208.66 Beginning Net Position 105.34 38.68 3.01 147.03 Change in Equity 2.03 (0.10) (0.18) 1.75 TOTAL NET $ 107.37 $ 38.58 $ 2.83 $ 148.78 Cash and Investments Cash and Investments are $23.15 million for the month of August, a decrease of $2.65 million from the prior month. In August the District paid $3.04 million for construction of the recycled water pipeline through May 2023 and $1.75 million for debt service payments on the 2020A and 2020B bonds. The District’s Due from Other Governments includes a receivable for work performed on the Recycled Water Pipeline from June through July and Grants Receivable from the State of California bringing the ending balance as of July 31, 2023 to $21.34 million. $0 $5 $10 $15 $20 $25 $30 Mi l l i o n s CASH & INVESTMENTS Restricted Unrestricted FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 2 Statement of Revenues & Expenses Total Revenues & Expenses through August 31, 2023 are summarized below (in millions): Column1 WATER WASTEWATER RECLAMATION DISTRICT TOTAL Revenue $ 5.50 $ 1.00 $ 1.74 $ 8.24 Expense 3.47 1.10 1.92 6.49 Water Sales by Tier Water Sales for the month ending August 31, 2023 were $1.99M; $168K under staff projections for the month and $244K under projections year-to-date. $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 Mi l l i o n s WATER SALES BY TIER Tier 1 Tier 2 Tier 3 FY 2023-24 Projection For a more detailed presentation, operating results are presented in three ways on pages 2 through 6 of the attached financial statements for the period ending August 31, 2023. First is a one-page summary with monthly and year-to-date totals for revenue and expenses, presented by Expense Category. Second is a one-page summary with monthly and year-to-date totals for Revenues and Expense by Program. Third is a Budget -to- Actual presentation of program expense detail. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 3 Water Sales by Customer Class The table below shows the District’s water sales for the month of August 2023 by customer class. The following icons are to compliment the graph below: positive change, no change, negative change when comparing actuals versus projections. CUSTOMER CLASS ACTUAL PROJECTION $ VARIANCE % VARIANCE Residential 1,135,353$ 1,261,000$ (125,647)$ -10% Multi-Family 335,813 411,000 (75,187) -18% Commercial 165,854 171,000 (5,146) -3% Irrigation 357,054 319,000 38,054 12% TOTAL $1,994,074 $ 2,162,000 $ (167,926)-8% The following table displays customer class by tier for the month of August 2023: CUSTOMER CLASS TIER ACTUAL PROJECTION $ VARIANCE % VARIANCE Residential Tier 1 356,063$ 387,000$ (30,937)$ -8% Residential Tier 2 619,748 655,000 (35,252) -5% Residential Tier 3 159,542 219,000 (59,458) -27% Multi-Family Tier 1 145,403 173,000 (27,597) -16% Multi-Family Tier 2 111,429 165,000 (53,571) -32% Multi-Family Tier 3 78,981 73,000 5,981 8% Commercial Tier 1 99,307 128,000 (28,693) -22% Commercial Tier 2 10,737 10,000 737 7% Commercial Tier 3 55,810 33,000 22,810 69% Irrigation Tier 2 176,185 197,000 (20,815) -11% Irrigation Tier 3 180,869 122,000 58,869 48% TOTAL $ 1,994,074 $ 2,162,000 $ (167,926)-8% Legend - Positive Change in Actuals - Neutral Change in Actuals - Negative Change in Actuals FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 4 The chart below is a comparative illustration of Water Revenue year -to-date compared to last year’s Water Revenue year-to-date as of August. As noted in the graph, Water Revenue experienced a minor increase over last year. Although water consumption decreased 14.87 million gallons (19.9K HCF) compared to August of 2022, water sales were up $68K for all three tiers combined. $0 $1 $2 $3 $4 $5 $6 8/31/2022 8/31/2023 Mi l l i o n s COMPARATIVE MONTHLY WATER REVENUE (WATER SALES & METER CHARGES) Meter Tier 1 Tier 2 Tier 3 Total -$5,164,309 Total -$5,281,618 FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 5 Water Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Water Fund operating cost centers for FY 2022-23 and FY 2023-24. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 6 Wastewater Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Wastewater Fund operating cost centers for FY 2022-23 and FY 2023-24. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING AUGUST 31, 2023 page | 7 Water Reclamation Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Water Reclamation Fund operating cost centers for FY 2022-23 and FY 2023-24. WATER WASTEWATER RECLAMATION DISTRICT TOTAL Assets: Current Assets: 01 Cash and Cash Equivalents 2,704,714.86$ 738,504.19$ 2,750,000.00$ 6,193,219.05$ 02 Investments 3,309,627.32 2,019,618.14 - 5,329,245.46 03 Accounts Receivable, Net 4,499,819.41 311,471.64 548,409.10 5,359,700.15 04 - Interest Receivable - - - - 14*05 Other Receivables 2,328,214.76 - - 2,328,214.76 07 Due from Sewer Fund 3,770,000.00 - - 3,770,000.00 07. Due from Reclamation Fund 12,744,180.30 11,293,299.24 - 24,037,479.54 06 Due from Other Governments 48,208.33 - 21,294,667.78 21,342,876.11 08 Inventory 1,089,999.13 6,721.16 - 1,096,720.29 09 Prepaid Expenses 212,514.89 32,079.63 - 244,594.52 30,707,279.00 14,401,694.00 24,593,076.88 69,702,049.88 Non-Current Assets: 10 Restricted Cash and Cash Equivalents 8,072,536.71 3,555,502.92 - 11,628,039.63 11 Capital Assets not being Depreciated 21,459,538.18 17,461,615.60 166,905,697.96 205,826,851.74 13 Capital Assets, Net 96,948,239.29 16,997,047.78 - 113,945,287.07 126,480,314.18 38,014,166.30 166,905,697.96 331,400,178.44 Total Assets:157,187,593.18 52,415,860.30 191,498,774.84 401,102,228.32 Deferred Outflow Of Resources 24*Deferred Charge on Refunding 581,826.53 272,820.05 - 854,646.58 25 Deferred Outflows - Pensions 4,954,821.80 1,546,575.07 - 6,501,396.87 162,724,241.51 54,235,255.42 191,498,774.84 408,458,271.77 Current Liabilities: 22 Accounts Payable and Accrued Expenses 4,386,594.18 29,842.00 - 4,416,436.18 29 Due to Water Fund - 3,770,000.00 12,744,180.30 16,514,180.30 29. Due to Sewer Fund - - 11,293,299.24 11,293,299.24 23 Accrued Payroll and Benefits - - - - 15 Customer Service Deposits 1,407,405.73 - - 1,407,405.73 16 Construction Advances and Retentions 497,820.15 3,010,696.98 8,722,144.45 12,230,661.58 17 Accrued Interest Payable 239,066.72 24,710.75 - 263,777.47 18 Current Portion of Compensated Absences 449,527.20 137,616.80 65,033.00 652,177.00 19 Current Portion of Long-Term Debt 2,140,008.61 175,000.00 - 2,315,008.61 9,120,422.59 7,147,866.53 32,824,656.99 49,092,946.11 Non-Current Liabilities: 20 Compensated Absences, less current portion 487,842.57 118,278.79 117,403.00 723,524.36 28 Net Pension Liability 10,600,994.28 3,254,141.95 - 13,855,136.23 21 Long Term Debt, Less Current Portion 33,555,886.89 4,800,908.00 155,723,918.00 194,080,712.89 27 Other Liabilities 1,173.64 - - 1,173.64 44,645,897.38 8,173,328.74 155,841,321.00 208,660,547.12 Total Liabilities:53,766,319.97 15,321,195.27 188,665,977.99 257,753,493.23 Deferred Inflows Of Resources 26 Deferred Inflows - Pensions 1,589,671.06 336,902.07 - 1,926,573.13 55,355,991.03 15,658,097.34 188,665,977.99 259,680,066.36 31 Equity 105,340,469.37 38,679,547.28 3,008,522.25 147,028,538.90 105,340,469.37 38,679,547.28 3,008,522.25 147,028,538.90 Tot Total Revenue 5,498,207.78 1,000,832.98 1,742,932.47 8,241,973.23 Tot Total Expense 3,470,426.67 1,103,222.18 1,918,657.87 6,492,306.72 2,027,781.11 (102,389.20) (175,725.40) 1,749,666.51 107,368,250.48 38,577,158.08 2,832,796.85 148,778,205.41 162,724,241.51$ 54,235,255.42$ 191,498,774.84$ 408,458,271.77$ Unaudited As of August 31, 2023 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 Beginning Equity: Equity: Revenues Over/Under Expenses Total Current Liabilities: Total Liabilities and Deferred Inflows of Resources: Total Non-Current Liabilities: Page 1 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 1,994,072.59$ 3,616,720.32$ 18,345,000.00$ -$ -$ -$ -$ -$ 692,000.00$ 19,037,000.00$ 15,420,279.68$ 42 Meter Charges 832,755.22 1,665,001.23 9,996,000.00 - - - - - - 9,996,000.00 8,330,998.77 43 Penalties 47,049.71 89,569.41 450,000.00 5,978.66 10,649.52 60,000.00 - - - 510,000.00 409,781.07 44 Wastewater System Charges - - - 493,082.67 980,056.46 5,968,000.00 - - - 5,968,000.00 4,987,943.54 45 Wastewater Treatment Charges - - - - - - 884,139.44 1,742,932.47 10,279,000.00 10,279,000.00 8,536,067.53 46 Other Operating Revenue 43,754.53 122,938.58 42,000.00 10,127.00 10,127.00 - - - 1,252,000.00 1,294,000.00 1,160,934.42 47 Non Operating Revenue 1,567.58 3,978.24 220,000.00 - - 20,000.00 - - 100,000.00 340,000.00 336,021.76 48 Gain or Loss on Disposition - - - - - - - - - - - 56 Benefits - - - - - - - - - - - 68 Depreciation - - - - - - - - - - - Revenue Total:2,919,199.63 5,498,207.78 29,053,000.00 509,188.33 1,000,832.98 6,048,000.00 884,139.44 1,742,932.47 12,323,000.00 47,424,000.00 39,182,026.77 - - - - - - - - Expense by Category 51 Labor 423,118.69 638,290.15 5,596,200.00 116,617.82 176,847.26 1,627,100.00 60,909.68 91,727.35 1,004,700.00 8,228,000.00 7,321,135.24 52 Temporary Labor 3,116.54 3,909.92 32,900.00 1,335.66 1,675.68 14,100.00 - - - 47,000.00 41,414.40 56 Benefits 293,119.67 1,023,940.07 2,915,800.00 70,960.39 239,518.26 756,300.00 45,582.82 155,382.33 492,900.00 4,165,000.00 2,746,159.34 63 Contract Services 339,059.58 197,104.91 5,048,000.00 112,851.08 200,579.56 1,582,100.00 758,125.55 1,578,792.15 6,018,900.00 12,649,000.00 10,672,523.38 65 Professional Development 15,332.26 36,628.63 291,000.00 4,151.66 8,546.15 104,000.00 604.14 1,703.14 21,000.00 416,000.00 369,122.08 53 Overtime 51,809.44 62,584.56 371,000.00 2,712.74 4,034.93 25,800.00 677.00 1,947.67 29,200.00 426,000.00 357,432.84 62 Materials and Supplies 147,766.94 261,204.12 1,331,500.00 5,532.86 14,535.50 133,100.00 340.92 6,456.20 751,400.00 2,216,000.00 1,933,804.18 64 Utilities 317,682.81 196,225.40 4,013,800.00 6,809.41 9,248.23 250,300.00 33,464.00 55,405.00 2,129,900.00 6,394,000.00 6,133,121.37 52 Temporary Labor 3,116.54 3,909.92 32,900.00 1,335.66 1,675.68 14,100.00 - - - 47,000.00 41,414.40 67 Other 9,619.00 933,045.64 1,300,900.00 3,478.41 417,279.60 341,100.00 - - 590,000.00 2,232,000.00 881,674.76 54 Standby 6,207.53 8,258.02 33,000.00 206.61 238.81 2,000.00 - - 55,000.00 90,000.00 81,503.17 61 Water Supply 271.39 271.39 768,000.00 - - - - - - 768,000.00 767,728.61 71 Debt Service 5,314.36 5,314.36 3,103,000.00 - - 273,000.00 - - - 3,376,000.00 3,370,685.64 81 Capital Improvement 16,718.72 16,718.72 3,425,000.00 - - 300,000.00 - - - 3,725,000.00 3,708,281.28 82 Capital Outlay 99,739.58 99,739.58 695,000.00 29,042.52 29,042.52 260,000.00 27,244.03 27,244.03 210,000.00 1,165,000.00 1,008,973.87 83 Accounting Income Add back (16,718.72) (16,718.72) - - - - - - - - 16,718.72 88 Transfer to Reserves - - 95,000.00 - - 365,000.00 - - 1,020,000.00 1,480,000.00 1,480,000.00 99 Transfer from Reserves - - - - - - - - - - - Expense Total:1,715,274.33 3,470,426.67 29,053,000.00 355,034.82 1,103,222.18 6,048,000.00 926,948.14 1,918,657.87 12,323,000.00 47,424,000.00 40,931,693.28 Total Surplus (Deficit):1,203,925.30$ 2,027,781.11$ -$ 154,153.51$ (102,389.20)$ -$ (42,808.70)$ (175,725.40)$ -$ -$ (1,749,666.51)$ Unaudited Revenue and Expense Budget-to-Actual by Category Month Ended August 31, 2023 WATER WASTEWATER DISTRICT WIDERECLAMATION Page 2 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 1,994,072.59$ 3,616,720.32$ 18,345,000.00$ -$ -$ -$ -$ -$ 692,000.00$ 19,037,000.00$ 15,420,279.68$ 42 Meter Charges 832,755.22 1,665,001.23 9,996,000.00 - - - - - - 9,996,000.00 8,330,998.77 43 Penalties 47,049.71 89,569.41 450,000.00 5,978.66 10,649.52 60,000.00 - - - 510,000.00 409,781.07 44 Wastewater System Charges - - - 493,082.67 980,056.46 5,968,000.00 - - - 5,968,000.00 4,987,943.54 45 Wastewater Treatment Charges - - - - - - 884,139.44 1,742,932.47 10,279,000.00 10,279,000.00 8,536,067.53 46 Other Operating Revenue 43,754.53 122,938.58 42,000.00 10,127.00 10,127.00 - - - 1,252,000.00 1,294,000.00 1,160,934.42 47 Non Operating Revenue 1,567.58 3,978.24 220,000.00 - - 20,000.00 - - 100,000.00 340,000.00 336,021.76 Revenue Total:2,919,199.63 5,498,207.78 29,053,000.00 509,188.33 1,000,832.98 6,048,000.00 884,139.44 1,742,932.47 12,323,000.00 47,424,000.00 39,182,026.77 Progra 1000 - Governing Board 13,487.36 (13,329.99) 254,800.00 5,576.18 (5,956.57) 109,200.00 - - - 364,000.00 383,286.56 Progra 2000 - General Administration 61,743.33 111,709.42 959,000.00 25,558.84 46,972.87 411,000.00 - - - 1,370,000.00 1,211,317.71 Progra 2100 - Human Resources 45,226.07 1,095,827.07 1,702,400.00 19,382.54 469,003.10 564,600.00 - - 590,000.00 2,857,000.00 1,292,169.83 Progra 2200 - Public Affairs 41,152.32 85,859.01 904,400.00 51,198.86 45,222.62 387,600.00 - - - 1,292,000.00 1,160,918.37 Progra 2300 - Conservation 31,994.92 (331,124.07) 689,000.00 - - - - - - 689,000.00 1,020,124.07 Progra 3000 - Finance 63,631.74 111,143.46 940,800.00 27,199.37 47,561.44 403,200.00 - - - 1,344,000.00 1,185,295.10 Progra 3200 - Information Technology 117,020.65 220,040.96 1,205,400.00 50,151.52 94,302.92 516,600.00 - - - 1,722,000.00 1,407,656.12 Progra 3300 - Customer Service 130,630.52 255,098.43 1,304,100.00 55,599.49 108,727.54 558,900.00 - - - 1,863,000.00 1,499,174.03 Progra 3400 - Meter Services 22,431.32 49,976.48 292,000.00 - - - - - - 292,000.00 242,023.52 Progra 4000 - Engineering 52,932.99 81,805.10 999,600.00 16,760.18 21,652.31 428,400.00 - - - 1,428,000.00 1,324,542.59 Progra 5000 - Water Production 438,914.61 424,702.28 5,992,000.00 - - - - - - 5,992,000.00 5,567,297.72 Progra 5100 - Water Treatment 105,454.50 221,189.33 1,082,000.00 - - - - - - 1,082,000.00 860,810.67 Progra 5200 - Water Quality 41,960.98 72,519.83 546,000.00 - - - - - - 546,000.00 473,480.17 Progra 6000 - Maintenance Administration 38,408.59 108,094.82 418,500.00 4,051.76 11,642.66 46,500.00 - - - 465,000.00 345,262.52 Progra 6100 - Water Maintenance 312,101.68 543,668.65 2,826,000.00 - - - - - - 2,826,000.00 2,282,331.35 Progra 6200 - Wastewater Collection - - - 49,604.22 91,471.00 867,000.00 - - - 867,000.00 775,529.00 Progra 6300 - Water Reclamation - - - - - - 847,102.78 1,685,821.40 9,896,000.00 9,896,000.00 8,210,178.60 Progra 7000 - Facilities Maintenance 49,920.43 230,907.34 1,011,000.00 15,504.74 131,890.10 405,000.00 52,601.33 205,592.44 607,000.00 2,023,000.00 1,454,610.12 Progra 7100 - Fleet Maintenance 43,208.38 97,284.61 608,000.00 5,404.60 11,689.67 152,000.00 - - - 760,000.00 651,025.72 Progra 8000 - Capital 105,053.94 105,053.94 7,318,000.00 29,042.52 29,042.52 1,198,000.00 27,244.03 27,244.03 1,230,000.00 9,746,000.00 9,584,659.51 Total Surplus (Deficit):1,203,925.30$ 2,027,781.11$ -$ 154,153.51$ (102,389.20)$ -$ (42,808.70)$ (175,725.40)$ -$ -$ (1,749,666.51)$ . WATER WASTEWATER DISTRICT WIDE Revenue and Expense Budget-to-Actual by Program Month Ended August 31, 2023 Unaudited RECLAMATION Page 3 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Revenue 41 Water Sales 1,994,072.59$ 3,616,720.32$ 18,345,000.00$ -$ -$ -$ -$ -$ 692,000.00$ 19,037,000.00$ 15,420,279.68$ 42 Meter Charges 832,755.22 1,665,001.23 9,996,000.00 - - - - - - 9,996,000.00 8,330,998.77 43 Penalties 47,049.71 89,569.41 450,000.00 5,978.66 10,649.52 60,000.00 - - - 510,000.00 409,781.07 44 Wastewater System Charges - - - 493,082.67 980,056.46 5,968,000.00 - - - 5,968,000.00 4,987,943.54 45 Wastewater Treatment Charges - - - - - - 884,139.44 1,742,932.47 10,279,000.00 10,279,000.00 8,536,067.53 46 Other Operating Revenue 43,754.53 122,938.58 42,000.00 10,127.00 10,127.00 - - - 1,252,000.00 1,294,000.00 1,160,934.42 47 Non Operating Revenue 1,567.58 3,978.24 220,000.00 - - 20,000.00 - - 100,000.00 340,000.00 336,021.76 48 Gain or Loss on Disposition - - - - - - - - - - - 56 Benefits - - - - - - - - - - - 68 Depreciation - - - - - - - - - - - Revenue Total:2,919,199.63 5,498,207.78 29,053,000.00 509,188.33 1,000,832.98 6,048,000.00 884,139.44 1,742,932.47 12,323,000.00 47,424,000.00 39,182,026.77 - - - - - - - - Program: 1000 - Governing Board - - - - - 51 Labor 6,300.01$ 13,072.51$ 98,000.00$ 2,699.99$ 5,602.49$ 42,000.00$ -$ -$ -$ 140,000.00$ 121,325.00$ 56 Benefits 4,109.42 8,254.92 63,000.00 1,761.09 3,537.72 27,000.00 - - - 90,000.00 78,207.36 62 Materials and Supplies 56.13 56.13 2,100.00 24.05 24.05 900.00 - - - 3,000.00 2,919.82 63 Contract Services - (39,728.62) 77,700.00 - (17,026.55) 33,300.00 - - - 111,000.00 167,755.17 65 Professional Development 3,021.80 5,015.07 14,000.00 1,091.05 1,905.72 6,000.00 - - - 20,000.00 13,079.21 Program: 1000 - Governing Board Total:13,487.36 (13,329.99) 254,800.00 5,576.18 (5,956.57) 109,200.00 - - - 364,000.00 383,286.56 - - - - - - Program: 2000 - General Administration - - - - - 51 Labor 29,698.20 44,547.28 417,900.00 12,727.80 19,091.72 179,100.00 - - - 597,000.00 533,361.00 52 Temporary Labor 1,503.74 2,297.12 21,000.00 644.46 984.48 9,000.00 - - - 30,000.00 26,718.40 53 Overtime 238.10 338.35 2,800.00 102.05 145.02 1,200.00 - - - 4,000.00 3,516.63 56 Benefits 15,373.09 44,170.51 184,800.00 5,685.88 18,027.58 79,200.00 - - - 264,000.00 201,801.91 62 Materials and Supplies 661.83 661.83 4,900.00 283.65 283.65 2,100.00 - - - 7,000.00 6,054.52 63 Contract Services 10,581.37 14,513.62 217,000.00 4,534.86 6,220.11 93,000.00 - - - 310,000.00 289,266.27 64 Utilities 117.28 234.55 2,800.00 50.26 100.52 1,200.00 - - - 4,000.00 3,664.93 65 Professional Development 3,569.72 4,946.16 107,800.00 1,529.88 2,119.79 46,200.00 - - - 154,000.00 146,934.05 Program: 2000 - General Administration Total:61,743.33 111,709.42 959,000.00 25,558.84 46,972.87 411,000.00 - - - 1,370,000.00 1,211,317.71 - - - - - - Program: 2100 - Human Resources - - - - - - 51 Labor 17,626.01 26,439.01 230,300.00 7,554.00 11,331.00 98,700.00 - - - 329,000.00 291,229.99 52 Temporary Labor - - - - - - - - - - - 53 Overtime 76.03 76.03 2,100.00 32.58 32.58 900.00 - - - 3,000.00 2,891.39 56 Benefits 16,657.32 71,042.90 139,300.00 7,138.81 30,446.92 59,700.00 - - - 199,000.00 97,510.18 62 Materials and Supplies 73.24 200.27 4,900.00 31.38 85.82 2,100.00 - - - 7,000.00 6,713.91 63 Contract Services 2,049.69 19,062.06 109,200.00 878.42 8,169.43 46,800.00 - - - 156,000.00 128,768.51 64 Utilities 41.57 83.84 700.00 17.82 35.93 300.00 - - - 1,000.00 880.23 65 Professional Development 585.94 5,270.59 39,200.00 251.12 1,621.82 16,800.00 - - - 56,000.00 49,107.59 67 Other 8,116.27 973,652.37 1,176,700.00 3,478.41 417,279.60 339,300.00 - - 590,000.00 2,106,000.00 715,068.03 Program: 2100 - Human Resources Total:45,226.07 1,095,827.07 1,702,400.00 19,382.54 469,003.10 564,600.00 - - 590,000.00 2,857,000.00 1,292,169.83 - - - - - - Program: 2200 - Public Affairs - - - - - - 51 Labor 25,667.08 38,500.61 300,300.00 11,000.14 16,500.21 128,700.00 - - - 429,000.00 373,999.18 52 Temporary Labor - - - - - - - - - - - 53 Overtime 157.32 314.63 11,900.00 67.41 134.82 5,100.00 - - - 17,000.00 16,550.55 56 Benefits 10,059.00 28,161.71 88,900.00 4,310.88 12,069.10 38,100.00 - - - 127,000.00 86,769.19 62 Materials and Supplies 706.11 1,460.92 58,800.00 302.62 626.11 25,200.00 - - - 84,000.00 81,912.97 63 Contract Services 4,109.86 16,221.18 385,700.00 35,323.68 15,378.10 165,300.00 - - - 551,000.00 519,400.72 64 Utilities 197.89 392.39 33,600.00 84.81 168.16 14,400.00 - - - 48,000.00 47,439.45 65 Professional Development 255.06 807.57 25,200.00 109.32 346.12 10,800.00 - - - 36,000.00 34,846.31 Program: 2200 - Public Affairs Total:41,152.32 85,859.01 904,400.00 51,198.86 45,222.62 387,600.00 - - - 1,292,000.00 1,160,918.37 - - - - - - Program: 2300 - Conservation - - - - - - 51 Labor 8,512.00 12,768.00 107,000.00 - - - - - - 107,000.00 94,232.00 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 7,000.00 - - - - - - 7,000.00 7,000.00 56 Benefits 2,897.92 3,381.04 42,000.00 - - - - - - 42,000.00 38,618.96 62 Materials and Supplies 119.56 119.56 26,000.00 - - - - - - 26,000.00 25,880.44 63 Contract Services 15,541.25 (310,352.31) 346,000.00 - - - - - - 346,000.00 656,352.31 64 Utilities 30.52 62.47 26,000.00 - - - - - - 26,000.00 25,937.53 65 Professional Development 3,750.00 3,750.00 15,000.00 - - - - - - 15,000.00 11,250.00 67 Other 1,143.67 (40,852.83) 120,000.00 - - - - - - 120,000.00 160,852.83 Program: 2300 - Conservation Total:31,994.92 (331,124.07) 689,000.00 - - - - - - 689,000.00 1,020,124.07 Program: 3000 - Finance & Accounting - - - - - - 51 Labor 33,700.00 49,522.54 542,500.00 14,427.23 21,208.29 232,500.00 - - - 775,000.00 704,269.17 52 Temporary Labor - - - - - - - - - - - 53 Overtime 276.35 381.80 9,100.00 118.44 163.63 3,900.00 - - - 13,000.00 12,454.57 56 Benefits 25,810.75 100,297.40 261,800.00 11,049.50 42,972.28 112,200.00 - - - 374,000.00 230,730.32 62 Materials and Supplies 16.66 16.66 4,900.00 7.14 7.14 2,100.00 - - - 7,000.00 6,976.20 63 Contract Services 2,866.00 (40,474.20) 98,700.00 1,219.72 (17,354.65) 42,300.00 - - - 141,000.00 198,828.85 64 Utilities 82.37 165.38 2,800.00 35.30 70.88 1,200.00 - - - 4,000.00 3,763.74 65 Professional Development 798.08 1,152.35 21,000.00 342.04 493.87 9,000.00 - - - 30,000.00 28,353.78 67 Other 81.53 81.53 - - - - - - - - (81.53) Program: 3000 - Finance & Accounting Total:63,631.74 111,143.46 940,800.00 27,199.37 47,561.44 403,200.00 - - - 1,344,000.00 1,185,295.10 - - - - - - Month Ended August 31, 2023 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDERECLAMATION Page 4 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Month Ended August 31, 2023 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDERECLAMATION Program: 3200 - Information Technology - - - - - - 51 Labor 21,412.16 33,019.87 303,100.00 9,176.64 14,151.33 129,900.00 - - - 433,000.00 385,828.80 52 Temporary Labor 1,612.80 1,612.80 11,900.00 691.20 691.20 5,100.00 - - - 17,000.00 14,696.00 53 Overtime - - - - - - - - - - - 56 Benefits 22,173.80 93,638.58 181,300.00 9,502.87 40,130.52 77,700.00 - - - 259,000.00 125,230.90 62 Materials and Supplies 2,500.71 10,145.48 49,000.00 1,071.74 4,348.05 21,000.00 - - - 70,000.00 55,506.47 63 Contract Services 65,715.88 77,105.29 648,200.00 28,163.94 33,045.12 277,800.00 - - - 926,000.00 815,849.59 64 Utilities 1,974.30 2,818.60 8,400.00 846.13 1,207.98 3,600.00 - - - 12,000.00 7,973.42 65 Professional Development 1,631.00 1,700.34 3,500.00 699.00 728.72 1,500.00 - - - 5,000.00 2,570.94 Program: 3200 - Information Technology Total:117,020.65 220,040.96 1,205,400.00 50,151.52 94,302.92 516,600.00 - - - 1,722,000.00 1,407,656.12 - - - - - - Program: 3300 - Customer Service - - - - - - 51 Labor 32,431.49 48,848.87 433,300.00 13,899.16 20,935.14 185,700.00 - - - 619,000.00 549,215.99 52 Temporary Labor - - - - - - - - - - - 53 Overtime 522.57 804.05 4,900.00 223.96 344.60 2,100.00 - - - 7,000.00 5,851.35 56 Benefits 22,001.15 72,681.86 217,000.00 9,428.77 31,149.08 93,000.00 - - - 310,000.00 206,169.06 62 Materials and Supplies 36.13 36.13 4,900.00 15.49 15.49 2,100.00 - - - 7,000.00 6,948.38 63 Contract Services 72,099.58 128,685.55 515,200.00 30,899.81 55,150.93 220,800.00 - - - 736,000.00 552,163.52 64 Utilities 3,225.12 3,840.45 112,700.00 1,116.47 1,116.47 48,300.00 - - - 161,000.00 156,043.08 65 Professional Development 36.95 36.95 11,900.00 15.83 15.83 5,100.00 - - - 17,000.00 16,947.22 67 Other 277.53 164.57 4,200.00 - - 1,800.00 - - - 6,000.00 5,835.43 Program: 3300 - Customer Service Total:130,630.52 255,098.43 1,304,100.00 55,599.49 108,727.54 558,900.00 - - - 1,863,000.00 1,499,174.03 - - - - - - Program: 3400 - Meter Services - - - - - - 51 Labor 12,540.81 18,811.21 173,000.00 - - - - - - 173,000.00 154,188.79 53 Overtime - - 6,000.00 - - - - - - 6,000.00 6,000.00 56 Benefits 9,687.85 30,941.90 101,000.00 - - - - - - 101,000.00 70,058.10 62 Materials and Supplies - - 4,000.00 - - - - - - 4,000.00 4,000.00 63 Contract Services 85.06 105.77 7,000.00 - - - - - - 7,000.00 6,894.23 64 Utilities 117.60 117.60 1,000.00 - - - - - - 1,000.00 882.40 65 Professional Development - - - - - - - - - - - Program: 3400 - Meter Services Total:22,431.32 49,976.48 292,000.00 - - - - - - 292,000.00 242,023.52 - - - - - - Program: 4000 - Engineering - - - - - - 51 Labor 31,007.76 46,511.64 438,900.00 13,289.04 19,933.56 188,100.00 - - - 627,000.00 560,554.80 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 2,100.00 - - 900.00 - - - 3,000.00 3,000.00 56 Benefits 7,333.59 9,015.49 107,100.00 3,142.94 3,863.74 45,900.00 - - - 153,000.00 140,120.77 62 Materials and Supplies - - 13,300.00 - - 5,700.00 - - - 19,000.00 19,000.00 63 Contract Services 12,525.00 14,258.00 296,100.00 252.00 (2,809.00) 126,900.00 - - - 423,000.00 411,551.00 64 Utilities 2,014.10 11,967.43 131,600.00 53.69 641.50 56,400.00 - - - 188,000.00 175,391.07 65 Professional Development 52.54 52.54 10,500.00 22.51 22.51 4,500.00 - - - 15,000.00 14,924.95 Program: 4000 - Engineering Total:52,932.99 81,805.10 999,600.00 16,760.18 21,652.31 428,400.00 - - - 1,428,000.00 1,324,542.59 - - - - - - Program: 5000 - Water Production - - - - - - 51 Labor 59,607.39 89,276.35 790,000.00 - - - - - - 790,000.00 700,723.65 53 Overtime 4,060.03 9,901.08 46,000.00 - - - - - - 46,000.00 36,098.92 54 Standby 3,108.00 4,588.12 15,000.00 - - - - - - 15,000.00 10,411.88 56 Benefits 44,104.21 168,397.29 400,000.00 - - - - - - 400,000.00 231,602.71 61 Water Supply 271.39 271.39 768,000.00 - - - - - - 768,000.00 767,728.61 62 Materials and Supplies 30,694.81 46,186.06 335,000.00 - - - - - - 335,000.00 288,813.94 63 Contract Services 34,454.46 22,430.22 528,000.00 - - - - - - 528,000.00 505,569.78 64 Utilities 262,164.32 82,739.60 3,099,000.00 - - - - - - 3,099,000.00 3,016,260.40 65 Professional Development 450.00 912.17 11,000.00 - - - - - - 11,000.00 10,087.83 Program: 5000 - Water Production Total:438,914.61 424,702.28 5,992,000.00 - - - - - - 5,992,000.00 5,567,297.72 - - - - - - Program: 5100 - Water Treatment - - - - - - 51 Labor 21,020.80 31,531.20 273,000.00 - - - - - - 273,000.00 241,468.80 53 Overtime 4,397.55 4,762.35 39,000.00 - - - - - - 39,000.00 34,237.65 56 Benefits 20,329.26 86,560.95 164,000.00 - - - - - - 164,000.00 77,439.05 62 Materials and Supplies 30,339.08 48,601.33 200,000.00 - - - - - - 200,000.00 151,398.67 63 Contract Services 9,303.86 1,707.72 224,000.00 - - - - - - 224,000.00 222,292.28 64 Utilities 20,063.95 48,025.78 182,000.00 - - - - - - 182,000.00 133,974.22 Program: 5100 - Water Treatment Total:105,454.50 221,189.33 1,082,000.00 - - - - - - 1,082,000.00 860,810.67 - - - - - - Program: 5200 - Water Quality - - - - - - 51 Labor 14,734.00 20,857.20 223,000.00 - - - - - - 223,000.00 202,142.80 53 Overtime - - 12,000.00 - - - - - - 12,000.00 12,000.00 56 Benefits 9,069.27 39,400.87 107,000.00 - - - - - - 107,000.00 67,599.13 62 Materials and Supplies 1,414.96 1,850.50 25,000.00 - - - - - - 25,000.00 23,149.50 63 Contract Services 16,557.75 10,226.26 170,000.00 - - - - - - 170,000.00 159,773.74 64 Utilities - - 2,000.00 - - - - - - 2,000.00 2,000.00 65 Professional Development 185.00 185.00 7,000.00 - - - - - - 7,000.00 6,815.00 Program: 5200 - Water Quality Total:41,960.98 72,519.83 546,000.00 - - - - - - 546,000.00 473,480.17 - - - - - - Page 5 of 6 AMENDED AMENDED AMENDED AMENDED REMAINING MTD YTD BUDGET MTD YTD BUDGET MTD YTD BUDGET TOTAL BUDGET BUDGET Month Ended August 31, 2023 Unaudited Program Expense Detail Budget-to-Actual WATER WASTEWATER DISTRICT WIDERECLAMATION Program: 6000 - Maintenance Administration - - - - - - 51 Labor 14,741.88 22,112.82 195,300.00 1,624.06 2,436.09 21,700.00 - - - 217,000.00 192,451.09 52 Temporary Labor - - - - - - - - - - - 53 Overtime - - 1,800.00 - - 200.00 - - - 2,000.00 2,000.00 54 Standby 3,099.53 3,669.90 18,000.00 206.61 238.81 2,000.00 - - - 20,000.00 16,091.29 56 Benefits 16,634.19 64,152.55 142,200.00 1,803.86 7,080.46 15,800.00 - - - 158,000.00 86,766.99 62 Materials and Supplies - 55.25 2,700.00 - 6.14 300.00 - - - 3,000.00 2,938.61 63 Contract Services 60.20 156.19 900.00 6.69 17.36 100.00 - - - 1,000.00 826.45 64 Utilities 2,876.62 5,148.22 36,900.00 319.63 572.03 4,100.00 - - - 41,000.00 35,279.75 65 Professional Development 996.17 12,799.89 20,700.00 90.91 1,291.77 2,300.00 - - - 23,000.00 8,908.34 Program: 6000 - Maintenance Administration Total:38,408.59 108,094.82 418,500.00 4,051.76 11,642.66 46,500.00 - - - 465,000.00 345,262.52 - - - - - - Program: 6100 - Water Maintenance - - - - - - 51 Labor 82,800.28 124,727.92 914,000.00 - - - - - - 914,000.00 789,272.08 53 Overtime 40,386.01 43,593.81 219,000.00 - - - - - - 219,000.00 175,406.19 56 Benefits 58,003.73 178,514.26 620,000.00 - - - - - - 620,000.00 441,485.74 62 Materials and Supplies 65,750.40 108,428.26 471,000.00 - - - - - - 471,000.00 362,571.74 63 Contract Services 65,161.26 88,404.40 602,000.00 - - - - - - 602,000.00 513,595.60 64 Utilities - - - - - - - - - - - Program: 6100 - Water Maintenance Total:312,101.68 543,668.65 2,826,000.00 - - - - - - 2,826,000.00 2,282,331.35 - - - - - - Program: 6200 - Wastewater Collection - - - - - - 51 Labor - - - 27,582.96 41,374.44 371,000.00 - - - 371,000.00 329,625.56 53 Overtime - - - 1,678.08 2,538.62 9,000.00 - - - 9,000.00 6,461.38 56 Benefits - - - 14,284.19 40,907.52 174,000.00 - - - 174,000.00 133,092.48 62 Materials and Supplies - - - 1,154.76 1,551.19 36,000.00 - - - 36,000.00 34,448.81 Wastewater Treatment - - - - - 7,610,000.00 - - - 7,610,000.00 7,610,000.00 63 Contract Services - - - 4,904.23 5,099.23 (7,333,000.00) - - - (7,333,000.00) (7,338,099.23) Program: 6200 - Wastewater Collection Total:- - - 49,604.22 91,471.00 867,000.00 - - - 867,000.00 775,529.00 - - - - - - Program: 6300 - Water Reclamation - - - - - - 51 Labor - - - - - - 55,990.56 84,348.65 939,000.00 939,000.00 854,651.35 53 Overtime - - - - - - - 1,050.98 25,000.00 25,000.00 23,949.02 54 Standby - - - - - - - - 55,000.00 55,000.00 55,000.00 56 Benefits - - - - - - 41,758.77 141,892.88 456,000.00 456,000.00 314,107.12 62 Materials and Supplies - - - - - - (1,424.45) (1,424.45) 734,000.00 734,000.00 735,424.45 63 Contract Services - - - - - - 730,402.38 1,421,638.69 5,646,000.00 5,646,000.00 4,224,361.31 64 Utilities - - - - - - 19,771.38 36,611.51 2,021,000.00 2,021,000.00 1,984,388.49 65 Professional Development - - - - - - 604.14 1,703.14 20,000.00 20,000.00 18,296.86 Program: 6300 - Water Reclamation Total:- - - - - - 847,102.78 1,685,821.40 9,896,000.00 9,896,000.00 8,210,178.60 - - - - - - Program: 7000 - Facilities Maintenance - - - - - - 51 Labor 8,198.72 12,298.08 109,500.00 3,279.50 4,919.23 43,800.00 4,919.12 7,378.70 65,700.00 219,000.00 194,403.99 53 Overtime 1,128.35 1,494.52 7,000.00 451.34 597.80 2,800.00 677.00 896.69 4,200.00 14,000.00 11,010.99 56 Benefits 6,374.37 22,483.54 61,500.00 2,549.62 8,993.22 24,600.00 3,824.05 13,489.45 36,900.00 123,000.00 78,033.79 62 Materials and Supplies 3,145.22 8,015.92 29,000.00 744.09 2,455.19 11,600.00 1,765.37 7,880.65 17,400.00 58,000.00 39,648.24 63 Contract Services 22,407.38 176,169.48 621,500.00 6,052.07 113,010.70 248,600.00 27,723.17 157,153.46 372,900.00 1,243,000.00 796,666.36 64 Utilities 8,666.39 10,445.80 181,500.00 2,428.12 1,913.96 72,600.00 13,692.62 18,793.49 108,900.00 363,000.00 331,846.75 65 Professional Development - - 1,000.00 - - 1,000.00 - - 1,000.00 3,000.00 3,000.00 Program: 7000 - Facilities Maintenance Total:49,920.43 230,907.34 1,011,000.00 15,504.74 131,890.10 405,000.00 52,601.33 205,592.44 607,000.00 2,023,000.00 1,454,610.12 - - - Program: 7100 - Fleet Maintenance - - - - - - 51 Labor 6,236.64 9,354.96 80,000.00 692.96 1,039.44 20,000.00 - - - 100,000.00 89,605.60 53 Overtime 643.16 993.97 2,400.00 71.46 110.44 600.00 - - - 3,000.00 1,895.59 56 Benefits 2,424.72 2,768.27 32,800.00 269.40 307.54 8,200.00 - - - 41,000.00 37,924.19 62 Materials and Supplies 12,252.10 35,369.82 96,000.00 1,897.94 5,132.67 24,000.00 - - - 120,000.00 79,497.51 63 Contract Services 5,540.98 18,614.30 200,800.00 615.66 1,678.78 50,200.00 - - - 251,000.00 230,706.92 64 Utilities 16,110.78 30,183.29 192,800.00 1,857.18 3,420.80 48,200.00 - - - 241,000.00 207,395.91 65 Professional Development - - 3,200.00 - - 800.00 - - - 4,000.00 4,000.00 Program: 7100 - Fleet Maintenance Total:43,208.38 97,284.61 608,000.00 5,404.60 11,689.67 152,000.00 - - - 760,000.00 651,025.72 - - - Program: 8000 - Capital - - - - - 71 Debt Service 5,314.36 5,314.36 3,103,000.00 - - 273,000.00 - - - 3,376,000.00 3,370,685.64 81 Capital Improvement 16,718.72 16,718.72 3,425,000.00 - - 300,000.00 - - - 3,725,000.00 3,708,281.28 82 Capital Outlay 99,739.58 99,739.58 695,000.00 29,042.52 29,042.52 260,000.00 27,244.03 27,244.03 210,000.00 1,165,000.00 1,008,973.87 83 Accounting Income Add back (16,718.72) (16,718.72) - - - - - - - - 16,718.72 88 Transfer to Reserves - - 95,000.00 - - 365,000.00 - - 1,020,000.00 1,480,000.00 1,480,000.00 99 Transfer from Reserves - - - - - - - - - - - Program: 8000 - Capital Total:105,053.94 105,053.94 7,318,000.00 29,042.52 29,042.52 1,198,000.00 27,244.03 27,244.03 1,230,000.00 9,746,000.00 9,584,659.51 Total Surplus (Deficit):1,203,925.30$ 2,027,781.11$ -$ 154,153.51$ (102,389.20)$ -$ (42,808.70)$ (175,725.40)$ -$ -$ (1,749,666.51)$ Page 6 of 6 Agenda Item #2e October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #2e Consent Item 9 0 9 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Approve Board Meeting Cancellations RECOMMENDATION That the Board of Directors approve the cancellation of the November 22, 2023 and December 27, 2023 Board meetings. BACKGROUND / ANALYSIS East Valley Water District’s regular Board meetings occur on the 2nd and 4th Wednesdays of each month. Staff is recommending that the Board of Directors approve the cancellation of the November 22, 2023 due to it falling the day before the Thanksgiving holiday closure and the December 27, 2023 regular meeting due to it falling during the winter holiday closure. These cancellations will not impact District operations and routine items are being scheduled accordingly. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability B. Utilize Effective Communication Methods REVIEW BY OTHERS This agenda item has been reviewed by Administration. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Justine Hendricksen District Clerk Agenda Item #3a October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #3a Discussion Item 9 0 7 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Consider Approval of the Annual Comprehensive Financial Report for Year Ended June 30, 2023 RECOMMENDATION That the Board of Directors approve the attached draft Annual Comprehensive Financial Report and audit reports for fiscal year 2022-23. BACKGROUND / ANALYSIS The Finance and Human Resources Committee recommended, at their October 10, 2023 meeting, that the Board of Directors (Board) approve the attached draft Annual Comprehensive Financial Report and audit reports for fiscal year 2022-23. Each year, the District contracts with an external audit firm to conduct an annual audit of the District’s books and records for the current fiscal year in compliance with California Water Code §30540(b)(2). The audit is both an industry best practice and a requirement of the State Controller Minimum Audit Requirements for California Special Districts. On July 11, 2023, the audit partner from RAMS met with the District’s Finance and Human Resources Committee to review the auditing services to be provided during the audit for fiscal year ended June 30, 2023. In addition, RAMS described the procedures that were to be used to perform their audit in accordance with generally accepted auditing standards (GAAS). Once the audit is complete, the final requirement under Statement of Auditing Standards 114 (SAS 114) is for the auditors to communicate to those charged with governance: •Their views about qualitative aspects of the entity's significant accounting practices, including accounting policies, accounting estimates, and financial statement disclosures; •Significant difficulties, if any, encountered during the audit; •Uncorrected misstatements, other than those the auditor believes are trivial, if any; •Disagreements with management, if any; and •Other findings or issues, if any, arising from the audit that are, in the auditor's professional judgement, significant and relevant to those charged with Agenda Item #3a October 25, 20232 Meeting Date: October 25, 2023 Agenda Item #3a Discussion Item 9 0 7 governance regarding their oversight of the financial reporting process. Attached is a draft of the 2022-23 Annual Comprehensive Financial Report (Annual Report) for the Board’s review. The Annual Report includes the District’s annual financial statements with accompanying note disclosures, management discussion and analysis, and statistical information compiled by staff. The 2022-23 Annual Report received an unmodified opinion from RAMS. An unmodified opinion indicates the financial data of the District is presented fairly. RAMS conducted an audit in accordance with auditing standards generally accepted in the United States of America and guidelines established by the California State Controller for Special Districts. On October 16, 2023 the District received the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence award for the 11th consecutive year; and will once again apply for this prestigious award in December. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department and the Finance and Human Resources Committee. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Agenda Item #3a October 25, 20233 Meeting Date: October 25, 2023 Agenda Item #3a Discussion Item 9 0 7 Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS 1. EVWD Presentation 2. RAMS Presentation 3. Draft Annual Report for FY 2022-23 4. Internal Controls Report 5. SAS 114 6. Independent Auditors Report Rudy Guerrero, Finance Supervisor ANNUAL COMPREHENSIVE FINANCIAL REPORT FY 2022-23 October 25, 2023 •Current •$9.0 Million Increase in Current Assets •Cash and Investments Decreased $93 Thousand to $15.8 Million •$5.4 Million Increase in Current Liabilities •Current Assets - $45.4 Million; Current Liabilities - $26.4 Million •Ratio of 1.72 to 1 •Non-Current •$11.8 Million Increase in Non-Current Assets •Includes $8.9 Million Invested in SNRC •Decrease of $2.7 Million in Depreciable Assets, Net •$20.9 Million Increase in Non-Current Liabilities •Includes $16.1 Million Borrowed for SNRC •Decrease of $2.5 Million on other Debt •Increase of $7.2 Million in Net Pension Liability 2 REPORT HIGHLIGHTS: FINANCIAL CONDITION •Net Position •$2.7 Million Increase to $147.3 Million •Investment in Utility Plant - $4.17 Million Decrease to $112.9 Million •Restricted - $1.69 Million Increase to $10.8 Million •Unrestricted - $5.18 Million Increase to $24.1 Million 3 REPORT HIGHLIGHTS: FINANCIAL CONDITION Replaced •Net Position •$2.7 Million Increase to $147.8 Million •Investment in Utility Plant - $4.17 Million Decrease to $112.9 Million •Restricted - $1.69 Million Increase to $10.8 Million •Unrestricted - $5.18 Million Increase to $24.1 Million 3 REPORT HIGHLIGHTS: FINANCIAL CONDITION Replacement Slide 4 FINANCIAL CONDITION: DAYS CASH ON HAND 234 178 152 170 159 0 50 100 150 200 250 2019 2020 2021 2022 2023 D A Y S FISCAL YEAR 5 FINANCIAL CONDITION: CURRENT RATIO 3.35 2.13 1.93 1.73 1.72 - 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2019 2020 2021 2022 2023 R A T I O FISCAL YEAR 6 OUTSTANDING DEBT $155,723,918 $444,375 $1,275,000 $13,060,000 $15,050,000 $5,445,812 SRF Loan - SNRC U.S. Bank Lease Purchase SBVMWD Loan 2020B Refunding Bonds 2020A Refunding Bonds DWR Loans 7 FINANCIAL CONDITION: UNRESTRICTED RESERVES 21.1 20.2 16.4 18.4 15.4 3.3 2.3 2.5 0.5 8.7 $0 $5 $10 $15 $20 $25 2019 2020 2021 2022 2023 MI L L I O N FISCAL YEAR Water Wastewater •Operating Activities •$1.2 Million Decrease in Operating Income •$479 Thousand Decrease in Water Operating Revenue •$851 Thousand Increase in Wastewater Operating Revenue •$344 Thousand Increase in Wastewater Treatment Charges •$1.9 Million Increase in Operating Expenses •Non-Operating Activities •$30 Thousand Gain on Disposal of Assets •$425 Thousand Decrease in Interest Expense •$87 Thousand Unrealized Investment Loss •$1.86 Million in Capacity Charges 8 REPORT HIGHLIGHTS: CHANGES IN NET POSITION 9 PRIOR YEAR COMPARISON DESCRIPTION FY 2022-23 FY 2021-22 Operating Revenue 43,810,012$ 43,093,615$ Operating Expenses (42,515,136) (40,578,341) Operating Income 1,294,876 2,515,274 Non-Operating Revenue 431,811 1,242,257 Interest Expense (869,397) (1,295,223) Unrealized Investment Losses (87,280) (303,474) Grants / Developer Fees 1,922,052 2,826,525 Increase in Net Position 2,692,062$ 4,985,359$ 10 FY 2022-23 EXPENDITURES 24% 41% 6% 29%Employee Services Payments to Suppliers Debt Service Payments Capital Assets LAST FIVE YEARS 11 DEBT SERVICE COVERAGE 2.32 2.48 2.08 2.96 2.67 5.86 34.48 4.72 14.48 5.37 - 5 10 15 20 25 30 35 40 2019 2020 2021 2022 2023 CO V E R A G E R A T I O FISCAL YEAR Water Wastewater Bond Requirement DISCUSSION OCTOBER 25, 2023 East Valley Water District Annual Audit Fiscal year ended June 30, 2023 Responsibilities of Auditor 2 Audit District’s financial statements in accordance with US Generally Accepted Auditing Standards, Government Auditing Standards and the State Controllers Minimum Audit Requirements for Special Districts Plan the audit to express an opinion as to whether managements financial statements are fairly presented, in all material respects, in accordance with generally accepted accounting principles (GAAP) o Provide reasonable assurance, not absolute Audit process 3 Interim audit procedures: o Reviewed internal controls over financial reporting for the following areas (inquiries, inspect documents, etc.): §Billing and cash receipts §Cash and investments §Information technology §Financial closing and reporting §Capital assets and long-term debt o Performed internal control testing over the following areas, as needed: §Cash disbursements §Purchasing and contracts §Payroll §Common controls over multiple areas (reconciliations, journal entries, etc.) Audit process (continued) 4 Year-end audit procedures (audit of numbers): o Conducted detailed audit of financial records o Inquire, inspect, and examine (and confirm as applicable) evidence about balances, transactions and events o Performed analytical procedures (review and evaluate significant variances and/or unusual transactions) o Performed data analytics over disbursements o Benford’s Law, check sequence, Holiday/weekend, etc. o Review ACFR and evaluate for compliance with GAAP and GFOA COA guidelines Audit process (continued) 5 Significant changes from prior year: o There were no significant changes in financial reporting from the prior year. o New accounting policies were adopted during the year. o GASB 96, SBITA Completing the process 6 Independent Auditor’s Report o Unmodified opinion expressed ●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 o Audit not designed to express an opinion on internal control o No significant deficiencies or material weaknesses reported o No matters of noncompliance reported Completing the process (continued) 7 SAS 114 letter to those charges with governance o No uncorrected misstatements reported o No material audit adjustments o No difficulties working with the District o No disagreements with management Conclusion ●Questions? 8 Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023 East Valley Water District Prepared by: Finance Department 31111 Greenspot Road Highland, CA 92346 Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023 Table of Contents 1 Page No. Introductory Section Financial Section Independent Auditors’ Report ...................................................................................... 13-15 Management’s Discussion and Analysis ......................................................................... 16-28 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 District’s Proportionate Share of the Net Pension Liability ............................... 69 Schedule of District’s Contributions ................................................................................ 70 Schedule of Changes in the Net OPEB Liability ............................................................ 71-72 Schedule of OPEB Healthcare Contributions .................................................................... 73 Notes to the Required Supplementary Information .......................................................... 74 Supplementary Information History and Organization ............................................................................................... 78 Combining Schedule of Net Position ........................................................................... 79-80 Combining Schedule of Revenues, Expenses, and Changes in Net Position .................... 81-83 Combining Schedule of Cash Flows ............................................................................ 85-86 Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023 Table of Contents 2 Page No. Statistical Information Section Financial Trends Changes in Net Position by Component – Last Ten Fiscal Years .................................... 91-92 Operating Revenue by Source – Last Ten Fiscal Years ..................................................... 93 Water Operating Expenses – Last Ten Fiscal Years .......................................................... 94 Wastewater Operating Expenses – Last Ten Fiscal Years ................................................. 95 Water Reclamation Operating Expenses – Last Ten Fiscal Years ....................................... 96 Revenue Capacity Water Sales and Production – Last Ten Fiscal Years ........................................................ 97 Revenue Rates for Water – Last Ten Fiscal Years ...................................................... 99-100 Revenue Rates for Wastewater – Last Ten Fiscal Years ............................................ 101-102 Active Services by Type – Last Ten Fiscal Years ............................................................. 103 Principal Customers – Current Fiscal Year and Nine Years Ago......................................... 104 Debt Capacity Ratio of Outstanding Debt – Last Ten Fiscal Years .......................................................... 105 Debt Service Coverage – Last Ten Fiscal Years............................................................... 106 Demographic Information Demographic and Economic Statistics – Last Ten Calendar / Fiscal Years ......................... 107 Operating Information Full-Time Equivalent Employees by Department – Last Ten Fiscal Years ........................... 108 Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ....... 109 Other Information Capacity Charge Funds ............................................................................................ 111-114 3 4 5 October 11, 2023 To the Board of Directors and Customers of East Valley Water District, We are pleased to submit the Annual Comprehensive Financial Report (Annual Report) for East Valley Water District for the year ended June 30, 2023. This report was prepared by District staff in accordance with standards established by the Governmental Accounting Standards Board (GASB). 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 Annual Report for a detailed discussion regarding the District’s financial condition and results of operations. The Annual Report follows the guidelines recommended by the Government Finance Officers Association (GFOA) of the United States and Canada. In November 2023, the District will, again, submit the Annual Report 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 104,000 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, 2023, the District had 21,679 water connections and 19,831 wastewater connections. Water Supply and Reliability The District’s water supply for the year ended June 30, 2023 includes groundwater (80.8 percent), surface water (6.9 percent), and imported water (12.3 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. 6 Local Economy East Valley Water District is located within San Bernardino County in a metropolitan area referred to as the “Inland Empire”. Since 2014, the District’s population has grown by more than 9 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, City of Highland, San Manuel Indian Bingo & Casino, and Village Lakes Homeowners Association forming the list of top five users. In 2023, the average household income within the District’s service area was $56,514, approximately 22% 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 $68,105, approximately 21% higher than the overall District average. Financial Management The District manages its resources conservatively 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 (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. 80.8% 6.9% 12.3% Water Supply Sources Groundwater Surface Water Imported 7 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 (GAAP). The District’s internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be derived and 2) the valuation of costs and benefits requires estimates and judgments by management. Budgetary Control The District’s Board of Directors annually adopts a balanced operating and capital budget prior to the new fiscal year. The budget authorizes expenditures and provides a basis for accountability over the District’s enterprise operations and capital projects. Each quarter, management provides the Board with a quarterly budget review to allow Board assessment of staff’s progress in meeting goals and 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 September 2020. This rating was affirmed by Standard and Poor’s Global Rating as the result of a review conducted in January 2023. Investment Policy The Board of Directors annually adopts an investment policy that conforms to California State Law, District ordinances and resolutions, and the prudent person standard. The objectives of the policy are safety, liquidity, and yield. District funds are normally invested in the State Treasurer’s Local Agency Investment Fund (LAIF), and Federal government Treasury notes or agency obligations. Audit and Financial Reporting State law requires the District to obtain an annual audit of its financial statements by an independent Certified Public Accountant. This year, the District’s Financial statements were audited by Rogers, Anderson, Malody & Scott, LLP from San Bernardino, 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 Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022. This was the 11th 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 Annual Comprehensive Financial Report. This report must satisfy both GAAP and applicable legal requirements. 8 A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program 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, Michael Moore General Manager/CEO Brian W. Tompkins Chief Financial Officer EAST VALLEY WATER DISTRICT Organizational Structure Year Ended June 30, 2023 9 EAST VALLEY WATER DISTRICT Principal Officials Year Ended June 30, 2023 10 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, 2023 Name Title Elected / Appointed Current Term Phillip R. Goodrich Chairman of the Board Elected 2022 - 2026 James Morales, Jr.Vice-Chairman of the Board Elected 2022 - 2026 David E. Smith Governing Board Member Elected 2020 - 2024 Ronald L. Coats Governing Board Member Elected 2022 - 2026 Chris Carrillo Governing Board Member Elected 2020 - 2024 Contact Information East Valley Water District Michael Moore, 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, 2022 11 12 EAST VALLEY WATER DISTRICT Independent Auditor’s Report Year Ended June 30, 2023 13 EAST VALLEY WATER DISTRICT Independent Auditor’s Report Year Ended June 30, 2023 14 EAST VALLEY WATER DISTRICT Independent Auditor’s Report Year Ended June 30, 2023 15 EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 16 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, 2023 (2022 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, 2023, the District’s total assets and deferred outflows increased by $24.5 million, to $385.1 million. The increase was the combined result of increases to both Current assets and Capital assets. Current assets increased $9.0 million (25%) to $45.4 million. While the increase is a net between increases and decreases of the various current asset line items, the primary reason for the increase was in the amount Due From Other Governments, which grew from $10.3 million to $20.5 million. This category recognizes outstanding EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 17 reimbursement claims from the state revolving fund for loan eligible construction activity on the Sterling Natural Resource Center (SNRC), or reimbursements receivable from partner agencies in the construction of regional recycled water facilities. Utility Accounts Receivable balances fell 14.8% to $5.9 million for two reasons. First, the District resumed full collection efforts on delinquent accounts, up to and including service disconnection, which is the District’s most effective tool for collections. The Governor’s moratorium on disconnections for non-payment between April of 2020 and December 2021 allowed some customers to accumulate delinquent balances for up to two years, balances that they would not be able to pay without financial assistance. Securing external financial assistance was the second tool that helped lower customer balances, which the District facilitated by enrolling in two programs - CAPP and LIHWAP. The California Arrearage Payment Program (CAPP) supplied state funds which could be applied to customer account balances incurred over a qualifying period during the pandemic. More recently the District enrolled in the Low Income Household Water Assistance Program (LIHWAP) which supplied federal funds to pay customer account balances if they were eligible, based on income thresholds. More than $600 thousand in external funding has been applied to customer balances through June 2023. Inventory balances remained level, increasing just 3.2% to $974 during FY 2022-23. Restricted Asset balances increased from $11.0 to $12.4 million. The increase is the result of significant development activity and the related collection of restricted development impact fees. Restricted assets do not include large retentions held on the construction contract of the Sterling Natural Resource Center, as payment of the retentions will be made with loan proceeds borrowed from the state revolving fund (converted to Long Term debt) rather than paid out of current financial resources. 2023 2022 Current Assets 45.4$ 36.4$ Restricted Assets 12.4 11.0 Other Assets 0.3 0.3 Capital Assets - Net 319.7 309.2 Total Assets 377.8 356.9 Total Deferred Outflow of Resources 7.3 3.7 Current Liabilities 26.4 21.0 Non-Current Liabilities 207.9 186.9 Total Liabilities 234.3 207.9 Total Deferred Inflows of Resources 3.0 7.6 Net Position Net Investment in Capital Assets 112.9 117.1 Restricted 10.8 9.1 Unrestricted 24.1 18.9 Total Net Position 147.8$ 145.1$ Capital Assets increased by $10.5 million during the 2022-23 fiscal year. For purposes of the table above, Capital Assets includes construction in progress (CIP), utility plant in service, and the related accumulated depreciation. Changes in Capital Assets included additions of $16.8 million, Net of Asset Retirements with a book value of $0.01 million and an annual depreciation charge of $6.3 million. Capital additions during the year were primarily EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 18 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. Investment losses of 6.1% on pension plan assets during the plan year ended June 2022, compounded by actuarial assumptions that the assets would earn 6.8%, led to a significant increase in Deferred Outflows-Pensions for 2022-23 of $3.3 million. This amount was accompanied by an increase in Deferred Outflows related to Other Post Employment Benefits (OPEB) of $0.3 million. As current assets increased by $9.0 million, current liabilities also increased by $5.1 million, the result of a growing retentions payable balance and an increase of $3.1 million in year-end vendor payables compared to the prior year end. These increase in the current balances resulted in no change to the District’s current ratio which remained at 1.7:1. However, by removing $10.6 million in retentions payable related to the SNRC from the calculation, the current ratio improves to 2.9:1. Justification for removing the SNRC retentions payable from the calculation is that when the contractor is paid the retention, the District will request a draw against its SRF loan for the retentions, rather than drawing on District financial resources, in effect converting retentions to long-term debt. Non-Current Liabilities increased by $20.9 million, the net effect of: • $16.1 million in draws on the State Revolving Fund loan for the SNRC; plus • $(2.5) million in principal payments and premium amortization; • $(0.1) million decrease in Long-Term Debt amounts classified as Current Liabilities; • $0.2 million increase in Compensated Absences and Other Post-Employment Benefit obligations calculated in accordance with GASB statement 75 (retiree medical); and • $7.2 million increase in unfunded pension benefit obligations due to extraordinary losses on pension plan assets held by CalPERS for the year ended June 2022, the date of the valuation on which current obligations are calculated. Pensions and OPEB (Other Post Employment Benefits) are further discussed in Notes 8 and 11 of the accompanying financial statements. Long-Term Debt and Compensated Absences are further explained in financial statement Notes 5 and 6, respectively. The District’s total Net Position was $147.8 million at the end of fiscal year 2023, a $2.7 million increase compared to the end of the previous fiscal year. Of the $147.8 million Net Position balance, $112.9 million is categorized as Net Investment in Capital Assets, $10.8 million is Restricted for Capital Expansion Projects, and $24.1 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 $24.5 million and $25.7 million over five and ten year periods, respectively. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 19 Results of Operations and Changes in Net Position Water Operations Water sales for fiscal year 2022-23 decreased 8.0% to $17.0 million, the result of a decrease in water demand by customers from 17,998 acre-feet in 2021-22, to 15,341 acre-feet. The significant decline in demand, or consumption, is attributable to historic levels of snowfall and rain in California during the winter of 2023. Locally, the District’s weather station in Highland, California recorded 24.03 inches of rain from July 2022 to June 2023, compared to 10.44 inches recorded in the previous fiscal year. Sales revenue of $17.0 million fell short of 2022-23 projections of $17.7 million. Projections are based on historical usage, and follow a predictable pattern, but again, extraordinary levels of rain throughout the winter months suppressed demand for water, especially water used for irrigation. Sales for irrigation purposes fell by approximately 21%, while residential usage decreased by approximately 15%. Usage by commercial / business customers had the smallest decline in usage at about 5%. Total water produced by the District during the year was 16,408 acre feet, with the difference between water produced and water sold of 1,067 acre feet (6.5%) being the result of District flushing programs, water use at District facilities, and system leaks. The District, like all California water agencies, participates in an annual water audit to identify and work to mitigate unidentified water losses from the District’s water distribution system. The other major water operating revenue collected by the District is Water System, or Meter Charge revenue. Meter Charge revenue grew by 6.9% to $9.8 million for fiscal year 2022-23. The increase was due to a 3% rate increase that became effective in February of 2023, and to a lesser extent, new development. The District has three active residential developments during 2022-23 and added approximately 100 new customers as a result. $0 $5 $10 $15 $20 $25 $30 $35 2019 2020 2021 2022 2023 Mi l l i o n s Water Operating Revenue versus Expenses Revenue Expenses Water Operating expenses decreased 1.2% to $26.6 million for fiscal year 2022-23. The primary factors contributing to this significant increase were a market median wage adjustment for positions found by an independent study to EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 20 be significantly below market median, energy costs, and inflationary pressure on the price of goods and services overall. The rising cost of energy has had a significant impact on water operations for the past three years. Although the District has recently implemented two rate adjustments, Edison rate increases, combined with rising insurance costs and fuel costs, have kept the District from being able to build on reserves. In addition to rate increases, Edison redefined daily ‘peak’ hours. Peak hours and the high rates associated with them, were shifted away from the period 1:00 p.m. to 5:00 p.m., hours during which demands on the electrical grid have fallen because many customers are generating their own solar energy during those hours, to 4:00 p.m. to 9:00 p.m. when customers returning home from work/school are using electrical appliances but cannot generate solar energy. The District was able to adjust to the shift in peak hours during weekdays, but another revision that added peak hour pricing to weekend days disrupted District operational strategies that avoided peak hour rates by filling all reservoirs during the weekend. The effects of power cost increases and other costs fluctuations on the various cost centers and programs are outlined below: • Source of Supply: power costs related to groundwater well production increased $834 thousand (46%) as water production was shifted from the District’s Surface Water Treatment Plant to wells while new Granular Activated Carbon treatment trains were installed at the treatment plant. • Pumping: power costs related to boosting water to higher pressure zones increased $117 thousand (18%) to $763 thousand due to continued changes in Edison rates and rate structures explained above. • Treatment: these costs increased $167 thousand (16%) overall primarily due to a $125 thousand increase in materials and supplies, as District staff replaced fittings and valves on Plant 134 membrane treatment trains as these fittings were 15 years old. Staff also had to contract for the replacement of GAC filter media at the District’s Plant 28, which led to a 54% increase in Contract Services costs for the treatment program compared to prior year costs. Power and chemical costs decreased slightly due to the shift in water production from the treatment plant to wells explained above. • Transmission and Distribution: distribution system maintenance costs increased $748 thousand (21%) due to increases to all the major budget line items for this program – salaries & benefits, contract services, and materials and supplies. The costs were higher than projected as District crews responded to more than 200 main leaks, five of which involved significant water loss. Contracted paving services increased along with the number of leaks repaired. Wastewater Collection Operations Wastewater Collections operating revenues consist of System 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. A rate adjustment implemented in January 2023 was primarily responsible for an increase in System charge revenue to $5.6 million for 2022-23. Other Operating Revenue includes inspections, plan checking, and other development related fees; and periodic reimbursements from other public agencies or utilities for shared costs or participation in conservation programs. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 21 In fiscal year 2022-23, Other Operating Revenue included significant service connection fees related to Additional Dwelling Units (ADUs) built on parcels with existing residential units. Wastewater Collection pipeline maintenance costs increased by 28% compared to the prior year. This change is the result of increased salaries and benefits costs as the District filled a vacant position on the maintenance crew. $0 $1 $2 $3 $4 $5 $6 $7 2019 2020 2021 2022 2023 Mi l l i o n s Wastewater Collections Operating Revenue versus Expenses Revenue Expenses Water Reclamation Operations Water Reclamation operating revenue consists primarily of Wastewater Treatment charges. Treatment Charge rates have historically been established by the City of San Bernardino Water Department (City), which currently, and until approximately February 2024, treats wastewater flows generated by District customers. In February, upon completion of the SNRC, the District should have the capability to treat its own wastewater. The graph below depicts the District’s revenue and expenses related to the treatment of wastewater. Through FY 2021 the District used the City rates to bill its customers and then remit payment to the City at the end of each month. Under this relationship, treatment revenue collected was exactly equal to treatment fees paid to the City. In May 2022, the District established and implemented its own rates and began hiring operators and covering startup costs for commencement of operations at the SNRC. The District’s Wastewater Treatment rates were adopted with three phases. Phases 1 and 2 were implemented in May 2022 and January 2023, respectively, with phase 3 scheduled for implementation in January 2024. The District’s rate structure consists of fixed monthly charges for all residential customers, and for non-residential customers, a combination of fixed and variable charges, which are assessed based on water usage. For the year ended June 2023, Water Reclamation revenue was $10.1 million, compared to $9.7 million in the previous fiscal year. The increase was substantially due to the rate adjustment that became effective in January 2023. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 22 $6 $7 $8 $9 $10 $11 2019 2020 2021 2022 2023 Mi l l i o n s Water Reclamation Operating Revenue versus Expenses Revenue Expenses Water Reclamation is presented as a separate fund for the first time in 2022-23 and costs that are being incurred have no prior year numbers for comparison purposes. Therefore, just a brief description of costs that were incurred in the inaugural year follows. Water Reclamation operating costs include continued monthly treatment fees paid to the City; these payments will continue until the SNRC is operational and flows can be diverted away from the City’s treatment plant. Treatment fees (included in Contract Services) were $8.5 million, compared to $9.0 million in the previous fiscal year; a 6% decrease. Treatment fees include a significant component based on water usage, which as explained in previous sections, was down significantly in 2022-23 Other treatment operating costs totaled $1.1 million and included operator labor and benefits, power costs, and supplies. In addition, costs for maintenance of the plant, such as facilities labor and benefits, insurance, security, and tools, totaled $0.7 million. Shared Customer Account & Administrative Costs Costs related to Customer Accounts are generated by the Customer Service and Meter Services departments. The burden for funding these costs is allocated between the Water and Wastewater Collection funds at roughly a 70%- 30% split; the Water Reclamation fund does not currently share in these costs, and will not until the fund is more established and revenues are able to cover costs sufficiently. Customer account costs did increase 31% in 2022-23, primarily due to the opening of a second Customer Service counter at the new SNRC campus in July 2022. The cost experiencing the most significant increases were salaries and benefits, contract services, and postage. Salaries & benefits increased due to normal pay range step increases, the creation of a second Lead position for the new office, and increased reliance on temporary labor to fill in for vacations and illnesses. Contract Services increased because of duplicate services needed at the second site (e.g. Armored car), and the ramping up of bill collection efforts when the moratorium on disconnections for non-payment was lifted by the Governor. Increased delinquent notice delivery related to the collection efforts was also the reason EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 23 for an increase in postage. Administrative and general costs for the District decreased by 5.0% to $13.2 million. The decrease is the net effect of several factors, the most significant of which are the following: 1. Salaries & Benefits decreased $2.4 million to $6.0 million, compared to $8.4 million incurred in the previous year. This unlikely variance between years is the result of accounting entries to adjust pension and OPEB liabilities to actuarially calculated balances. These adjustments had the effect of increasing Benefits costs by $1.4 million in the previous year, and decreasing them by $1.0 million in the current year. If these adjustments are ignored, salaries and benefits remained constant at about $7.0 million, with the normal pressures for increases from raises and COLA adjustments that were offset by vacated positions that had not been filled as of June 2023. 2. Insurance costs continued to climb, by 52.5% to $1.2 million in 2022-23. The insurance industry in California continues to feel the effects of costly wildfires in 2019, including the District’s risk pool which buys excess insurance on the open market. 3. Contract Services increased 45.8% to $3.8 million. The most significant items were incurred at the new SNRC administrative campus, where security services, landscaping and other maintenance services, software licensing and maintenance, and utilities added approximately $800 thousand to annual costs. Non-Operating Activities The District’s non-operating revenue of $432 thousand includes investment income of $352 thousand, a gain on disposal of surplus vehicles of $30 thousand, and miscellaneous income of $50 thousand. Investment income is earned on the District’s portfolio of US Treasury and Agency Bonds and deposits with the Local Agency Investment Fund (LAIF). During 2022-23, the District’s investment earnings increased 50% compared to the prior year, with yields on U.S. obligations exceeding 5% and the apportionment rate paid by LAIF more than quadrupled from 0.75% to 3.15%. At year end, however, the District booked an unrealized loss on investments due to fair value fluctuations, and the loss of $87 thousand (presented with non-operating expenses) reduces the net income on investments to $265 thousand. One additional item shown as non-operating expense is interest paid on Long-Term Debt of $869 thousand. Capital Contributions Contributions received during fiscal year 2022-23 included $1.9 million in developer capacity fees and $62 thousand in operating cost reimbursement grants related to COVID-19. Capacity fees were received for 113 Equivalent Dwelling Units (EDUs) throughout the fiscal year, with 36 of the units being classified as commercial, and the remaining 77 units coming from two moderate developments of single- family homes. Grant funds received were $58 thousand FEMA funds for COVID-19 pandemic related expenses and safety protocols put in place during 2021. The remaining $4 thousand is administrative cost reimbursements for the District’s participation in the California Arrearage Payment Program (CAPP) in which the state paid delinquent customer accounts for bills incurred during the pandemic. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 24 East Valley Water District Changes in Net Position (in millions) 2023 2022 2021 Water Sales 17.0$ 18.5$ 19.3$ System Charges 15.5 14.0 13.9 Treatment Charges 10.1 9.8 8.5 Other Operating Rev 1.2 0.8 0.5 Supply & Pumping (4.9) (4.3) (4.2) Distribution / Collection (5.1) (4.2) (4.0) Treatment (10.8) (10.1) (9.5) Customer Accounts (2.2) (1.7) (1.6) General & Administrative (13.2) (13.9) (10.7) Depreciation (6.3) (6.4) (6.5) Non-Operating Revenues 0.4 1.3 0.2 Interest Expense (0.9) (1.6) (2.6) Income Before Contributions & Special Item 0.8 2.2 3.3 Developer Contributions 1.8 2.7 0.6 Grant Funds Contributed 0.1 0.1 0.3 Change in Net Position 2.7 5.0 4.2 Beginning Net Position, as Previously Reported 145.1 140.1 135.9 Ending Net Position 147.8$ 145.1 140.1 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, 2023 is $112.9 million, a decrease of $4.2 million compared to June 30, 2022. The decrease is the net result of the acquisition or construction of capital assets for $16.7 million, offset by a $14.6 million increase in outstanding debt (includes associated deferred inflows/outflows), and depreciation of $6.3 million. Restricted Restricted Net Position consists of unexpended development impact fees which may only be appropriated for a project included in the District’s Capital Improvement Program. During fiscal year 2022-23 the District received $1.9 million in capacity fees while no restricted funds were used to fund current projects. A summary of the accumulation and use of these funds is presented as Other Information in this document. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 25 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 increased $5.2 million to $24.1 million in fiscal year 2022-23. Capital Assets The District spent approximately $16.7 million for expansion or replacement of property, plant, and equipment during the 2022-23 fiscal year. These amounts are reflected in Utility Plant, or as additions to Construction in Progress, in the accompanying financial statements. Placed in Service During the 2022-23 fiscal year, District staff, consultants, and contractors completed work on the following: • Rehabilitated 2 million gallon storage tank at Plant 108; • Installed emergency generator (grant funded) at Plant 101; • Replaced and upsized approximately 1,800 feet of water main in Elmwood Road and Pleasant Hill Drive with District crews; and • Completed renovations to Boardroom and Customer Service counters to enhance security and functionality. Utility Plant in Service – June 30th (in millions) Department 2023 2022 Water Source of Supply 19.8$ 19.5$ Pumping 15.2 15.2 Transmission & Distribution 102.2 100.9 Treatment 29.3 29.2 Wastewater Collection Lines 27.9 27.8 General Plant 32.6 31.2 Total 227.0$ 223.8$ Construction in Progress (CIP) Construction in Progress increased $12.7 million to $196.7 million (see note 4) between June 30, 2022 and June 30, 2023. With approximately 45 projects in progress, additions to CIP totaled $15.6 million, while $2.9 million was capitalized and transferred to Utility Plant in Service, or expenses. Of the $196.7 million balance in Construction in Progress at June 30, 2023, 96% is related to a single project, the Sterling Natural Resource Center. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 26 The SNRC is a water reclamation plant capable of converting six million gallons per day (mgd) of wastewater into recycled water that will be recharged into the regional groundwater basin. Future phases will increase capacity of the plant to 10 mgd. Other significant work in progress includes upgrades to treatment processes at the District Surface Water Treatment Plant (134), and drilling of two monitoring wells to monitor effects of recharging recycled water in the groundwater basin. 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; • Seismic retrofits for multiple water tanks / reservoirs to help ensure structural integrity of the tank during a major earthquake; and • Partner with developers to increase the capacity of new storage tanks they plan to build to serve their project. The District has been awarded 10% match funding under the State’s Prepare California Match Program for a $6.8 million project to complete seismic retrofits on several water storage tanks. A District application for FEMA 2022 Building Resilient Infrastructure and Communities (BRIC) grant funds to cover 90% of the project is under review and should be finalized early in 2023. The District has also been awarded Phase 1 FEMA funding of over $1.1 million for design of a significant water main replacement project. Once design is complete, the District will work to finalize Phase 2 funding to cover up to $40 million in replacement of pipelines which qualify for hazard mitigation assistance. The District is also exploring the feasibility of building a new surface water treatment plant in the District’s east end, closest to the source of surface water and to the largest areas of undeveloped land in the District’s service area. Future Capital Improvements - Wastewater The District maintains a list of recommended wastewater main replacements / rehabilitations based on assessments of pipeline condition noted during video logging of the collection system. Pipelines assessed at the highest risk of structural failure are prioritized on the District’s 5-year Capital Improvement Plan (CIP). The District will also update its Wastewater Collection System Master Plan during fiscal year 2024-25 to identify undersized main pipelines that are susceptible to surcharging during heavy rains. Undersized pipelines can impede new development and will be included in discussions with developers as necessary. Pipelines identified in the District’s Wastewater Collection System Master Plan will be built into models developed for an update to the District’s capacity fees. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 27 Long Term Debt / Credit The District’s long-term debt consists of Revenue Bonds, loans from the California Department of Water Resources (DWR) State Revolving Fund, a capital lease purchase with U.S. Bank, and a loan from the San Bernardino Valley Municipal Water District (SBVMWD). Outstanding balances as of June 30, 2023 were as follows: 2020A Refunding Bonds 15,050,000$ 2020B Refunding Bonds 13,060,000 SBVMWD Loan 1,275,000 AVAD Construction 50,716 EFAD Construction 260,323 Plant 134 Construction 5,134,773 SNRC Construction 155,723,918 U.S. Bank Lease Purchase 444,375 Total 190,999,105$ 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, and was finalized on November 21, 2019. In May of 2023 the District was approved for an increase in the loan to $168.3 million for three purposes, 1) finance a large emergency storage basin for off-spec water in the event of an SNRC emergency shutdown, 2) upgrade boosters to move recycled water farther to a revised location for recharge, and 3) to fund a gap between the amount of contracts signed to build digesters at the SNRC, and the existing loan funding for those digesters. Debt service of approximately $7.5 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 recharge of recycled water produced by the SNRC, 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, 2023 is $155.7 million; loan payments will begin one year after the Notice of Completion is filed for the SNRC. All scheduled debt payments for fiscal year 2022-23 were paid timely. See Note 5 to the accompanying financial statement notes for further discussion about Long-Term Debt. EAST VALLEY WATER DISTRICT Management’s Discussion and Analysis Year Ended June 30, 2023 28 $0 $50 $100 $150 $200 $250 2019 2020 2021 2022 2023 Mi l l i o n s Outstanding Long-Term Debt June 30th 2020B Bonds 2020A Bonds SBVMWD Loan US Bank Loan SRF Loans-Other SRF Loan-SNRC Standard & Poor’s and Fitch rated the District’s 2020 Series A and B Revenue Bonds at AA- at the time of issuance. Fitch affirmed this rating after a review of the District’s financial plans in June 2023. Dun & Bradstreet (D&B), based on audited financial statements and creditor input, also rated the District. The rating given by D&B is currently 5A1 accompanied by a financial condition assessment of ‘strong’, which is no change from previous years. Rate Increases On May 12, 2021 the District adopted rate adjustments for water and wastewater collection activities, and adopted inaugural rates for the District’s water reclamation activities which were implemented in May of 2022 to help pay startup costs being incurred prior to commencement of operations of the Sterling Natural Resource Center. Additional rate adjustments for all water and wastewater services are scheduled to become effective on January 1, 2024. Additional information about the District’s water and wastewater rates can be found on the District’s website at www.eastvalley.org. Contacting the District’s Financial Management This financial report is designed to give our customers / ratepayers, creditors, and investors a general overview of the District’s finances, and to demonstrate the District’s accountability for money it receives, and stewardship over facilities it maintains. If you have questions about this report, or need additional information, contact the District’s Finance Department at 31111 Greenspot Road, Highland, California 92346, or call (909) 381-6463. 29 30 EAST VALLEY WATER DISTRICT Statement of Net Position June 30, 2023 The accompanying notes are an integral part of this statement. 31 For Comparative Purposes Only 2023 2022 ASSETS Current Assets: Cash and Cash Equivalents 10,465,911$ 11,313,557$ Investments 5,329,245 4,574,471 Accounts Receivable, Net 5,940,839 6,974,934 Interest Receivable 73,545 18,461 Other Receivables 1,847,810 1,994,056 Due from Other Governments 20,552,300 10,306,002 Inventory 974,820 944,539 Prepaid Expenses 256,800 270,497 Total Current Assets 45,441,270 36,396,517 Non-Current Assets: Restricted Cash and Cash Equivalents 12,357,894 10,960,683 Assessments Receivable 263,478 285,745 Capital Assets not being Depreciated 203,751,889 190,577,346 Capital Assets, Net 115,951,753 118,693,660 Total Non-Current Assets 332,325,014 320,517,434 Total Assets 377,766,284 356,913,951 DEFERRED OUTFLOWS OF RESOURCES Deferred Charge on Refunding 854,647 896,852 Deferred Outflows - Pensions 5,317,071 2,024,887 Deferred Outflows - OPEB 1,184,326 794,163 Total Deferred Outflows Of Resources 7,356,044 3,715,902 Total Assets and Deferred Outflows of Resources 385,122,328$ 360,629,853$ (Continued) EAST VALLEY WATER DISTRICT Statement of Net Position - Continued June 30, 2023 The accompanying notes are an integral part of this statement. 32 For Comparative Purposes Only 2023 2022 LIABILITIES Current Liabilities: Accounts Payable and Accrued Expenses 8,423,138$ 5,283,932$ Accrued Payroll and Benefits 825,377 772,778 Customer Service Deposits 1,403,962 1,390,220 Construction Advances and Retentions 12,142,565 10,188,813 Accrued Interest Payable 263,778 263,507 Current Portion of Compensated Absences 652,177 604,122 Current Portion of Long-Term Debt 2,555,654 2,499,787 Due to Other Governments 135,523 - Total Current Liabilities 26,402,174 21,003,159 Non-Current Liabilities: Compensated Absences, Less Current Portion 775,590 683,507 Net Pension Liability 13,855,136 6,657,689 Net OPEB Liability 1,986,360 1,861,875 Long-Term Debt, Less Current Portion 191,256,816 177,740,054 Total Non-Current Liabilities 207,873,902 186,943,125 Total Liabilities 234,276,076 207,946,284 DEFERRED INFLOWS OF RESOURCES Deferred Inflows - Refunding 1,128,796 1,181,143 Deferred Inflows - Pensions 1,600,501 6,115,141 Deferred Inflows - OPEB 326,072 288,464 Total Deferred Inflows Of Resources 3,055,369 7,584,748 Total Liabilities and Deferred Inflows Of Resources 237,331,445 215,531,032 NET POSITION Net Investment in Capital Assets 112,909,956 117,079,071 Restricted for: Future Capital Expansion Projects 10,761,677 9,076,014 Unrestricted 24,119,250 18,943,736 Total Net Position 147,790,883$ 145,098,821$ EAST VALLEY WATER DISTRICT Statement of Revenues, Expenses, and Changes in Net Position Year Ended June 30, 2023 The accompanying notes are an integral part of this statement. 33 For Comparative Purposes Only 2023 2022 OPERATING REVENUES Water Sales 17,004,576$ 18,472,876$ Wastewater Treatment Charges 10,108,850 9,764,357 System Charges 15,483,115 14,020,823 Other Charges 1,213,471 835,559 Total Operating Revenues 43,810,012 43,093,615 OPERATING EXPENSES Water Department: Source of Supply 3,890,634 3,515,262 Pumping 1,003,038 756,843 Treatment 1,212,646 1,045,730 Transmission and Distribution 4,311,606 3,563,328 Customer Accounts 1,653,739 1,225,403 Total Water Department 12,071,663 10,106,566 Wastewater Department: Wastewater Collection 752,489 587,128 Customer Accounts 604,006 494,505 Total Wastewater Department 1,356,495 1,081,633 Reclamation Department: Customer Accounts 9,601,461 9,084,061 Total Reclamation Department 9,601,461 9,084,061 Administrative and General 13,221,140 13,927,491 Operating Expenses Before Depreciation 36,250,759 34,199,751 Depreciation 6,264,377 6,378,590 Total Operating Expenses 42,515,136 40,578,341 Operating Income 1,294,876$ 2,515,274$ (Continued) EAST VALLEY WATER DISTRICT Statement of Revenues, Expenses, and Changes in Net Position - Continued Year Ended June 30, 2023 The accompanying notes are an integral part of this statement. 34 For Comparative Purposes Only 2023 2022 NON-OPERATING REVENUES (EXPENSES) Investment Income 352,273$ 165,989$ Gain on Disposal 30,134 1,042,562 Other Income 49,404 33,706 Interest Expense (869,397) (1,295,223) Unrealized Investment Losses (87,280) (303,474) Total Non-Operating Revenues (Expenses)(524,866) (356,440) Income Before Contributions 770,010 2,158,834 CONTRIBUTIONS Capacity Charges 1,860,020 2,722,948 Operating Grants 62,032 103,577 Total Contributions 1,922,052 2,826,525 CHA NGE IN NET POSITION 2,692,062 4,985,359 TOTA L NET POSITION, BEGINNING 145,098,821 140,113,462 TOTA L NET POSITION, ENDING 147,790,883$ 145,098,821$ EAST VALLEY WATER DISTRICT Statement of Cash Flows Year Ended June 30, 2023 The accompanying notes are an integral part of this statement. 35 For Comparative Purposes Only 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers 45,004,610$ 42,383,540$ Cash Payments for Employees Services (12,286,780) (12,167,869) Cash Payments to Suppliers (21,332,407) (22,435,948) Cash to/(from) Other Sources 49,404 (1,186,152) Net Cash Provided by Operating Activities 11,434,827 6,593,571 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Reimbursements Received 3,103,376 8,287,456 Grant Funds Received 62,032 - Proceeds from Sale of Capital Assets 40,093 3,368,677 Developer Fees Received 1,860,020 2,826,525 Assessments Received 93,827 23,081 Proceeds/Draws from SRF Loan 2,705,185 13,221,385 Principal Paid on Capital Debt (2,336,691) (2,290,011) Interest Paid on Capital Debt (1,024,807) (1,527,660) Acquisition of Capital Assets (14,771,878) (25,897,709) Net Cash Used for Capital and Related Financing Activites (10,268,843) (1,988,256) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received from Investments 224,214 62,700 Acquisition of Investments (1,139,837) (3,456,732) Proceeds from Sale of Investments 299,203 2,357,673 Net Cash Provided (Used) by Investing Activities (616,420) (1,036,359) Net Increase (Decrease) in Cash and Cash Equivalents 549,564 3,568,956 Cash and Equivalents, Beginning of Year 22,274,241 18,705,285 Cash and Equivalents, End of Year 22,823,805$ 22,274,241$ RECONCILIATION TO STATEMENT OF NET POSITION Cash and Cash Equivalents 10,465,911$ 11,313,557$ Restricted Cash and Cash Equivalents 12,357,894 10,960,683 Total Cash and Cash Equivalents 22,823,805$ 22,274,240$ (Continued) EAST VALLEY WATER DISTRICT Statement of Cash Flows - Continued Year Ended June 30, 2023 The accompanying notes are an integral part of this statement. 36 For Comparative Purposes Only 2023 2022 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income 1,294,874$ 2,515,274$ Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation 6,264,377 6,378,590 Miscellaneous Income/(Expense)49,404 126,699 CIP Projects Expensed 18,656 714,343 Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 1,412,339 (938,233) (Increase) Decrease in Inventory (30,281) (440,925) (Increase) Decrease in Prepaids 13,697 116,907 (Increase) in Deferred Outflows of Resources - Pensions (3,682,347) 851,405 Increase (Decrease) in Accounts Payable 3,274,023 (2,053,069) Increase (Decrease) in Accrued Salaries and Benefits 52,612 88,171 Increase (Decrease) in Compensated Absences 140,139 81,086 Increase (Decrease) in Net Pension Liability 7,197,447 (5,655,605) Increase in Net OPEB Liability 124,485 (179,102) Decrease in Deferred Inflows of Resources (4,477,032) 6,072,725 Increase (Decrease) in Customer Deposits (231,483) (1,312,853) Increase (Decrease) in Developer Deposits 13,917 228,158 Total Cash Provided by Operating Activities 11,434,827$ 6,593,571$ NON-CA SH INVESTING, CA PITA L, A ND NON-CA PITA L FINANCING ACTIVITIES: Fair Value Adjustments to Investments 300,746$ 300,746$ Receivable Offset by Debt 13,349,674$ -$ 1,953,751$ 2,079,355$ Capital Assets Acquired by Assuming Liabilities, Including Retainage Payable EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 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 to secure rights to the Santa Ana River water and have it delivered to the District's surface water treatment plant. At June 30, 2022, the District owned 7,146.99 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, 2023 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 District NFWC Eliminations Total Statement of Net Position Current Assets 45,429,065$ 12,205$ -$ 45,441,270$ Capital Assets 321,611,270 158,603 (2,066,231) 319,703,642 Other Assets 9,959,296 2,662,076 - 12,621,372 Deferred Outflows 7,356,044 - 7,356,044 Total Assets & Deferred Outflows 384,355,675 2,832,884 (2,066,231) 385,122,328 Current Liabilities 26,396,607 5,567 - 26,402,174 Long-Term Liabilities 207,873,902 - - 207,873,902 Deferred Inflows 3,055,369 - - 3,055,369 Total Liabilities & Deferred Inflows 237,325,878 5,567 - 237,331,445 Net Investment in Capital Assets 112,226,565 2,749,622 (2,066,231) 112,909,956 Restricted Net Position 10,683,982 77,695 - 10,761,677 Unrestricted Net Position 24,119,250 - 24,119,250 Total Net Position 147,029,797$ 2,827,317$ (2,066,231)$ 147,790,883$ Statement of Changes in Net Position Sales and Services 42,596,541$ -$ -$ 42,596,541$ Other Operating Revenue 1,213,471 - 1,213,471 Operating Expenses 36,138,327 112,432 - 36,250,759 Depreciation 6,208,540 55,837 - 6,264,377 Operating Income 1,463,145 (168,269) - 1,294,876 Net Non-Operating Revenue (Expenses)(596,426) 71,560 - (524,866) Capital Contributions 1,922,052 - - 1,922,052 Special Items - - - - Change in Net Position 2,788,771 (96,709) - 2,692,062 Beginning Net Position 144,241,026 2,924,026 (2,066,231) 145,098,821 Ending Net Position 147,029,797$ 2,827,317$ (2,066,231)$ 147,790,883$ Net Cash from Operating Activities 11,581,310$ (146,483)$ -$ 11,434,827$ Net Cash from Capital and Related Financing Activities (10,340,403) 71,560 - (10,268,843) Net Cash from Investing Activities (616,420) - (616,420) Beginning Cash and Equivalents 22,042,173 232,068 - 22,274,241 Ending Cash & Equivalents 22,666,660$ 157,145$ -$ 22,823,805$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 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, 2023 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 assets 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 assets 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 three items which qualify for reporting in this category: Deferred Inflows related to Pensions, Deferred Inflows related to OPEB, and Deferred Inflows related to Bond Refinancing. 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, 2023 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 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, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date June 30, 2021 Measurement Date June 30, 2022 Measurement Period July 1, 2021 to June 30, 2022 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 EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 42 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 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. 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. 99 Omnibus 2022 Objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The statement is effective for reporting periods beginning after June 15, 2023. Statement No. 100 (an amendment of GASB Statement No. 62) Accounting Changes and Error Corrections Prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections. The statement is effective for fiscal years beginning after June 15, 2023. Statement No. 101 Compensated Absences Updates the recognition and measurement guidance for compensated absences by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The statement is effective for fiscal years beginning after December 15, 2023. 2) CASH AND INVESTMENTS Cash and Investments as of June 30, 2023 are classified in the accompanying financial statements as follows: Table 2-1 Cash and Cash Equivalents 10,465,911$ Restricted Cash and Cash Equivalents 12,357,894 Investments 5,329,245 Total 28,153,050$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 43 2) CASH AND INVESTMENTS - Continued Cash and investments as of June 30, 2023 consist of the following: Table 2-2 Cash on Hand 9,000$ Deposits with Financial Institutions 8,781,290 Money Market Accounts with Financial Institutions 311,360 Investments with Local Agency Investment Fund 13,722,155 Investment in Debt Securities 5,329,245 Total 28,153,050$ 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 Municipal Securities including EVWD Issues 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 Placement Service Deposits 5 years 30%None Money Market Mutual Funds and Mutual Funds 5 years 15%2 - AAA Collateralized Bank Deposits 5 years None None Commercial Papers 270 days 5%A Medium Term Notes 5 years 30%AA Local Government Investment Pools N/A 25%AA Local Agency Investment Fund (LAIF)N/A None None At June 30, 2023, 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 with reverse repurchase agreements. 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 44 2) CASH AND INVESTMENTS - Continued As of June 30, 2023, the District had the following investments and maturities: Table 2-4 Investment Type Fair Value Average Maturity Freddie Mac 91,310$ 2.14 years Federal Home Loan Bank 2,983,235 1.74 years Federal Farm Credit Bank 180,696 3.40 years US Treasury 1,783,067 1.73 years Tenn Valley Authority 290,937 1.21 years LAIF 13,722,155 N/A Money Market Mutual Funds 311,360 N/A 19,362,760$ Disclosures Relating to Credit Risk Generally, credit risk is the risk that the 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 Freddie Mac 91,310$ N/A -$ 91,310$ -$ Federal Home Loan Bank 2,983,235 N/A - 2,983,235 - Federal Farm Credit Bank 180,696 - 180,696 - US Treasury 1,783,067 N/A 1,783,067 - - Tenn Valley Authority 290,937 N/A - 290,937 - LAIF 13,722,155 N/A - - 13,722,155 Money Market Mutual Funds 311,360 N/A - 311,360 - 19,362,760$ 1,783,067$ 3,857,538$ 13,722,155$ 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 45 2) CASH AND INVESTMENTS - Continued 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, 2023: 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 Freddie Mac 91,310$ -$ -$ 91,310$ Federal Home Loan Bank 2,983,235 - - 2,983,235 Federal Farm Credit Bank 180,696 - - 180,696 US Treasury 1,783,067 - - 1,783,067 Tenn Valley Authority 290,937 - - 290,937 Total Investments Measured at Fair Value 5,329,245$ -$ -$ 5,329,245$ Investments Measured at Amortized Cost LAIF 13,722,155 Money Market Mutual Funds 311,360 Total Investments 19,362,760$ 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, 2023, there were no investments (other than external pools, U.S. Government Securities and Money Market Mutual Funds) that exceeded 5% of the District's total investments. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its 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 EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 46 2) CASH AND INVESTMENTS - Continued public deposits. The District may waive collateral requirements for deposits which are fully insured by Federal depository insurance. As of June 30, 2023, the District had $7,931,933 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, 2023, the carrying amount (at amortized cost) of the pool was $179,160,181,982 and the estimated fair value of the pool was $176,442,053,163. LAIF is regulated by the California Government Code under the oversight of the Treasurers of California. The District's proportionate share of the fair value (as determined by LAIF) as of June 30, 2022, was $13,722,155. 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. Currently LAIF does not have an investment rating. LAIF has a minimum $5,000 transaction amount in increments of $1,000 with a maximum of 15 transactions (combination of deposits and withdrawals) per month. LAIF requires a one-day prior notice for deposits and withdrawals of $10 million or more. 3) RESTRICTED CASH AND CASH EQUIVALENTS Restricted cash and cash equivalents at June 30, 2023 are restricted as follows: Table 3-1 Held for Debt Service 279,428$ Capacity Fees from Developers 10,408,760 Customer Deposits 1,403,059 Construction Advances 109,500 North Fork Water Company 157,147 Total 12,357,894$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 47 4) CAPITAL ASSETS A summary of changes in capital assets for the year ended June 30, 2023 is as follows: Table 4-1 Beginning of End of Year Additions Deletions Adjustments Year Water Fund Non-Depreciable Assets Land and Easements 3,148,311$ 503,385$ -$ -$ 3,651,696$ Water Rights 732,835 - - - 732,835 Construction in Progress 13,134,060 5,734,649 (2,546,191) - 16,322,518 Total Non-Depreciable Assets 17,015,206 6,238,034 (2,546,191) - 20,707,049 Depreciable Assets Source of Supply 19,485,560 328,669 - - 19,814,229 Pumping Plant 15,186,844 93,653 (34,716) - 15,245,781 Treatment Plant 29,227,351 121,422 - - 29,348,773 Transmission and Distribution Plant 100,916,558 1,282,439 - - 102,198,997 General Plant 21,207,565 1,504,970 (150,627) - 22,561,908 Total Depreciable Assets 186,023,878 3,331,153 (185,343) - 189,169,688 Accumulated Depreciation Source of Supply (9,105,956) (664,715) - - (9,770,671) Pumping Plant (8,041,575) (487,631) 34,716 - (8,494,490) Treatment Plant (13,835,822) (649,948) - - (14,485,770) Transmission and Distribution Plant (45,246,131) (2,520,713) - - (47,766,844) General Plant (8,745,386) (1,102,449) 150,627 - (9,697,208) Total Accumulated Depreciation (84,974,870) (5,425,456) 185,343 - (90,214,983) Water Fund Capital Assets, Net 118,064,214 4,143,731 (2,546,191) - 119,661,754 Wastewater Fund Non-Depreciable Assets Land and Easements 2,698,706 - - - 2,698,706 Construction in Progress 13,954,185 859,076 - - 14,813,261 Total Non-Depreciable Assets 16,652,891 859,076 - - 17,511,967 Depreciable Assets Wastewater Collection Plant 27,841,682 36,452 (5,220) - 27,872,914 General Plant 9,948,793 164,824 (159,871) - 9,953,746 Total Depreciable Assets 37,790,475 201,276 (165,091) - 37,826,660 Accumulated Depreciation Wastewater Collection Plant (15,973,236) (460,352) 5,220 - (16,428,368) General Plant (4,172,587) (378,569) 149,912 - (4,401,244) Total Accumulated Depreciation (20,145,823) (838,921) 155,132 - (20,829,612) Wastewater Fund Capital Assets, Net 34,297,543 221,431 (9,959) - 34,509,015 Water Reclamation Fund Construction in Progress 156,909,249 8,623,624 - - 165,532,873 Total Non-Depreciable Assets 156,909,249 8,623,624 - - 165,532,873 Water Reclamation Fund Capital Assets 156,909,249 8,623,624 - - 165,532,873 Total Capital Assets, Net 309,271,006$ 12,988,786$ (2,556,150)$ -$ 319,703,642$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 48 5) LONG-TERM DEBT The schedule below summarizes changes in long-term debt during the year ended June 30, 2023: Table 5-1 Beginning Balance (June 30, 2022) Additions Retirements / Payments Ending Balance (June 30, 2023) Current Portion Long-Term Portion Direct Placement: 2020A Refunding Bonds 15,990,000$ -$ (940,000)$ 15,050,000$ 990,000$ 14,060,000$ 2020A Unamortized Premium 2,958,904 17,555 (163,094) 2,813,365 163,101 2,650,264 2020B Refunding Bonds 13,340,000 - (280,000) 13,060,000 280,000 12,780,000 Subtotal Direct Placement 32,288,904 17,555 (1,383,094) 30,923,365 1,433,101 29,490,264 Direct Borrowing: U.S. Bank Lease Purchase 878,870$ -$ (434,495)$ 444,375 444,375$ -$ SBVMWD Loan 1,704,019 - (429,019) 1,275,000 425,000 850,000 DWR Contracts: AVAD Construction 57,478 - (6,762) 50,716 6,762 43,954 Plant 134 Construction 5,368,172 - (233,399) 5,134,773 233,398 4,901,375 EFAD Construction 273,339 - (13,016) 260,323 13,018 247,305 SNRC 139,669,059 16,054,859 - 155,723,918 - 155,723,918 Subtotal Direct Borrowing 147,950,937 16,054,859 (1,116,691) 162,889,105 1,122,553 161,766,552 Total 180,239,841$ 16,072,414$ (2,499,785)$ 193,812,470$ 2,555,654$ 191,256,816$ 2020 Revenue Bonds Series 2020A - On September 10, 2020, the District issued $16,885,000 of East Valley Water District Refunding Revenue Bonds, Series 2020A (2020A Bonds), to accomplish a current refunding of then outstanding 2010 Revenue Bonds ($21,635,000). The 2020A Bonds carry interest rates ranging from 3.00% to 5.00% and will be repaid in various principal increments with the final payment due on October 1, 2040. The refunded 2010 Bonds carried interest rates ranging from 4.00% to 5.00% and were due in various principal increments until October 1, 2040. The 2020A bonds were issued at a premium of $3,261,890, and after paying issuance costs of $161,885, net proceeds were $19,985,005. The net proceeds, combined with a $2,129,931 sinking fund for 2010 bond debt service, were sufficient to accomplish the refunding of the existing debt. All refunded debt has been retired. 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 2040 using the straight-line method of amortization. The District completed the refunding to decrease total debt service over the next 20 years by $6,052,794, and to obtain an economic gain (difference between the present values of the old and new debt service payment) of $4,765,023. Series 2020B - Also on September 10, 2020, the District issued $13,615,000 of East Valley Water District Refunding Revenue Bonds, Series 2020B (2020B Bonds), to accomplish an advance refunding of then outstanding 2013 Revenue Bonds ($12,085,000). The 2020B Refunding Bonds carry interest rates from 0.42 % to 2.93 % (federally taxable) and will be repaid in various principal increments with the final payment due EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 49 5) LONG-TERM DEBT - Continued on October 1, 2043. The refunded 2013 Bonds carried interest rates ranging from 4.00% to 5.00% and were due in various principal increments until October 1, 2043. The 2020B bonds were issued at face value, and after paying issuance costs of $123,500, net proceeds were $13,491,500. The net proceeds, combined with a $292,563 sinking fund held for 2013 bond debt service, were used to purchase US Government securities which were deposited in an irrevocable trust with an escrow agent to provide debt service on the 2013 Bonds until October 1, 2023 on which date all outstanding bonds will be redeemed. The advance refunding met the requirements of an in-substance defeasance therefore; accordingly, the 2013 Revenue Bonds are no longer reflected as a liability on the accompanying financial statements. 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 2043 using the straight-line method of amortization. The District completed the refunding to decrease total debt service over the next 23 years by $3,014,190, and to obtain an economic gain (difference between the present values of the old and new debt service payment) of $2,154,117. 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), 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 in 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 0.75% at June 30, 2022. 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 EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 50 5) LONG-TERM DEBT - Continued 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 and accrued interest thereon. Department of Water Resources Contract 11CX101 - Eastwood Farms Assessment District (EFAD) 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 $6,508 are due for 30 years through January 2043. Repayment of the loan is secured by annual assessments to property owners within the Eastwood Farms Assessment District. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon. The aggregate debt service requirements to maturity for long-term debt as of June 30, 2023 are as follows (excludes unamortized premiums/discounts and the California State Water Resource Control Board Contract C- 06-8106-110): Table 5-2 Year Ending June 30,Principal Interest Total 2024 2,392,553$ 983,949$ 3,376,502$ 2025 1,983,177 909,493 2,881,365 2026 1,628,177 854,464 2,479,114 2027 1,243,177 808,729 2,051,906 2028 1,278,177 772,613 2,050,790 2029-2033 6,977,425 3,238,672 10,216,097 2034-2038 8,063,757 2,131,896 10,195,653 2039-2043 9,243,758 940,192 10,183,950 2044-2045 2,464,986 29,227 2,494,213 35,275,187$ 10,669,235$ 45,929,590$ EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 51 5) LONG-TERM DEBT - Continued 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 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, 2023 the District has incurred $138.6 million in design and construction cost, the District has drawn approximately $126.4 million, $10.3 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 $7.3 million. The District has pledged available water and wastewater revenue for the repayment of the loan, including the following new revenue streams: • Wastewater treatment charges (previously paid to the City of San Bernardino); • Sale of electrical energy produced by plant digesters (beyond energy used on site); • Local Resource Investment Program fees for recycled water delivered for groundwater recharge; and • Tipping fees from waste haulers. Estimated debt service on this loan is not included in Table 5-2 above. Security for debt is as follows: Table 5-3 Debt Security 2020A and 2020B Refunding Revenue Bonds and Department of Water Resources Construction Loans The District is required to maintain net revenues, as defined by the revenue bond trust agreements and State of California Department of Public Health Funding agreements of at least 120% of District's annual debt service (principal and interest). At June 30, 2023, net water revenues represented 240% of the annual water debt service and net wastewater revenues represented 639% of the annual wastewater debt service. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 52 6) COMPENSATED ABSENCES Compensated absences are comprised of unused vacation leave and a limited amount of sick leave which is accrued as earned in accordance with District policy. The District's liability for compensated absences is determined annually. Current portions are determined based on estimates of usage, amounts in excess of 196 hours that will be voluntarily cashed out and amounts that will be cashed out upon termination of employment. Table 6-1 Beginning of Year Additions Usage / Payments End of Year Current Portion Long-Term Portion Accrued Vacation Leave 630,133$ 658,926$ (586,516)$ 702,543$ 385,383$ 317,160$ Accrued Sick Leave 657,496 432,627 (364,899) 725,224 266,794 458,430 Total 1,287,629$ 1,091,553$ (951,415)$ 1,427,767$ 652,177$ 775,590$ 7) NET INVESTMENT IN CAPITAL ASSETS Net Investment in capital assets at June 30, 2023 consisted of the following: Table 7-1 Non-Depreciable Capital Assets 203,751,889$ Depreciable Capital Assets 226,996,348 Accumulated Depreciation (111,044,595) North Fork Water Company 651,683 Loans Payable (176,247,855) Bonds Payable (30,923,365) Deferred Inflows - Debt Refunding (1,128,796) Deferred Ouflows - Debt Refunding 854,647 Total 112,909,956$ 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 Public Agency Cost- Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The District participates in 2 rate plans (two miscellaneous). Benefit provisions under the Plan are established by State statute and District’s resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website, at www.calpers.ca.gov. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 53 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued 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 Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board. The Plans’ provisions and benefits in effect at June 30, 2023, 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%7.0% Required Employer Contribution Rates 13.66%7.56% Miscellaneous Contributions Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 54 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued For the year ended June 30, 2023, the contributions recognized as part of pension expense for the Plans were as follows: Table 8-2 Miscellaneous Contributions - Employer $ 964,748 B) Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2023, 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 $ 13,855,136 The District’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows: Table 8-4 Proportion - June 30, 2022 0.35063% Proportion - June 30, 2023 0.29610% Change - Increase (Decrease)-0.05453% Miscellaneous Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 55 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued The amortization period differs depending on the source of the gain or loss: Net difference between projected and actual earnings on pension plan investments 5-year straight-line amortization All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C). The EARSL for PERF C for the measurement period ending June 30, 2022 is 3.7 years, which was obtained by dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by 153,587 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund. For the year ended June 30, 2023, the District recognized pension expense of $173,810. At June 30, 2023, 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 $ 278,238 186,352$ Changes in Assumptions 1,419,748 - Net differences between projected and actual earnings on plan investments 2,537,893 - Change in employer's proportion - 595,037 Difference between the employer's contributions and the employer's proportionate share of contributions 116,444 819,112 Pension contributions subsequent to measurement date 964,748 - Total $ 5,317,071 $ 1,600,501 EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 56 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued $964,748 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, 2024. 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 2024 $ 573,249 2025 436,296 2026 190,015 2027 1,552,262 $ 2,751,822 Actuarial Methods and Assumptions Used to Determine Total Pension Liability The collective total pension liability for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with updated procedures used to roll forward the total pension liability to June 30, 2022. The collective total pension liability was based on the following assumptions: Table 8-7 Miscellaneous Valuation Date June 30, 2021 Measurement Date June 30, 2022 Entry Age Normal in accordance with the requirements of GASB Market Value of Assets 6.90% 2.30% Varies by Entry Age and Service Derived using CalPERS' membership data for all Funds The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter (1)The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. Mortality Rate Table (1) Post Retirement Benefit Increase Actuarial Cost Method Asset Valuation Method Actuarial Assumptions: Discount Rate Inflation Salary Increases EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 57 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued Change of Assumptions Effective with the June 30, 2021, valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long-term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Discount Rate The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Subsequent Events On July 12, 2021, Cal PERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021. On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 58 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued 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 Assumed Asset Allocation Real Return (1)(2) Global Equity - cap weighted 30.0%4.54% Global Equity - non-cap-weighted 12.0%3.84% Private Equity 13.0%7.28% Treasury 5.0%0.27% Mortgage-backed securities 5.0%0.50% Investment grade corporates 10.0%1.56% High Yield 5.0%2.27% Emerging market debt 5.0%2.48% Private debt 5.0%3.57% Real Assets 15.0%3.21% Leverage -5.0%-0.59% Total 100.0% 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: Table 8-9 Miscellaneous 1% Decrease 5.90% Net Pension Liability $ 21,373,930 Current Discount Rate 6.90% Net Pension Liability $ 13,855,136 1% Increase 7.90% Net Pension Liability $ 7,669,035 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 59 8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued E) Payable to the Pension Plan At June 30, 2023, the District reported a payable of $0 for the outstanding number of contributions to the pension plan required for the year ended June 30, 2023. 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, 2023, or in the previous two fiscal years. 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 60 10) RISK MANAGEMENT - Continued At June 30, 2023, 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, 2023 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, 2023, 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 1,986,360$ 1,184,326$ 326,072$ 311,790$ 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 an Annual Comprehensive Financial Report (Report). The Report is issued in aggregate and includes the sum of all CalPERS plans. Copies of the CalPERS Report 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, 2023, the date of the latest actuarial valuation: Table 11-2 Participant Type 27 0 Active employees 65 92 Number of Participants Inactive participants currently receiving benefits Inactive participants entitled to but not yet receiving benefit Total 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. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 62 11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued 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 $850 per month). The surviving spouse of an eligible retiree is eligible for the District's contribution upon the death of the retiree through the spouse's attainment of Medicare eligibility age. 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, 2022, the District paid $556,222 to the plan including the implicit rate subsidy. The District contributed $348,363 including the implicit rate subsidy for retiree health benefits to the Trust during the fiscal year ended June 30, 2023. Net OPEB Liability The table herein shows the components of the net OPEB liability of the District: Table 11-3 Balance June 30, 2023 Total OPEB Liability $ 3,567,214 Plan Fiduciary Net Position (1,580,854) District's Net OPEB Liability (Asset) $ 5,148,068 Investments As described above, at June 30, 2023, 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, 2023, 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 332,001$ -$ Differences between expected and actuarial experience 391,150 155,907 Changes of assumptions 306,132 170,165 Differences between projected and actual earnings on OPEB plan investments 155,043 - Total 1,184,326$ 326,072$ 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. Contributions submitted subsequent to the measurement date will be recognized in the following fiscal year. The EARSL for the OPEB plan for EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 63 11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued June 30, 2023 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. The deferred inflows of resources related to OPEB resulting from the net differences between projected and actual earnings on planned 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 2024 $ 81,971 2025 82,665 2026 78,811 2027 105,300 2028 48,426 Thereafter 129,080 $ 526,253 Actuarial Methods and Assumptions The District’s net OPEB liability was measured as of June 30, 2022, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022. 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, 2022, 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, 2022 Measurement Date June 30, 2022 Inflation 2.50% Salary Increases 2.75% Investment Rate of Return 5.50% Health Care Trend Rate 6.25% HMO / 6.25% 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, 2023 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, 2022 are shown herein: Table 11-7 Asset Class Global Equity 34%N/A Fixed Income 41%N/A Treasury Inflation - Protected Securities 5%N/A Commodities 3%N/A Real Estate Investment Trusts 17%N/A Total 100%5.50% Target Allocation L/T Expected Gross ROR The discount rate used to measure the total OPEB liability was 5.5 percent. The discount rate assumes the District continues to fully fund 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) Liability (Asset) (a) - (b) Balances at June 30, 2022 $ 3,276,038 $ 1,414,163 $ 1,861,875 Changes for the year: Service Cost 118,145 - 118,145 Interest 213,973 - 213,973 Differences between expected and actual experience (173,230) - (173,230) Employer Contributions - 556,222 (556,222) Net Investment Income - (181,313) 181,313 Change of assumptions 340,147 - 340,147 Benefit Payments (207,859) (207,859) - Administrative Expenses - (359) 359 Other Expenses - - - Net Changes 291,176 166,691 124,485 Balances at June 30, 2023 $ 3,567,214 $ 1,580,854 $ 1,986,360 Increase (Decrease) EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 65 11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued The following presents the District’s net OPEB liability calculated using the discount rate of 5.5 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 (4.5 percent) or 1-percentage-point higher (6.5 percent) than the current rate: Table 11-9 Discount Rate Net OPEB Liability (Asset) 2,382,842$ 1,986,360$ 1,646,214$ 1% Decrease (4.50%) Current Discount Rate (5.50%) 1% Increase (6.50%) The following presents the District’s net OPEB liability calculated using the current healthcare cost trend rate of 6.25 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 (5.25 percent) or 1-percentage-point higher (7.25 percent) than the current rate: Table 11-10 Healthcare Trend Rate Net OPEB Liability (Asset) 1% Decrease (5.25% HMO/5.25% PPO Decreasing to 3.50% HMO/3.50% PPO)1,450,377$ Current Healthcare Cost Trend Rates (6.25% HMO/6.25% PPO Decreasing to 4.50% HMO/4.50% PPO)1,986,360$ 1% Increase (7.25% HMO/7.25%PPO Decreasing to 5.50% HMO/5.50% PPO)2,403,025$ OPEB Expense For the year ended June 30, 2023, the District recognized OPEB expense of $311,790 and recorded deferred outflows of resources of $1,184,326 for contributions made during fiscal year 2023 after the measurement date. The deferred outflows will be recognized in OPEB expense for the period ending June 30, 2024. The District recorded $326,072 of deferred inflows of resources resulting from the differences between projected and actual earnings on OPEB plan investments for the period ending June 30, 2022. The deferred inflows of resources will be amortized and recognized in OPEB expense over three remaining periods ending June 30, 2026. EAST VALLEY WATER DISTRICT Notes to the Basic Financial Statements Year Ended June 30, 2023 66 12) CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS The District has six significant active construction project commitments as of June 30, 2023. The following contracts are related to the construction of the Recycled Water Facility. Table 12-1 Contractual Commitments Spent to Date Remaining Commitment Valve Truck - Ford Super Duty F-550 Flatbed -$ 247,429$ Drought Contingency Plan Development, Management, and Preparation 63,106$ 325,894$ Water Main Seismic Retrofit 455,288$ 728,712$ Design-Build Services of additional water storage in the District's Canal Pressure Zone 120,440$ 618,788$ Design-Build Services of the Recycled Water Facility 213,343,235$ 5,666,880$ Design-Build Services of the Digester 18,513,544$ 1,715,500$ 67 East Valley Water District Schedule of District’s Proportionate Share of the Net Pension Liability Year Ended June 30, 2023 Last Ten Years* The accompanying notes to required supplementary information are an integral part of this schedule. 69 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 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. 2023 2022 2021 2020 Proportion of the Net Pension Liability 0.119950%0.123102%0.113169%0.115205% Proportionate Share of the Net Pension Liability $ 13,855,136 $ 6,657,689 $12,313,294 $11,805,140 Covered Payroll $ 6,536,459 $ 6,188,589 $ 5,888,338 $ 5,658,626 Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll 211.97%107.58%209.11%208.62% Plan's Fiduciary Net Position $ 41,301,132 $44,006,462 $36,172,219 $34,016,773 Plan's Fiduciary Net Position as a Percentage of the Total Pension Liability 74.88%86.86%77.71%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 $29,336,566 Plan's Fiduciary Net Position as a Percentage of the Total Pension Liability 77.69%71.37%74.06%78.40%79.82% Note: Fiscal year 2015 was the first year of implementation, therefore only nine years are shown. East Valley Water District Schedule of District’s Contributions Year Ended June 30, 2023 Last Ten Years* The accompanying notes to required supplementary information are an integral part of this schedule. 70 Schedule of District’s Contributions The schedule presents information on the District’s required contribution, the amounts actually contributed, and any excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of information will be presented. 2023 2022 2021 2020 Contractually Required Contribution (Actuarially Determined)964,748$ 1,019,834$ 1,900,537$ 1,798,495$ Contributions in Relation to the Actuarially Determined Contributions 964,748$ 1,019,834$ 1,900,537$ 1,798,495$ Contribution Deficiency (Excess)-$ -$ -$ -$ Covered Payroll $ 7,289,703 $ 6,536,459 $ 6,188,589 $ 5,888,338 Contributions as a Percentage of Covered Payroll 13.23%15.60%30.71%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 nine years are shown. East Valley Water District Schedule of Changes in the Net OPEB Liability Year Ended June 30, 2023 Last Ten Years* The accompanying notes to required supplementary information are an integral part of this schedule. 71 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 2023 Service Cost 118,145$ Interest 213,973 Differences bewteen exptected and actual experience (173,230) Changes of assumptions 340,147 Benefit Payments, including refunds of member contributions (207,859) Net Change in Total OPEB Liability 291,176 Total OPEB Liability - Beginning 3,276,038 Total OPEB Liability - Ending (a)3,567,214$ Plan Fiduciary Net Position 2023 Contributions - Employer 556,222$ Net Investment Income (181,313) Benefit Payments (207,859) Administrative Expense (359) Other Expense - Net Change in Plan Fiduciary Net Position 166,691$ Plan Fiduciary Net Position - Beginning 1,414,163 Plan Fiduciary Net Position - Ending (b)1,580,854$ Net OPEB Liability (Asset) - Ending (a) - (b)1,986,360$ Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 44.32% Covered Payroll 5,847,005$ Net OPEB Liability (Asset) as a Percentage of Covered- Employee Payroll 33.97% (Continued) Note: Fiscal year 2018 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, 2023 – Continued Last Ten Years* The accompanying notes to required supplementary information are an integral part of this schedule. 72 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 2022 2021 2020 2019 2018 Service Cost 122,441$ 122,428$ 106,297$ 103,452$ 97,138$ Interest 199,913 189,204 174,233 166,826 160,043 Differences bewteen exptected and actual experience 278,335 75,893 192,265 - - Changes of assumptions (163,361) - (65,796) - - Benefit Payments, including refunds of member contributions (225,321) (220,316) (168,787) (149,550) (168,724) Net Change in Total OPEB Liability 212,007 167,209 238,212 120,728 88,457 Total OPEB Liability - Beginning 3,064,031 2,896,822 2,658,610 2,537,882 2,449,425 Total OPEB Liability - Ending (a)3,276,038$ 3,064,031$ 2,896,822$ 2,658,610$ 2,537,882$ Plan Fiduciary Net Position 2022 2021 2020 2019 2018 Contributions - Employer 412,106$ 405,008$ 278,539$ 149,548$ 218,724$ Net Investment Income 204,887 38,644 48,769 37,365 36,877 Benefit Payments (225,321) (220,316) (168,787) (149,548) (168,724) Administrative Expense - - (330) - (261) Other Expense (563) (427) (240) (683) - Net Change in Plan Fiduciary Net Position 391,109$ 222,909$ 157,951$ 36,682$ 86,616$ Plan Fiduciary Net Position - Beginning 1,023,054 800,145 642,194 605,512 518,896 Plan Fiduciary Net Position - Ending (b)1,414,163$ 1,023,054$ 800,145$ 642,194$ 605,512$ Net OPEB Liability (Asset) - Ending (a) - (b)1,861,875$ 2,040,977$ 2,096,677$ 2,016,416$ 1,932,370$ Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 43.17%33.39%27.62%24.16%23.86% Covered Payroll 5,902,604$ 5,744,627$ 5,495,000$ 5,495,000$ 5,220,250$ Net OPEB Liability (Asset) as a Percentage of Covered- Employee Payroll 31.54%35.53%38.16%36.70%37.02% Note: Fiscal year 2018 was the first year of implementation, therefore only six years are shown. East Valley Water District Schedule of OPEB Healthcare Contributions Year Ended June 30, 2023 Last Ten Years* The accompanying notes to required supplementary information are an integral part of this schedule. 73 Schedule of OPEB Healthcare 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 2023 Actuarially Determined Contribution (ADC)332,001$ Contributions in Relation to the ADC (556,222) Contribution Deficiency (Excess)(224,221)$ District's Covered Payroll 6,007,798$ Contributions as a Percentage of Covered-Employee Payroll 5.53% OPEB Contributions 2022 2021 2020 2019 2018 Actuarially Determined Contribution (ADC)348,363$ 350,024$ 362,533$ 285,551$ 144,415$ Contributions in Relation to the ADC (412,106) (405,008) (278,539) (149,548) (218,724) Contribution Deficiency (Excess)(63,743)$ (54,984)$ 83,994$ 136,003$ (74,309)$ District's Covered Payroll 5,847,000$ 5,903,000$ 5,745,000$ 5,495,000$ 5,495,000$ Contributions as a Percentage of Covered-Employee Payroll 5.96%5.93%6.31%5.20%2.63% Note: Fiscal year 2018 was the first year of implementation, therefore only six years are shown. East Valley Water District Notes to the Required Supplementary Information Purpose of Schedules Year Ended June 30, 2023 74 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. Schedule of Changes in Net OPEB Liability The schedule is intended to show the funded status of the District’s actuarially determined liability for postemployment benefits other than pensions. In the future, as data becomes available, 10 years of information will be presented. Schedule of OPEB 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. Pertinent valuation dates and methods and assumptions used to determine the OPEB liability and required contributions are as follows: Measurement Date June 30, 2022 Valuation Date June 30, 2022 Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll Remaining Amortization Period 12 years Assets Valuation Method 5 Year Inflation 2.50% Salary Increases 2.75% Annually Plus Merit Increases Based on 2017 Experience Study Investement Rate of Return 5.50% 75 76 77 East Valley Water District History and Organization Year Ended June 30, 2023 78 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 for 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 Phillip R. Goodrich Chairman of the Board James Morales, Jr.Vice-Chairman of the Board David E. Smith Governing Board Member Ronald L. Coats Governing Board Member Chris Carrillo Governing Board Member East Valley Water District Phillip R. Goodrich President James Morales, Jr.Vice-President Michael Moore Secretary/Executive Director Brian W. Tompkins Director of Finance East Valley Water District Financing Authority Management Michael Moore 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, 2023 79 Water Wastewater Water Reclamation Eliminations Total ASSETS Current Assets: Cash and Cash Equivalents 9,551,007$ 914,904$ -$ -$ 10,465,911$ Investments 3,309,627 2,019,618 - - 5,329,245 Accounts Receivable, Net 5,080,958 311,472 548,409 - 5,940,839 Interest Receivable 73,545 - - - 73,545 Other Receivables 1,847,810 - - - 1,847,810 Due From Other Fund 13,597,742 14,655,612 - (28,253,354) - Due from Other Governments - - 20,552,300 - 20,552,300 Inventory 968,099 6,721 - - 974,820 Prepaid Expenses 224,720 32,080 - - 256,800 Total Current Assets 34,653,508 17,940,407 21,100,709 (28,253,354) 45,441,270 Non-Current Assets: Restricted Cash and Cash Equivalents 6,473,212 3,147,881 2,736,801 - 12,357,894 Assessments Receivable 263,478 - - - 263,478 Capital Assets not being Depreciated 20,707,049 17,511,967 165,532,873 - 203,751,889 Capital Assets, Net (Note 4)98,954,705 16,997,048 - - 115,951,753 Total Non-Current Assets 126,398,444 37,656,896 168,269,674 - 332,325,014 Total Assets 161,051,952 55,597,303 189,370,383 (28,253,354) 377,766,284 DEFERRED OUTFLOWS OF RESOURCES Deferred Charge on Refunding 581,827 272,820 - - 854,647 Deferred Outflows - Pensions 4,125,794 1,191,277 - - 5,317,071 Deferred Outflows - OPEB 829,028 355,298 - - 1,184,326 Total Deferred Outflows 5,536,649 1,819,395 - - 7,356,044 Total Assets and Deferred Outflows of Resources 166,588,601$ 57,416,698$ 189,370,383$ (28,253,354)$ 385,122,328$ (Continued) East Valley Water District Combining Schedule of Net Position – Continued June 30, 2023 80 Water Wastewater Water Reclamation Eliminations Total LIABILITIES Current Liabilities: Accounts Payable and Accrued Expenses 8,217,541$ 193,817$ 11,780$ -$ 8,423,138$ Accrued Payroll and Benefits 576,789 174,600 73,988 - 825,377 Customer Service Deposits 1,403,962 - - - 1,403,962 Construction Advances and Retentions 514,309 3,011,871 8,616,385 - 12,142,565 Accrued Interest Payable 239,067 24,711 - - 263,778 Current Portion of Compensated Absences 449,527 137,617 65,033 - 652,177 Current Portion of Long-Term Debt 2,380,654 175,000 - - 2,555,654 Due To Other Fund - 6,500,000 21,753,354 (28,253,354) - Due To Other Governnents 135,523 - - - 135,523 Total Current Liabilities 13,917,372 10,217,616 30,520,540 (28,253,354) 26,402,174 Non-Current Liabilities: Compensated Absences, Less Current Portion 530,612 127,575 117,403 - 775,590 Net Pension Liability 10,600,994 3,254,142 - - 13,855,136 Net OPEB Liability 1,390,452 595,908 - - 1,986,360 Long-Term Debt, Less Current Portion 31,327,898 4,205,000 155,723,918 - 191,256,816 Total Non-Current Liabilities 43,849,956 8,182,625 155,841,321 - 207,873,902 Total Liabilities 57,767,328 18,400,241 186,361,861 (28,253,354) 234,276,076 DEFERRED INFLOWS OF RESOURCES Deferred Inflows - Refunding 1,128,796 - - - 1,128,796 Deferred Inflows - Pensions 1,361,421 239,080 - - 1,600,501 Deferred Inflows - OPEB 228,250 97,822 - - 326,072 Total Deferred Inflows 2,718,467 336,902 - - 3,055,369 Total Liabilities and Deferred Inflows of Resources 60,485,795 18,737,143 186,361,861 (28,253,354) 237,331,445 NET POSITION Net Investment in Capital Assets 86,057,916 26,852,040 - - 112,909,956 Restricted for: Future Capital Expansion Projects 4,605,274 3,147,881 3,008,522 - 10,761,677 Unrestricted 15,439,616 8,679,634 - - 24,119,250 Total Net Position 106,102,806$ 38,679,555$ 3,008,522$ -$ 147,790,883$ East Valley Water District Combining Schedule of Revenues, Expenses, and Changes in Net Position Year Ended June 30, 2023 81 Water Wastewater Water Reclamation Eliminations Total OPERATING REVENUE Water Sales 17,004,576$ -$ -$ -$ 17,004,576$ Wastewater Treatment Charges - - 10,108,850 - 10,108,850 System Charges 9,831,561 5,651,554 - - 15,483,115 Other Revenue 1,073,128 140,343 - - 1,213,471 Total Operating Revenue 27,909,265 5,791,897 10,108,850 - 43,810,012 OPERATING EXPENSES Source of Supply: Salary & Benefits 379,114 - - - 379,114 Contract Services 359,689 - - - 359,689 Utilities 2,645,670 - - - 2,645,670 Insurance 4,344 - - - 4,344 Materials & Supplies 83,705 - - - 83,705 Purchased Water 141,188 - - - 141,188 Water Assessments 115,973 - - - 115,973 Chemicals 135,241 - - - 135,241 Professional Development 234 - - 234 Taxes 25,476 - - - 25,476 Total Source of Supply 3,890,634 - - - 3,890,634 Pumping: Salary & Benefits 168,229 - - - 168,229 Contract Services 57,993 - - - 57,993 Utilities 762,784 - - - 762,784 Materials & Supplies 14,032 - - - 14,032 Total Pumping 1,003,038 - - - 1,003,038 Treatment: Salary & Benefits 459,166 - 865,059 - 1,324,225 Contract Services 264,564 - 8,543,156 - 8,807,720 Utilities 168,266 - 178,367 - 346,633 Materials & Supplies 163,790 - 7,185 - 170,975 Legal Services - - 1,960 - 1,960 Chemicals 156,860 - - - 156,860 Memberships & Dues - - 602 - 602 Tools - - 1,746 - 1,746 Printing & Publishing - - 970 - 970 Professional Development - - 2,416 - 2,416 Total Treatment 1,212,646 - 9,601,461 - 10,814,107 Transmission & Distribution: Salary & Benefits 2,658,220 - - - 2,658,220 Contract Services 650,095 - - - 650,095 Materials & Supplies 910,949 - - - 910,949 Chemicals 30,516 - - - 30,516 Permits 6,835 - - - 6,835 Tools 54,991 - - - 54,991 Total Transmission & Distribution 4,311,606$ -$ -$ -$ 4,311,606$ (Continued) East Valley Water District Combining Schedule of Revenues, Expenses, and Changes in Net Position -Continued Year Ended June 30, 2023 82 Water Wastewater Water Reclamation Eliminations Total OPERATING EXPENSES - Continued Wastewater Collection: Salary & Benefits -$ 581,538$ -$ -$ 581,538$ Contract Services - 154,229 - - 154,229 Materials & Supplies - 9,607 - - 9,607 Tools - 7,115 - - 7,115 Total Wastewater Collection - 752,489 - - 752,489 Customer Accounts: Salary & Benefits 876,660 277,854 - - 1,154,514 Contract Services 618,220 262,319 - - 880,539 Utilities 5,372 2,405 - - 7,777 Materials & Supplies 5,593 - - - 5,593 General Office Supplies 8,217 1,567 - - 9,784 Printing & Publishing 7,276 3,118 - - 10,394 Postage 130,524 55,939 - - 186,463 Professional Development 1,877 804 - - 2,681 Total Customer Accounts 1,653,739 604,006 - - 2,257,745 General & Administrative: Salary & Benefits 3,931,251 1,953,106 87,769 - 5,972,126 Contract Services 2,589,528 794,784 409,853 - 3,794,165 Conservation Rebates 227,661 - - - 227,661 Utilities 402,917 60,088 109,842 - 572,847 Insurance 923,621 238,174 8,811 - 1,170,606 Materials & Supplies 366,432 123,076 62,879 - 552,387 General Office Supplies 32,247 16,607 - - 48,854 Legal Services 142,388 61,365 - - 203,753 Permits 35,742 25,086 - - 60,828 Memberships & Dues 110,503 40,295 - - 150,798 Tools 15,336 2,077 1,037 - 18,450 Printing & Publishing 177,937 87,060 - - 264,997 Professional Development 126,270 39,419 - - 165,689 Rents & Leases 9,337 3,587 5,055 - 17,979 Total General & Administrative 9,091,170 3,444,724 685,246 - 13,221,140 OPERATING EXPENSES BEFORE DEPRECIATION 21,162,833 4,801,219 10,286,707 - 36,250,759 Depreciation 5,425,456 838,921 - - 6,264,377 Total Operating Expenses 26,588,289 5,640,140 10,286,707 - 42,515,136 OPERATING INCOME (LOSS)1,320,976$ 151,757$ (177,857)$ -$ 1,294,876$ (Continued) East Valley Water District Combining Schedule of Revenues, Expenses, and Changes in Net Position - Continued Year Ended June 30, 2023 83 Water Wastewater Water Reclamation Eliminations Total NON-OPERATING REVENUES Investment Income 323,438$ 28,835$ -$ -$ 352,273$ Gain on Disposal of Assets 23,669 6,465 - 30,134 Other Income 49,404 - - - 49,404 Total Non-Operating Revenues 396,511 35,300 - - 431,811 NON-OPERATING EXPENSES Interest Expense 756,845 112,552 - - 869,397 Unrealized Investment Losses 55,399 31,881 - 87,280 Total Non-Operating Expenses 812,244 144,433 - - 956,677 INCOME BEFORE CONTRIBUTIONS 905,243 42,624 (177,857) - 770,010 CONTRIBUTIONS: Capacity Charges 967,401 443,041 449,578 - 1,860,020 Operating Grants 57,339 4,693 - - 62,032 Total Contributions 1,024,740 447,734 449,578 - 1,922,052 CHANGE IN NET POSITION 1,929,983 490,358 271,721 - 2,692,062 TOTAL NET POSITION, BEGINNING 104,172,823 38,189,197 2,736,801 - 145,098,821 TOTAL NET POSITION, ENDING 106,102,806$ 38,679,555$ 3,008,522$ -$ 147,790,883$ 84 East Valley Water District Combining Schedule of Cash Flows Year Ended June 30, 2023 85 Water Wastewater Water Reclamation Eliminations Total CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers 29,143,215$ 6,300,954$ 9,560,441$ -$ 45,004,610$ Cash Payments for Employees Services (9,625,431) (1,964,945) (696,404) - (12,286,780) Cash Payments to Suppliers (9,542,486) (2,467,822) (9,322,099) - (21,332,407) Misc Income / (Expense)49,404 - - - 49,404 Net Cash Provided by Operating Activities 10,024,702 1,868,187 (458,062) - 11,434,827 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Assessments Received 93,827 - - - 93,827 Proceeds from Sale of Capital Assets 23,669 16,424 - - 40,093 Developer Fees Received 967,401 443,041 449,578 - 1,860,020 Reimbursements Received - - 3,103,376 - 3,103,376 Proceeds/Draws from SRF Loan - - 2,705,185 - 2,705,185 Grant Fund Received 57,339 4,693 - - 62,032 Due (From) To Water Fund - 999,433 1,946,638 (2,946,071) - Due (From) To Reclamation Fund (1,108,517) (1,837,554) - 2,946,071 - Principal Paid on Capital Debt (2,161,691) (175,000) - - (2,336,691) Interest Paid on Capital Debt (925,492) (99,315) - - (1,024,807) Acquisition of Capital Assets (6,802,524) (222,639) (7,746,715) - (14,771,878) Net Cash Used for Capital and Related Financing Activities (9,855,988) (870,917) 458,062 - (10,268,843) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received from Investments 193,814 30,400 - - 224,214 Acquisition of Investment Securities (597,678) (542,159) - - (1,139,837) Proceeds from Sales of Investments 299,203 - - - 299,203 Net Cash Provided (Used) by Investing Activities (104,661) (511,759) - - (616,420) Net (Decrease) Increase in Cash and Cash Equivalents 64,053 485,511 - - 549,564 Cash and Equivalents: Beginning of Year 15,960,166 3,577,274 2,736,801 - 22,274,241 End of Year 16,024,219$ 4,062,785$ 2,736,801$ -$ 22,823,805$ RECONCILIATION TO STATEMENT OF NET POSITION Cash and Cash Equivalents 9,551,007$ 914,904$ -$ -$ 10,465,911$ Restricted Cash and Cash Equivalents 6,473,212 3,147,881 2,736,801 - 12,357,894 Total Cash and Cash Equivalents 16,024,219$ 4,062,785$ 2,736,801$ -$ 22,823,805$ (Continued) East Valley Water District Combining Schedule of Cash Flows - Continued Year Ended June 30, 2023 86 Water Wastewater Water Reclamation Eliminations Total Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss)1,320,974$ 151,757$ (177,857)$ -$ 1,294,874$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities: Depreciation 5,425,456 838,921 - - 6,264,377 Miscellaneous Income/(Expense)49,404 - - - 49,404 CIP Projects Expensed 18,656 - - - 18,656 Change in Assets and Liabilities: Customer Receivables 1,451,691 509,057 (548,409) - 1,412,339 Inventory (30,281) - - - (30,281) Prepaids 11,492 2,205 - - 13,697 Deferred Outflow of Resources (2,827,691) (854,656) - - (3,682,347) Accounts Payable - Supplier 3,162,011 100,232 11,780 - 3,274,023 Salaries & Benefits Payable (32,606) 11,230 73,988 - 52,612 Compensated absences (87,041) 44,744 182,436 - 140,139 Net Pension Liability 5,506,990 1,690,457 - - 7,197,447 Net OPEB Liability 87,139 37,346 - - 124,485 Deferred Inflows of Resources (3,813,926) (663,106) - - (4,477,032) Other Receivables (231,483) - - - (231,483) Customer / Developer Deposits 13,917 - - - 13,917 Total Cash Provided by Operating Activities 10,024,702$ 1,868,187$ (458,062)$ -$ 11,434,827$ NON-CASH INVESTING, CAPITAL, AND NON-CAPITAL FINANCING ACTIVITIES: Fair Value Adjustments to Investments 208,616$ 92,130$ -$ -$ 300,746$ -$ -$ 13,349,674$ -$ 13,349,674$ Liabilities, Including Retainage 239,129$ 837,713$ 876,909$ -$ 1,953,751$ Receivable Offset by Debt Capital Assets Acquired by Assuming 87 88 Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023 Table of Contents 89 Page No. Statistical Information Section Financial Trends .................................................................................................. 91-96 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 .................................... 91-92 Operating Revenue by Source – Last Ten Fiscal Years ..................................................... 93 Water Operating Expenses – Last Ten Fiscal Years .......................................................... 94 Wastewater Operating Expenses – Last Ten Fiscal Years ................................................. 95 Water Reclamation Operating Expenses – Last Ten Fiscal Years ....................................... 96 Revenue Capacity .............................................................................................. 97-104 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 ........................................................ 97 Revenue Rates for Water – Last Ten Fiscal Years ...................................................... 99-100 Revenue Rates for Wastewater – Last Ten Fiscal Years ............................................ 101-102 Active Services by Type – Last Ten Fiscal Years ............................................................. 103 Principal Customers – Current Fiscal Year and Nine Years Ago......................................... 104 Debt Capacity ................................................................................................. 105-106 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 .......................................................... 105 Debt Service Coverage – Last Ten Fiscal Years............................................................... 106 Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2023 Table of Contents 90 Page No. Statistical Information Section - Continued Demographic Information ..................................................................................... 107 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 ......................... 107 Operating Information ................................................................................... 108-109 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 ........................... 108 Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ....... 109 EAST VALLEY WATER DISTRICT Changes in Net Position by Component Last Ten Fiscal Years 91 Year ended June 30, 2014 2015 2016 2017 2018 Change In Net Position Operating Revenue 32,620,577$ 30,743,445$ 33,024,082$ 37,448,549$ 40,291,125$ Operating Expenses 29,191,176 29,146,339 32,655,921 32,299,587 35,980,099 Operating Income (Loss)3,429,401 1,597,106 368,161 5,148,962 4,311,026 Non-Operating Revenue (Expenses) Investment Income 49,846 100,830 146,874 69,237 221,359 Other Income 334,700 800,278 830,806 401,323 258,560 Interest Expense (1,917,676) (1,980,062) (1,843,440) (1,776,684) (1,777,852) Amortization (99,688) - - - - Gain (Loss) on Disposal of Assets (606,085) - - - - Total Non-Operating Revenue (Expenses)(2,238,903) (1,078,954) (865,760) (1,306,124) (1,297,933) Special Item Abandoned Projects - (2,413,478) - (1,615,241) - Hazard Mitigation - - - - (155,177) Capital Contributions 6,369,890 596,940 732,642 2,446,118 523,918 Change in Net Position 7,560,388 (1,298,386) 235,043 4,673,715 3,381,834 Prior Period Adjustment - (7,956,231) - - - Cumulative Effect of Change in Accounting Principles - - - - (1,711,803) Net Position - Beginning 114,509,106 122,069,494 112,814,877 113,049,920 117,723,635 Net Position - Ending 122,069,494$ 112,814,877$ 113,049,920$ 117,723,635$ 119,393,666$ Net Position By Component Net Investment in Capital Assets 101,757,787$ 98,091,685$ 103,222,160$ 104,659,796$ 103,210,762$ Restricted 2,274,769 2,322,238 2,276,695 2,847,924 3,334,940 Unrestricted 18,036,938 12,400,954 7,551,065 10,215,915 12,847,964 122,069,494$ 112,814,877$ 113,049,920$ 117,723,635$ 119,393,666$ (Continued) SOURCE: East Valley Water District - Finance Department EAST VALLEY WATER DISTRICT Changes in Net Position by Component - Continued Last Ten Fiscal Years 92 Year ended June 30, 2019 2020 2021 2022 2023 Change In Net Position Operating Revenue 39,309,298$ 39,812,912$ 42,236,814$ 43,093,615$ 43,810,012$ Operating Expenses 35,898,073 36,249,650 36,496,064 40,578,341 42,515,136 Operating Income (Loss)3,411,225 3,563,262 5,740,750 2,515,274 1,294,876 Non Operating Revenue (Expenses) Investment Income 571,549 524,675 167,499 165,989 352,273 Other Income 307,247 121,983 43,744 (269,768) (37,876) Interest Expense (1,684,986) (1,579,104) (1,387,113) (1,295,223) (869,397) Amortization - - Gain (Loss) on Disposal of Assets 705,285 - (1,236,600) 1,042,562 30,134 (100,905) (932,446) (2,412,470) (356,440) (524,866) Special Item Abandoned Projects - - - - - Hazard Mitigation - - - - - Capital Contributions 611,673 9,961,522 877,185 2,826,525 1,922,052 Change in Net Position 3,921,993 12,592,338 4,205,465 4,985,359 2,692,062 Prior Period Adjustment - - - - - Cumulative Effect of Change in Accounting Principles - - - - - Net Position - Beginning 119,393,666 123,315,659 135,907,997 140,113,462 145,098,821 Net Position - Ending 123,315,659$ 135,907,997$ 140,113,462$ 145,098,821$ 147,790,883$ Net Position By Component Net Investment in Capital Assets 95,468,735$ 106,708,555$ 114,767,362$ 117,079,071$ 112,909,956$ Restricted 3,460,835 6,659,487 6,435,505 9,076,014 10,761,677 Unrestricted 24,386,089 22,539,955 18,910,595 18,943,736 24,119,250 123,315,659$ 135,907,997$ 140,113,462$ 145,098,821$ 147,790,883$ SOURCE: East Valley Water District - Finance Department EAST VALLEY WATER DISTRICT Operating Revenue by Source Last Ten Fiscal Years 93 Wastewater Wastewater Total Year Ended Water Meter System Treatment Other Operating June 30,Sales Charges Charges Charges Charges Revenue 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 2021 19,305,631 9,217,003 4,705,683 8,456,508 551,989 42,236,814 2022 18,472,876 9,192,297 4,828,526 9,764,357 835,559 43,093,615 2023 17,004,576 9,831,561 5,651,554 10,108,850 1,213,471 43,810,012 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 $50,000,000 Other Charges Wastewater Treatement Charges Wastewater System Charges Meter Charges Water Sales EAST VALLEY WATER DISTRICT Water Operating Expenses Last Ten Fiscal Years 94 Transmission Customer Accts,Total Year Ended Source of Water &General, &Water Oper June 30,Supply Pumping Treatment Distribution Admin Expenses 2014 2,875,518$ 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 2021 3,617,788 596,586 1,008,129 3,253,175 9,208,176 17,683,854 2022 3,515,262 756,843 1,045,730 3,563,328 12,534,090 21,415,253 2023 3,890,634 1,003,038 1,212,646 4,311,606 10,744,909 21,162,833 SOURCES: East Valley Water District - Customer Service, Finance, and Operations Departments $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 Source of Supply Pumping Water Treatment Transmission & Distribution Customer Accts, General, & Admin EAST VALLEY WATER DISTRICT Wastewater Operating Expenses Last Ten Fiscal Years 95 Customer Accts,Total Year Ended Wastewater General, &Wastewater Oper June 30,Collections Admin Expenses 2014 312,193$ 2,953,997$ 3,266,190$ 2015 448,399 3,356,250 3,804,649 2016 407,913 2,752,779 3,160,692 2017 425,944 2,510,920 2,936,864 2018 753,000 3,367,091 4,120,091 2019 700,507 3,309,983 4,010,490 2020 767,448 2,922,949 3,690,397 2021 722,680 3,140,650 3,863,330 2022 587,128 3,113,309 3,700,437 2023 752,489 4,048,730 4,801,219 SOURCES: East Valley Water District - Customer Service and Finance Departments $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 Wastewater Collections Customer Accts, General, & Admin EAST VALLEY WATER DISTRICT Water Reclamation Operating Expenses Last Ten Fiscal Years 96 Customer Accts,Total Year Ended Wastewater General, &Water Recl Oper June 30,Treatment Admin Expenses 2014 7,197,418$ -$ 7,197,418$ 2015 6,907,828 - 6,907,828 2016 7,302,389 - 7,302,389 2017 8,128,030 - 8,128,030 2018 8,697,671 - 8,697,671 2019 8,592,950 - 8,592,950 2020 8,496,012 - 8,496,012 2021 8,456,508 - 8,456,508 2022 9,084,061 - 9,084,061 2023 9,601,461 685,246 10,286,707 SOURCES: East Valley Water District - Customer Service and Finance Departments $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 Wastewater Treatment Customer Accts, General, & Admin EAST VALLEY WATER DISTRICT Water Sales and Production Last Ten Fiscal Years 97 Year Ended Water Sales Water Produced June 30,(Acre Feet)(Acre Feet) 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 2021 18,429 18,784 2022 17,998 18,789 2023 15,341 16,408 SOURCES: East Valley Water District - Finance and Operations Departments 0 5,000 10,000 15,000 20,000 25,000 Water Produced Water Sales 98 EAST VALLEY WATER DISTRICT Revenue Rates for Water Last Ten Fiscal Years 99 Year ended June 30, 2014 2015(1)2016 2017 2018 Tier 1-$1.45 Tier 1-$1.45 Tier 1-$1.63 Tier 1-$1.73 Tier 2-$2.07 Tier 2-$2.07 Tier 2-$2.32 Tier 2-$2.46 Tier 3-$2.89 Tier 3-$2.89 Tier 3-$3.24 Tier 3-$3.44 Year ended June 30, 2014 2015 2016 2017 2018 13.71$ 20.96$ 20.96$ 23.06$ 23.06$ 13.71 26.61 26.61 29.27 29.27 20.87 37.92 37.92 41.71 41.71 38.60 66.19 66.19 72.81 72.81 88.48 100.12 100.12 110.13 110.13 163.25 207.54 207.54 228.30 228.30 270.06 365.85 365.85 402.44 402.44 537.09 744.67 744.67 819.14 819.14 857.52 1,366.62 1,366.62 1,503.28 1,503.28 (Continued) NOTES: HCF = Hundred Cubic Feet = 748 gallons (1)On June 1, 2015 the District adopted Water Budget Based Rates. (2)On January 1, 2020 the District adopted New Water Rates. (3)On January 1, 2022 the District adopted New Water Rates. SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions Water Consumption Rates 1 1 1/2 2 8 3 4 6 (inches) 5/8 3/4 Meter Size Charge per HCF 1.77$ Water Monthly System Charges EAST VALLEY WATER DISTRICT Revenue Rates for Water - Continued Last Ten Fiscal Years 100 Year ended June 30, 2019 2020(2)2021 2022(3)2023 Tier 1-$1.73 Tier 1-$1.83 Tier 1-$1.83 Tier 1-$1.98 Tier 1-$2.04 Tier 2-$2.46 Tier 2-$2.61 Tier 2-$2.61 Tier 2-$2.54 Tier 2-$2.62 Tier 3-$3.44 Tier 3-$3.64 Tier 3-$3.64 Tier 3-$3.93 Tier 3-$4.05 Year ended June 30, 2019 2020 2021 2022(3)2023 23.06$ 23.06$ 23.06$ 24.01$ 24.74$ 29.27 29.27 29.27 30.85 31.78 41.71 41.71 41.71 44.52 45.86 72.81 72.81 72.81 78.69 81.06 110.13 110.13 110.13 119.70 123.30 228.30 228.30 228.30 229.05 235.93 402.44 402.44 402.44 352.07 362.64 819.14 819.14 819.14 693.79 714.61 1,503.28 1,503.28 1,503.28 1,923.98 1,981.70 NOTES: HCF = Hundred Cubic Feet = 748 gallons (1)On June 1, 2015 the District adopted Water Budget Based Rates. (2)On January 1, 2020 the District adopted New Water Rates. (3)On January 1, 2022 the District adopted New Water Rates. SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions Water Consumption Rates 1 1 1/2 2 8 3 4 6 (inches) 5/8 3/4 Charge per HCF Meter Size Water Monthly System Charges EAST VALLEY WATER DISTRICT Revenue Rates for Wastewater Last Ten Fiscal Years 101 Year ended June 30, 2014 2015(1)2016 2017 2018 Single-Family Residential (1 to 3 units) Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 15.36$ 15.36$ Multi-Family Residential (4 or more units) Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 15.36 N/A Commercial Non-Residential 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, 2014 2015(1)2016 2017 2018 Residential (Flat Monthly Charge) Flat Monthly Charge Residential (1 unit)18.50$ 18.50$ 19.18$ 20.85$ 21.55$ Residential (2 units)N/A N/A N/A N/A N/A Residential (3 units)N/A N/A N/A N/A N/A Multi-Family (2 units)37.00 37.00 38.37 41.72 43.10 Multi-Family (3 units)55.50 55.50 57.55 62.58 64.64 Multi-Family (4 or more units)N/A N/A N/A N/A N/A Commercial Multi-Family (4+ units)2.40 2.40 1.71 1.90 1.97 Non-Residential 2.40 2.40 3.18 3.42 3.52 plus, Charge per HCF: Multi-Family (4+ units)1.25 1.25 1.36 1.48 1.53 Retail 2.10 2.10 2.28 2.47 2.55 Restaurants/Lounges 2.70 2.70 2.93 3.18 3.28 Schools/Churches 1.10 1.10 1.19 1.29 1.33 Governments/Municipal 1.50 1.50 1.63 1.77 1.83 Laundromats 1.50 1.50 1.63 1.77 1.83 Dry Cleaners 2.10 2.10 2.28 2.47 2.55 Convalescent Homes 1.35 1.35 1.46 1.58 1.63 Auto Repair/Svc Stations 1.30 1.30 1.41 1.53 1.58 Car Wash 1.30 1.30 1.41 1.53 1.58 Patton State Hospital N/A N/A N/A N/A N/A Hotels 2.70 2.70 2.93 3.18 3.28 Ofc Bldgs/Motels 1.50 1.50 1.63 1.77 1.83 Supermarkets 2.70 2.70 2.93 3.18 3.28 NOTES:(Continued) HCF = Hundred Cubic Feet = 748 gallons (1)On June 1, 2015 the District adopted Water Budget Based Rates. (2) SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions Starting in May 2022, the District transitioned from rates established by the City of San Bernardino to rates adopted as the result of a wastewater Cost of Service Analysis for the District's Sterling Natural Resource Center Water Reclamation Plant. Wastewater Maintenance Charges Wastewater Treatment Charges EAST VALLEY WATER DISTRICT Revenue Rates for Wastewater - Continued Last Ten Fiscal Years 102 Year ended June 30, 2019 2020 2021 2022(2)2023 Single-Family Residential (1 to 3 units) Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 14.25$ 15.25$ Multi-Family Residential (4 or more units) Flat Monthly Charge (per unit)N/A N/A N/A 13.46 14.41 Commercial Non-Residential Flat Monthly Charge 3.90 3.90 3.90 10.33 11.06 plus, Charge per HCF 0.55 0.55 0.55 - - Year ended June 30, 2019 2020 2021 2022(2)2023 Residential (Flat Monthly Charge) Flat Monthly Charge Residential (1 unit)21.55$ 21.55$ 21.55$ 23.37$ 25.01$ Residential (2 units)N/A N/A N/A 23.37 25.01 Residential (3 units)N/A N/A N/A 23.37 25.01 Multi-Family (2 units)43.10 43.10 43.10 20.86 22.33 Multi-Family (3 units)64.64 64.64 64.64 20.86 22.33 Multi-Family (4 or more units)N/A N/A N/A 20.86 22.33 Commercial Multi-Family (4+ units)1.97 1.97 1.97 N/A N/A Non-Residential 3.52 3.52 3.52 10.83 11.59 plus, Charge per HCF: Multi-Family (4 + units)1.53 1.53 1.53 N/A N/A Retail 2.55 2.55 2.55 1.31 1.41 Restaurants/Lounges 3.28 3.28 3.28 1.31 4.16 Schools/Churches 1.33 1.33 1.33 1.31 1.41 Governments/Municipal 1.83 1.83 1.83 1.31 1.41 Laundromats 1.83 1.83 1.83 1.99 2.14 Dry Cleaners 2.55 2.55 2.55 1.99 2.14 Convalescent Homes 1.63 1.63 1.63 1.99 2.14 Auto Repair/Svc Stations 1.58 1.58 1.58 1.99 2.14 Car Wash 1.58 1.58 1.58 1.99 1.41 Patton State Hospital N/A N/A N/A 2.36 2.53 Hotels 3.28 3.28 3.28 3.88 4.16 Ofc Bldgs/Motels 1.83 1.83 1.83 3.88 1.41 Supermarkets 3.28 3.28 3.28 1.31 4.16 NOTES: HCF = Hundred Cubic Feet = 748 gallons (1)On June 1, 2015 the District adopted Water Budget Based Rates. (2) SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions Wastewater Treatment Charges Starting in May 2022, the District transitioned from rates established by the City of San Bernardino to rates adopted as the result of a wastewater Cost of Service Analysis for the District's Sterling Natural Resource Center Water Reclamation Plant. Wastewater Maintenance Charges EAST VALLEY WATER DISTRICT Active Services by Type Last Ten Fiscal Years 103 Year Ended Residential Multi-Family Total June 30,(1 to 3 units)(4+ units)Commercial Irrigation Fire Svcs Service 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 2021 19,526 463 988 275 255 21,507 2022 19,853 463 988 275 255 21,834 2023 19,876 474 715 354 260 21,679 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 104 Water Percentage Water Percentage Consumed of Total Consumed of Total Customer (AF)Rank (%)(AF)Rank (%) San Bernardino City Unified School District 507 1 3.09%545 2 2.64% Patton State Hospital 359 2 2.19%595 1 2.88% City of Highland 312 3 1.90%297 4 1.44% San Manuel Indian Bingo & Casino 309 4 1.88%208 6 1.01% Village Lakes Homeowners Association 164 5 1.00%- East Highlands Ranch 151 6 0.92%365 3 1.77% San Manuel Mission Indians 151 7 0.92%228 5 1.10% Amusement Industry 142 8 0.87%- Tuscany Apartment Homes 139 9 0.85%95 10 0.46% Victoria Village Apartments 105 10 0.64%99 9 0.48% Stubblefield Mobile Home Parks & Offices 154 7 0.75% Valencia Lea Mobile Home Park 136 8 0.66% Total - Top 10 2,339 14.26%2,722 13.19% Total - Water Produced 16,408 100.00%20,665 100.00% SOURCES: East Valley Water District - Customer Service and IT Departments 20142023 EAST VALLEY WATER DISTRICT Ratio of Outstanding Debt Last Ten Fiscal Years 105 Fiscal Year Revenue Bonds DWR Loans Capital Lease and Loan Certificates of Participation Installment Note Outstanding Debt $ Per Capita As a Share of Personal Income 2014 42,195,000$ 7,091,964$ 3,998,560$ -$ -$ $ 53,285,524 561 1.67% 2015 40,930,000 7,071,964 3,671,849 - - 51,673,813 508 1.43% 2016 39,615,000 6,818,565 3,299,108 - - 49,732,673 476 1.30% 2017 38,235,000 6,565,166 7,278,478 - - 52,078,644 510 1.36% 2018 36,800,000 6,721,695 6,392,308 - - 49,914,003 489 1.26% 2019 35,300,000 31,947,551 5,131,238 - - 72,378,789 710 1.72% 2020 33,720,000 69,565,404 4,295,104 - - 107,580,508 1,044 2.30% 2021 33,261,998 132,399,838 3,449,724 - - 169,111,561 1,642 3.32% 2022 32,288,904 145,368,048 2,582,889 - - 180,239,841 1,750 * 2023 30,923,365 161,169,730 1,719,375 - - 193,812,470 1,864 * NOTE: * This data was not developed in the format required for this fiscal year. SOURCE: East Valley Water District - Finance Department $0 $25,000,000 $50,000,000 $75,000,000 $100,000,000 $125,000,000 $150,000,000 $175,000,000 $200,000,000 Revenue Bonds DWR Loans Capital Lease and Loan Certificates of Participation Installment Note EAST VALLEY WATER DISTRICT Debt Service Coverage Last Ten Fiscal Years 106 Gross Operating Net Available Revenue (1)Expenses(2)Revenue Principal(3)Interest Total 27,397,559$ 13,219,850$ 14,177,709$ 1,167,718$ 1,840,671$ $3,008,389 4.71 % 20,662,750 12,915,690 7,747,060 1,546,490 1,813,348 3,359,838 2.31 22,543,107 15,048,582 7,494,525 1,851,139 1,718,658 3,569,797 2.10 25,257,709 14,717,219 10,540,490 1,926,956 1,653,322 3,580,278 2.94 27,537,072 16,134,461 11,402,611 2,479,570 1,584,820 4,064,390 2.81 27,071,082 16,614,399 10,456,683 2,904,466 1,593,181 4,497,647 2.32 27,466,707 17,487,780 9,978,927 2,564,310 1,456,842 4,021,152 2.48 29,738,333 17,638,854 12,099,479 4,703,778 1,104,438 5,808,216 2.08 30,465,196 21,415,253 9,049,943 2,100,233 957,953 3,058,186 2.96 29,330,516 21,162,833 8,167,683 2,141,913 917,000 3,058,913 2.67 Gross Operating Net Available Revenue (1)Expenses(2)Revenue Principal Interest Total 2014 11,974,164$ 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 2021 13,586,909 12,319,838 1,267,071 110,000 158,476 268,476 4.72 2022 16,697,201 12,784,498 3,912,703 170,000 100,145 270,145 14.48 2023 6,274,931 4,801,219 1,473,712 175,000 99,315 274,315 5.37 NOTES: (1) (2)Operating expenses, less depreciation, for the utility fund. (3)Excludes Debt Service for Assessment Districts' Arroyo Verde and Eastwood Farms. SOURCE: East Valley Water District - Finance Department 2021 2022 2023 Wastewater Department Coverage 2014 2015 2016 2017 2018 2019 2020 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 107 Personal Personal Income Income District Unemployment Population (thousands Per Capita Population (3)(4)Rate (1)(3)(2)+of dollars)(2)+(dollars)(2)+ 2014 95,000 8.9%2,095,533 70,425,945 33,608 2015 101,733 7.2%2,110,852 74,773,589 35,423 2016 104,457 6.0%2,126,539 77,868,801 36,618 2017 102,208 5.5%2,144,961 80,514,585 37,537 2018 102,000 4.4%2,160,049 83,915,091 38,849 2019 102,000 4.0%2,170,992 89,559,909 41,253 2020 103,000 6.4%2,182,740 99,313,293 45,499 2021 103,000 9.0%2,194,710 108,623,799 49,493 2022 104,000 5.4%*** 2023 104,000 4.2%*** NOTES: +This data was revised in 2021(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. (4)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 108 District Engineering &Water Administration Maintenance Operations Reclamation(1)Total 25.5 29 11 0 65.5* 27.5 28.5 11 0 67* 27 28 13 0 68* 27 29 12 0 68* 26.5 29 13 0 68.5* 27.5 32 11 0 70.5* 26 30 11 0 67 25 30 11 0 66 26 30 11 9 76 26 30 11 9 76 NOTES: *Includes Part-Time Employees (PTEs) (1)Water Reclamation program started in FY 2021-22 SOURCES: East Valley Water District - Finance and Human Resources Departments Year Ended June 30, 2020 2021 2023 2018 2014 2015 2016 2017 2019 2022 0 10 20 30 40 50 60 70 80 District Administration Engineering & Maintenance Operations Water Reclamation EAST VALLEY WATER DISTRICT Operating and Capacity Indicators for Water and Wastewater Last Ten Fiscal Years 109 Annual Average Miles of Number of Production Production Water Main Fire Hydrants (MG)(MGD) 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 2021 300 3,029 6,121 17 2022 300 3,043 6,122 17 2023 300 3,048 5,347 15 Annual Daily Miles of Service Sewerage Sewerage Wastewater Connections (MG)(MGD) 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 2021 214 19,686 2,220.61 6.08 2022 220 19,766 2,448.97 6.71 2023 220 19,831 2,138.63 5.86 SOURCE: East Valley Water District - Engineering and Finance Departments Water System Wastewater System Year Ended June 30, Year Ended June 30, 110 EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2023 111 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 annually 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 facilities and to help ensure the wastewater collection system can contain additional wastewater flows from new customers. Water Reclamation Capacity Fee Fund. This fund collects fees for the expansion of the Sterling Natural Resource Center to treat the flows generated by new development. EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2023 112 A summary of changes in Water Fund Capacity Fees collected for the year ended June 30, 2023 is as follows: Beginning of End of Categories Year Contributions Usage Year Storage 265,338$ $ 94,413 $ - $ 359,751 Treatment 845,165 28,892 - 874,057 Supply 482,841 42,822 - 525,663 Trans & Distribution 1,323,394 454,431 - 1,777,825 General 189,280 25,614 - 214,894 East Treatment Plant 454,160 321,229 - 775,389 3,560,178$ 967,401$ -$ 4,527,579$ A summary of Projects Funded by Capacity Fees for the year ended June 30, 2023: Categories CIP Project* FY 2022-23 Expended % Funded by Capacity Total Capacity Fees Usage Storage -$ 0%-$ Treatment Supply Trans & Distribution General New Treatment Plant -$ -$ Note: * The District did not have any CIP projects utilizing Capacity Fee funds for the year ended June 30, 2023. EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2023 113 A summary of changes in Wastewater Fund Capacity Fees collected for the year ended June 30, 2023 is as follows: Beginning of End of Categories Year Contributions Usage Year Collection $ 1,821,985 $ 156,513 $ - $ 1,978,498 General 281,356 22,782 - 304,138 Greenspot Main 399,412 176,145 - 575,557 5th Street Main 158,728 70,009 - 228,737 Lynwood Main 39,859 17,592 - 57,451 2,701,340$ 443,041$ -$ 3,144,381$ A summary Project Funded by Capacity Fees for the year ended June 30, 2023: Categories CIP Project FY 2022-23 Expended % Funded by Capacity Total Capacity Fees Usage Collection -$ 0%-$ Transmission - Recharge - Operations - -$ -$ EAST VALLEY WATER DISTRICT Capacity Charge Funds Year Ended June 30, 2023 114 A summary of changes in Water Reclamation Fund Capacity Fees collected for the year ended June 30, 2023 is as follows: Beginning of End of Categories Year Contributions Usage Year Treatment 2,736,801 271,721 - 3,008,522 2,736,801$ 271,721$ -$ 3,008,522$ A summary Project Funded by Capacity Fees for the year ended June 30, 2023: Categories CIP Project FY 2022-23 Expended % Funded by Capacity Total Capacity Fees Usage Treatment -$ 0%-$ -$ -$ 735 E. Carnegie Dr. Suite I 00 San Bernardino , CA 92408 909 889 0871 T 909 889 5361 F ramscpa .net PARTNERS Terry P Shea. CPA Scott W Manno, CPA. CGMA Leena Shanbhag, CPA. MST. CGMA Bradferd A Weleb,r. CPA. MBA. CGMA Jenny W Liu, CPA. MST Gardenya Duran, CPA. CGMA Brianna Schultz, CPA. CGMA Brenda L. Odle, CPA. MST (Partner Emeritus) MANAGERS/ STAFF Seong-Hyea Lee, CPA. MBA Evelyn Mo, entin-Barcena, CPA Veronica Hernandez, CPA Laura Arvizu, CPA John Maldonado, CPA. MSA Julia Rodnguez Fuentes. CPA. MSA Dem, Hite. CPA Jeffrey McKennan. CPA MEMBERS Amencan lnslltute of Certified Public Accountants PCPS Tlie A/CPA All,ance for CPA Fmns Governmental Aud,1 Qua/11y Cenre, California Society of Cert1f1ed Public Accountants dil5b Proud Member of 9 AlliottGlobalAlliance~ mm IIIIJ ROGERS , ANDERSON , MALODY & SCOTT , LLP CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948 STABILITY. ACCURACY . TRUST. 1 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 Independent Auditor’s Report Board of Directors East Valley Water District Highland, California We have audited, in accordance with 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 the East Valley Water District (the District) as of and for the year ended June 30 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated October 11, 2023. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the 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. 2 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 or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the 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 financial statements. 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 District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. San Bernardino, California October 11, 2023 East Valley Water District Schedule of Findings and Responses Year Ended June 30, 2023 3 A. Current Year Findings None in the current year. B. Prior Year Findings Findings 2022-001 – Segregation of Duties – Payroll Status: Finding has been corrected. Finding 2022-002 – Purchasing – Credit Card Support Status: Finding has been corrected. Finding 2022-003 – Segregation of Duties – Bank Reconciliations and Journal Entries Status: Finding has been corrected. 735 E. Carnegie Dr. Suite I 00 San Bernardino , CA 92408 909 889 0871 T 909 889 5361 F ramscpa .net PARTNERS Terry P Shea. CPA Scott W Manno, CPA. CGMA Leena Shanbhag, CPA. MST. CGMA Bradferd A Weleb,r. CPA. MBA. CGMA Jenny W Liu, CPA. MST Gardenya Duran, CPA. CGMA Brianna Schultz, CPA. CGMA Brenda L. Odle, CPA. MST (Partner Emeritus) MANAGERS/ STAFF Seong-Hyea Lee, CPA. MBA Evelyn Mo, entin-Barcena, CPA Veronica Hernandez, CPA Laura Arvizu, CPA John Maldonado, CPA. MSA Julia Rodnguez Fuentes. CPA. MSA Dem, Hite. CPA Jeffrey McKennan. CPA MEMBERS Amencan lnslltute of Certified Public Accountants PCPS Tlie A/CPA All,ance for CPA Fmns Governmental Aud,1 Qua/11y Cenre, California Society of Cert1f1ed Public Accountants dil5b Proud Member of 9 AlliottGlobalAlliance~ mm IIIIJ ROGERS , ANDERSON , MALODY & SCOTT , LLP CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948 STABILITY. ACCURACY . TRUST. 1 October 11, 2023 Board of Directors East Valley Water District Highland, California We have audited the financial statements of the East Valley Water District (the District) as of and for the year ended June 30, 2023, and have issued our report thereon dated October 11, 2023. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated May 31, 2023, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the District solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm, have complied with all relevant ethical requirements regarding independence. 2 Significant Risks Identified We have identified the possibility of the following significant risks: Management's override of internal controls over financial reporting – Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy. Revenue recognition – Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits. These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks. Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the District is included in Note 1 to the financial statements. There have been no changes in significant accounting policies or their application during the year under audit. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements are: Management’s estimate of the fair value of investments is based on information provided by financial institutions. We evaluated the key factors and assumptions used to develop the fair value of investments and determined that it is reasonable in relation to the basic financial statements taken as a whole. Management’s estimate of depreciation expense is based on the useful lives of acquired assets. We evaluated the key factors and assumptions used to develop depreciation expense in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the net pension liability and related deferred inflows and outflows of resources are based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the statements taken as a whole. 3 Management’s estimate of the liability for other post-employment benefits (OPEB) and related deferred inflows and outflows of resources are based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the District’s financial statements relate to: The disclosure of fair value of investments in the basic financial statements represents amounts susceptible to market fluctuations. The disclosure of accumulated depreciation in the basic financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item. The disclosure of net pension liability and related deferred inflows and outflows of resources in the basic financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates. The disclosure of the other post-employment benefits (OPEB) and related deferred inflows and outflows of resources in the basic financial statements identifies the annual OPEB cost and the funded status of the actuarial accrued liability. The information disclosed is based on actuarial assumptions which could differ from actual costs. The financial statement disclosures are neutral, consistent, and clear. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were no such misstatements. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the District’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit. 4 Representations Requested from Management We have requested certain written representations from management, which are included in the attached letter dated October 11, 2023. Management’s Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with the District, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as District’s auditors. Other Information Included in Annual Report Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the District’s annual report, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have: Applied certain limited procedures to the Management’s Discussion and Analysis, the Budgetary Comparison Schedules, the Schedule of the Plan’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios, the Schedule of Plan’s Contributions, the Schedule of Changes in the Net OPEB Liability and Related Ratios, and the Schedule of OPEB Plan Contributions which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were not engaged to report on introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. Restriction on Use This report is intended solely for the information and use of the Board of Directors and management of the District and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, San Bernardino, California 735 E. Carnegie Dr. Suite I 00 San Bernardino , CA 92408 909 889 0871 T 909 889 5361 F ramscpa .net PARTNERS Terry P Shea. CPA Scott W Manno, CPA. CGMA Leena Shanbhag, CPA. MST. CGMA Bradferd A Weleb,r. CPA. MBA. CGMA Jenny W Liu, CPA. MST Gardenya Duran, CPA. CGMA Brianna Schultz, CPA. CGMA Brenda L. Odle, CPA. MST (Partner Emeritus) MANAGERS/ STAFF Seong-Hyea Lee, CPA. MBA Evelyn Mo, entin-Barcena, CPA Veronica Hernandez, CPA Laura Arvizu, CPA John Maldonado, CPA. MSA Julia Rodnguez Fuentes. CPA. MSA Dem, Hite. CPA Jeffrey McKennan. CPA MEMBERS Amencan lnslltute of Certified Public Accountants PCPS Tlie A/CPA All,ance for CPA Fmns Governmental Aud,1 Qua/11y Cenre, California Society of Cert1f1ed Public Accountants dil5b Proud Member of 9 AlliottGlobalAlliance~ mm IIIIJ ROGERS , ANDERSON , MALODY & SCOTT , LLP CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948 STABILITY. ACCURACY . TRUST. Independent Auditor’s Report Board of Directors East Valley Water District Highland, California Report on the Audit of the Financial Statements Opinion We have audited the financial statements of East Valley Water District (the District), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the District as of June 30, 2023, and the changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the State Controller’s Minimum Audit Requirements for California Special Districts. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Other Matter Report on Summarized Comparative Information We have previously audited the District’s 2022 financial statements, and we expressed an unmodified opinion on the respective financial statements in our report dated December 14, 2022. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District’s basic financial statements. The supplementary information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic 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 supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other information Management is responsible for the other information included in the annual report. The other information comprises the letter of transmittal and the statistical section but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 11, 2023 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. San Bernardino, California October 11, 2023 Agenda Item #3b October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #3b Discussion Item 9 0 4 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Consider Approval of Conservation and Public Affairs Design Services Contract with SG Creative and We The Creative RECOMMENDATION That the Board of Directors authorize the General Manager/CEO to execute a professional services agreement with SG Creative and We The Creative for on-call creative design services. BACKGROUND / ANALYSIS The Legislative and Public Outreach Committee recommended, at their October 12, 2023 meeting, that the Board of Directors approve the on-call professional services agreements for creative services. East Valley Water District (District) recognizes the importance of effective public outreach and communication to ensure the community stays informed about the District's initiatives, services, and water conservation efforts. Contract creative design consultants are used to produce many public outreach communications used by the District. Their expertise is a valuable resource to supplement District staff in creating a wide range of printed and digital material. The creative design services consultants will support the development of creative assets targeting audiences including ratepayers, businesses, students, community groups, and regional stakeholders through multiple channels. The District utilizes direct mail, print, outdoor, electronic media, website banners, newsletters, media toolkits, and social media as its primary channels to engage with the selected audience. In accordance with District Policy 7.1, a competitive bidding process was used to select the consultants for the creative design services. A request for proposals (RFP) was posted on the District’s website and nine (9) firms submitted proposals in response to the RFP. A selection committee reviewed the proposals and interviewed the top-ranked firms. The selection committee recommended SG Creative and We The Creative as the most suitable organizations for an on-call contract with the District. Contracting two consultants provides additional resources to meet the District’s communications needs over the contract period. Both SG Creative and We The Creative were selected based on their outstanding qualifications, experience working with public agencies, and resources to meet the District's schedule. SG Creative has been providing creative services for the District in Agenda Item #3b October 25, 20232 Meeting Date: October 25, 2023 Agenda Item #3b Discussion Item 9 0 4 the past and We the Creative has worked with Southern California local government agencies such as Long Beach Water Department, City of Santa Monica and the City of Laguna Niguel. Both firms clearly demonstrated capabilities in developing strategic communications strategies, graphic design, advertising planning, creative development, digital asset development, and the creation of engaging water/wastewater communications collateral. The recommended contract will be for three (3) years with up to two 1-year optional extensions, District staff will utilize task orders to allocate work to each consultant. Each contract will have a maximum annual amount of $100,000. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability B. Utilize Effective Communication Methods D. Provide Quality Information to Encourage Community Engagement III - Deliver Public Service With Purpose While Embracing Continuous Growth B. Strive to Provide World Class Customer Relations REVIEW BY OTHERS This agenda item has been reviewed by Administration. FISCAL IMPACT This item is funded in the current fiscal year budget and future budget allocations will be requested during the annual budget development. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ William Ringland Public Affairs/Conservation Manager ATTACHMENTS Draft agreements Page 1 East Valley Water District Conservation and Public Affairs Design Services AGREEMENT NO 2023.12 EAST VALLEY WATER DISTRICT FOR FOR PROFESSIONAL SERVICES THIS AGREEMENT is made this 26 day of October 2023, by and between the EAST VALLEY WATER DISTRICT, a County Water District organized and operating pursuant to California Water Code Section 30000 et seq. (hereinafter referred to as the “DISTRICT”), and SG Creative, a communications and creative consultant (hereinafter referred to as “CONSULTANT”). RECITALS WHEREAS, the DISTRICT desires to contract with CONSULTANT to provide design professional services for Creative Design Services (hereinafter referred to as “Project”); and WHEREAS, CONSULTANT is willing to contract with the DISTRICT to provide such services; and WHEREAS, CONSULTANT holds itself as duly licensed, qualified, and capable of performing said services; and WHEREAS, this Agreement establishes the terms and conditions for the DISTRICT to retain CONSULTANT to provide the services described herein for the Project. COVENANTS NOW, THEREFORE, in consideration of the faithful performance of the terms and conditions set forth herein, the parties hereto agree as follows: ARTICLE I ENGAGEMENT OF CONSULTANT AND AUTHORIZATION TO PROCEED 1.1 ENGAGEMENT: The DISTRICT hereby engages CONSULTANT, and CONSULTANT hereby accepts the engagement, to perform certain design professional services described in Section 2.1 of this Agreement for the term set forth in Section 6.7 of this Agreement. 1.2 AUTHORIZATION TO PROCEED: Authorization for CONSULTANT to proceed with all or a portion of the work described in Section 2.1 of this Page 2 East Valley Water District Conservation and Public Affairs Design Services Agreement will be granted in writing by the DISTRICT as soon as both parties sign the Agreement and all applicable insurance and other security documents required pursuant to Section 6.3 of this Agreement are received and approved by the DISTRICT. CONSULTANT shall not proceed with said work until so authorized by the DISTRICT, and shall commence work immediately upon receipt of the Notice to Proceed. 1.3 NO EMPLOYEE RELATIONSHIP: CONSULTANT shall perform the services provided for herein as an independent contractor, and not as an employee of the DISTRICT. The DISTRICT shall have ultimate control over the work performed for the Project. CONSULTANT is not to be considered an agent or employee of the DISTRICT for any purpose, and shall not be entitled to participate in any pension plans, insurance coverage, bonus, stock, or similar benefits that the DISTRICT provides for its employees. CONSULTANT shall indemnify the DISTRICT for any tax, retirement contribution, social security, overtime payment, or workers’ compensation payment which the DISTRICT may be required to make on behalf of CONSULTANT or any employee of CONSULTANT for work performed under this Agreement. ARTICLE II SERVICES OF CONSULTANT 2.1 SCOPE OF SERVICES: The scope of design professional services to be performed by the CONSULTANT under this Agreement are described in the Scope of Work attached hereto as Exhibit “A” and incorporated herein by this reference (“Scope of Work”), and shall, where not specifically addressed, include all related services ordinarily provided by the CONSULTANT under same or similar circumstances and/or otherwise necessary to satisfy the requirements of Section 3.3 of this Agreement. In case of conflict between the terms of this Agreement and the provisions of the Scope of Work, this Agreement shall govern. 2.2 DEPARTMENT OF INDUSTRIAL RELATIONS COMPLIANCE: This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the California Public Contract Code, or engage in the performance of any contract for public work, as defined by the California Labor Code, unless currently registered and qualified to perform public work Page 3 East Valley Water District Conservation and Public Affairs Design Services pursuant to Section 1725.5 of the California Labor Code. 2.3 PREVAILING WAGES: In accordance with the provisions of the California Labor Code, CONSULTANT shall secure the payment of compensation to employees. To the extent required by the California Labor Code, CONSULTANT shall pay not less than the prevailing rate of per diem wages as determined by the Director, Department of Industrial Relations, and State of California. Copies of such prevailing rate of per diem wages are on file at the DISTRICT’s office, which copies will be made available to any interested party upon request. CONSULTANT shall post a copy of such determination at each job site. If applicable, CONSULTANT shall forfeit to the DISTRICT the amount of the penalty set forth in Labor Code Section 1777.7(b), or any subsequent amendments thereto, for each calendar day, or portion thereof, for each worker paid less than the specified prevailing rates for such work or craft in which such worker is employed, whether paid by CONSULTANT or by any subcontractor. 2.4 HOURS AND WORKING CONDITIONS: The DISTRICT is a public entity in the State of California and is subject to the provisions of the Government Code and the Labor Code of the State. It is stipulated and agreed that all provisions of law applicable to public contracts are a part of this Agreement to the same extent as though set forth herein and will be complied with by CONSULTANT. CONSULTANT shall comply with all applicable provisions of the California Labor Code relating to working hours and the employment of apprentices on public works projects. CONSULTANT shall, as a penalty to the DISTRICT, forfeit $25.00 for each worker employed in the execution of this Agreement by CONSULTANT or by any subcontractor, for each calendar day during which such worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week, unless such worker received compensation for all hours worked in excess of 8 hours at not less than 1½ times the basic rate of pay. Page 4 East Valley Water District Conservation and Public Affairs Design Services ARTICLE III RESPONSIBILITIES OF THE DISTRICT AND OF CONSULTANT 3.1 DUTIES OF THE DISTRICT: The DISTRICT, without cost to CONSULTANT, will provide all pertinent information necessary for CONSULTANT’s performance of its obligations under this Agreement that is reasonably available to the DISTRICT unless otherwise specified in the Scope of Work, in which case the CONSULTANT is to acquire such information. The DISTRICT does not guarantee or ensure the accuracy of any reports, information, and/or data so provided. To the extent that any reports, information, and/or other data so provided was supplied to the DISTRICT by persons who are not employees of the DISTRICT, any liability resulting from inaccuracies and/or omissions contained in said information shall be limited to liability on behalf of the party who prepared the information for the DISTRICT. 3.2 REPRESENTATIVE OF DISTRICT: The DISTRICT will designate William Ringland as the person to act as the DISTRICT’s representative with respect to the work to be performed under this Agreement. Such person will have complete authority to transmit instructions, receive information, and interpret and define the DISTRICT’s policies and decisions pertinent to the work. In the event the DISTRICT wishes to make a change in the DISTRICT’s representative, the DISTRICT shall notify the CONSULTANT of the change in writing. 3.3 DUTIES OF CONSULTANT: CONSULTANT shall perform the Project work in such a manner as to fully comply with all applicable professional standards of care, including professional quality, technical accuracy, timely completion, and other services furnished and/or work undertaken by CONSULTANT pursuant to this Agreement. The CONSULTANT shall cause all work and deliverables to conform to all applicable federal, state, and local laws and regulations. 3.4 APPROVAL OF WORK: The DISTRICT’s approval of work or materials furnished hereunder shall not in any way relieve CONSULTANT of responsibility for the technical adequacy of its work. Neither the DISTRICT’s review, approval or acceptance of nor payment for any of the services shall be construed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement. Where approval by the DISTRICT is indicated in this Agreement, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry Page 5 East Valley Water District Conservation and Public Affairs Design Services standards, or the willful misconduct of the CONSULTANT or its subcontractors. CONSULTANT’s obligation to defend, indemnify, and hold harmless the DISTRICT, and its directors, officers, employees and agents as set forth in Section 6.9 of this Agreement also applies to the actions or omissions of the CONSULTANT or its subcontractors as set forth above in this paragraph. ARTICLE IV PAYMENTS TO CONSULTANT 4.1 PAYMENT: The DISTRICT will pay CONSULTANT for work performed under this Agreement, which work can be verified by the DISTRICT, on the basis of the following: CONSULTANT shall exercise its good faith best efforts to facilitate a full and clear definition of the scope of all assigned work so that the amount set forth in Section 4.3 of this Agreement will cover all tasks necessary to complete the work. The amount set forth in Section 4.3 of this Agreement is the maximum compensation to which CONSULTANT may be entitled for the performance of services to complete the work for the Project, unless the Scope of Work or time to complete the work is changed by the DISTRICT in writing in advance of the work to be performed thereunder. Adjustments in the total payment amount shall only be allowed pursuant to Section 6.4 of this Agreement. In no event shall CONSULTANT be entitled to compensation greater than the amount set forth in Section 4.3 of this Agreement where changes in the Scope of Work or the time for performance are necessitated by the negligence of CONSULTANT or any subcontractor performing work on the Project. 4.2 PAYMENT TO CONSULTANT: Payment will be made by the DISTRICT within thirty (30) calendar days after receipt of an invoice from CONSULTANT, provided that all invoices are complete and product and services are determined to be of sufficient quality by the DISTRICT. CONSULTANT shall invoice DISTRICT monthly for services performed under this Agreement. In the event that a payment dispute arises between the parties, CONSULTANT shall provide to the DISTRICT full and complete access to CONSULTANT’s labor cost records and other direct cost data, and copies thereof if requested by the DISTRICT. 4.3 ESTIMATED CHARGES: The total estimated charges for all work under this Agreement will be estimated within each individual task order, and such amount is the cost ceiling as described herein for a period of three years, with an option to renew for two (2) additional annual contract terms as allowable by the DISTRICT’s Purchasing Page 6 East Valley Water District Conservation and Public Affairs Design Services Policy. Each individual task order will follow the submitted hourly rates as show in ATTACHMENT B. 4.4 NOT-TO-EXCEED: CONSULTANT will be authorized work under this agreement by task orders. CONSULTANT will be placed on an on-call bench for the services identified. The total not-to-exceed amount for the agreement is $500,000; $100,000, maximum annual amount. 4.5 COST FOR REWORK: CONSULTANT shall, at no cost to the DISTRICT, prepare any necessary rework occasioned by CONSULTANT’s negligent act or omission or otherwise due substantially to CONSULTANT’s fault. ARTICLE V COMPLETION SCHEDULE 5.1 TASK SCHEDULE: The work is anticipated to be completed in accordance with the schedule contained in the Scope of Work. Agreement for on-call services will be in place for a period of three (3) years, with an option to renew for two (2) additional annual contract terms as allowable by the DISTRICT’s Purchasing Policy. 5.2 TIME OF ESSENCE: CONSULTANT shall perform all services required by this Agreement in a prompt, timely, and professional manner in accordance with the above schedule. Time is of the essence in this Agreement. ARTICLE VI GENERAL PROVISIONS 6.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS: CONSULTANT shall at all times observe all applicable provisions of Federal, State, and Local laws and regulations including, but not limited to, those related to Equal Opportunity Employment. 6.2 SUBCONTRACTORS AND OUTSIDE CONSULTANTS: No subcontract shall be awarded by CONSULTANT if not identified as a subcontractor in its Proposal unless prior written approval is obtained from the DISTRICT. CONSULTANT shall be responsible for payment to subcontractors used by them to perform the services under this Agreement. If CONSULTANT subcontracts any of the work to be performed, CONSULTANT shall be as fully responsible to the DISTRICT for the performance of the work, including errors and omissions of CONSULTANT’s subcontractors and of the persons employed by the subcontractor, as CONSULTANT is for the acts and omissions of persons directly employed by the CONSULTANT. Nothing contained in this Agreement shall create any contractual relationship between any subcontractor of CONSULTANT and the Page 7 East Valley Water District Conservation and Public Affairs Design Services DISTRICT. CONSULTANT shall bind every subcontractor and every subcontractor of a subcontractor to the terms of this Agreement that are applicable to CONSULTANT’s work unless specifically noted to the contrary in the subcontract in question and approved in writing by the DISTRICT. 6.3 INSURANCE: CONSULTANT shall secure and maintain in full force and effect, until the satisfactory completion and acceptance of the Project by DISTRICT, such insurance as will protect it and the DISTRICT in such a manner and in such amounts as set forth below. The premiums for said insurance coverage shall be paid by the CONSULTANT. The failure to comply with these insurance requirements may constitute a material breach of this Agreement, at the sole discretion of the DISTRICT. (a) Certificates of Insurance: Prior to commencing services under this Agreement, and in any event no later than ten (10) calendar days after execution of this Agreement, CONSULTANT shall furnish DISTRICT with Certificates of Insurance and endorsements verifying the insurance coverage required by this Agreement is in full force and effect. The DISTRICT reserves the right to require complete and accurate copies of all insurance policies required under this Agreement. (b) Required Provisions: The insurance policies required by this Agreement shall include the following provisions or have them incorporated by endorsement(s): (1) Primary Coverage: The insurance policies provided by CONSULTANT shall be primary insurance and any self-insured retention and/or insurance carried by or available to the DISTRICT or its employees shall be excess and non-contributory coverage so that any self- insured retention and/or insurance carried by or available to the DISTRICT shall not contribute to any loss or expense under CONSULTANT’s insurance. (2) Additional Insured: The policies of insurance provided by CONSULTANT, except Workers' Compensation and Professional Liability, shall include as additional insureds: the DISTRICT, its directors, officers, employees, and agents when acting in their capacity as such in conjunction with the performance of this Agreement. Such policies shall contain a "severability of interests" provision, also known as "Cross liability" or "separation of insured". (3) Cancellation: Each certificate of insurance and insurance policy shall Page 8 East Valley Water District Conservation and Public Affairs Design Services provide that the policy may not be non-renewed, canceled (for reasons other than non-payment of premium) or materially changed without first giving thirty (30) days advance written notice to the DISTRICT, or ten (10) days advance written notice in the event of cancellation due to non-payment of premium. (4) Waiver of Subrogation: The insurance policies provided by CONSULTANT shall contain a waiver of subrogation against DISTRICT, its directors, officers, employees and agents for any claims arising out of the services performed under this Agreement by CONSULTANT. (5) Claim Reporting: CONSULTANT shall not fail to comply with the claim reporting provisions or cause any breach of a policy condition or warranty of the insurance policies required by this Agreement that would affect the coverage afforded under the policies to the DISTRICT. (6) Deductible/Retention: If the insurance policies provided by CONSULTANT contain deductibles or self-insured retentions, any such deductible or self-insured retention shall not be applicable with respect to the coverage provided to DISTRICT under such policies. CONSULTANT shall be solely responsible for any such deductible or self-insured retention and the DISTRICT, in its sole discretion, may require CONSULTANT to secure the payment of any such deductible or self-insured retention by a surety bond or an irrevocable and unconditional letter of credit. (7) Consultant’s Subcontractors: CONSULTANT shall include all subcontractors as additional insureds under the insurance policies required by this Agreement to the same extent as the DISTRICT or shall furnish separate certificates of insurance and policy endorsements for each subcontractor verifying that the insurance for each subcontractor complies with the same insurance requirements applicable to CONSULTANT under this Agreement. (c) Insurance Company Requirements: CONSULTANT shall provide insurance coverage through insurers that have at least an "A" Financial Strength Rating and a "VII" Financial Size Category in accordance with the current ratings by the A. M. Best Company, Inc. as published in Best’s Key Rating Page 9 East Valley Water District Conservation and Public Affairs Design Services Guide or on said company’s web site. In addition, any and all insurers must be admitted and authorized to conduct business in the State of California and be a participant in the California Insurance Guaranty Association, as evidenced by a listing in the appropriate publication of the California Department of Insurance. (d) Policy Requirements: The insurance required under this Agreement shall meet or exceed the minimum requirements as set forth below: (1) Workers' Compensation: CONSULTANT shall maintain Workers' Compensation insurance as required by law in the State of California to cover CONSULTANT’s obligations as imposed by federal and state law having jurisdiction over CONSULTANT’s employees and Employers' Liability insurance, including disease coverage, of not less than $1,000,000. (2) General Liability: CONSULTANT shall maintain Comprehensive General Liability insurance with a combined single limit of not less than $1,000,000 per occurrence or claim and $1,000,000 aggregate. The policy shall include, but not be limited to, coverage for bodily injury, property damage, personal injury, products, completed operations and blanket contractual to cover, but not be limited to, the liability assumed under the indemnification provisions of this Agreement. In the event the Comprehensive General Liability insurance policy is written on a "claims made" basis, coverage shall extend for two years after the satisfactory completion and acceptance of the Project by DISTRICT. (3) Automobile Liability: CONSULTANT shall maintain Commercial Automobile Liability insurance with a combined single limit for bodily injury and property damage of not less than $1,000,000 each occurrence for any owned, hired, or non-owned vehicles. (4) Professional Liability: CONSULTANT shall maintain Professional Liability insurance covering errors and omissions arising out of the services performed by the CONSULTANT or any person employed by him, with a limit of not less than $1,000,000 per occurrence or claim and $1,000,000 aggregate. In the event the insurance policy is written on a "Claims made" basis, coverage shall extend for two years after the satisfactory completion and acceptance of the Project Page 10 East Valley Water District Conservation and Public Affairs Design Services by DISTRICT. (5) Property Coverage – Valuable Papers: Property coverage on an all- risk, replacement cost form with Valuable Papers insurance sufficient to assure the restoration of any documents, memoranda, reports, plans or other similar data, whether in hard copy or electronic form, relating to the services provided by CONSULTANT under this Agreement. 6.4 CHANGES IN SCOPE OR TIME: If the DISTRICT requests a change in the Scope of Work or time of completion by either adding to or deleting from the original scope or time of completion, an equitable adjustment shall be made and this Agreement shall be modified in writing accordingly. CONSULTANT must assert any claim for adjustment under this clause in writing within thirty (30) calendar days from the date of receipt from CONSULTANT of the notification of change unless the DISTRICT grants a further period of time before the date of final payment under this Agreement. 6.5 NOTICES: All notices to either party by the other shall be made in writing and delivered or mailed to such party at their respective addresses as follows, or to other such address as either party may designate, and said notices shall be deemed to have been made when delivered or, if mailed, five (5) days after mailing. To DISTRICT: East Valley Water District 31111 Greenspot Road Highland, CA 92346 Attn: General Manager/CEO To CONSULTANT: SG Creative 3605 Copper Court High Point, NC 27265 Attn: Stephanie Guida 6.6 CONSULTANT’S ASSIGNED PERSONNEL: CONSULTANT designates Stephanie Guida to have immediate responsibility for the performance of the work and for all matters relating to performance under this Agreement. Substitution of any assigned personnel shall require the prior written approval of the DISTRICT. If the DISTRICT determines that a proposed substitution is not acceptable, then, at the request of the DISTRICT, CONSULTANT shall substitute with a person acceptable to the DISTRICT. Page 11 East Valley Water District Conservation and Public Affairs Design Services 6.7 TERMINATION: (a) If the engagement of CONSULTANT is not extended by the mutual written consent of the DISTRICT and CONSULTANT, then this Agreement shall expire on the latest date set forth in the schedule contained in the Scope of Work for completion of tasks for the Project. (b) Notwithstanding the above, the DISTRICT may terminate this Agreement or abandon any portion of the Project by giving ten (10) days written notice thereof to CONSULTANT. CONSULTANT may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days written notice only in the event of substantial failure by the DISTRICT to perform in accordance with the terms of this Agreement through no fault of the CONSULTANT. (c) In the event of termination of this Agreement or abandonment of any portion of the Project, the DISTRICT shall be immediately given title to all original drawings and other documents developed for the Project, and the sole right and remedy of CONSULTANT shall be to receive payment for all amounts due and not previously paid to CONSULTANT for services completed or in progress in accordance with the Agreement prior to such date of termination. If termination occurs prior to completion of any task for which payment has not been made, the fee for services performed during such task shall be based on an amount mutually agreed to by the DISTRICT and CONSULTANT. Such payments available to the CONSULTANT under this paragraph shall not include costs related to lost profit associated with the expected completion of the work or other such payments relating to the benefit of this Agreement. 6.8 ATTORNEYS’ FEES: In the event that either the DISTRICT or CONSULTANT brings an action or proceeding for damages for an alleged breach of any provision of this Agreement, to interpret this Agreement or determine the rights of and duties of either party in relation thereto, the prevailing party shall be entitled to recover as part of such action or proceeding all litigation, arbitration, mediation and collection expenses, including witness fees, court costs, and reasonable attorneys' fees. Such fees shall be determined by the Court in such litigation or in a separate action brought for that purpose. Mediation will be attempted if both parties mutually agree before, during, or after any such action or proceeding has begun. Page 12 East Valley Water District Conservation and Public Affairs Design Services 6.9 INDEMNITY: (a) CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT or any of CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, excepting only such matters arising from the sole negligence or willful misconduct of the DISTRICT. (b) CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, with respect to or arising out of any infringement or alleged infringement of any patent, copyright or trademark and arising out of the use of any equipment or materials furnished under this Agreement by the CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, or out of the processes or actions employed by, or on behalf of, the CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, in connection with the performance of services under this Agreement. CONSULTANT shall have the right, in order to avoid such claims or actions, to substitute at its expense non-infringing equipment, materials or processes, or to modify at its expense such infringing equipment, materials, and processes so they become non-infringing, provided that such substituted and modified equipment, materials, and processes shall meet all the requirements and be subject to all the provisions of this Agreement. (c) CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, Page 13 East Valley Water District Conservation and Public Affairs Design Services liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, with respect to or arising out of any breach by CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, of the aforesaid obligations and covenants, and any other provision or covenant of this Agreement. (d) It is the intent of the parties to this Agreement that the defense, indemnity, and hold harmless obligation of CONSULTANT under this Agreement shall be as broad and inclusive as may be allowed under California Civil Code § 2778 through 2784.5, or other similar state or federal law. 6.10 SAFETY: CONSULTANT shall perform the work in full compliance with applicable State and Federal safety requirements including, but not limited to, Occupational Safety and Health Administration requirements. (a) CONSULTANT shall take all precautions necessary for the safety of, and prevention of damage to, property on or adjacent to the Project site, and for the safety of, and prevention of injury to, persons, including DISTRICT’s employees, CONSULTANT’s employees, and third persons. All work shall be performed entirely at CONSULTANT’s risk. CONSULTANT shall comply with the insurance requirements set forth in Section 6.3 of this Agreement. (b) CONSULTANT shall also furnish the DISTRICT with a copy of any injury prevention program established for the CONSULTANT’s employees pursuant to Labor Code Section 6401.7, including any necessary documentation regarding implementation of the program. CONSULTANT hereby certifies that its employees have been trained in the program, and procedures are in place to train employees whenever new substances, processes, procedures, or equipment are introduced. CONSULTANT shall demonstrate compliance with Labor Code Section 6401.7 by maintaining a copy of its Injury and Illness Prevention Plan at the Project site and making it available to the DISTRICT. 6.11 EXAMINATION OF RECORDS: All original drawings, specifications, reports, calculations, and other documents or electronic data developed by CONSULTANT for the Project shall be furnished to and become the property of the DISTRICT. CONSULTANT agrees that the DISTRICT will have access to and the right to examine any directly pertinent books, documents, papers, and records of any and all of the transactions Page 14 East Valley Water District Conservation and Public Affairs Design Services relating to this Agreement. 6.12 OWNERSHIP OF SOFTWARE: (a) Subject to payment of all compensation due under this Agreement and all other terms and conditions herein, CONSULTANT hereby grants DISTRICT a nonexclusive, transferable, royalty-free license to use the Software furnished to DISTRICT by CONSULTANT under this Agreement. The license granted herein shall authorize DISTRICT to: (1) Install the Software on computer systems owned, leased or otherwise controlled by DISTRICT; (2) Utilize the Software for its internal data-processing purposes; and (3) Copy the Software and distribute as desired to exercise the rights granted herein. (b) CONSULTANT retains its entire right, title and interest in the Software developed under this Agreement. DISTRICT acknowledges that CONSULTANT owns or holds a license to use and sublicense various pre- existing development tools, routines, subroutines and other programs, data and materials that CONSULTANT may include in the Software developed under this Agreement. This material shall be referred to hereafter as “Background Technology.” (c) DISTRICT agrees that CONSULTANT shall retain any and all rights CONSULTANT may have in the Background Technology. CONSULTANT grants DISTRICT an unrestricted, nonexclusive, perpetual, fully paid-up worldwide license to use the Background Technology in the Software developed and delivered to DISTRICT under this Agreement, and all updates and revisions thereto. However, DISTRICT shall make no other commercial use of the Background Technology without CONSULTANT’s written consent. 6.13 INTEGRATION AND AMENDMENT: This Agreement contains the entire understanding between the DISTRICT and CONSULTANT as to those matters contained herein. No other representations, covenants, undertakings or other prior or contemporaneous agreements, oral or written, respecting those matters, which are not specifically incorporated herein, may be deemed in any way to exist or to bind any of the parties hereto. Each party acknowledges that it has not executed this Agreement in reliance on any promise, representation or warranty not set forth herein. This Agreement Page 15 East Valley Water District Conservation and Public Affairs Design Services may not be amended except by a writing signed by all parties hereto. 6.14 ASSIGNMENT: Neither party shall assign or transfer its interest in this Agreement without written consent of the other party. All terms, conditions, and provisions of this Agreement shall inure to and shall bind each of the parties hereto, and each of their respective heirs, executors, administrators, successors, and assigns. 6.15 GOVERNING LAW: This Agreement shall be construed as if it was jointly prepared by both parties hereto, and any uncertainty or ambiguity contained herein shall not be interpreted against the party drafting same. This Agreement shall be enforced and governed by the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state court situated in the County of San Bernardino, State of California, or in a federal court with in rem jurisdiction over the Project. 6.16 HEADINGS: Article and Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, and conditions of this Agreement. 6.17 PARTIAL INVALIDITY: If any term, covenant, condition, or provision of this Agreement is found by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated thereby. 6.18 EFFECT OF DISTRICT’S WAIVER: Any failure by the DISTRICT to enforce any provision of this Agreement, or any waiver thereof by the DISTRICT, shall not constitute a waiver of its right to enforce subsequent violations of the same or any other terms or conditions herein. 6.19 AUTHORITY: The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to sign this Agreement on behalf of and to so bind their respective legal entities. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. CONSULTANT DISTRICT By: _____________________________ By:_____________________________ Stephanie Guida Michael Moore, General Manager/ CEO SG Creative East Valley Water District Page 16 East Valley Water District Conservation and Public Affairs Design Services ATTACHMENT A – Scope of Work Proposal Conservation and Public Aairs Design Services AUGUST 4, 2023 SUBMITTED BY: Strong brands and engaging messaging brings a client’s project to life. 1 Transmittal Letter Signed letter briefly stating the consultant’s understanding of work, commitment, and qualifications.3 Key Personnel Resume of employee assigned to the District’s service contract. 13 Qualifications and Work Plan Qualifications to complete the Scope of Work and written work plan. 23 References Names and contact information for public agencies for whom comparable services were completed.25 Cost Line item pricing for labor rates of the specified staff member assigned to this contract. Table of Contents Conservation and Public Affairs Design Services | page i This page left blank intentionally page ii | SG Creative, LLC TR A N S M I T T A L L E T T E R LETTERTransmittal July 16, 2023 William Ringland Public Affairs / Conservation Manager East Valley Water District 25318 5th Street San Bernardino, CA 92410 Reference: Request for Proposal, Conservation and Public Affairs Design Services Subject: Supporting East Valley Water District’s Public Affairs Team Dear William, I started SG Creative after a successful career serving as an employee for public and private corporations, a non-profit and East Valley Water District (or District). My business was born from an inherent desire to create and at the request of a former employer to support their graphic design needs. Over the years my portfolio has expanded and I have been blessed with the opportunity to work on projects that serve the needs of communities where I once resided. My knowledge of East Valley Water District and the community served by the District is unmatched. It has been gained while: • Residing in the community, • Working on the District’s headquarters facility design-build contract as an employee of Balfour Beatty/Parsons Brinckerhoff, • During my employment as the District’s Community Relations Officer, and • Through the last six years as your graphic design consultant. After careful review of your Request for Proposal, I have prepared a comprehensive document addressing your scope of services. Details of my experience meet all of the core competencies and industry expertise the District has requested. Included in the subsequent pages of this proposal is evidence of successful multi-channel, targeted communications and conservation campaigns. It demonstrates my proficiencies for a variety of clients since you are primarily familiar with my work with the District. As a benefit to the District, I have gained additional knowledge and experience of the water and wastewater industry while working with other water districts and public agencies. This proficiency only adds to my capabilities as a designer and ability to convey complex messages to ratepayers. sgcreativellc.com 3605 Copper Court High Point, NC 27265 (909) 754-6672 stephanie@sgcreativellc.com Conservation and Public Affairs Design Services | page 1 page 2 | SG Creative, LLC My commitment to East Valley Water District is just as strong today as it was when I first starting working at the District in 2015. I would like to continue serving as your graphic design consultant and develop more projects in the future, including the upcoming SNRC ribbon cutting for the operations facility and updates/ restyling of your branding standards. Thank you for the opportunity to respond to your Request for Proposal for Conservation and Public Affairs Design Services. I look forward to hearing your response to SG Creative’s qualifications to complete your scope of services. Please feel free to contact me if you have any questions. Respectfully Submitted, Stephanie Guida Owner/Graphic Designer PersonnelKey KE Y P E R S O N N E L Conservation and Public Affairs Design Services | page 3 SG Creative excels in collaborative relationships, strategic solutions, and visual campaigns for communities in southern California. SG Creative, LLC is a registered Minority, Woman-Owned Business Enterprise. Officially formed in 2020 by Stephanie Guida, SG Creative specializes in providing graphic design services to public and private organizations along with several non-profit groups. As the owner and sole employee of SG Creative, Stephanie has a passion for graphic design and building collaborative relationships resulting in: As a southern California native, Stephanie has hands-on working knowledge and experience with the local community, particularly in the city of Highland, and city and county of San Bernardino. Her entire career has been devoted to these communities while working with a variety of clients in: • California Public Agencies and Special Districts ―Ratepayer Recognition and Loyalty • Multi-Regional and Global Engineering Corporations ―Business to Business ―Business to Local, State and Federal Agencies • Small Business Startups ―Business to Consumer • Regional, National and International Non-Profits ―Multicultural markets ―College and youth markets • Private Educational Institutions ―Youth Market Each of category of organization listed above varied in size and complexity. Stephanie has worked directly with their elected officials, business owners, executive officers, board members, administrators, managers, and personnel at all levels. Together, they have developed successful communications campaigns, increased community engagement, and achieved their goals and objectives. key personnel Audience Engagement through Compelling and Consistent Communications Unique Design Materials that Support the Client’s Mission Creative Deliverables that Exceed Expectations while Maintaining Brand Integrity Stephanie’s core competency in each of these client areas is demonstrated by her industry expertise and experience shown in italics. page 4 | SG Creative, LLC Core Competencies Stephanie is a highly productive team member able to manage multiple design projects and adhere to strict deliverable deadlines. She has conveyed client messages to a variety of audiences such as ratepayers, businesses, students, community groups, small businesses, stakeholders, nearby residents, and the general public through these multiple channels: • Direct Mail • Print • Radio • Outdoor • Electronic Media • Website • Newsletters • Public Relations • Social Media SG Creative has developed and managed programs, projects and outreach activities in these general areas: • Communications Campaign Strategy and Planning • Graphic Design • Advertising Planning • Creative Development • Digital Asset Development • Water/Wastewater Communications Collateral • Social Media Creative • Coordination Support with Printshops • Coordination Support with Promotional Item Supplies and Production of Branded Items Stephanie’s portfolio is extensive in the types of projects she has completed. They range from business cards to billboards. Each project is unique to the client and memorable to the consumer. Graphic design, copywriting and creative development have been completed for the following: During her employment with Forest Home Christian Camp in Forest Falls, Stephanie performed crisis management communication during an emergency campus closure. This included coordination with national news media (interviews and prepared statements), press releases, hourly website and social media updates, outreach material development, communications monitoring, and post-crisis evaluation. Branding and Style Guides • Business Cards • Full Website Design • Letterhead • Logo Design • Office Templates Advertising • Billboards • Bus Stops • Print and Digital Advertisements SAN GABRIEL VALLEY REGION A logo mark is used in addition to the full logo when space is limited or as an emblem on a polo shirt, hat, etc. Can also be used as a background watermark. IN WATER @eastvalleywater PROVIDING SAFE,QUALITY WATERWHEN YOU NEED IT For more information on the quality of your drinking water, visit eastvalley.org/waterquality East Valley Water District provides over 103,000 residents with safe, high-quality water. Before reaching the tap, water served by the District is disinfected to remove or kill bacteria, viruses, and other contaminants. Stay hydrated with confidence knowing that your water is sampled and tested year-round to ensure its quality. Select portfolio samples of Stephanie’s work are shown as thumbnails above and on the following pages. SG Creative focuses on creating work that is unique, creative and timeliness. Conservation and Public Affairs Design Services | page 5 Outreach Materials • Banners • Bill Inserts • Direct Mail Pieces • Door Tags • Facility Maps Promotional Materials • Rate Changes • Stickers • Visitors Guides • Vehicle Wraps Annual Publications • Consumer Confidence Reports • Financial Documents and Budgets • Yearbooks Event Planning • Anniversary Planning • Booth Displays and Tablecloths • Event Invitations and Programs • EZ-Ups • Planning Activities • Ribbon Cutting and Groundbreaking • Site Maps and Event Layout Plans • Tour Tickets General Communication • Brochures • Fact Sheets • Handouts/Flyers • Meeting Agendas and Notes • Newsletters (Ratepayer and Employee) • Postcards • Ratepayer Surveys th e PUBLISHED JULY 2023@vcwdwater 5121 LANTE STREET, BALDWIN PARK, CALIFORNIA 91706 | (626) 338-7301 | VCWD.ORG MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY EVEN ADDRESSESOK TO WATER ADDRESS ENDS IN0, 2, 4, 6, 8 ADDRESS ENDS IN1, 3, 5, 7, 9 CHECK FOR LEAKS ADDRESS ENDS IN0, 2, 4, 6, 8ADDRESS ENDS IN0, 2, 4, 6, 8 ADDRESS ENDS IN1, 3, 5, 7, 9 ODD ADDRESSESOK TO WATER NO WATERINGON WEDNESDAYS EVEN ADDRESSESOK TO WATER ODD ADDRESSESOK TO WATER EVEN ADDRESSESOK TO WATER SUNDAY ADDRESS ENDS IN1, 3, 5, 7, 9 ODD ADDRESSESOK TO WATER Our community continues to use less water and make permanent water use changes at home. Improved groundwater levels allow the District to scale back some of our water use restrictions, but customers are encouraged to continue conserving for future times of drought. The District's Board of Directors voted to return to a Stage One Water Supply Emergency, which means: Updaed WATER USE RESTRICTIONS • Outdoor irrigation 3 times per week before 9am and after 5pm. – Even addresses can water Monday, Thursday and Saturday – Odd addresses can water Tuesday, Friday and Sunday • No watering on Wednesdays. • Leaks must be fi xed within 5 days after District notice. • Permanent water conservation measures are still in aff ect and can be found online at vcwd.org/conservation. Keeping our customers informed is part of the District's commitment to building trust and confi dence in your tap water. Information about the quality of your water is provided yearly in the Consumer Confi dence Report, which will be available June 30, 2023 online at vcwd.org/ccr and sent to our customers in July. Waer Qualiy Repr We live in an arid climate. Even during wet years, we can't go back to "watering daily." Making permanent changes is the only way to weather times of drought. Scan this QR code with your smartphone for a video walk-through explaining the District's Consumer Confi dence Report. ANNUALMINISTRY2022 Report “We live by faith, not by sight” - 2 Corinthians 5:7 PO Box 5000, Yucaipa, CA 92399 | 800-925-6092 | www.LBWloveworks.org Sustainable Water Infrastructure Project Thursday, November 17, 2022 at 10:00 a.m. Ribbon Cuing Event 1771 Main Street, Santa Monica, CA 90401 Join us as we celebrate the grand opening of this first of its kind storm water harvesting and water recycling facility in California. Note: First three rows are reserved seating. EVENT PLAN/LAYOUT Sustainable WaterInfrastructure Project Guests will park in public parking lot off 4th Street and walk to event location 1771 MAIN STREETSANTA MONICA, CA 90401 40’X40’ TENT (OPEN SIDES) Pro j e c t Bo a r d Pro j e c t Boa r d Pro j e c t Boa r d Pro j e c t Bo a r d Water Bottle GiveawaysRefreshments Water Bottle GiveawaysRefreshments Wat e r B o t t l e G i v e a w a y s Re f r e s h m e n t s Wa t e r B o t t l e G i v e a w a y s Ref r e s h m e n t s 3$5.,1*$,6/( ţʉŧ MEDIA PARKINGCONE OFF AREA RI B B O N C U T T I N G EMERGENCYEXIT EMERGENCYEXIT EMERGENCYEXIT EMERGENCYVEHICLE ACCESS EMERGENCYVEHICLE ACCESS AV EQUIPMENTREQUIRES ELECTRIC POWER STAGE GENERATOR DISPLAY VEHICLES ONLY DISPLAY VEHICLES ONLY FIRE EXTINGUISHER FIRE EXTINGUISHER Valley County Water District Provides a Safe and Reliable Supply of Water to All of Our Customers at a Reasonable Cost, and In An Environmentally Sound Manner SAFE | AFFORDABLE | RELIABLE | SINCE 1926 Formed in 1926 as Baldwin Park Water District, Valley County Water District is an independent, special district that provides water services to a portion of the cities of Baldwin Park, Irwindale, West Covina, and Azusa. The District is positioned above a portion of the Main San Gabriel Groundwater Basin, which is its primary source of water. @vcwdwater Waer Surce SERVING A POPULATION OF 57,000 Valley County Water District is governed by a fi ve-member Board of Directors elected at-large by the constituents residing in the service area to serve a four-year term. Today, the District serves a population of approximately 57,000 through 12,745 water delivery service connections with water that meets all State and Federal drinking water standards. The District uses social media as a way to communicate with its customers by keeping them informed about important issues. Follow us to fi nd out more! DISTRICT HEADQUARTERS 5121 Lante StreetBaldwin Park, California 91706(626) 338-7301vcwd.org BOARD MEETINGS 2nd and 4th Monday at 5:30 PMFor details on how to participate, visit vcwd.org/boardmeetings. The District’s water supply is 100% reliant on groundwater wells located in the Main San Gabriel Groundwater Basin. The current groundwater level has risen above the historic low, but we still need to replenish the supply of water depleted during the drought. Sysem Overview 6Reservoirs 120 Miles of Water Pipeline 17Booster Pumps 3 Water Treatment Facilities 4 Active Wells 10 Square Miles 1,022Fire Hydrants page 6 | SG Creative, LLC Electronic Communication • Constant Contact • EventBrite • Kiosk Signage and Displays • Lobby TVs • PowerPoints and Templates • Social Media • Website Content and Updates Outdoor • Aframes • Display Boards • Flags • Informational Displays • Monument Signs • Murals • Plant Stakes • Wayfinding Signage Specialty Designs • Badges • Emergency Evacuation Maps • Employee IDs • Interior Signage • Lapel Pins • Notebooks • Office Wall Artwork and Displays • Playing Cards • Socks • Specialty Publications • Tshirts Leadership and Training • Administrative and Support Staff Training • Graphic Design Tutorials Recognition • Award Submittals • Commemorative Plaque • Trademark Registration learning to savewater at homeis easy! …with the Virtual Helpof Your Water District! Request an in-home water conservation survey kit from Customer Service to get started saving at home! SHAREEN CRONIN, MSN, RN OWNER / PRESIDENT Shareen Cronin is the Owner and President of Cronin Consulting Group. As a registered nurse with 23 years of clinical experience, Shareen consults with attorneys on injury cases using her medical background to prepare case reviews and synopsis, summarizing medical records, preparing chronologies and written expert opinion reports, and providing objective opinions in medical-legal matters. Based in Northern California, Cronin Consulting Group has been providing legal consulting services since 2017. As a former Director of Emergency and Trauma Services, Shareen’s leadership and understanding of nursing care, medical practices and overall hospital operations is instrumental to her success as a legal nurse consultant. FIND OUT MORE CONTACTABOUTBLOGEXPERTISE EXPERT IN NURSING CARE,OVERALL HOSPITAL OPERATIONSAND MEDICAL-RELATED CASES LEGAL NURSE CONSULTING Inser clien quot her abou how awesom yo ar an wha the thin abou worin wit yo. Name, TitleCompany Inser clien quot her abou how awesom yo ar an wha the thin abou worin wit yo. Name, TitleCompany Inser clien quot her abou how awesom yo ar an wha the thin abou worin wit yo. Name, TitleCompany PROFESSIONAL AFFILIATIONS Critical Analysis &Evaluation of Facts RenderingInformed Opinions Assess Adherenceto Medical Standards Preparation ofWritten Reports Expert WitnessSupport AND IDENTIFY THE INFORMATION YOU NEED TO KNOW. WE CAN HELP MAKE SENSE OF OVERWHELMING MEDICAL RECORDS (415) 602-7513 Discove Ou Epertis © 2020 CRONIN CONSULTING GROUP QUARTERLY NEWSLETTER Published August 2023 INDUSTRY INSIGHT The Industry Public Utilities Commission voted to return to a Stage 1 Water Supply Emergency. Watering restrictions will now be as follows: Watering Restrictions Updated • Outdoor watering is limted to 3 days per week on Monday, Wednesday and Friday • Repair leaks within 5 days ater receiving notice from LaPuente Valley County Water District • No outdoor irrigation between 9a.m. and 5p.m. Effective August 2023 Did you know a Consumer Confi dence Report is an annual drinking water report delivered to our customers that provides important information about your drinking water quality? Your drinking water is tested thousands of times per year to ensure it meets or exceeds all state and federal drinking water standards. Our water is tested by certifi ed professionals and laboratories to ensure the highest levels of safety. Consumer Confi dence Report For more information about drought conditions and conservation, visit industrypublicutilities.com Your copy of this report was mailed out on June 30, 2023. Electronic versions are available at industrypublicutilities.com. The design and construction of a new generator to replace the existing generator at the Lomitas Pumping Station will provide backup power to ensure a continuous water supply during power outages or disruption events. New Generator Coming Soon @industryca @industry_ca FISCALYEAR BUDGET Annual Publication of East Valley Water District Highland, California 2023-24 Included below is the District’s mandatory graphic design and communication core competencies along with a narrative detailing Stephanie’s ability and experience to deliver on each one. Ability to Work with District Staff Stephanie has worked with East Valley Water District for the past eight years. Working as an extension of District staff, Stephanie has maintained positive working relationships that provide her with unique insight and better understanding of District needs. She can be trusted to advise the District on required language requirements for state and federal documents, to deliver a project on time or ahead of schedule, to be available when and as needed, and remain committed to District values, vision, and mission. SG Creative will comply with the District’s contract requirements for documents. Campaign Strategy and Planning for Programs Consistent with the District’s Five-Year Work Plan Stephanie appreciates the use of a guiding document when establishing campaign strategies. She is very familiar with the District’s Five-Year Work Plan, as the document’s designer, and sees it as a benefit for planning out Public Affairs programs for the coming fiscal year. This document will be useful for establishing an event calendar, identifying key public affairs objectives and stakeholders, developing an action plan, and creating measures for success and tracking methods. Support District’s Graphic Branding Efforts East Valley Water District’s existing brand was initiated with Stephanie’s contribution beginning in 2015. It has developed over the years into a strong, high-quality, and recognizable brand. Most organizations rebrand every seven to ten years. A restyling of color palettes, visual styles, layouts, and typography will keep the brand relevant and can help achieve new goals. Stephanie has successfully assisted organizations with building their brands, including two other Water Districts in Los Angeles County. Support Media Planning and Placement Stephanie can assist the District with media planning and placement through research of target audiences, building media lists and contacts, developing story opportunities, and designing key messaging materials. Art Direction and Graphic Design for Outreach Campaigns, Collateral Materials and Other Assignments Stephanie has a unique ability to take sketched notes or pages of text and turn it into well-thought-out communication pieces. She excels at creating visual concepts and collaborates through the editing process for solid final designs. Her skills help bridge the design gap when communicating to audiences by helping them understand important messages. Stephanie’s art direction skills begin with research, inspiration, and timelines. Then continue to concept development and refinement with client feedback. Revisions, client approval and final product delivery are part of the finishing steps. Print production vendors receive clear directions and detailed printing specifications until the final product is delivered. “Thank you so much for your fantastic presentation to our branch yesterday. It was really appreciated, and I received emails from assistants saying how much they enjoyed it.” - Karen Dales, Vancouver Fraser Port Authority Conservation and Public Affairs Design Services | page 7 Copywriting Stephanie is a skilled writer and often develops copy for client projects. Because of her active listening ability, she can take verbal thoughts and ideas from conversations and develop them into cohesive content. Similarly, Stephanie can form compelling written text from bullets, key words and phrases. She has had the opportunity to develop these skills through many years of supporting technical staff in engineering, water resources, and wastewater fields. Design of Digital Assets, Social Media and Online Ads Digital asset production and design is just as important as developing printed pieces. Ratepayers are gathering information from online sources, social media platforms, and the District’s website. Stephanie understands this lifestyle behavior and creates pieces at different sizing, aspect ratios, color modes, and file types. Digital assets are also created for payment kiosks, customer lobby displays, and similar messaging systems. Design and Production of Communications Collateral and Water/Wastewater Specific Materials Stephanie has eight years of experience working in the water and wastewater industry for several public agencies with populations ranging in size, ethnic origin, and economic status. Her experience includes a comprehensive understanding of technical concepts and terminology with the ability to effectively communicate difficult concepts to the general public. Software and Training Stephanie has been utilizing the Adobe Creative Suite for more than 20 years and is currently subscribed to the Adobe Creative Cloud All Apps Plan, which includes 39 applications and services. She utilizes the most recent versions of Adobe Illustrator (version 27.7), InDesign (version 18.4), Photoshop (version 24.6), and Adobe Acrobat Pro DC (version 23) daily. Each of these programs are essential to the successful completion of each design project. Additionally, software updates are regularly monitored and tracked. New versions are installed as they become available. SG Creative believes it is important for the health of the programs and operating system to run the latest software version. Stephanie’s formal training is in business administration, which provides her an overall understanding of business operations. To develop and refine her creative skills, Stephanie has taken several education and Adobe software training courses on the elements and fundamentals of graphic design. Over the years, Stephanie has learned from other professional designers and regularly engages in online education courses and workshops. She follows inspiring designers, reviews their tutorials and practices techniques to improve her skills. Education is an essential and fundamental component of SG Creative’s success. Staying updated on design trends through online resources, printed books and magazines, and design blogs is a regular occurrence. Stephanie’s strong professional network allows her to stay connected within the water and wastewater industry. page 8 | SG Creative, LLC Changes or new additions to software tools used for design can occur during version updates. When this takes place, Stephanie actively seeks to learn more about the tool, how to use it in the design process, and evaluates its implementation for improved productivity. Stephanie also shares her expertise with others by contributing in new ways to her client teams. She has done this through regular training sessions, sharing topics on the basics of graphic design, form and function of strong layouts, Adobe tools, and other design techniques. She is also an approved speaker for the International Association of Administrative Professionals (IAAP). Her program for IAAP focuses on Adobe Acrobat tools and how to enhance this universal file format. Assigned Personnel SG Creative proposes to use Stephanie Guida as the assigned team member for this contract. As the owner and president of SG Creative, Stephanie serves as the sole employee but is also the most qualified person to contribute to the fulfillment of the District’s requirements. No subconsultants will be included in this proposal. Stephanie’s established working relationship with the District provides knowledge of her skills and ability. It is a mutually beneficial association built on respect, honest and open communication. Stephanie has always been a hard-working, results- oriented, and dedicated employee. She is devoted to her clients and continually produces award- winning work. Stephanie will represent SG Creative as the lead graphic designer for this contract. She will report to the District’s Public Affairs/Conservation Manager and will work as an extension of the Public Affairs team in an effort to support their outreach activities. SG Creative is available to meet the annual estimated workload percentages as noted in the primary disciplines of: • Project Management/Planning 5% • Creative Development (Concepts, Graphic Design, Copyrighting, etc.) 90% • Production (Print, Broadcast, Digital) 5% Additional details of Stephanie’s experience and resume are included in the following pages. SG Creative is committed to working diligently, exceeding expectations and being a valuable team member. Conservation and Public Affairs Design Services | page 9 Public Affairs/ Conservation Team stephanie guida sg creative, llc. Project Manager, Graphic Designer District Sta project manager Public Aairs/ Conservation Manager OrganizationChart Public Service/Client Experience East Valley Water District 2017–Present • Graphic Design Consultant providing contract graphic design services for a wide-range of projects, including the Sterling Natural Resource Center. Valley County Water District 2017–Present • Graphic Design Consultant participating as a member of Valley County Water District’s public affairs team providing a wide-range of graphic design services. City of Santa Monica, Water Resources Division 2021–Present • Graphic design services for event planning (groundbreaking and ribbon cutting activities), water conservation projects, interior facility artwork, outdoor murals, and AMI project launch. City of Glendora, Water Division 2023–Present • Periodic graphic design services for water conservation projects, including home survey box and custom sticker giveaways. La Puente Valley County Water District 2023–Present • Graphic Design Consultant providing contract graphic design services for a wide-range of projects. Work Experience Community Relations Officer 2015–2017 East Valley Water District, Highland, California Facilitated target audience communication for a public utility with more than 104,000 customers; promoting programs and achievements; supporting internal and external clients; graphics design; photography; managing e-marketing/web/social media communications; copy writing for budget document, press releases, brochures, handouts, direct mail pieces, bill inserts; event management; developing communications campaigns; conservation management; emergency preparedness; representing District with engaging speaking and presentation topics to schools, community groups and similar organizations. • Developed District’s first style guide and branding campaign that includes presentation templates, color schemes, fonts, graphic and photography styles. • Established District’s social media presence in three platforms as a communication and relationship building tool. • Designed three award-winning fiscal year budget documents with more than 200 pages of text, financial tables, graphic elements, charts, graphs, and photography. 23 YEARS EXPERIENCE STEPHANIE GUIDAProject Manager/Graphic Designer California Baptist University, Riverside, California, 2006 • Masters Studies in Business Administration Group ESC Business School, Marseille, France, 2002 California State University, San Bernardino, California, 2002 • B.S. Business Administration, Management Information Systems Concentration, Minor in Finance EDUCATION DESIGN PORTFOLIO • Online Design Portfolio: www.sgcreativellc.com/portfolio • Logo, Branding and Website Design Samples: croninconsultinggroup.com elevatedoutdoorspaces.com esnewmarkconsulting.com sgcreativellc.com • Social Media Management + Content Creator instagram.com/vcwdwater instagram.com/lapuentewater COMPUTER PROFICIENCY • Adobe Creative Cloud — Illustrator, Photoshop, InDesign • CivicPlus Website Administration • Wix Website Development • Social Media Administration — Facebook, Twitter, Instagram, Threads, Nextdoor • Microsoft Office Suite — Word, Excel, PowerPoint, Publisher, Outlook page 10 | SG Creative, LLC • Created extensive conservation education and outreach campaign with 53 different pieces of materials including logo design, print advertisements, direct mail, website content, social media messages, meeting presentations, yard signs, fact sheets, vehicle magnets, news releases, bus shelter advertisements, and regular staff communication. • Track yearly communication outreach efforts, including events and activities with details on publish dates, target audience response, quantities, total impressions, and total expenses. Director of Communications 2013–2015 Forest Home Christian Camps, Forest Falls, California Led daily communication operations for a non-profit organization with responsibilities including: management, mentorship and training of 15 design and multi-media staff; budget development and expense monitoring; art direction and graphic design; script and copy writing for catalogs, brochures and direct mail pieces; managed e-marketing/web/social media communications; regional media campaigns for radio and print advertisements; video/photography productions; graphic design and print shop operations; developed and executed yearly strategic communication plans; conducted market research and identify industry trends; managed external vendors and contract staff; tracked activities and return on investment metrics; and developed collateral materials. Inland Empire Communications/Marketing Manager + Graphics Designer 2010–2014 Parsons Brinckerhoff, San Bernardino, California Conducted communications, marketing and business development activities in San Bernardino and Riverside counties with responsibilities for: client relationships management; market, client and pursuit research; tracking and monitoring of industry trends and publications; graphic design and document layout; special event planning; development of tactical, political and civic engagement action plans; budgeting; financial performance evaluations; staff development and mentoring; facilitated cross-discipline communication; interview/presentation coaching; proposal strategies and sales theme development; facilitation of strategy session and technical pursuit meetings; proposal writing; and brand adherence and standards training. Firmwide Marketing Manager + Graphics Designer 2002–2010 Wilson & Company, Inc., Engineers & Architects, San Bernardino, California Led corporate communications and marketing efforts for 18 offices across 10 states. Responsibilities included: management, mentorship and training of 13 staff; public relations; strategic communication and marketing plans; budgeting; graphic design; brand positioning and adherence; special event planning; art direction, video production, script and copy writing for print and electronic applications; e-marketing, website, social media, and database management; implementation of sustainability program with education and communication strategies; interview and presentation coaching; quality control/assurance; supervision of proposal protocol; market research; return on investment tracking; company store management; and member of Executive Committee responsible for the day-to- day operations of the firm. “As a business owner, Stephanie has taken Valley County Water District’s public outreach effort to a higher level of professionalism and technical artistry.” - Jose Martinez, General Manager Conservation and Public Affairs Design Services | page 11 • East Valley Water District’s Leadership in Action Program Graduate • FEMA Emergency Management Training Certifications for Incident Command System ICS-100, Emergency Planning for Public Works ICS-554, National Incident Management System ICS-700 • Business Development Associate Program Certificate, Parsons Brinckerhoff • San Bernardino Area Chamber of Commerce’s Leadership Development Program Graduate Board of Directors President 2012–2014 Women’s Transportation Seminar (WTS), Inland Empire Chapter Chapter President of a professional non-profit organization managing a 22-member volunteer board with responsibilities for: public speaking; public relations and communication campaigns utilizing press releases, newsletter articles, social media, and e-marketing tools; scholarship fundraising; development of informative luncheon programs; art direction and graphic design; and script and copy writing. Event planner for annual awards and scholarship benefit dinner (300+ in attendance), and specialty fundraising events with responsibilities of vendor and volunteer management; budgeting and expenditure tracking; task and assignment coordination; progress meeting facilitation; fundraising activities; event sponsorship appeals; and event promotion. Cultivated meaningful relationships with local and state elected officials and executive management of public agencies. TRAINING AND CERTIFICATIONS • Southern California Water Utilities Association • Join-in Kindness Association • Women’s Transportation Seminar (WTS) Inland Empire Chapter • Lemon-aide for Life Fundraiser for Spinal Muscular Atrophy (Highland, CA) • Volunteer for YWCA, Santa Claus Incorporated, Center for Individual Development, and Alliance for Education (San Bernardino, CA) • Dress for Success (Winston-Salem) COMMUNITY INVOLVEMENT PROFESSIONAL NETWORK Join my network, and read additional professional recommendations on Linkedin: linkedin.com/in/stephanieguida “Stephanie is meticulous with detail, professional in her presentation, and highly receptive and responsive. You will get top notch products - with a unique look and feel - that surpass any products I’ve seen produced by top agencies.” - Christy Roberg, Business Owner/Consultantpage 12 | SG Creative, LLC Work planQualifications & QU A L I F I C A T I O N S & WO R K P L A N SG Creative has never missed a deadline and will do whatever is necessary to deliver projects on time or ahead of schedule. Conservation and Public Affairs Design Services | page 13 There are multiple steps to designing a project. Most importantly, SG Creative approaches all designs with an open mind, listening and designing for the client to meet their needs. Stephanie loves to develop creative ideas and make the client’s desire a reality. To do this, she gathers information, conducts research, brainstorms ideas, develops concepts, presents design approaches, requests feedback and reviews, and works collectively to finalize each deliverable. Creative Development To start a project, it is important to understand the scope of work, intended audience and purpose. This information is gathered at the project “kickoff meeting” that includes: • Target Audience • Goals and Strategy • Type of Final Product (Printed, Digital) ―Product Sizing and/or Template Requirements • Delivery and Use of Final Product (Direct Mail, Hand Delivery, Website, Social Post, etc.) • Branding Expectations (Likes, Dislikes, Items to Use or Avoid) • Content, Imagery and Available Copy • Timeline and Due Date • Budget Considerations Once the kick-off meeting concludes and initial project information is gathered, Stephanie begins the research phase and brainstorms design ideas. This is an information gathering process that informs the design and sets the design direction. Stephanie will collect ideas and concepts that creatively solve the problem and put the project into motion. During the concept development phase of a project, the client is presented with draft layouts for evaluation that are based on research and details gathered during the kickoff meeting. Feedback is requested for the initial concept(s) and upon approval, Stephanie begins building the design. Once the content and design are in place, an electronic copy marked DRAFT is presented to the client. qualifications and work plan Kick-off Meeting Scope of Work and Design Brief brainstorming Research and Design Ideas concepts Concept Development and Approval Design Drafts andEditing Process QA/QC Quality Control and Assurance Activities final document Print-Ready Files, Print Specifications, Final Files file sharing Original Files, Links, Fonts, Graphics The DRAFT document is sent via email or discussed during a video conference call. Stephanie can work with edits provided on hard copies and scanned, inserted into PDF documents, and/or with tracked changes in Microsoft products. These edits are then incorporated into the design and a second draft document is created. This process repeats with new versions of the document marked in the file name (DraftV2, DraftV3 etc.) until the final approved version of the design is achieved. Each time the document is updated, the original file is saved as a new version using the version number in the file name. This practice provides backups in case information in a previous version is ever needed during the design process. Quality control procedures are just as vital to the success of a project as the design itself. It is imperative to ensuring client confidence and high-quality results. Included in SG Creative’s quality control procedures are the following tasks: • Spell Check has been Conducted • Engaging Multiple Document Reviewers/Readers to Identify Areas in Need of Editing • High Resolution Imagery is Used • Document Bleeds are Set Correctly • Text and Shapes Converted to Outlines (as required by print vendor) • Artboards and Layers are Named as Necessary • Linked Files are Embedded • Hole Drill Placement Does Not Interfere with Content/Text • Correct Color Mode (RBG, CMYK) is in Use • Print Specifications Include all Aspects of Final Document Expectations • Mailing Pieces Meet USPS Requirements The last stage of the design process is to finalize the approved project and create the final files. This process includes: • Saving the approved final draft of the design as the final document, with the file name marked as FINAL (i.e. FINALEventBrochure.INDD). ―All linked files and images used in the design will be embedded, with the original files included in the packaged deliverables. ―InDesign files are packaged to include all assets such as links, fonts, original graphics, images, etc. ― Adobe Illustrator and Photoshop files are layered. • Creating a PDF of the final design and a print-ready PDF that includes a bleed and/or created to the print vendor specifications. ―A ¼-inch bleed is typically included unless otherwise specified by the print vendor. ―Clients requesting ADA accessibility will have PDF files that meet accessibility requirements, which are met by running the Acrobat Accessibility check. Any issues are resolved as necessary. page 14 | SG Creative, LLC All design files are stored on a cloud- based storage system called pCloud. Access to file locations are provided to the client. All files are also backed up on Dropbox to create redundancy and avoid loss of data. The best design meets the client’s goals and the audience for whom it was intended. Conservation and Public Affairs Design Services | page 15 • Providing multiple file types of the final design. For example, logo files are sent in AI, EPS, PDF, PNG, and JPG formats so that the client has a variety of files for use immediately or in the future without the need to make an additional request from the designer. • Additional file formats are created for web or social media use and sized appropriately. At the close of large and complex projects, Stephanie requests a review session to evaluate the process and ways to make improvements in the future. A team’s collective input at the project closeout stage provides enhancements for similar projects in the future. Stephanie enjoys improving the design process and enhancing the product, particularly with repeat projects occurring at regular intervals. Printing Vendor Coordination Print adds a tactile experience to the communications message and is essential to a successful final product. Stephanie treats print vendors as a partnership with communication and collaboration as key to the relationship. Printing specifications should be clear and include as many details as possible. Expectations, timelines, budget, and purpose are all important details that cannot be overlooked. Stephanie works with trusted print vendors in Southern California and online resources with proven product delivery to work on her projects. She coordinates with client vendors or makes suggestions for local partners. Clients may choose to communicate with vendors directly. In these cases, Stephanie provides the client with all of the details needed to avoid confusion and make clear expectations for the final project. Client Communications SG Creative encourages open and honest feedback so that the client’s expectations are met, and a successful working relationship is achieved. Stephanie’s desire is for the client to provide their likes and dislikes early and often during the design process. Making sure the client is happy is her greatest desire. She regularly asks questions or pitches ideas. Stephanie often likes to dream big. Seeking client feedback on design ideas is important to not over design the project. She also understands that texting and large email exchanges can be replaced with a simple phone call. It may seem simple, but a quick phone conversation can result in questions being answered quickly or clear up any confusion. Role of Consultant Project Manager SG Creative’s Project Manager, Stephanie Guida, will report directly to the District’s Public Affairs/ Conservation Manager. Stephanie will be responsible for the following: • Adhere to the District’s brand standards. • Manage projects and activities for time, budget and quality control. • Ensure scope and schedule requirements are met. • Design effective communication pieces focused on the intended audience. • Confirm all local, state and federal communication requirements are met. • Perform quality control/assurance tasks are completed on all projects. • Give 100 percent effort on all communication campaigns. Contract Administrative Aspects SG Creative is managed by Stephanie Guida. Required forms, budgeting, invoicing, and similar business tasks are completed by Stephanie. As a small business owner, she does not delegate her responsibilities. She keeps her client list at a manageable size and does not overextend her commitments. Stephanie values focused and personalized attention to her clients. It is important that they feel needs are met beyond expectations and that SG Creative is a reliable consultant. Project Scheduling SG Creative understands the District’s Public Affairs design and activities calendar is contained on the Monday.com work management tool. Projects and events are identified in advance and assigned to staff. Rather than create a separate tool, SG Creative can use Monday.com as deemed necessary by the District. This continuity will keep the same information readily available to all members of the team and consultant at all phases of project development and completion. In addition, project assignments are finalized in order of importance. Individual critical paths are established for larger projects, such as the District’s Fiscal Year Budget document. This structure breaks down the larger project into smaller, manageable pieces with due dates and staff responsibilities for completion. Smaller projects are prioritized according to when final documents are needed in hand. Critical projects such as 218 communications, Consumer Confidence Reports, and the Fiscal Year Budget have strict deadlines. Two of these document’s due dates are specified by state and federal agencies. During the development of these essential communications, obligatory dates are established and timelines work backwards from there to create a full calendar of tasks to meet the deadlines. Tracking and Reporting Processes Stephanie prefers to conduct frequent design meetings with clients to discuss ongoing projects and design calendars. This is an effective method to communicate progress, review edits, discuss due dates, and confirm projects stay on track. Meetings include detailed agendas (created by SG Creative) and due dates of projects. Agendas are organized by current projects, items awaiting approvals, on-hold activities waiting for more information, and upcoming projects. This helps to organize topics by level of importance. Stephanie takes notes throughout the meeting so that no details are overlooked. Discussions focus on immediate needs and project status. Stephanie provides an update on each project and asks questions for additional information as needed to complete the designs. Often, Stephanie visually shares designs during these meetings so the Public Affairs team can provide feedback and visualize how a project is developing. Management of Subconsultants As previously mentioned, no subconsultants will be included in this proposal. page 16 | SG Creative, LLC Not all design trends fit every client or their brand portfolio. Conservation and Public Affairs Design Services | page 17 Project Management Approach SG Creative’s general management philosophy is to design on behalf of the client and not for personal expression. The client’s brand is rooted in each design effort to strengthen their recognition and placement within the community. Focus is not placed on the designer or the design effort, but on the content being communicated. Design critiques are not taken personally. They are seen as enhancements to the project. Collaboration is key and perceived as necessary for the success of each effort. Project file organization is an important step in managing a project. SG Creative organizes all files the same to provide ease in locating and retrieving files. All project folders are organized the same way and contain the following main folders: Protocols for file sharing are typically determined by the client. In the absence of a specified system, SG Creative uses WeTransfer, Dropbox and Google Drive. Each of these services provides a fast and secure platform to share files. Another consideration SG Creative takes into account when managing projects is cost consideration. Stephanie researches cost-effective products when recommending promotional giveaways. She also weighs page sizing when recommending final print sizes to avoid excess waste charges. Paper weights and finishes are also important concerns to avoid the perception of high cost material choices. Technical Experience A sampling of Stephanie’s project portfolio can be viewed online at sgcreativellc.com/portfolio. Several case studies illustrating her experience are included in the following pages. Drafts Documents Graphics Images Website Print Files Final Files At the close of a project all final files are prepared and shared with the client. This includes all original design files, final files, print-ready files, links, fonts, and graphics used in the design. SG Creative does not, and will not provide uneditable files to the client. Stephanie believes all work ultimately belongs to the client and they should have access to all original design files for their use as they see fit. Project Case Study: Sterling Natural Resource Center The Sterling Natural Resource Center (SNRC) is a 20-acre state-of-the-art facility. Capable of creating millions of gallons of recycled water per day, the SNRC will create a sustainable water supply for the region and enhance the quality of life for residents by providing new opportunities in the form of education and training, community space, and neighborhood improvements. Included in the SNRC new facility and outreach campaign were the following materials: At a Glance... The Need: The SNRC helps East Valley Water District meet the needs of their growing community by replenishing the groundwater aquifer with recycled water. The SNRC was built to serve the community for more than 100 years and provide a sustainable new water supply for the region. The Challenge: Creating a new local source of water requires educating the community about the benefits of recycled water using an advanced wastewater treatment process. Stephanie has been involved in this project from its inception. Public affairs activities required extensive outreach and educational events and materials. Creating clear and informed messaging was required in all phases of the project. Success: East Valley Water District opened the SNRC in 2022. The District succeeded in bringing the project to fruition and developing a more engaged community that supports the SNRC’s mission. The new facility features gardens, and education and event spaces that provide additional resources for the community. The District has also successfully changed the skyline in Highland with improvements to the surrounding neighborhood. page 18 | SG Creative, LLC • Coloring Page • EventBrite • Event Invite(s) • Handouts • Infographics • Interior Artwork • Maps • Newsletters • Outdoor Artwork • PowerPoint • Presentation Folder • Program • Promotional Giveaways • Signage • Tshirts • Visitor’s Guide RIBBON CUTTING CELEBRATION You’ Invite est. 2022STERLING N AT U R A L R E S O U R C E CENTER RSVP: EASTVALLEY.ORG/SNRCRIBBONCUTTING Sixth Street Fifth Street D e l R o s a Event The Sterling Natural Resource Center (SNRC) is a 20-acre state-of-the-art facility located in Highland, California. Capable of creating 6 million gallons per day of replenished water, the SNRC has created a sustainable new water supply for the region and will enhance the quality of life for residents by providing new opportunities in the form of education and training, community space, and neighborhood improvements. FACILITY TOURS SPECIAL ACTIVITIES RAFFLES & GIVEAWAYS FOOD PHOTO BOOTH LIVE MUSIC Joi U fo Fu-Fille Evenin! WATER RECYCLING 101 STERLING NATURAL RESOURCE CENTER Treatment Process The state-of-the-art technology utilized at the Sterling Natural Resource Center (SNRC) can recycle up to 8 million gallons of wastewater per day before recharging it in the local Bunker Hill Groundwater Basin. Recycled water will spend at least 12 months in the groundwater basin before being pumped and treated for community use. WASTEWATERENTERS THE SNRC GroundwaterRecharge Basin 3 4 6 8 RECYCLEDWATER PUMPSTATION Ultraviolet Disinfection Neutralizes Any Remaining Microorganisms Recycled Water Travels Through a DedicatedSystem PipelineScreens and Chambers Remove Inorganic Waste, Sand, and Grit HEADWORKS FACILITY AERATIONBASINS Biological Process Used to Break Down Nitrogen and Organics 7 Membrane Bioreactors (MBRs) Filter Water Using Ultrafiltration Membranes MBR FACILITY 5 The SNRC uses Membrane BioReactors (MBR), which is a process that combines filtration with biological treatment to reduce the amount of space needed to operate the facility. UV DISINFECTION INFLUENTPUMP STATION Wastewater is Pumped Into the Facility 2 1 SUSTAINABLE WATER SUPPLY Water recycled at the SNRC will undergo a multi-step treatment process using advanced technology before being recharged into the local groundwater. This treatment process will remove nitrogen, organics, and neutralize any harmful microorganisms. Conservation and Public Affairs Design Services | page 19 Project Case Study: Sustainable Water Infrastructure Project Ribbon Cutting The City of Santa Monica celebrated its Sustainable Water Infrastructure Project (SWIP) with a ribbon cutting ceremony. SWIP is the first of its kind storm water harvesting and water recycling facility in California. It is uniquely located beneath the Civic Center parking lot and provides a new, sustainable, and drought resilient water supply for the City. Included in the SWIP ribbon cutting event were the following materials: At a Glance... The Need: The City of Santa Monica Water Resources Division desired to celebrate the opening of their SWIP project to inform the public of its benefits to the community. SWIP has the ability to divert over 40 million gallons of stormwater and urban runoff away from the Santa Monica Bay each year. The City’s goal is to protect the bay, improve beach water quality, and reduce beach closures. The Challenge: The Water Resources Division does not have dedicated public affairs staff to lead their projects and must share resources with other City departments. As a result, they required a dedicated advisor to lead them through the ribbon cutting event process. SG Creative planned the event from a different time zone and while physically disabled, making attendance at the event impossible. Stephanie relied on her detail-oriented project management style to develop comprehensive instructions, map layouts, itemized lists, and specific directions for on-the-ground City staff. Success: The event was well attended and featured several City elected officials as speakers as well as representatives from the Metropolitan Water District, Los Angeles Regional Water Quality Control Board, and Los Angeles County Department of Public Works. The event was televised and livestreamed on City TV. Attendees received guided tours and specialty promotional giveaways. Recently, educational murals designed by SG Creative were installed on outdoor walls leading to the facility’s entry points (elevator and stairways) from the Civic Center Parking lot. This artwork will play an important role in future facility tours, particularly for students. • Commemorative Plaque • Display Boards • EventBrite • Event Planning • Fact Sheet • Guided Tour Ticket • Interior Artwork • Invitation • Outdoor Murals Local. Sustainable. Drought Resilient. What Lives Beneath At the surface, the Civic Center Parking Lot is restored to serve the surrounding community. The first subsurface level of the SWIP AWTF houses the headwork screens, odor control facility, bulk chemical storage, Membrane Bioreactor, cartridge filters, RO system, UV AOP system, control room, and electrical room. The SWIP AWTF's treatment process basins are located on subsurface level 2, including the biological basins, chlorine disinfection tank, and waste return and evacuation sump. Scan QR Codefor More Information Ground Level Subsurface Operating Floor (Level One) Subsurface Operating Floor (Level Two) 0 FT. -20 FT. -45 FT. A Solution to Reducing the City’s Reliance on Imported Water 1 2 • Order of Events + Schedule • Project Logo • Program • Promotional Giveaways • Script + Speaker Order • Signage • Specialty Cookie Design • Social Media • Thank You Card • Vendor Coordination (Event Rentals) page 20 | SG Creative, LLC Project Case Study: Trust the Tap Logo Design and Public Service Campaign SG Creative serves Valley County Water District (VCWD) as their graphics design consultant. Together in January 2020, they launched the Trust the Tap Public Service Campaign that focuses on changing customer perceptions in their tap water supply (versus bottled water). Included in the campaign were the following materials: At a Glance... The Need: VCWD wanted to develop a sense of dependability and reliability in the customer mindset and strengthen trust and confidence in their public water supplier. The Challenge: Mass media and marketing campaigns for bottled water or water purification systems has altered the public view of their local public water supplies. Success: The Trust the Tap campaign, artwork and application has developed a higher level of credibility within the industry as evidenced by peers emulating the same messaging. Staff members are fully engaged in the program, and most importantly, customers are encouraged, stating they “have confidence in their tap water”. Recognition: In 2020, the Public Relations Society of America Los Angeles Chapter (PRSA-LA) recognized SG Creative with an award for logo/identity design for the Trust the Tap Logo. In October 2021, PRSA-LA selected SG Creative for an Award of Excellence for the Trust the Tap Public Service Campaign. Stephanie also led the effort (without the use of legal counsel) to apply and submit an application for trademark of the Trust the Tap logo. The U.S. Patent and Trademark Office approved the application on April 27, 2021 under the registration number 6,332,240. • Advertisements • Annual Report • Bill Inserts • Coloring Books • Direct Mail Pieces • Fact Sheets • Presentations • Promotional Giveaways • Social Media Posts • Staff T-shirts • TV Monitor Content • Vehicle Wraps • Signage Installations • Website Content SAFE MAKING WATER As water service providers, Valley County Water District understands the need to have safe drinking water readily available. Its our mission to exceed water quality standards through testing, monitoring and treatment of our groundwater supply and delivering it to our customers at a resonable cost. Tap water is vital to the health and safety of our community. BUILDING TRUST AND CONFIDENCE Open and honest communication is part of the District’s commitment to keeping our customers informed. We do this by using third-party laboratories for testing analysis, regular reporting to the USEPA and SWRCB, and providing the community with information about the quality of your drinking water in the yearly Consumer Confidence Report. The District welcomes the public to attend monthly Board meetings and invites the community to regular water education events. @vcwdwater WATER SAFETY IS OUR TOP PRIORITY The District regularly tests your drinking water using the U.S. Environmental Protection Agency (USEPA) and California State Water Resources Control Board (SWRCB), Division of Drinking Water–approved methods. Our staff monitors the District’s water supply 24 hours a day and uses state-of-the-art treatment processes to remove potential contaminants. AND AFFORDABLE Necessary for Overall Hygiene and Health CHANGING PERCEPTIONS Major brands of bottled water are actually sourced from tap water supplies and sold at an average retail cost of $1.29 per bottle. The same amount of water provided by VCWD costs less than one cent and is available from the convenience of home. Did you know? Tap water is held to higher water quality standards than bottled water and it takes three times the amount of water to produce one bottle of water. For More Information Contact the District at (626) 338-7301, Visit our Website at www.vcwd.org and Follow Us: Para preguntas e información sobre la calidad del agua, llame al Distrito al (626) 338-7301. Tap water gives your produce a fresh rinse and safely cleans fruits and vegetables for all your flavorful meals. Tap water provides an unlimited source of clean water for washing away your daily activities. Conservation and Public Affairs Design Services | page 21 Project Case Study: Weathering the Drought Conservation Campaign To address impacts of the drought on local water supplies and connect with the community on this vital topic, VCWD developed a conservation campaign — Weathering the Drought. Communications included simple, consistent and frequent messaging to educate the community. Information was concise, educational and easy to understand. Visual graphics are bright, relatable and eye-catching. Included in the campaign were the following materials: At a Glance... The Need: With data, research and state mandates in hand, VCWD set out to create a public outreach program with goals focused on communicating the importance of saving water, educating the community on ways to be water efficient, sharing state conservation restrictions, and engaging customers to change water use behaviors. The Challenge: In the past, drought awareness has emerged slowly in the public perception with the absence of rain and reduced imported water supplies. Once it intensifies and the public can no longer ignore dry conditions, water use behaviors change but only until drought conditions improve; then it is business as usual. The objective is to change this pattern. Success: In order to reach as many members of the community as possible, VCWD applied for grant funding and was awarded $30,000 in late March 2022. The success of the program was measured against the ability to meet the grant’s compliance requirements, implementation in only two months, and changes in customer water use behavior. Participation increased in rebates/water conservation incentives, and social media engagement. Most importantly, VCWD experienced a reduction in water use between 15-20 percent. Recognition: In 2022, PRSA-LA awarded SG Creative with a Prism award for the campaign. • Advertisements • Billboards • Bill inserts • Bus Stops • Children’s Activity Book • Direct Mail Postcards • Door Tags • Flyers • Posters • Promotional Giveaways • Signage Installations • Social Media Posts • Customer Lobby Visuals • Website Content • Yard Signs • Service Truck Tailgates sweater weather may have to wait Even though warmer than average temperatures are expected to continue through the fall months, now is a great time to adjust your sprinkler timer in preparation for the pending cooler seasons. F water leaks are common household wasters Valley County Water District is now in a Stage Two Water Supply Emergency. Household leaks can waste up to 1,000 gallons of water/month. Fix leaks within 72 hours. F VALLEY COUNTY WATER DISTRICT 1/4 of an inch of rain = Light Rain for 2-3 Hours or Moderate Rain for 30-60 Minutes or Heavy Rain for 15 Minutes With Many Puddles that Don’t Easily Disappear VALLEY COUNTY WATER DISTRICT CONSERVING WATER IS EASIERTHAN CONTROLLING THE WEATHER. Valley County Water District is now in a Stage Two Water Supply Emergency. Control water use at home by adjusting sprinklers to watering two days/week before 9am and after 5pm. ON OFF Water is a precious and limited resource. With severe dry conditions existing in most of the State, we are now in a Stage Two Water Supply Emergency. This means changing your outdoor watering to 2 days/week and fi xing water leaks within 72 hours. Details for your new watering schedule are shown below. WEATHER FORECASTS ARE CALLING FOR DROUGHT CONDITIONS F MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY EVEN ADDRESSESOK TO WATER ADDRESS ENDS IN0, 2, 4, 6, 8 ADDRESS ENDS IN1, 3, 5, 7, 9 CHECK FOR LEAKS CHECK FOR LEAKS CHECK FOR LEAKSADDRESS ENDS IN0, 2, 4, 6, 8 ADDRESS ENDS IN1, 3, 5, 7, 9 ODD ADDRESSESOK TO WATER NO WATERINGON WEDNESDAYS EVEN ADDRESSESOK TO WATER ODD ADDRESSESOK TO WATER NO WATERINGON SATURDAYS NO WATERINGON SUNDAYS Using Water Efficiently The District has established permanent water conservation guidelines to prevent waste and maximize the effi cient use of available water supplies. These permanent changes include the following: No wateringBetween 9am-5pm Wait 48 Hours AfterRainfall to Water Don’t Let Water RunoInto the Street or Sidewalk Avoid Washing DownDriveways & Sidewalks Use Hoses with Shut-oNozzles to Wash Cars Decorative Water Fountains Must UseRe-circulating Systems Don’t Choose Daily Laundry Service at Hotels Restaurants Can ServeWater Upon Request Repair Indoor & OutdoorWater Leaks in 72 Hours Now in eff ect with Stage Two Water Supply Emergency Scan Code for Drought Information, Current Water Use Restrictions, Rebates + Conservation Tips or visit vcwd.org/conservation @vcwdwater page 22 | SG Creative, LLC This page left blank intentionally References RE F E R E N C E S Conservation and Public Affairs Design Services | page 23 Stephanie’s experience is directly relevant to the graphic design and communication support services you seek from a consultant. She has a 23-year track record of delivering successful projects and collaborating to create informative stories that convey a clear message. Each of the following four references can attest to the quality of work she provides. SG Creative has received several awards of recognition for the projects Stephanie has created in collaboration with her clients. References “Stephanie has inspiring creativity, business acumen and the ability to listen to the needs of her customers/clients resulting in compelling communications that hit the mark.” - Nicole Schramm, Senior Director Sales and Client Services Jose Martinez General Manager Valley County Water District 5121 Lante Street Baldwin Park, California 91706 (626) 338-7301 jmartinez@vcwd.org Sunny Wang, PE Water Resources Manager City of Santa Monica Public Works Department – Water Resources Division 2500 Michigan Avenue, Building 1 Santa Monica, California 90404 (310) 458-8230 sunny.wang@santamonica.gov Stephanie Moreno Public Outreach Coordinator San Gabriel Basin Water Quality Authority 1720 W. Cameron Avenue, Suite 100 West Covina, California 91790 (909) 238-0737 stephanie@wqa.com Mando De Jesus Management Aide City of Glendora Water Division 1051 E. Sierra Madre Avenue Glendora, California 91741 (626) 852-4838 adejesus@cityofglendora.org This page left blank intentionally page 24 | SG Creative, LLC page 36 | SG Creative, LLC This page left blank intentionally sgcreativellc.com 3605 Copper Court, High Point, NC 27265 (909) 754-6672 stephanie@sgcreativellc.com Page 17 East Valley Water District Conservation and Public Affairs Design Services ATTACHMENT B – COST PROPOSAL COST CO S T Conservation and Public Affairs Design Services | page 25 SG Creative’s billing rate is fully burdened to include all costs and profit. The billing rate includes a 5 percent escalation every two years of the contract period. The required rate forms for all five years of potential contract term are included in the following pages. SG Creative does not have any non-labor direct costs. All expenses are included in the fully burdened rate. In addition, SG Creative maintains the required insurance coverage for worker’s compensation, general liability, automobile liability, professional liability, and property coverage as required in the District’s standard service agreement. If selected for this contract, SG Creative accepts the terms of the service agreement and will provide evidence of insurance coverage at the time of signing. cost SG Creative considers cost factors and resource management when determining final product delivery recommendations. page 26 | SG Creative, LLC Page 25 East Valley Water District Request for Proposal ATTACHMENT B – COST PROPOSAL Time and Material/Fully Burdened Labor Rates Include a complete hourly labor rate for all CONSULTANT staff or subcontractor(s) staff identified and listed below. Auditable hourly rates for each named individual CONSULTANT or subcontractor(s) are to be fully burdened to include all costs and profit. Services performed under the Scope of Services on a time and materials basis will be priced at the identified hourly rates subject to an approved purchase order. These rates will be used to establish the maximum not-to-exceed amount of each purchase order issued under this Contract. Fill in forms for all 5 years of POTENTIAL contract term. DETAILED DESCRIPTION OF COST ELEMENTS – FY 2023-24 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. SG Creative, LLC Stephanie Guida Project Manager & Graphic Designer $110.00 Page 26 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2023-24 - PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate SG Creative, LLC N/A Conservation and Public Affairs Design Services | page 27 page 28 | SG Creative, LLC Page 27 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2024-25 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Stephanie Guida Project Manager & Graphic Designer $115.00 SG Creative, LLC Page 28 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2024-25- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate SG Creative, LLC N/A Conservation and Public Affairs Design Services | page 29 page 30 | SG Creative, LLC Page 29 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2025-26 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Stephanie Guida Project Manager & Graphic Designer $115.00 SG Creative, LLC Page 30 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2025-26- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate SG Creative, LLC N/A Conservation and Public Affairs Design Services | page 31 page 32 | SG Creative, LLC Page 31 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2026-27 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Stephanie Guida Project Manager & Graphic Designer $120.00 SG Creative, LLC Page 32 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2026-27- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate SG Creative, LLC N/A Conservation and Public Affairs Design Services | page 33 page 34 | SG Creative, LLC Page 33 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2027-28 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* *Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Stephanie Guida Project Manager & Graphic Designer $120.00 SG Creative, LLC Page 34 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2027-28- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate SG Creative, LLC N/A Conservation and Public Affairs Design Services | page 35 Page 1 East Valley Water District Conservation and Public Affairs Design Services AGREEMENT NO 2023.11 EAST VALLEY WATER DISTRICT FOR FOR PROFESSIONAL SERVICES THIS AGREEMENT is made this 26 day of October 2023, by and between the EAST VALLEY WATER DISTRICT, a County Water District organized and operating pursuant to California Water Code Section 30000 et seq. (hereinafter referred to as the “DISTRICT”), and We The Creative, a communications and creative consultant (hereinafter referred to as “CONSULTANT”). RECITALS WHEREAS, the DISTRICT desires to contract with CONSULTANT to provide design professional services for Creative Design Services (hereinafter referred to as “Project”); and WHEREAS, CONSULTANT is willing to contract with the DISTRICT to provide such services; and WHEREAS, CONSULTANT holds itself as duly licensed, qualified, and capable of performing said services; and WHEREAS, this Agreement establishes the terms and conditions for the DISTRICT to retain CONSULTANT to provide the services described herein for the Project. COVENANTS NOW, THEREFORE, in consideration of the faithful performance of the terms and conditions set forth herein, the parties hereto agree as follows: ARTICLE I ENGAGEMENT OF CONSULTANT AND AUTHORIZATION TO PROCEED 1.1 ENGAGEMENT: The DISTRICT hereby engages CONSULTANT, and CONSULTANT hereby accepts the engagement, to perform certain design professional services described in Section 2.1 of this Agreement for the term set forth in Section 6.7 of this Agreement. 1.2 AUTHORIZATION TO PROCEED: Authorization for CONSULTANT to proceed with all or a portion of the work described in Section 2.1 of this Page 2 East Valley Water District Conservation and Public Affairs Design Services Agreement will be granted in writing by the DISTRICT as soon as both parties sign the Agreement and all applicable insurance and other security documents required pursuant to Section 6.3 of this Agreement are received and approved by the DISTRICT. CONSULTANT shall not proceed with said work until so authorized by the DISTRICT, and shall commence work immediately upon receipt of the Notice to Proceed. 1.3 NO EMPLOYEE RELATIONSHIP: CONSULTANT shall perform the services provided for herein as an independent contractor, and not as an employee of the DISTRICT. The DISTRICT shall have ultimate control over the work performed for the Project. CONSULTANT is not to be considered an agent or employee of the DISTRICT for any purpose, and shall not be entitled to participate in any pension plans, insurance coverage, bonus, stock, or similar benefits that the DISTRICT provides for its employees. CONSULTANT shall indemnify the DISTRICT for any tax, retirement contribution, social security, overtime payment, or workers’ compensation payment which the DISTRICT may be required to make on behalf of CONSULTANT or any employee of CONSULTANT for work performed under this Agreement. ARTICLE II SERVICES OF CONSULTANT 2.1 SCOPE OF SERVICES: The scope of design professional services to be performed by the CONSULTANT under this Agreement are described in the Scope of Work attached hereto as Exhibit “A” and incorporated herein by this reference (“Scope of Work”), and shall, where not specifically addressed, include all related services ordinarily provided by the CONSULTANT under same or similar circumstances and/or otherwise necessary to satisfy the requirements of Section 3.3 of this Agreement. In case of conflict between the terms of this Agreement and the provisions of the Scope of Work, this Agreement shall govern. 2.2 DEPARTMENT OF INDUSTRIAL RELATIONS COMPLIANCE: This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the California Public Contract Code, or engage in the performance of any contract for public work, as defined by the California Labor Code, unless currently registered and qualified to perform public work Page 3 East Valley Water District Conservation and Public Affairs Design Services pursuant to Section 1725.5 of the California Labor Code. 2.3 PREVAILING WAGES: In accordance with the provisions of the California Labor Code, CONSULTANT shall secure the payment of compensation to employees. To the extent required by the California Labor Code, CONSULTANT shall pay not less than the prevailing rate of per diem wages as determined by the Director, Department of Industrial Relations, and State of California. Copies of such prevailing rate of per diem wages are on file at the DISTRICT’s office, which copies will be made available to any interested party upon request. CONSULTANT shall post a copy of such determination at each job site. If applicable, CONSULTANT shall forfeit to the DISTRICT the amount of the penalty set forth in Labor Code Section 1777.7(b), or any subsequent amendments thereto, for each calendar day, or portion thereof, for each worker paid less than the specified prevailing rates for such work or craft in which such worker is employed, whether paid by CONSULTANT or by any subcontractor. 2.4 HOURS AND WORKING CONDITIONS: The DISTRICT is a public entity in the State of California and is subject to the provisions of the Government Code and the Labor Code of the State. It is stipulated and agreed that all provisions of law applicable to public contracts are a part of this Agreement to the same extent as though set forth herein and will be complied with by CONSULTANT. CONSULTANT shall comply with all applicable provisions of the California Labor Code relating to working hours and the employment of apprentices on public works projects. CONSULTANT shall, as a penalty to the DISTRICT, forfeit $25.00 for each worker employed in the execution of this Agreement by CONSULTANT or by any subcontractor, for each calendar day during which such worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week, unless such worker received compensation for all hours worked in excess of 8 hours at not less than 1½ times the basic rate of pay. Page 4 East Valley Water District Conservation and Public Affairs Design Services ARTICLE III RESPONSIBILITIES OF THE DISTRICT AND OF CONSULTANT 3.1 DUTIES OF THE DISTRICT: The DISTRICT, without cost to CONSULTANT, will provide all pertinent information necessary for CONSULTANT’s performance of its obligations under this Agreement that is reasonably available to the DISTRICT unless otherwise specified in the Scope of Work, in which case the CONSULTANT is to acquire such information. The DISTRICT does not guarantee or ensure the accuracy of any reports, information, and/or data so provided. To the extent that any reports, information, and/or other data so provided was supplied to the DISTRICT by persons who are not employees of the DISTRICT, any liability resulting from inaccuracies and/or omissions contained in said information shall be limited to liability on behalf of the party who prepared the information for the DISTRICT. 3.2 REPRESENTATIVE OF DISTRICT: The DISTRICT will designate William Ringland as the person to act as the DISTRICT’s representative with respect to the work to be performed under this Agreement. Such person will have complete authority to transmit instructions, receive information, and interpret and define the DISTRICT’s policies and decisions pertinent to the work. In the event the DISTRICT wishes to make a change in the DISTRICT’s representative, the DISTRICT shall notify the CONSULTANT of the change in writing. 3.3 DUTIES OF CONSULTANT: CONSULTANT shall perform the Project work in such a manner as to fully comply with all applicable professional standards of care, including professional quality, technical accuracy, timely completion, and other services furnished and/or work undertaken by CONSULTANT pursuant to this Agreement. The CONSULTANT shall cause all work and deliverables to conform to all applicable federal, state, and local laws and regulations. 3.4 APPROVAL OF WORK: The DISTRICT’s approval of work or materials furnished hereunder shall not in any way relieve CONSULTANT of responsibility for the technical adequacy of its work. Neither the DISTRICT’s review, approval or acceptance of nor payment for any of the services shall be construed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement. Where approval by the DISTRICT is indicated in this Agreement, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry Page 5 East Valley Water District Conservation and Public Affairs Design Services standards, or the willful misconduct of the CONSULTANT or its subcontractors. CONSULTANT’s obligation to defend, indemnify, and hold harmless the DISTRICT, and its directors, officers, employees and agents as set forth in Section 6.9 of this Agreement also applies to the actions or omissions of the CONSULTANT or its subcontractors as set forth above in this paragraph. ARTICLE IV PAYMENTS TO CONSULTANT 4.1 PAYMENT: The DISTRICT will pay CONSULTANT for work performed under this Agreement, which work can be verified by the DISTRICT, on the basis of the following: CONSULTANT shall exercise its good faith best efforts to facilitate a full and clear definition of the scope of all assigned work so that the amount set forth in Section 4.3 of this Agreement will cover all tasks necessary to complete the work. The amount set forth in Section 4.3 of this Agreement is the maximum compensation to which CONSULTANT may be entitled for the performance of services to complete the work for the Project, unless the Scope of Work or time to complete the work is changed by the DISTRICT in writing in advance of the work to be performed thereunder. Adjustments in the total payment amount shall only be allowed pursuant to Section 6.4 of this Agreement. In no event shall CONSULTANT be entitled to compensation greater than the amount set forth in Section 4.3 of this Agreement where changes in the Scope of Work or the time for performance are necessitated by the negligence of CONSULTANT or any subcontractor performing work on the Project. 4.2 PAYMENT TO CONSULTANT: Payment will be made by the DISTRICT within thirty (30) calendar days after receipt of an invoice from CONSULTANT, provided that all invoices are complete and product and services are determined to be of sufficient quality by the DISTRICT. CONSULTANT shall invoice DISTRICT monthly for services performed under this Agreement. In the event that a payment dispute arises between the parties, CONSULTANT shall provide to the DISTRICT full and complete access to CONSULTANT’s labor cost records and other direct cost data, and copies thereof if requested by the DISTRICT. 4.3 ESTIMATED CHARGES: The total estimated charges for all work under this Agreement will be estimated within each individual task order, and such amount is the cost ceiling as described herein for a period of three years, with an option to renew for two (2) additional annual contract terms as allowable by the DISTRICT’s Purchasing Page 6 East Valley Water District Conservation and Public Affairs Design Services Policy. Each individual task order will follow the submitted hourly rates as show in ATTACHMENT B. 4.4 NOT-TO-EXCEED: CONSULTANT will be authorized work under this agreement by task orders. CONSULTANT will be placed on an on-call bench for the services identified. The total not-to-exceed amount for the agreement is $500,000; $100,000, maximum annual amount. 4.5 COST FOR REWORK: CONSULTANT shall, at no cost to the DISTRICT, prepare any necessary rework occasioned by CONSULTANT’s negligent act or omission or otherwise due substantially to CONSULTANT’s fault. ARTICLE V COMPLETION SCHEDULE 5.1 TASK SCHEDULE: The work is anticipated to be completed in accordance with the schedule contained in the Scope of Work. Agreement for on-call services will be in place for a period of three (3) years, with an option to renew for two (2) additional annual contract terms as allowable by the DISTRICT’s Purchasing Policy. 5.2 TIME OF ESSENCE: CONSULTANT shall perform all services required by this Agreement in a prompt, timely, and professional manner in accordance with the above schedule. Time is of the essence in this Agreement. ARTICLE VI GENERAL PROVISIONS 6.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS: CONSULTANT shall at all times observe all applicable provisions of Federal, State, and Local laws and regulations including, but not limited to, those related to Equal Opportunity Employment. 6.2 SUBCONTRACTORS AND OUTSIDE CONSULTANTS: No subcontract shall be awarded by CONSULTANT if not identified as a subcontractor in its Proposal unless prior written approval is obtained from the DISTRICT. CONSULTANT shall be responsible for payment to subcontractors used by them to perform the services under this Agreement. If CONSULTANT subcontracts any of the work to be performed, CONSULTANT shall be as fully responsible to the DISTRICT for the performance of the work, including errors and omissions of CONSULTANT’s subcontractors and of the persons employed by the subcontractor, as CONSULTANT is for the acts and omissions of persons directly employed by the CONSULTANT. Nothing contained in this Agreement shall create any contractual relationship between any subcontractor of CONSULTANT and the DISTRICT. CONSULTANT shall bind every subcontractor and every subcontractor of a Page 7 East Valley Water District Conservation and Public Affairs Design Services subcontractor to the terms of this Agreement that are applicable to CONSULTANT’s work unless specifically noted to the contrary in the subcontract in question and approved in writing by the DISTRICT. 6.3 INSURANCE: CONSULTANT shall secure and maintain in full force and effect, until the satisfactory completion and acceptance of the Project by DISTRICT, such insurance as will protect it and the DISTRICT in such a manner and in such amounts as set forth below. The premiums for said insurance coverage shall be paid by the CONSULTANT. The failure to comply with these insurance requirements may constitute a material breach of this Agreement, at the sole discretion of the DISTRICT. (a) Certificates of Insurance: Prior to commencing services under this Agreement, and in any event no later than ten (10) calendar days after execution of this Agreement, CONSULTANT shall furnish DISTRICT with Certificates of Insurance and endorsements verifying the insurance coverage required by this Agreement is in full force and effect. The DISTRICT reserves the right to require complete and accurate copies of all insurance policies required under this Agreement. (b) Required Provisions: The insurance policies required by this Agreement shall include the following provisions or have them incorporated by endorsement(s): (1) Primary Coverage: The insurance policies provided by CONSULTANT shall be primary insurance and any self-insured retention and/or insurance carried by or available to the DISTRICT or its employees shall be excess and non-contributory coverage so that any self- insured retention and/or insurance carried by or available to the DISTRICT shall not contribute to any loss or expense under CONSULTANT’s insurance. (2) Additional Insured: The policies of insurance provided by CONSULTANT, except Workers' Compensation and Professional Liability, shall include as additional insureds: the DISTRICT, its directors, officers, employees, and agents when acting in their capacity as such in conjunction with the performance of this Agreement. Such policies shall contain a "severability of interests" provision, also known as "Cross liability" or "separation of insured". (3) Cancellation: Each certificate of insurance and insurance policy shall provide that the policy may not be non-renewed, canceled (for Page 8 East Valley Water District Conservation and Public Affairs Design Services reasons other than non-payment of premium) or materially changed without first giving thirty (30) days advance written notice to the DISTRICT, or ten (10) days advance written notice in the event of cancellation due to non-payment of premium. (4) Waiver of Subrogation: The insurance policies provided by CONSULTANT shall contain a waiver of subrogation against DISTRICT, its directors, officers, employees and agents for any claims arising out of the services performed under this Agreement by CONSULTANT. (5) Claim Reporting: CONSULTANT shall not fail to comply with the claim reporting provisions or cause any breach of a policy condition or warranty of the insurance policies required by this Agreement that would affect the coverage afforded under the policies to the DISTRICT. (6) Deductible/Retention: If the insurance policies provided by CONSULTANT contain deductibles or self-insured retentions, any such deductible or self-insured retention shall not be applicable with respect to the coverage provided to DISTRICT under such policies. CONSULTANT shall be solely responsible for any such deductible or self-insured retention and the DISTRICT, in its sole discretion, may require CONSULTANT to secure the payment of any such deductible or self-insured retention by a surety bond or an irrevocable and unconditional letter of credit. (7) Consultant’s Subcontractors: CONSULTANT shall include all subcontractors as additional insureds under the insurance policies required by this Agreement to the same extent as the DISTRICT or shall furnish separate certificates of insurance and policy endorsements for each subcontractor verifying that the insurance for each subcontractor complies with the same insurance requirements applicable to CONSULTANT under this Agreement. (c) Insurance Company Requirements: CONSULTANT shall provide insurance coverage through insurers that have at least an "A" Financial Strength Rating and a "VII" Financial Size Category in accordance with the current ratings by the A. M. Best Company, Inc. as published in Best’s Key Rating Guide or on said company’s web site. In addition, any and all insurers must Page 9 East Valley Water District Conservation and Public Affairs Design Services be admitted and authorized to conduct business in the State of California and be a participant in the California Insurance Guaranty Association, as evidenced by a listing in the appropriate publication of the California Department of Insurance. (d) Policy Requirements: The insurance required under this Agreement shall meet or exceed the minimum requirements as set forth below: (1) Workers' Compensation: CONSULTANT shall maintain Workers' Compensation insurance as required by law in the State of California to cover CONSULTANT’s obligations as imposed by federal and state law having jurisdiction over CONSULTANT’s employees and Employers' Liability insurance, including disease coverage, of not less than $1,000,000. (2) General Liability: CONSULTANT shall maintain Comprehensive General Liability insurance with a combined single limit of not less than $1,000,000 per occurrence or claim and $1,000,000 aggregate. The policy shall include, but not be limited to, coverage for bodily injury, property damage, personal injury, products, completed operations and blanket contractual to cover, but not be limited to, the liability assumed under the indemnification provisions of this Agreement. In the event the Comprehensive General Liability insurance policy is written on a "claims made" basis, coverage shall extend for two years after the satisfactory completion and acceptance of the Project by DISTRICT. (3) Automobile Liability: CONSULTANT shall maintain Commercial Automobile Liability insurance with a combined single limit for bodily injury and property damage of not less than $1,000,000 each occurrence for any owned, hired, or non-owned vehicles. (4) Professional Liability: CONSULTANT shall maintain Professional Liability insurance covering errors and omissions arising out of the services performed by the CONSULTANT or any person employed by him, with a limit of not less than $1,000,000 per occurrence or claim and $1,000,000 aggregate. In the event the insurance policy is written on a "Claims made" basis, coverage shall extend for two years after the satisfactory completion and acceptance of the Project by DISTRICT. Page 10 East Valley Water District Conservation and Public Affairs Design Services (5)Property Coverage – Valuable Papers: Property coverage on an all- risk, replacement cost form with Valuable Papers insurance sufficient to assure the restoration of any documents, memoranda, reports, plans or other similar data, whether in hard copy or electronic form, relating to the services provided by CONSULTANT under this Agreement. 6.4 CHANGES IN SCOPE OR TIME: If the DISTRICT requests a change in the Scope of Work or time of completion by either adding to or deleting from the original scope or time of completion, an equitable adjustment shall be made and this Agreement shall be modified in writing accordingly. CONSULTANT must assert any claim for adjustment under this clause in writing within thirty (30) calendar days from the date of receipt from CONSULTANT of the notification of change unless the DISTRICT grants a further period of time before the date of final payment under this Agreement. 6.5 NOTICES: All notices to either party by the other shall be made in writing and delivered or mailed to such party at their respective addresses as follows, or to other such address as either party may designate, and said notices shall be deemed to have been made when delivered or, if mailed, five (5) days after mailing. To DISTRICT: East Valley Water District 31111 Greenspot Road Highland, CA 92346 Attn: General Manager/CEO To CONSULTANT: We The Creative 3349 Michelson Drive, Suite 200 Irvine, CA 92612 Attn: Joven Orozco 6.6 CONSULTANT’S ASSIGNED PERSONNEL: CONSULTANT designates Joven Orozco to have immediate responsibility for the performance of the work and for all matters relating to performance under this Agreement. Substitution of any assigned personnel shall require the prior written approval of the DISTRICT. If the DISTRICT determines that a proposed substitution is not acceptable, then, at the request of the DISTRICT, CONSULTANT shall substitute with a person acceptable to the DISTRICT. 6.7 TERMINATION: (a)If the engagement of CONSULTANT is not extended by the mutual written Page 11 East Valley Water District Conservation and Public Affairs Design Services consent of the DISTRICT and CONSULTANT, then this Agreement shall expire on the latest date set forth in the schedule contained in the Scope of Work for completion of tasks for the Project. (b)Notwithstanding the above, the DISTRICT may terminate this Agreement or abandon any portion of the Project by giving ten (10) days written notice thereof to CONSULTANT. CONSULTANT may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days written notice only in the event of substantial failure by the DISTRICT to perform in accordance with the terms of this Agreement through no fault of the CONSULTANT. (c)In the event of termination of this Agreement or abandonment of any portion of the Project, the DISTRICT shall be immediately given title to all original drawings and other documents developed for the Project, and the sole right and remedy of CONSULTANT shall be to receive payment for all amounts due and not previously paid to CONSULTANT for services completed or in progress in accordance with the Agreement prior to such date of termination. If termination occurs prior to completion of any task for which payment has not been made, the fee for services performed during such task shall be based on an amount mutually agreed to by the DISTRICT and CONSULTANT. Such payments available to the CONSULTANT under this paragraph shall not include costs related to lost profit associated with the expected completion of the work or other such payments relating to the benefit of this Agreement. 6.8 ATTORNEYS’ FEES: In the event that either the DISTRICT or CONSULTANT brings an action or proceeding for damages for an alleged breach of any provision of this Agreement, to interpret this Agreement or determine the rights of and duties of either party in relation thereto, the prevailing party shall be entitled to recover as part of such action or proceeding all litigation, arbitration, mediation and collection expenses, including witness fees, court costs, and reasonable attorneys' fees. Such fees shall be determined by the Court in such litigation or in a separate action brought for that purpose. Mediation will be attempted if both parties mutually agree before, during, or after any such action or proceeding has begun. 6.9 INDEMNITY: Page 12 East Valley Water District Conservation and Public Affairs Design Services (a)CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT or any of CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, excepting only such matters arising from the sole negligence or willful misconduct of the DISTRICT. (b)CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and description, with respect to or arising out of any infringement or alleged infringement of any patent, copyright or trademark and arising out of the use of any equipment or materials furnished under this Agreement by the CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, or out of the processes or actions employed by, or on behalf of, the CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, in connection with the performance of services under this Agreement. CONSULTANT shall have the right, in order to avoid such claims or actions, to substitute at its expense non-infringing equipment, materials or processes, or to modify at its expense such infringing equipment, materials, and processes so they become non-infringing, provided that such substituted and modified equipment, materials, and processes shall meet all the requirements and be subject to all the provisions of this Agreement. (c)CONSULTANT shall defend, indemnify and hold DISTRICT, including its directors, officers, employees and agents, harmless from and against any and all claims, demands, causes of action, suits, debts, obligations, liabilities, losses, damages, costs, expenses, attorney’s fees, awards, fines, settlements, judgments or losses of whatever nature, character, and Page 13 East Valley Water District Conservation and Public Affairs Design Services description, with respect to or arising out of any breach by CONSULTANT or CONSULTANT’s subcontractors, including their respective directors, officers, employees, agents and assigns, of the aforesaid obligations and covenants, and any other provision or covenant of this Agreement. (d)It is the intent of the parties to this Agreement that the defense, indemnity, and hold harmless obligation of CONSULTANT under this Agreement shall be as broad and inclusive as may be allowed under California Civil Code § 2778 through 2784.5, or other similar state or federal law. 6.10 SAFETY: CONSULTANT shall perform the work in full compliance with applicable State and Federal safety requirements including, but not limited to, Occupational Safety and Health Administration requirements. (a)CONSULTANT shall take all precautions necessary for the safety of, and prevention of damage to, property on or adjacent to the Project site, and for the safety of, and prevention of injury to, persons, including DISTRICT’s employees, CONSULTANT’s employees, and third persons. All work shall be performed entirely at CONSULTANT’s risk. CONSULTANT shall comply with the insurance requirements set forth in Section 6.3 of this Agreement. (b)CONSULTANT shall also furnish the DISTRICT with a copy of any injury prevention program established for the CONSULTANT’s employees pursuant to Labor Code Section 6401.7, including any necessary documentation regarding implementation of the program. CONSULTANT hereby certifies that its employees have been trained in the program, and procedures are in place to train employees whenever new substances, processes, procedures, or equipment are introduced. CONSULTANT shall demonstrate compliance with Labor Code Section 6401.7 by maintaining a copy of its Injury and Illness Prevention Plan at the Project site and making it available to the DISTRICT. 6.11 EXAMINATION OF RECORDS: All original drawings, specifications, reports, calculations, and other documents or electronic data developed by CONSULTANT for the Project shall be furnished to and become the property of the DISTRICT. CONSULTANT agrees that the DISTRICT will have access to and the right to examine any directly pertinent books, documents, papers, and records of any and all of the transactions relating to this Agreement. 6.12 OWNERSHIP OF SOFTWARE: Page 14 East Valley Water District Conservation and Public Affairs Design Services (a)Subject to payment of all compensation due under this Agreement and all other terms and conditions herein, CONSULTANT hereby grants DISTRICT a nonexclusive, transferable, royalty-free license to use the Software furnished to DISTRICT by CONSULTANT under this Agreement. The license granted herein shall authorize DISTRICT to: (1)Install the Software on computer systems owned, leased or otherwise controlled by DISTRICT; (2)Utilize the Software for its internal data-processing purposes; and (3)Copy the Software and distribute as desired to exercise the rights granted herein. (b)CONSULTANT retains its entire right, title and interest in the Software developed under this Agreement. DISTRICT acknowledges that CONSULTANT owns or holds a license to use and sublicense various pre- existing development tools, routines, subroutines and other programs, data and materials that CONSULTANT may include in the Software developed under this Agreement. This material shall be referred to hereafter as “Background Technology.” (c)DISTRICT agrees that CONSULTANT shall retain any and all rights CONSULTANT may have in the Background Technology. CONSULTANT grants DISTRICT an unrestricted, nonexclusive, perpetual, fully paid-up worldwide license to use the Background Technology in the Software developed and delivered to DISTRICT under this Agreement, and all updates and revisions thereto. However, DISTRICT shall make no other commercial use of the Background Technology without CONSULTANT’s written consent. 6.13 INTEGRATION AND AMENDMENT: This Agreement contains the entire understanding between the DISTRICT and CONSULTANT as to those matters contained herein. No other representations, covenants, undertakings or other prior or contemporaneous agreements, oral or written, respecting those matters, which are not specifically incorporated herein, may be deemed in any way to exist or to bind any of the parties hereto. Each party acknowledges that it has not executed this Agreement in reliance on any promise, representation or warranty not set forth herein. This Agreement may not be amended except by a writing signed by all parties hereto. 6.14 ASSIGNMENT: Neither party shall assign or transfer its interest in this Page 15 East Valley Water District Conservation and Public Affairs Design Services Agreement without written consent of the other party. All terms, conditions, and provisions of this Agreement shall inure to and shall bind each of the parties hereto, and each of their respective heirs, executors, administrators, successors, and assigns. 6.15 GOVERNING LAW: This Agreement shall be construed as if it was jointly prepared by both parties hereto, and any uncertainty or ambiguity contained herein shall not be interpreted against the party drafting same. This Agreement shall be enforced and governed by the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state court situated in the County of San Bernardino, State of California, or in a federal court with in rem jurisdiction over the Project. 6.16 HEADINGS: Article and Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, and conditions of this Agreement. 6.17 PARTIAL INVALIDITY: If any term, covenant, condition, or provision of this Agreement is found by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated thereby. 6.18 EFFECT OF DISTRICT’S WAIVER: Any failure by the DISTRICT to enforce any provision of this Agreement, or any waiver thereof by the DISTRICT, shall not constitute a waiver of its right to enforce subsequent violations of the same or any other terms or conditions herein. 6.19 AUTHORITY: The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to sign this Agreement on behalf of and to so bind their respective legal entities. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. CONSULTANT DISTRICT By: _____________________________ By:_____________________________ Joven Orozco Michael Moore, General Manager/ CEO We The Creative East Valley Water District Page 16 East Valley Water District Conservation and Public Affairs Design Services ATTACHMENT A – Scope of Work PREPARED BY: We The Creative Joven Orozco, President And Main Contact 3349 Michelson Drive, Suite 200, Irvine, CA 92612 Tel. (877) 887-1318, Cell: (949) 463-7887 Joven@wethecreative.com REQUEST FOR PROPOSAL Conservation & Public Aairs Design Services ATTENTION: William Ringland, Public Aairs/Conservation Manager. East Valley Water District 25318 5th Street Highland, CA 92410 William Ringland, Public Affairs/Conservation Manager. East Valley Water District 25318 5th Street, San Bernardino, CA 92410 Re: Conservation & Public Affairs Design Services, East Valley Water District Dear Mr William Ringland, Public Affairs/Conservation Manager; We The Creative (WTC) is the proposer for the East Valley Water District RFP for Conservation & Public Affairs Design Services. WTC is a DBA of Jovenville, LLC. Joven Orozco is the main contact to contractually obligate the organization, negotiate the contract and contact for clarification. I can be reached at: We The Creative, Joven Orozco, President and Founder, Joven@WeTheCreative.com Tel. (877) 887-1318, Cell: (949) 463-7887, Fax (949) 723-1566, WeTheCreative.com 3349 Michelson Drive, Suite 200, Irvine, CA 92612 We The Creative understands the scope of services required by the East Valley Water District and are fully committed to performing the necessary work within the provided time period. As a contracted partner, we will collaborate closely with the District's staff to develop and implement creative materials that align with the annual Five Year Work Plan and additional projects as needed. Considerations for a good fit: Public Sector Experts WTC has exclusively served government clients for 13 of the past 26 years. We understand the special acumen it takes to navigate through the sometimes rough waters of the public sector. We have immense expertise with attracting, engaging and motivating key stakeholders toward action. Customer Service Driven WTC believes great creative results are achieved through an understanding of client business goals, great communication and strong collaboration. We have a simple process and a simple way of communicating that maintains transparency throughout the entire process. Design Innovation With thousands of marketing messages bombarding target audiences, innovation must be used as a tool to change behavior. Once we understand project parameters, we become impassioned to challenge the status quo by exploring a wide range of possible strategies, tactics, technologies, designs and much more to positively impact a brand, campaign and metrics. Account Manager Jillian Martinez is a consummate business professional. She will work closely with the East Valley Water District for administration, project tracking, research, handling budgets, client correspondence, creating presentations, and maintaining contact lists. She works in conjunction with Joven Orozco to manage the entire process using our proprietary 4D Approach TM We acknowledge the receipt of the entire RFP wi th no (0) addenda. All information submitted with this proposal is true and correct. By submitting this proposal, we acknowledge that we have read and understand the contents and agree to comply with the requirements and conditions. The proposal shall remain valid for a period of no less than 90 days from the date of submission. Thank you for your time and consideration. Best regards, Joven Orozco, President and Founder 1. Transmittal Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Key Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Qualifications and Work Plan. . . . . . . . . . . . . . . . . . . . . . . 4. Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sample Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . Resumes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . WTC is an experienced, proactive team that utilizes the most modern technologies to achieve the best results, yet our management approach is traditional, personal and customer-focused. WTC schedules regular internal meetings to ensure every team member stays current and up-to-date on the status of each job. This team has cohesively worked together on several projects. Key members of the WTC team will be available for the duration of the project. No person designed as Key Personnel shall be removed or replaced without the prior written agreement of the client. WTC will subcontract and use vendors if necessary. WTC does not employ or retain any lobbying or advocating services on behalf of WTC This project team has worked together on several projects and is fluent working within the This team understands what it takes to deliver projects that are on time and within budget to meet or exceed expectations. JOVEN OROZCO President & Creative Director Joven Orozco is the President, Founder and Creative Director of We The Creative (WTC) with 26 years of experience specializing in branding and marketing. Joven earned a Bachelor of Fine Art with an emphasis in Graphic Design at California State University, Fullerton. He leads the WTC team toward cutting-edge creativity with a steady business hand. Clients include OCTA, City of Long Beach, City of Anaheim, John Wayne Airport, City of Costa Mesa, OC Waste & Recycling, City of Santa Monica and several more. JILLIAN MARTINEZ Account Manager Jillian Martinez, a Cal State Fuller ton graduate (BA in Communications: Advertising), is a skilled project manager with 3 years of experience. Working with Joven Orozco, she ensures on-time, within-budget project delivery for esteemed clients like OCTA, Long Beach, Anaheim, John Wayne Airpor t, and more. TOMMY CLAY Project Manager Tommy, a valued member of the WTC team, brings expertise as a recent Full Sail University graduate in Audio Production. Proficient in studio recording, post-production audio editing, and live-sound mixing, Tommy effectively manages activity guides, marketing projects, and branding initiatives. ANDY RUIZ Creative Director Andy Ruiz is a Creative Director with over ten years of experience in marketing and advertising. He loves everything creative, including illustration, branding, typography, and the latest trends in UX/UI. He strives to create meaningful and uniquely crafted physical and digital products through conceptual thinking, attention to every detail, and high aesthetic sensibility. KINSEY DAVIS Graphic Designer A visual storyteller and graphic designer passionate about brand identity, editorial design, brand campaigns, photo art direction, and packaging. Kinsey has been an integral part of many designs for We The Creative including John Wayne Airport’s annual report and Bay Area Air Quality District Management’s interactive annual report. ERIC LUMBA Graphic Designer Eric Lumba earned a Bachelor of Fine Art with an emphasis on Graphic Design from California State University, Fuller ton. Eric has a serious commitment to customer service and is one of the main reasons for the success and growth of WTC. He is proficient in the latest graphic programs including Adobe Photoshop, Illustrator, InDesign, AfterEffects, MS Word & Excel and HTML coding. Projects with WTC include the City of Long Beach, City of Costa Mesa, City of Santa Monica, OCTA, John Wayne Airport and many others. JULIE BOS Copywriter Julie Bos is a skilled copywriter for journals, newsletters, web content, email blasts, product branding/messaging, sales literature, brochures, ads, feature stories, case studies, white papers, direct-response marketing, videos, press releases, product demonstrations and annual reports. She has collaborated to translate WTC visions to the written word since 2014. NAOMI PEARSON Marketing Strategy A Marketing Communications strategist, Naomi has successfully identified marketing opportunities and developed sound and actionable strategies that help companies identify and reach their target audiences through traditional and digital mediums. DAVE ROE Media Buys He has a penchant for adapting new technologies and strategies into each campaign. Dave uses his background in analytics to successfully manage digital campaigns across the Google Ad Network including Search, Display, and Social platforms. Refer to Appendix B: Resumes Project Management Services We The Creative has many skills and a wide field of experience. However, our proprietary 4D Approach TM to project management sets us apart from the competition with a structured discipline applied to the creative development process. Jillian Martinez is an experienced Account and Project Manager who is a key reason for the success of We The Creative. She is organized and detail-oriented with extensive experience using the 4D Approach TM . Jillian works closely with the entire project team in conjunction with Creative Director Joven Orozco to deliver on-time and within-budget results. JILLIAN MARTINEZ Account Manager Jillian Martinez is a graduate of California State University, Fullerton, with a Bachelor of Arts Communications: Adver tising. She is a consummate business professional with three years of experience as a project manager working with Joven Orozco to manage the proprietary 4D ApproachTM. Jillian has delivered on-time and within-budget projects for OCTA, City of Long Beach, Anaheim, John Wayne Airpor t, Costa Mesa, OC Waste & Recycling, City of Santa Monica, and many others. As the primary communicator and direct connection to the WTC project team, she establishes and maintains orderly process operations, develops/delivers reports, and resolves conflict. She initiates and manages a secure website for authorized users to follow project progress with a 24/7 voice. Jillian Martinez, Joven Orozco, and other key personnel typically attend in-person meetings at client offices, but COVID health and safety restrictions necessitate the project be conducted in a virtual environment. WTC staff is comfortable and experienced working in a vir tual environment to share ideas, files and documentation. WTC is open to alternatives as the situation changes. Although Joven Orozco is the primary contact, key personnel Jillian Martinez will be available daily to respond to any requests promptly for the duration of the project. Jillian Martinez (877) 887-1318, Jillian@wethecreative.com We The Creative (WTC) is a DBA of 26-year-old Jovenville, LLC specializing in marketing and branding for the public sector. Jovenville has been a leading creative agency of consumer products and services since 1995. WTC is both a Small Business Enterprise (SBE) and Disadvantaged Business Enterprise (DBE) located in Irvine, California. In 2007, Jovenville, LLC, braced itself for a downturn in the consumer segment due to a nationwide economic slowdown. We decided to create the subsidiary We The Creative (WTC) to specifically service public sector and government agencies. Essentially, we hedged our bets against a drop-off in business which was affecting many marketing and advertising agencies at the time. That downturn never came for WTC. One of the biggest and most rewarding surprises about our work at WTC is the people we work with. It’s exciting and gratifying to see how receptive and enthusiastic our clients are when they see our consumer brand tactics and strategies in action. We The Creative 3349 Michelson Drive, Suite 200, Irvine, CA 92612 T: (877) 887-1318 C: (949) 463-7887 F: (949) 723-1566 WeTheCreative.com DUNS Number: 964198816 Joven Orozco, Main Contact T: (877) 887-1318 C: (949) 463-7887 F: (949) 723-1566 Joven@WeTheCreative.com WTC takes great pride in our work process. We feel strongly about collaborating with our clients to meet expectations and deadlines for optimal results. Our process explores hundreds of ideas that push the boundaries of creative, strategy and execution. We are unconventional and are always looking to innovate. We exist for and strive to change the status quo of creative design in the public sector. WTC is a creative agency specializing in a wide range of services. Our creativity coupled with a proprietary business process delight our clients time and again. Developing a strategy requires a broad-yet-detailed look at the evolution of a current position and a projection of future goals. WTC has the collaborative tools and creative disposition to cultivate a fresh new look, feel and outreach. Branding is more than just a symbol. It defines how a business presents itself to the world and sets the tone for the future. WTC has developed some great-fitting brands for government, public organizations and programs. Marketing is the thoughtful research process to determine the best way of bringing public awareness to an organization or project. WTC makes it our business to discover the best methods of delivering the right message to the right audience at the right time with innovation. WTC never markets without a purpose. The goal is to always reach a target audience where they live their lives, in ways that effectively elicit their thoughts and actions. Advertising is a combination of art and copy designed to attract, engage and motivate action within a short period of time. WTC will determine the main strategy and create a compelling, fully integrated campaign that spans all platforms. Social media is ever-evolving and quickly-changing. WTC makes it our business to have the right people following social media trends, so we can develop and execute a currently-trending, positive social media presence. Graphic design is the application of artistic concepts that enliven an organization or project with widely-appealing interest. Our talented staff has received many awards for their creative achievements and always gives each project their full attention. WTC has a unique approach to developing annual reports. Our process has attracted the attention of several media outlets, and received acclaim at industry events. These are the portals that connect the government with the public 24/7. WTC believes websites should have an easy-to-use experience with great visual appeal, so they can leave a positive impression on all who interface with the website. WTC Photography and Video brings projects to life in expressive and memorable ways. Our team’s trained and creative ‘eyes’ can vividly enhance any media. - Development Services Department Branding - Year in Review Repor ts - Housing Authority 10 Year Book - Climate Adaptation Action Plan (CAAP) Brand - Bring Your Own Long Beach City (#BYOLBC) - Rideshare Marketing - Vanpool Marketing - Bike Safety/Bike to Work Marketing - Dump The Pump Marketing - RideMatch.info - Annual Reports - Water Quality Repor ts - Rideshare Marketing - Brand Style Guide - Annual Report - Seascape Newsletter - Standardize Email Strategy for Mayor - Outlook Magazine Redesign - Housing Authority Annual Repor t - Westview Outreach Factsheets - Economic Development Brochure - Fire Depar tment Annual Report - Interactive Annual Reports - Upstart Valley Brand Strategy & Marketing - Pass Transit Free Fare Marketing Campaign - Alternate Fuel Marketing Campaign - Brand Strategy and Visual Language - Branding and Marketing Collateral - Brand Identity Guidelines - Interactive Annual Reports - Parking Meter Graphics Refer to Appendix A: Sample Work WTC is stable with no bankruptcies, litigations, liens, claims, planned office closures, impending mergers, acquisitions, buyouts or mergers or any cause of action or judgment and/or investigation against WTC that will impede the ability to complete scope of work as described in this proposal. Creative work with great results is accomplished through trust and collaboration. Our processes allow us to deliver on our clients objectives and push creativity to areas never thought imaginable. Each project has its own unique scope of work that needs a standard way of working and communicating. WTC developed the 4D Approach™ to address those needs in a creative industry where chaos can easily dominate in an unstructured environment. It serves as the model for project development to enable both the client and the design team to focus on the message and the audience to deliver a compelling and accurate product. We use an online platform to communicate efficiently and effectively. The very foundation of the entire project is Discovery. Before any project begins, we use planning to establish a fundamental understanding of the parameters that helps us set achievable goals. Design criteria guides the project to help us achieve the goals defined in the Discovery phase. Explorations and experimentations are presented for client review, feedback and approval. Boardstorming happens in this phase. Concept and design become reality by blending research, art, craft and science. We develop and refine the design that best represents the established objectives. The project is one step closer to tangible completion by finalizing production, verifying accuracy, and double-checking with vendors to ensure it will be delivered on time and in the right configuration. Some of our secret tools for collaboration and fun! Boardstorming is a process Joven Orozco created to generate over a dozen loose ideas for strategic direction, image direction, printing techniques, social techniques and/or outreach ideas. Basically, every idea we can think of is placed on a board for feedback and conversation during an informal presentation with the client. It allows us to quickly understand what is possible, but more importantly, what is not possible for tactics, styles, messaging and/or strategies. WTC provides a secure, access-controlled website as an easy way for our clients to communicate with WTC and stay up-to-the-minute- current on projects whether sitting at a desk or out globetrotting. It’s a paperless ‘paper trail that keeps everyone up to date with information such as:. Overview: Chronological record of events and deliverables. Messages: Up-to-date details of projects organized in order Contacts: Everyone involved with the project is listed and reachable. Calendar: Up-to-date timeline to follow during the project. Given communication technology that is available today and the secure website we provide, we prefer to largely utilize video conferencing to communicate. We reserve face-to-face meetings for early meetings where we will spend dedicated time getting to know you and the desired direction, strategic development and Boardstorming. 4D Approach™ The WTC 4D Approach™ is a structured proprietary process that moves a project through strategic development, conceptual design, refinement of design direction and final delivery. Turnaround times are based on unique project needs and our desire to meet or exceed client expectations. At the project's core, Discovery lays the groundwork. Through careful planning, we establish a deep understanding of project parameters, setting achievable goals. Job forecasting and project management and upload project website Set time frames, establish budgets and define responsibilities Research to gain understanding of the target market and needs Audit current marketing, branding, source information and client ideas Send survey questionnaire Interview stakeholders (as needed) Kick off meeting with all team members Guided by the design criteria, we navigate the project towards goal attainment. Explorations and experiments are presented for client feedback and approval, while Boardstorming fuels creative brainstorming. Round 00 - Boardstorming Establish design direction to best represent the client’s goal Approve strategy (as needed) Round 01 - Three (3) design directions (pre-determined tactics TBD in round 00) Concepts via rough composites Round 02 - One (1) composite with client revisions and suggestions 100% of assets (photography, copywriting, etc) needed to proceed Round 03 - One (1) tight composite with client revisions and suggestions All pre-determined tactics flushed out One collective revision per round of chosen design direction The process in which the concept and design are made into reality. The design is developed and refined to best embody the established objectives. Prepare final artwork and verify accuracy for each project Photo retouch, copyedit, prepare files for print and/or digital uses Present final proof for sign-off via project website or in-person Approaching tangible completion, we finalize production, ensure accuracy, and collaborate with vendors for timely and precise delivery. The project moves closer to its final form. Develop proofs in the format specified for each project assigned Develop detailed printing specifications allowing printers and other vendors to understand the entire scope of the job and provide a responsive quote Submit final electronic artwork to selected printer or vendor Wrap up project with submission of final project files, reports and invoices The following clients are familiar with the WTC design process and work methodology. 375 Beale Street, Suite 600 San Francisco, CA 94105 (415) 940-3585, tlandis@baaqmd.gov Dates : 2017 to present, ongoing Projects : annual reports 333 West Ocean Blvd., 3rd Floor Long Beach, CA 90802 (562) 570-5232, Chelsey.Finegan@longbeach.gov Dates : 2015 to present, ongoing Projects : Housing Authority 10-Year Report, annual reports, digital collateral, print collateral, photography, branding 300 North Flower Street Suite 400 Santa Ana, CA 92703 (714) 834-4072, andy.alimohammadi@ocwr.ocgov.com Dates : 2017 to present, ongoing Projects : annual reports, marketing brochures 44933 Fern Ave Lancaster, CA 93534 (661) 723–6081, amerino@cityoflancasterca.org Dates : 2020 - Present Projects : Outlook Magazine Redesign and Production 1685 Main St. Santa Monica, CA 90401 (310) 458-8301, Debbie.Lee@smgov.net Dates : 2014-present, ongoing Projects : several projects including the Seascape production and the Year End Report for the City of Santa Monica, branding, marketing campaigns 550 S. Main Street Orange, CA 92863 (714) 560-5834, rarmstrong@octa.net Dates : 2010 to present, ongoing Projects : public outreach, print collateral, digital collateral, photography, videography, copywriting Refer to Appendix C: Cost Proposal We The Creative, Joven Orozco, President and Main Contact, Joven@WeTheCreative.com 3349 Michelson Drive, Suite 200, Irvine, CA 92612; Tel. (877) 887-1318, Cell: (949) 463-7887 1. I acknowledge receipt of East Valley Water District RFP for Conservation & Public Affairs Design Services with no (0) Add enda. 2. This offer shall remain firm for 90 days from the date of proposal. Water Quality Report Anaheim Public Utilities 201 S. Anaheim Blvd. Suite 801 Anaheim, CA 92805 2019 Mark Bradley Senior Communications Specialist Project Manager 714.765.4226 MBradley@anaheim.net In 2018, the City of Anaheim served 360,000 residents, 20,000 businesses and more than 50 schools with clean, healthy drinking water that meets or exceeds standards of quality set forth by the U.S. Environmental Protection Agency and the State Water Resources Control Board. A new 2019 Water Quality Report produced by the We The Creative team on behalf of the City of Anaheim helps showcase these and other metrics to the public, as well as city partners and leadership. The colorful design and user-friendliness of the interactive PDF make the complex information feel easy to understand. Key Personnel: Joven Orozco, Nikita Morton Water Quality Report Long Beach Water Depar tment 2021 Morgan Venter, Security & Emergency Preparedness Analyst (562) 760.5976, Morgan.Venter@lbwater.org Every year, Long Beach Water’s staff performs tens of thousands of tests and analyzes the samples for more than 100 drinking water contaminants. A 2021 consumer confidence report developed by We The Creative details these efforts and more. In keeping with the water theme, WTC designers came up with a reader-friendly, ADA-compliant layout in a primarily blue color palette. The report incorporates photos of Long Beach Water staff members working to provide clean, healthy water to citizens. Summer Trolley Branding and Marketing City of Laguna Niguel 30111 Crown Valley Laguna Niguel, CA 92677 2022 Russell Narahara Senior Management Analyst RNarahara@cityoflagunaniguel.org 949-362-4313 WTC developed marketing, branding, communications, and public outreach campaign to coincide with the inaugural year of the new Summer Trolley Program (Trolley Program). This work exceeded the City’s expectations and ridership goals. Deliverables: Logo, Visual Language, Messaging, Photoshoot, Videoshoot, Marketing Collateral, Street Team, and Social Media Graphics. PREPARED BY:We The CreativeJoven Orozco, President And Main Contact3349 Michelson Drive, Suite 200, Irvine, CA 92612Tel. (877) 887-1318, Cell: (949) 463-7887Joven@wethecreative.com PREPARED BY:We The CreativeJoven Orozco, President And Main Contact3349 Michelson Drive, Suite 200, Irvine, CA 92612Tel. (877) 887-1318, Cell: (949) 463-7887Joven@wethecreative.com Rider Guide Design and Production Marin Transit 711 Grand Ave. Ste. 110 San Rafael, CA 94901 2021 Aida Banihashemi Manager of Planning and Marketing (415) 226-0878, abanihashemi@marintransit.org WTC is responsible for Marin Transit’s rider’s guide each update. We are responsible for all route changes on the tables and maps. WTC also has streamlined the entire process so all parties work efficiently and effectively. Sustainable City Plan Report City of Santa Monica 2022 Amanda Grossman Sustainability Analyst (310) 458-2201 x 2406 Amanda.Grossman@santamonica.gov WTC is responsible for designing and laying out Santa Monica’s Sustainable City Plan. Our goal was to make a dense document more consumable for the reader. WTC helped rebrand the city and showcased the visual language within this document. This was provided a template for their graphic design team to utilize for future reports. Branding and Style Guide City of Santa Monica 2019 Debbie Lee, Chief Communications Officer (310) 458-8301, E Debbie.Lee@smgov.net WTC was responsible for evolving the current logo, determining the color palette, fonts, and the components of the brand. Ctr City Anaheim Marketing City of Anaheim 2019 Jessica Garcia Community & Economic Development (714) 765-4300 x 4569, JGarcia3@anaheim.net WTC developed an annual social media plan and content strategy, identified the client voice and target audience buckets and developed unique contests, social promotions and campaigns that drive fan growth and consumers to visit and experience all that Anaheim has to offer. WTC also included recommendations on targeting, performing hashtags, user generated content, event pages, influencer programs, third party apps for shoppable feeds, reservations on social and other valuable opportunities John Wayne Airport Brand Guidelines John Wayne Airport 3160 Airway Avenue | Costa Mesa, CA 92626 2018 Unvert, Marisa, Communications Manager 949.252.5163, MUnvert@ocair.com As the only airport for commercial flight passengers in Orange County, California, John Wayne Airport sees hundreds of takeoffs and landings per year. The airport recently hired We The Creative to create a comprehensive branding guide to keep their marketing efforts consistent. As part of this project, the We The Creative team developed a comprehensive list of standards to explain easy-to-follow usage rules for branding elements such as logos, fonts and colors. The guide includes examples of correct and incorrect uses of all these different aspects, as well as print and digital stationery and various collateral items. The team also compiled all the working files for the assets, and packaged them with the guide. Airport employees began implementing the brand standards immediately, starting with the new email signature We The Creative designed. Consistency is key to successful marketing, and the guidelines will help ensure the airport’s brand remains strong for years to come. Joven integrates the fundamental understanding of business goals and objectives with precise creative solutions to produce and deliver accurate products. He provides strategic supervision on all client projects from initial discovery to final delivery. Joven always works hard to remain fresh, competitive and ahead of the market. 15 Years: City of Aliso Viejo, City of Anaheim, City of Carlsbad, City of Costa Mesa, City of Hayward, City of Irvine, City of Long Beach, City of Palo Alto, City of San Buenaventura, City of Santa Monica, John Wayne Airport, Los Angeles County, Los Angeles World Airports, Omnitrans of San Bernardino, Orange County Council of Governments, Orange County Transpor tation Authority, Sonoma County, Van Nuys Airport Bachelor of Fine Ar t with an emphasis in Graphic Design, California State University, Fullerton, 1995 Chief Creative Officer, Jovenville, LLC/We The Creative, 27132 Paseo Espada, Suite B1225, San Juan Capistrano, CA 92675 Duties: Team leader responsible for strategic and creative direction for all projects and to oversee all work through production and delivery Partner, Joken Industries 2814 Lafayette Ave., Newpor t Beach, CA 92663 Duties: Responsible for creative development, sales and marketing Typography Instructor, Cal State University, Fullerton, 800 N. State College Blvd., Fullerton, CA 92831 Duties: Responsible for class structure and nurturing students to become good designers who understand the importance and fundamentals of type AIGA Orange County, Board Member, Vice President of Operations Orange County Ad Federation, Member Orange County Ad Club Judges Choice, AIGA OC Design Awards, Best of Show, OCPRSA, Best of Show, and How Magazine Best of Category Jillian works closely with clients and internal teams to best meet client needs. Her responsibilities encompass administration, project tracking, research and handling budgets as well as composing client correspondence, creating presentations and maintaining contact lists. 3 Years: City of Lancaster, City of Long Beach, City of Santa Monica, John Wayne Airpor t, Orange County Transportation Authority, Town of Danville, SunLine Transit Agency and Sonoma County Bachelor of Arts Communications: Adver tising, California State University, Fullerton, 2017 Jovenville, LLC/We The Creative 27132 Paseo Espada, Suite B1225, San Juan Capistrano, CA 92675 Duties: Responsible for client services and traffic for all projects. Works closely with all clients with the ability to understand client needs and get projects done on time and within budget. Digital Marketing Specialist, Your Marketing People 200 Spectrum Center Dr Suite 300-B, Irvine, CA 92618 Managed different client accounts on social media, website content, email marketing, SEM campaign creation and copywriting. Managed and assigned tasks to myself and coworkers for clients’ projects through Asana and participated in weekly meetings. Created and edited email marketing campaigns through marketing automation tools like Dotmailer, Marketo, and MailChimp. Built social media campaigns, create and manage social media calendars, create content, and edit pictures in Photoshop for clients. Read clients’ Google Analytics and Google Ad Words reports. Proficient in all the latest graphic programs including, Adobe Suite, Dotmailer, MailChimp, Google Analytics/Adwords, Marketo, Social Media, Microsoft Office Tommy is a Self-Started creative with a finger on the pulse of culture and best practices for project management. With his comfort in leading and facilitating, Tommy has helped manage numerous projects throughout the city of Irvine while building fruitful relationships along the way. Bachelors of Science, Full Sail University, 2020 Project Manager , Jovenville | Irvine, CA 92612 Duties: Responsible for graphic design projects from inception to completion. Negotiating and building relationships amongst team members and clients alike. Audio Engineer/ Production Manager , Arise Irvine | Irvine, CA 92618 Duties: Oversee mix for in-house and live stream audio. Planning and organizing production schedules. Supervising and assisting team members throughout production. Founder, Ice Cold Worldwide | Santa Ana, CA 92703 Duties: Head of all Music and Multimedia production, promotion, and distribution. Love Irvine, The Hub, Arise Irvine, Hope California. Naomi has demonstrated success in identifying marketing opportunities and developing sound and actionable strategies that help companies identify and reach their target audiences through both traditional and digital mediums. University of CalgaryUniversity of Calgary Bachelor of Arts, Communications Bachelor of Arts, Communications, 1994 - 1997 Naomi Pearson Consulting Co Duties: Provide research and insight-based approach to brand and marketing strategy development to clients and suppor t plan execution. Deloitte CanadaDeloitte Canada, Calgary, Canada Area Senior Marketing Manager (1 year contract) Manager, Marketing Communications ENMAX Responsible for the development and execution of the marketing strategy and budget with the emphasis on digital, including paid media, CRM strategy, merchandise release calendar, content production and brand partnerships. A believer in taking the time upfront to research, employ customer insights, and properly plan a strategy, Naomi has developed B2B and B2C brand and marketing strategies for corporations such as Deloitte, ENMAX Energy and Eaton Corporation (Fortune 500) as well as non-profits including ACAD and the Calgary Performing Arts Centre. She has a passion for helping organizations identify their audiences and communicate their unique stories and differentiators to increase sales, engagement, and client retention. She executes plans with precision and understands the impor tance of the small details. Andy works professionally in tandem with his education. He has gained valuable on-the-job practical experience to supplement textbook knowledge with his work on concept-driven branding and marketing campaigns. As a passionate designer, he continues to challenge himself by making visually-compelling designs that are both purposeful and solution-oriented. 6 Years: City of Anaheim, City of Costa Mesa, City of Hayward, City of LancasterCity of Long Beach, City of Palo Alto, City of Santa Monica, John Wayne Airport, Los Angeles County, Marin Transit, Orange County Transpor tation Authority, SunLine Transit Agency, Sonoma County Bachelor of Fine Ar t with an emphasis in Graphic Design, California State University, Fullerton, 2015 Jovenville, LLC/We The Creative, 27132 Paseo Espada, Ste. B1225, San Juan Capistrano, CA 92675 Duties: Works closely with design team to carry out designs across a variety of mediums. Graphic Design Assistant, CSUF Mihaylo College of Business and Economics Focused on print-driven projects. Collaborated with lead designer and marketing manager. Work on large college campaigns and projects from concept to design and production. Graphic Designer, Komet Creations LLC Responsible for print projects, consisting of product catalog and ads. Maintained website and designed monthly eblast. Developed and designed plush products. Photographed all product images. Communicated with art directors of major corporations to produce licensed products. Proficient in all the latest graphic programs including, Adobe Photoshop, Illustrator, Acrobat, Indesign, Microsoft Office, Macromedia Dreamweaver, Fireworks, Flash, and Quark Xpress AIGA Orange County, Member Orange County Ad Club Judges Choice, AIGA OC Design Awards, Best of Show, OCPRSA, Best of Show, and How Magazine Best of Category Visual Storyteller, Graphic Designer, and Ar t Director located in Seattle, WA. Passionate about brand identity, editorial design, brand campaigns, photo art direction, and packaging. Bachelor of Arts, Graphic Design, Western Washington University, 2013 Jovenville, LLC/We The Creative, Graphic Designer 27132 Paseo Espada, Suite B1225, San Juan Capistrano, CA 92675 Duties: Design and develop collateral materials for print and digital media. Project and production management. Compass, Associate Design Manager Seattle, Washington Promoted twice in 17 months. Managed team of two designers while balancing full workload capacity; Partnered with Marketing Strategists to elevate the customer experience through world-class design materials across all channels. Led local photography and art direction, and spearheaded top-level brand adver tising experiences for regional luxury programs. Actively led internal initiatives to promote inclusivity, mentorship, and cross-collaboration. Amazon, Senior Designer Seattle, Washington Freelanced as a Brand Designer for Amazon's internal agency, Day 1. Developed and executed co-branding initiatives with major retail and boutique brands. Created cross-site branded campaigns from concept to launch. Developed packaging systems for new program launches and editorial and technical design for long-format brand books including brand strategy and visual identities. Starbucks, Visual Communications Designer Seattle, Washington Worked as liaison between Visual Communication team and Visual Merchandising Design team. Designed comprehensive communication documents from concept through print for internal strategies and store communications while maintaining Starbucks brand and voice throughout. Eric is responsible for graphic design of all projects. Eric works with the client to identify the needs of the client to ensure each project is a smooth process. Eric has a serious commitment to customer service and is one of the main reasons for the success and growth of We The Creative. 10 Years: City of Anaheim, City of Costa Mesa, City of Hayward, City of Long Beach, City of San Buenaventura, City of Santa Monica, John Wayne Airport, Los Angeles World Airports, Omnitrans of San Bernardino, Orange County Transportation Authority, Van Nuys Airport Bachelor of Fine Ar t with an emphasis in Graphic Design, California State University, Fullerton, 1993 Jovenville, LLC/We The Creative, 27132 Paseo Espada, Suite B1225, San Juan Capistrano, CA 92675 Duties: Responsible for art direction, client services and traffic. Design Instructor, California State University, Fullerton Instructed Typography A, B, and C to university students in the Graphic Design program of CSUF. Create lesson plans; lecture; demo software and design tools; assign projects; critique projects; counsel students. Ar t Director, B&A Marketing & Consulting Spearhead company’s web and multimedia initiatives; concept, art direction and design of marketing and collateral materials (brochures, media kit, direct mail); development of corporate and brand identities; packaging design; design of trade show graphics and materials; participate in strategic planning of marketing campaigns; lead brainstorming sessions; market research. Proficient in all the latest graphic programs including Adobe Photoshop, Illustrator, InDesign, AfterEffects, Microsoft Word & Excel, HTML coding. Copywriting skills for journals, newsletters, web content, e-mail blasts, product branding/messaging, sales literature, brochures, ads, feature stories, case studies, white papers, direct-response marketing, videos, press releases, product demonstrations and annual reports. Additional skills include project and budget management, interviewing, graphic design/layout and print production. 6 Years: John Wayne Airport, Orange County Transportation Authority, OC Waste & Recycling Bachelor of Arts, Communications/Advertising with Honors, California State University, Fullerton 1989 President and Copywriter, Bos Communications AMR Marketing Group, Beckman Coulter, Agency Ingram Micro, Mazda USA, Corinthian Colleges, D-Link, Toshiba (laptops), Microsoft, Cisco, OCTA, Cal Poly Pomona, Grifols Diagnostics, Presbyterian Intercommunity Hospital (PIH Health), St. Joseph Hospital, St. Jude Medical Center, Workforce Management Magazine, Avery Dennison, LexisNexis, Rhythm Interactive (Website Agency) Jovenville (Creative Agency), Beckman Coulter, UCI Pediatrics, Targus, Cal State San Bernardino, Saba Software Global Strategic Messaging: Created all-new product messaging for Grifols Global Marketing, supporting a strategic re-launch after company acquisition. Toshiba Laptop Division (2011-present): Create quarterly product branding/messaging, headlines, web pages and Amazon A+ content for all Toshiba laptops, storage products and TV product lines. Healthy Living Magazine (2010-present): Contribute 10-15 articles for PIH Health quarterly community magazine, distributed to 250,00 homes in Southern California. Mazda Dealership Magazine (2005-2008): Contributed 7-10 articles for Mazda’s bi-monthly FUEL Magazine (circulation 20,000), distributed to 700+ Mazda North America dealerships nationwide. Agency Ingram Micro (AIM): Consistently create 10-20 reseller emails/e-newsletters per month for Top Tier manufacturers within the distribution channel. Dave has a penchant for adapting new technologies and strategies into each campaign. Dave uses his background in analytics to successfully manage digital campaigns across the Google Ad Network including Search, Display, and Social platforms. MS, Mass Communications, Miami University Jovenville, LLC/We The Creative, Media buys SEM/PPC Professional, BADGED Premier Google Adwords Certified Partner, Website Development, Dedicated/Managed CentOS | WHM | Cpanel Hosting Move, inc, Senior Regional Sales Manager Senior Mid-Atlantic Sales Manager. Pioneered Internet marketing to Multifamily Home sector within an aggregated format. Consistently exceeded sales quota. Introduced major property management companies throughout the Mid-Atlantic and Nor th East Corridor to the Internet for the first time. Developed innovative 360 VR photography and processing techniques; Worked directly with senior management and creative teams tasked with executing web-borne marketing efforts. Google Ads. Strategies. Execution. Advisory. Since 2000, 3DR Communications Has Specialized In Google Ads PPC Advertising For Multifamily Property Management Companies Throughout The Mid-Atlantic & Nor th East Corridor. As A Cer tified Premier Partner, 3DR Communications Can Offer Clients The Benefit Of A Dedicated Google Account Strategist. Having A Strategist From Google On Our Team Enables Us To Offer Insight Into The Latest Targeting Strategies, Best Tracking Code Implementations, Google Ads Features & Access To Invitation Only Beta Test Programs Not Available To The General Public. Page 17 East Valley Water District Conservation and Public Affairs Design Services ATTACHMENT B – COST PROPOSAL Page 25 East Valley Water District Request for Proposal ATTACHMENT B – COST PROPOSAL Time and Material/Fully Burdened Labor Rates Include a complete hourly labor rate for all CONSULTANT staff or subcontractor(s) staff identified and listed below. Auditable hourly rates for each named individual CONSULTANT or subcontractor(s) are to be fully burdened to include all costs and profit. Services performed under the Scope of Services on a time and materials basis will be priced at the identified hourly rates subject to an approved purchase order. These rates will be used to establish the maximum not-to-exceed amount of each purchase order issued under this Contract. Fill in forms for all 5 years of POTENTIAL contract term. DETAILED DESCRIPTION OF COST ELEMENTS – FY 2023-24 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Joven Orozco, Chief Creative Ocer $81.50 $40.75 $48.90 $171.15 Jillian Martinez, Account Manager $42.50 $21.25 $25.50 $89.25 Tommy Clay, Project Manager $36.00 $18.13 $21.75 $76.13 Andy Ruiz, Creative Director $65.00 $33.22 $39.86 $139.50 Naomi Pearson, Marketing Strategy $75.00 $0.00 $32.10 $112.35 Kinsey Davis, Graphic Designer $53.50 $26.75 $26.85 $93.98 Eric Lumba, Graphic Designer $44.75 $26.85 $30.00 $105.00 Julie Bos, Copywriter $90.00 $0.00 $36.00 $126.00 Dave Rose, Media Buys $65.00 $0.00 $26.00 $91.00 We The Creative Page 26 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2023-24 - PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate USB Drive (1 TB) We The Creative USB_023 $24.99 Page 27 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2024-25 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Joven Orozco, Chief Creative Ocer $81.50 $40.75 $48.90 $171.15 Jillian Martinez, Account Manager $42.50 $21.25 $25.50 $89.25 Tommy Clay, Project Manager $36.00 $18.13 $21.75 $76.13 Andy Ruiz, Creative Director $65.00 $33.22 $39.86 $139.50 Naomi Pearson, Marketing Strategy $75.00 $0.00 $32.10 $112.35 Kinsey Davis, Graphic Designer $53.50 $26.75 $26.85 $93.98 Eric Lumba, Graphic Designer $44.75 $26.85 $30.00 $105.00 Julie Bos, Copywriter $90.00 $0.00 $36.00 $126.00 Dave Rose, Media Buys $65.00 $0.00 $26.00 $91.00 We The Creative Page 28 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2024-25- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate USB Drive (1 TB) We The Creative USB_023 $24.99 Page 29 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2025-26 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Joven Orozco, Chief Creative Ocer $81.50 $40.75 $48.90 $171.15 Jillian Martinez, Account Manager $42.50 $21.25 $25.50 $89.25 Tommy Clay, Project Manager $36.00 $18.13 $21.75 $76.13 Andy Ruiz, Creative Director $65.00 $33.22 $39.86 $139.50 Naomi Pearson, Marketing Strategy $75.00 $0.00 $32.10 $112.35 Kinsey Davis, Graphic Designer $53.50 $26.75 $26.85 $93.98 Eric Lumba, Graphic Designer $44.75 $26.85 $30.00 $105.00 Julie Bos, Copywriter $90.00 $0.00 $36.00 $126.00 Dave Rose, Media Buys $65.00 $0.00 $26.00 $91.00 We The Creative Page 30 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2025-26- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate USB Drive (1 TB) We The Creative USB_023 $24.99 Page 31 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2026-27 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. We The Creative Joven Orozco, Chief Creative Ocer $81.50 $46.86 $56.24 $196.82 Jillian Martinez, Account Manager $42.50 $24.44 $29.33 $102.64 Tommy Clay, Project Manager $36.00 $20.84 $25.01 $87.54 Andy Ruiz, Creative Director $65.00 $38.20 $45.84 $160.43 Naomi Pearson, Marketing Strategy $75.00 $0.00 $36.92 $129.20 Kinsey Davis, Graphic Designer $53.50 $30.76 $30.88 $108.07 Eric Lumba, Graphic Designer $44.75 $30.88 $34.50 $120.75 Julie Bos, Copywriter $90.00 $0.00 $41.40 $144.90 Dave Rose, Media Buys $65.00 $0.00 $29.90 $104.65 Page 32 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2026-27- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate USB Drive (1 TB) We The Creative USB_023 $24.99 Page 33 East Valley Water District Request for Proposal DETAILED DESCRIPTION OF COST ELEMENTS – FY 2027-28 Name of Proposer: _________________________ Direct Labor* (NAME, TITLE, FUNCTION) Rate Per Hour Overhead Profit Fully Burdened Hourly Rate* * Subtotal Rate + Overhead + Profit Direct Costs: Please provide a list of other non-labor direct costs on page 2. Joven Orozco, Chief Creative Ocer $81.50 $46.86 $56.24 $196.82 Jillian Martinez, Account Manager $42.50 $24.44 $29.33 $102.64 Tommy Clay, Project Manager $36.00 $20.84 $25.01 $87.54 Andy Ruiz, Creative Director $65.00 $38.20 $45.84 $160.43 Naomi Pearson, Marketing Strategy $75.00 $0.00 $36.92 $129.20 Kinsey Davis, Graphic Designer $53.50 $30.76 $30.88 $108.07 Eric Lumba, Graphic Designer $44.75 $30.88 $34.50 $120.75 Julie Bos, Copywriter $90.00 $0.00 $41.40 $144.90 Dave Rose, Media Buys $65.00 $0.00 $29.90 $104.65 We The Creative Page 34 East Valley Water District Request for Proposal Non-Labor Direct Costs DETAILED DESCRIPTION OF COST ELEMENTS – FY 2027-28- PAGE 2 Name of Proposer: _________________________ Item Number Item Description Cost Estimate USB Drive (1 TB) We The Creative USB_023 $24.99 Agenda Item #3c October 25, 20231 Meeting Date: October 25, 2023 Agenda Item #3c Discussion Item Regular Board Meeting TO: Governing Board Members FROM: General Manager SUBJECT: Consider Approval of Amendments to the Memorandum of Understanding and Cost Share Agreement for the Bunker Hill Basin Regional Recycled Water Feasibility Study RECOMMENDATION That the Board of Directors authorize the General Manager/CEO to execute Amendment 01 to the Memorandum of Understanding and Amendment 01 to the Cost Share Agreement related to Mitigation of Salt Loading in the Bunker Hill-B Groundwater Basin and authorize de minimis changes to the Amendments that do not substantially change the terms and conditions of the Memorandum of Understanding or Cost Share Agreement. BACKGROUND / ANALYSIS The Sterling Natural Resource Center (SNRC) Treatment Plant will discharge recycled water to the new Weaver Basins to recharge the Bunker Hill-B Groundwater Basin. Other recycled water projects are planning to discharge recycled water to the Weaver Basins through the Regional Recycled Water Pipeline. Together the Weaver Basins and Regional Recycled Water Pipeline will be owned and operated by the San Bernardino Valley Municipal Water District (Valley District). To collaborate salt mitigation, the potential recycled water agencies and Valley District will work together to ensure salt loading to the groundwater basin does not impact water supplies. A Memorandum of Understanding (MOU) and Cost Share Agreement were authorized by the Board on March 8, 2023, to support this collaborative effort to evaluate mitigation alternatives. In addition to the Sterling Natural Resource Center (SNRC), the San Bernardino Municipal Water Department (SBMWD) and City of Redlands are planning to produce recycled water for recharge. As part of the permitting process for each of these projects, the Regional Water Quality Control Board (Regional Board) requires evaluation and management of salt and nutrient loading to the groundwater basin to ensure the water quality is protected. Memorandum of Understanding Amendment 01 The Memorandum of Understanding (MOU) between the recycled water agencies (EVWD, SBMWD, and City of Redlands) and Valley District established salt mitigation commitments necessary for the Regional Board to issue permits. It contemplates a feasibility study to evaluate salt mitigation alternatives and the assignment of Agenda Item #3c October 25, 20232 Meeting Date: October 25, 2023 Agenda Item #3c Discussion Item responsibility for salt mitigation to be based on mass loading of salts to the groundwater basin. Amendment 01 is being proposed to revise milestone dates associated with the feasibility study, to incorporate partnership principles that outline the decision-making process among the parties, and to provide added detail on the role of Valley District with respect to potential salt mitigation efforts. Cost Share Agreement Amendment 01 The Cost Share Agreement states the cost will be shared equally (25% each) among Valley District, EVWD, SBMWD, and City of Redlands for the work associated with the feasibility study, facilitation services, and grant application assistance which was estimated to be $400,000 to $500,000. It was stipulated in the Agreement that an amendment would be developed upon selection of final consultants for this work to incorporate, as an exhibit, the final scope of work and estimated budget. The proposed Amendment 01 extends the effective date of the agreement and incorporates the feasibility study’s final scope of work and budget of $304,731 for the services of the WSC/Trussell team. The parties have been successful in obtaining a grant for $247,000 to support the feasibility study work, which reduces the cost share obligation for each party to approximately $44,000. AGENCY GOALS AND OBJECTIVES I - Implement Effective Solutions Through Visionary Leadership A. Identify Opportunities to Optimize Natural Resources II - Maintain a Commitment To Sustainability, Transparency, and Accountability C. Pursue Alternative Funding Sources IV - Promote Planning, Maintenance and Preservation of District Resources A. Develop Projects and Programs to Ensure Safe and Reliable Services REVIEW BY OTHERS This agenda item has been reviewed by the Executive Management Team. FISCAL IMPACT This item is funded in the current fiscal year budget. Agenda Item #3c October 25, 20233 Meeting Date: October 25, 2023 Agenda Item #3c Discussion Item Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Jeff Noelte Director of Engineering and Operations ATTACHMENTS MOU Amendment 01 Cost Share Agreement Amendment 01 Page 1 of 5 MEMORANDUM OF UNDERSTANDING FOR THE MITIGATION OF SALT LOADING IN THE BUNKER HILL-B MANAGEMENT ZONE BY AND BETWEEN SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT, EAST VALLEY WATER DISTRICT, CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT, AND CITY OF REDLANDS This Memorandum of Understanding (MOU) for the Mitigation of Total Dissolved Solids (TDS, Salt) Loading in the Bunker Hill-B Management Zone is entered into and effective on the 25th day of January 2023 among the following listed Signatories: San Bernardino Valley Municipal Water District (“Valley District”), East Valley Water District (“EVWD”), City of San Bernardino Municipal Water Department (“San Bernardino”), and City of Redlands (“Redlands”), collectively referred to as the “Parties”. Recitals A. In 2009, the State Water Resources Control Board adopted a Recycled Water Policy that encourages public agencies to recycle municipal wastewater as it becomes an increasingly valuable source of water for the State. The Recycled Water Policy was amended in 2018 to encourage development of groundwater recharge projects using recycled water. B. The Recycled Water Policy requires evaluation and management of salt and nutrient loading to groundwater as a result of basin-wide recycled water use for irrigation and/or recharge. Groundwater recharge project proponents are required to participate in applicable salt and nutrient management planning efforts. C. The Recycled Water Policy also requires Antidegradation Analysis (State Water Resources Control Board Resolution 68-16) for all groundwater recharge projects to determine if assimilative capacity is available for projected salt and nutrient loading. Individual projects are permitted to consume up to 10% of available assimilative capacity in a basin, while multiple projects may consume up to 20% of available assimilative capacity. D. Valley District is constructing the Regional Recycled Water Facilities which includes a recycled water conveyance system and a groundwater recharge facility known as the Weaver Basins. The conveyance system will allow recycled water to be conveyed from EVWD and San Bernardino facilities to the Weaver Basins. E. EVWD is constructing Sterling Natural Resource Center, a new water reclamation facility that will recycle wastewater from EVWD’s service area and recharge it via Weaver Basins into Bunker Hill-B Groundwater Management Zone. F. San Bernardino is developing the Tertiary Treatment System, which will produce recycled water from the San Bernardino Water Reclamation Plant (WRP) with the intent of beneficially using in and around WRP for general plant use and irrigation. Valley District’s recycled conveyance system will convey recycled water from the WRP and will also convey recycled water produced by EVWD via a future pipe connection to Valley District’s conveyance system for recharge via Weaver Basins into Bunker Hill-B Groundwater Management Zone. Page 2 of 5 G. Redlands has existing Waste Discharge Requirements for treatment and discharge of recycled water from its service area into Bunker Hill-B Groundwater Management Zone. Phase 2 expansion of its Redlands Wastewater Treatment Facility will increase recycled water discharges via Redlands Basins. H. The Parties believe that through their cooperative work, they can treat and discharge recycled water in a manner that will maximize benefits to the Bunker Hill-B Groundwater Management Zone, the Parties, and their ratepayers. I. Using recycled water to replenish the Bunker Hill-B Groundwater Management Zone provides a drought tolerant water supply that improves water supply reliability for the Parties and the region and also provides a drought buffer for those agencies in the event of a prolonged drought. J. The Parties, together with a number of other water agencies, are working together to develop a collaborative regional plan – the Upper Santa Ana River Watershed Salt & Nutrient Management Plan – that supports increasing the use of recycled water for groundwater replenishment and other purposes, while also managing groundwater quality to provide the maximum benefits to the people of the State. K. The Upper Santa Ana River Watershed Salt & Nutrient Management Plan is a multi-year effort and will not be complete before the Parties – namely EVWD’s Sterling Natural Resources Center, and potentially San Bernardino’s Tertiary Treatment System and Redlands’ Phase 2 expansion of its Redlands Wastewater Treatment Facility – require executed Waste Discharge Requirements for the recycled water discharge projects listed above. This MOU is intended to establish and implement salt mitigation commitments for the Parties, to be reflected in the Upper Santa Ana River Watershed Salt & Nutrient Management Plan. Salt mitigation commitments may include regional groundwater quality monitoring, brine line discharge for high-TDS industries, optimized chemical use at wastewater treatment/reclamation facilities, a regional recycled water desalter, and enhanced upstream recharge of low-TDS water. L. The Parties wish to establish and agree to a framework for their working collaboratively toward mitigation of salt loading that will occur due to all the Parties’ recycled water recharge operations within the Bunker Hill-B Groundwater Management Zone, prior to the implementation of the Upper Santa Ana River Watershed Salt & Nutrient Management Plan. Agreements 1. The Parties agree that they will work together in good faith to develop and implement a regional approach to salt mitigation in Bunker Hill-B Groundwater Management Zone, prior to the implementation of the Upper Santa Ana River Watershed Salt & Nutrient Management Plan. This may include a regional recycled water desalter and associated brine line, enhanced upstream recharge of low-TDS water, or other regional project constructed via partnership between all Parties that contribute salt loading to the basin. 2. The Parties agree that assignment of responsibility for salt mitigation shall be based on mass loading of salts to the basin by the Parties’ recycled water contributions and overall benefit to the basin and its stakeholders, as calculated through a mutually agreeable Antidegradation Analysis or similar effort. Page 3 of 5 3. The Parties will continue to participate in the development of the Upper Santa Ana River Watershed Salt & Nutrient Management Plan to manage salt and nutrient loading in the broader San Bernardino Basin Area and will support mitigation strategies for Bunker Hill-B Groundwater Management Zone in accordance with the responsibility structure set forth in paragraph 2. 4. The Parties will conduct collaborative reporting and assessment to document the assimilative capacity that is consumed by the Parties’ recycled water recharges. Annually, each Party shall provide total discharge volumes and TDS concentrations to a mutually agreeable third party who shall calculate mass loading by each Party and calculate use of available assimilative capacity, both individually and cumulatively. 5. The Parties will collaborate on a Feasibility Study (conceptual design and engineering, alternative salt mitigation strategies, benefits analysis, economic modeling for cost share) for a regional recycled water desalter, to be completed by December 2024. The regional recycled water desalter will be defined in this Feasibility Study to serve as supporting documentation for funding pursuits. 6. The Parties agree to develop and execute a Funding Agreement for cost share of the Feasibility Study in Item 5 by March 2023. 7. Wastewater that goes through advanced water treatment processes (reverse osmosis) and is recharged to the Bunker Hill basin has additional regional benefits by contributing to removal of multiple water quality constituents that may be of concern to the Parties. The Parties shall also consider these regional benefits in the design of the regional recycled water desalter or other salt mitigation strategy. 8. The Parties will collaborate on development of a Salt Mitigation Implementation Plan for Bunker Hill-B Groundwater Management Zone, to be completed and submitted to Santa Ana Regional Water Quality Control Board by June 2025, which defines the selected mitigation strategy, operations, roles and responsibilities, cost share, and schedule. 9. The Parties will use 285 mg/L ambient TDS concentration as an “action limit” – once 10% of available assimilative capacity (5 mg/L increase over 280 mg/L ambient condition 1) is used in Bunker Hill-B Groundwater Management Zone, based on the collaborative reporting and assessment completed annually, the Parties shall begin implementation (final design and construction) of the regional desalter. Based on current modeling results, with implementation of a regional desalter, the action limit is expected to be reached in year 2027. 10. The Parties will ensure that the salt mitigation measures are constructed and operational by the time 20% of available assimilative capacity (10 mg/L increase over 280 mg/L ambient condition 2) is consumed. Based on current modeling results, prior to construction and start-up of the regional desalter, total allowable assimilative capacity is expected to be reached in 2031. Construction of 1 Santa Ana Watershed Project Authority’s 2020 Recomputation of Ambient Water Quality in Santa Ana River Watershed for the Period 1999-2018 2 Ibid. Page 4 of 5 the regional recycled water desalter or other salt mitigation strategy will be completed by the end of 2031, with operation beginning in January 2032. With implementation of a regional recycled water desalter, cumulative TDS loading from the four regional partners will not exceed total allowable assimilative capacity within the model timeframe (60 years). 11. Should the Upper Santa Ana River Watershed Salt & Nutrient Management Plan analysis and findings be accepted by regulatory agencies in the future, and with consensus of the Regional Water Quality Control Board, the Parties may amend this MOU to revise the “mitigation strategies” in Paragraph 1 and/or “action limits” identified in Paragraphs 9 and 10 in order to be consistent with the Plan. 12. The Parties will collaborate via committee made up of the General Managers of each of the four Parties, or their designees. All decisions shall be made on a unanimous basis. 13. The Parties hereby authorize their respective General Managers or designees to develop administrative and operating rules and procedures that may be needed to implement the terms of this MOU. 14. All notices, requests, demands, or other communications required or permitted under this MOU shall be addressed as follows: SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT Heather Dyer, General Manager 380 East Vanderbilt Way San Bernardino, CA 92408 heatherd@sbvmwd.com EAST VALLEY WATER DISTRICT Michael Moore, General Manager/CEO 31111 Greenspot Road Highland, CA 92346 mmoore@eastvalley.org CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT Miguel Guerrero, General Manager PO Box 710 San Bernardino, CA 92402 Miguel.Guerrero@sbmwd.org CITY OF REDLANDS John Harris, Director, Municipal Utilities & Engineering Department 35 Cajon St Suite 15A Redlands, Ca 92374 Page 5 of 5 In witness whereof, the Parties have caused this MOU to become effective by their respective endorsements below: SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT EAST VALLEY WATER DISTRICT CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT CITY OF REDLANDS Page 1 of 2 MEMORANDUM OF UNDERSTANDING FOR THE MITIGATION OF SALT LOADING IN THE BUNKER HILL-B MANAGEMENT ZONE AMENDMENT 01 Amendment 01 for this Memorandum of Understanding (MOU) for the Mitigation of Salt Loading in the Bunker Hill-B Management Zone is entered into and effective on the 17th day of October 2023 among the following list of Signatories: San Bernardino Valley Municipal Water District (“Valley District”), East Valley Water District (“EVWD”), City of San Bernardino Municipal Water Department (“San Bernardino”), and City of Redlands (“Redlands”), collectively referred to as the “Parties”. WHEREAS, the Parties entered into the MOU, dated January 25, 2023, in which the Parties agreed that they would work together in good faith to develop and implement a regional approach to salt mitigation in Bunker Hill-B Groundwater Management Zone; and WHEREAS, Agreement 2 of the MOU states that the Parties agree that assignment of responsibility for salt mitigation shall be based on mass loading of salts to the basin by the Parties’ recycled water contributions and overall benefit to the basin and its stakeholders, as calculated through a mutually agreeable Antidegradation Analysis or similar effort; and WHEREAS, Agreement 5 of the MOU states that the Parties will collaborate on a Feasibility Study for a regional recycled water desalter and other salt mitigation strategies to be completed by December 2024, Agreement 6 of the MOU states that the Parties will develop and execute a Funding Agreement for cost share of the Feasibility Study, and Agreement 8 of the MOU states that the Parties will complete a submit a Salt Mitigation Implementation Plan to the Santa Ana Regional Water Quality Control Board by June 2025; and WHEREAS, the Parties entered into Cost Sharing Agreement for the Bunker Hill-B Management Zone Feasibility Study, dated March 9, 2023, which provides for a 25% cost share of the invoiced costs associated with the development of the Feasibility Study; and WHEREAS, since execution of the MOU, the Parties have developed Partnership Principles to outline the decision-making process among the Parties, articulate guiding principles for group conduct, describe how consultants will be managed, and explain how new partners can be added as the Parties embark on beneficial projects and processes to serve the Bunker Hill-B Management Zone. NOW, THEREFORE, the Parties agree as follows: 1. Agreement 5 shall be revised to extend completion of the Feasibility Study to June 2025. 2. Agreement 8 shall be revised to extend completion of a Salt Mitigation Implementation Plan for submittal to Santa Ana Regional Water Quality Control Board to December 2025. 3. The Partnership Principles agreed upon by the Parties attached hereto shall be incorporated into the MOU as Exhibit A. 4. Valley District will continue to serve as a facilitator and the Administering Agency pursuant to the Cost Sharing Agreement. Valley District will not directly bring new capital, operational, nor maintenance investments to fund a potential future regional desalter. However, Valley District will support and facilitate efforts by the Parties to obtain and administer outside funding such as state or federal grants, and/or potential contributions from other basin stakeholders. Valley District will Page 2 of 2 redirect Local Resource Investment Program (LRIP) payments at the request of LRIP parties. Each Party is ultimately responsible for mitigating salinity impacts from their respective recycled water projects. IN WITNESS WHEREOF, the parties hereto have entered into this instrument as of the Effective Date set forth above. SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT By: Name: Date: EAST VALLEY WATER DISTRICT By: Name: Date: CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT By: Name: Date: CITY OF REDLANDS By: Name: Date: Exhibit A Partnership Principles Partnership Principles Bunker Hill Basin Regional Recycled Water Coalition July 14, 2023 1.0 Purpose The purpose of this Partnership Agreement for the Bunker Hill Basin Regional Recycled Water Coalition (Coalition) is to outline the decision-making process among the agencies, articulate guiding principles for Coalition conduct, describe how consultants will be managed, and explain how new partners can be added as the partner agencies embark on beneficial projects and processes to serve the Bunker Hill-B Groundwater Management Zone (GMZ). The Guiding Principles derive from and include by reference the Memorandum of Understanding for the Mitigation of Salt Loading in the Bunker Hill-B Management Zone by and Between San Bernardino Valley Municipal Water District, East Valley Water District, City of San Bernardino Municipal Water Department, and the City of Redlands (Coalition MOU). This Partnership Agreement is valid through submittal of the Salt Mitigation Implementation Plan to Santa Ana Regional Water Quality Control Board, anticipated to occur in June 2025. Following submittal of the Salt Mitigation Implementation Plan, the Coalition shall revisit the Partnership Agreement and either amend the existing agreement or create a new agreement to best capture the next phases of the Coalition’s efforts and corresponding commitments. 2.0 Coalition Partners The Coalition is made up of the following four agencies: San Bernardino Valley Municipal Water District (San Bernardino Valley) East Valley Water District (EVWD) City of San Bernardino Municipal Water Department (SBMWD) City of Redlands (Redlands) The core parties that make up the Coalition are described below. Coalition Boards/Councils The respective legislative bodies of the four agencies have designated representatives as Steering Committee members. Coalition Steering Committee The Steering Committee is responsible for determining appropriate salinity management strategies for the Bunker Hill-B GMZ. The following describes the current recycled water recharge operations of each Steering Committee agency. San Bernardino Valley is constructing the Regional Recycled Water Facilities which includes a recycled water conveyance system and a groundwater recharge facility known as the Weaver Basins. The conveyance system will allow recycled water to be conveyed from EVWD and SBMWD facilities to the Weaver Basins. EVWD is constructing Sterling Natural Resource Center, a new water reclamation facility that will recycle wastewater from EVWD’s service area, convey it through San Bernardino Valley’s recycled water conveyance infrastructure, and recharge it via Weaver Basins into Bunker Hill-B GMZ. SBMWD is developing the Tertiary Treatment System, which will produce recycled water from the San Bernardino Water Reclamation Plant (WRP) for beneficial use in and around the WRP (plant use and irrigation). Recycled water will also be conveyed through San Bernardino Valley’s recycled conveyance system for recharge via Weaver Basins into Bunker Hill-B GMZ. Redlands has existing Waste Discharge Requirements for treatment and discharge of recycled water from its service area into Bunker Hill-B GMZ. Phase 2 expansion of its Redlands Wastewater Treatment Facility will increase recycled water production for distribution to recycled water end users and/or discharge to the Redlands Basins. The Coalition believes that through their cooperative work, they can treat and discharge recycled water in a manner that will maximize benefits to the Bunker Hill-B GMZ, their agencies, and their ratepayers. A map of the three recycled water projects located in the Bunker Hill basin is included as Figure 1. Coalition Administrator San Bernardino Valley has been determined as the Administrating Agency for the Coalition by the members of the Steering Committee. San Bernardino Valley will coordinate among the four agencies in development of a Bunker Hill Basin Regional Recycled Water Feasibility Study (Feasibility Study). 3.0 Responsibilities The primary responsibilities of each party of the Coalition are identified below. Coalition Boards/Councils Each respective legislative body for the four Coalition agencies will be responsible for: Receiving updates on the Feasibility Study and directing its Steering Committee members as it deems appropriate. Approving an updated Memorandum of Understanding (or similar arrangement) outlining the Coalition’s next steps following completion of the Feasibility Study. Coalition Steering Committee The Steering Committee shall be responsible for: Participating in execution of this Partnership Agreement and development and implementation of an Outreach Strategy for Coalition activities. Selecting an engineering firm to prepare the Feasibility Study. Collaborating on the Feasibility Study for a regional approach to salinity management in Bunker Hill-B GMZ, to be completed by June 2025. Reviewing and providing comments on the Feasibility Study. Considering and approving any potential scope enhancements to the Feasibility Study, and sharing the additional costs equally at 25 percent, if any. Collaborating on development of a Salt Mitigation Implementation Plan for Bunker Hill-B GMZ to be completed and submitted to Santa Ana Regional Water Quality Control Board by December 2025. Coalition Administrator San Bernardino Valley will be responsible for: Serving as point-of-contact for coordinating with Coalition consultants, including managing any necessary Request for Proposals and procurement processes, as well as entering into an agreement with each of the Coalition consultants. Day-to-day oversight of the Coalition consultants (grant writer, facilitator, engineer, and others as needed). Tracking and invoicing of costs associated with consultant work, along with billing of equal share (25 percent each) to Coalition parties. Coordinating with consultants on monthly progress reports to the Steering Committee. Ensuring Title XVI planning grant obligations are met and reimbursements received (if awarded). 4.0 Decision Making The Steering Committee will seek to make decisions through consensus. Consensus is a form of decision-making that concludes only when all participants reach agreement. This does not mean that all participants must provide an unqualified “yes” on a decision; however, all parties must agree to support and implement it. To facilitate decision-making discussions when consensus is not immediately met, the following levels of consensus can be referenced to communicate how comfortable Steering Committee members are with moving forward with a decision. 1. I can say an unqualified "yes"! 2. I can accept the decision. 3. I can live with the decision. 4. I do not fully agree with the decision, however, I will not block it and will support it. 5. I do not agree with the decision and feel the need to stand in the way of this decision being accepted. If any members communicate that they are a level four or five on the consensus scale, the Steering Committee shall take the time to hear and consider additional ideas and reasoning. Figure 1: Map of Regional Recycled Water Projects In support of consensus-based decision-making, the Coalition parties agree to come to discussions with an open mind, view differences of opinions as helpful rather than harmful, and avoid changing their mind only to reach an agreement and avoid conflict. In the event a decision cannot be made through consensus and a majority vote is required, each agency will receive one vote, all of which will be weighted equally, and the decision with the most votes will move forward. 5.0 Membership Should an existing Coalition partner choose to exit the Coalition prior to completion of the Salt Mitigation Implementation Plan in December 2025, all monetary contributions from the date of execution of the Coalition MOU shall be forfeited. The Coalition MOU and Cost Share Agreement shall be amended to reflect the new Coalition membership. Should a new water or recycled water agency in the Bunker Hill Basin desire to join the Coalition during this timeframe, that new partner shall pay an equal share of all monetary contributions from the date of execution of the Coalition MOU. This share shall be held by the Coalition Administrator for use in Coalition-directed activities or redistribution among the existing partners as a reimbursement for early phase work. The Coalition MOU and Cost Share Agreement shall be amended to reflect the new Coalition membership. 6.0 Success Factors and Barriers to Success In April 2023, the Coalition partners identified how to define success for the Coalition’s efforts and anticipated challenges the group will face. The following categories were used to define both the success factors and barriers: Governance/Decisions Making Stakeholder/Outreach Technical Regulatory Schedule Funding The activity responses were discussed at the Steering Committee meeting on April 20, 2023, and have been used to develop the Guiding Principles discussed below. 7.0 Guiding Principles Members agree to the following guiding principles to inform and guide Steering Committee deliberations, foster constructive discussions, promote a clear and shared set of expectations, and encourage collaboration. Dedicated Participation and Respectful Engagement Commitment to Collaborate. All members agree to work together in a constructive manner to meet key milestones. Understand that all agencies are equal and agree to support partner projects. Strive to reach consensus on positions of shared interest and proactively identify barriers for discussion and, where possible, resolution at the earliest opportunity. Once decisions are made will support successful implementation. Equitable Cost Share. All members agree to work collaboratively to develop a fair and equitable cost sharing agreement. No one is to benefit at the expense of others, and all parties agree to negotiate in good faith. Per the Coalition MOU, all members agree that future cost responsibilities for salt mitigation shall be based on the mass loading of salts to the basin by the members’ recycled water contributions and overall benefit to the basin and its stakeholders, as calculated through a mutually agreeable Antidegradation Analysis or similar effort. Commitment of Time. Strive to attend meetings consistently; we need everyone at the table throughout. Contribute your thoughts and share our time so everyone can participate. Respect Others and the Process. Seek opportunities to share your perspective and understand the perspectives of others. Listen intently to what others are saying. Be honest and fair, and as candid as possible. If you hear something you do not understand, ask questions to clarify. If you hear something you do not agree with, help people understand your concerns. Support an Effective Process Rely on Credible Information. To foster effective dialogues, members agree to mutually support a transparent and inclusive process where parties commit to providing and relying on credible data and clear criteria to inform decision-making and to draw on the advice of the Feasibility Study consultant. Equitable Allocation of Assimilative Capacity. All members agree to work collaboratively to develop a fair and equitable allocation of assimilative capacity. All members agree to strive for consistency in their approach to permitting with the Regional Water Quality Control Board and have shared permitting expectations to ensure consistency in permit conditions and requirements across partner agencies. Support the Schedule. Provide timely responses and input to communication and deliverables and be transparent and timely in the delivery of pertinent information. Commit to meeting key milestones and provide adequate time for members and stakeholders when requesting information. State-of-the-Art Analysis. Commitment to a science-based process for identifying and evaluating technical alternatives and salinity management strategies. Be proactive and creative about potential solutions and benefits to regional stakeholders. Invest in Stakeholder Engagement Transparency. Commitment to address groundwater salinity at regional level, sharing information freely among partners and stakeholders. Strive for Consistent Communication. All members agree to support the development and communication of united messaging to stakeholder groups (including regulatory agencies) and collaborate on the direction of the messaging specific to the stakeholder. Page 1 of 5 COST SHARE AGREEMENT FOR BUNKER HILL-B MANAGEMENT ZONE FEASIBILITY STUDY This Cost Sharing Agreement for the preparation of a Feasibility Study related to the Mitigation of Total Dissolved Solids (TDS, Salt) Loading in the Bunker Hill-B Management Zone is entered into and effective on the 9th day of March 2023 among the following listed Signatories: San Bernardino Valley Municipal Water District (“Valley District”), East Valley Water District (“EVWD”), City of San Bernardino Municipal Water Department (“San Bernardino”), and City of Redlands (“Redlands”), collectively referred to as the “Parties”. Recitals WHEREAS, the State Water Resources Control Board’s Recycled Water Policy encourages public agencies to recycle municipal wastewater, including in the development of groundwater recharge projects, to enhance the State’s existing water supply; and WHEREAS, the Parties, together with a number of other water agencies, are working together to develop a collaborative regional plan – the Upper Santa Ana River Watershed Salt & Nutrient Management Plan – that increases the use of recycled water for groundwater replenishment and other purposes, while also managing groundwater quality to provide the maximum benefits to the State; and WHEREAS, the Parties believe that through their cooperative work, they can treat and discharge recycled water in a manner that will maximize benefits to the Bunker Hill-B Groundwater Management Zone, the Parties, and their ratepayers; and WHEREAS, using recycled water to replenish the Bunker Hill-B Groundwater Management Zone provides a drought tolerant water supply that improves water supply reliability for the Parties and the region and also provides a drought buffer for those agencies in the event of a prolonged drought; and WHEREAS, the Parties will collaborate on a Feasibility Study (conceptual design and engineering, benefits analysis, economic modeling for cost share) for a regional desalter, to be completed by September 2024; and WHEREAS, the Parties believe that there is potential to pursue and apply for available and qualifying grants, such as the WaterSMART FY2023 Water Recycling and Desalination Planning Grant Program. WHEREAS, the Feasibility Study is expected to serve as supporting documentation for future funding pursuits; and WHEREAS, the Parties wish to establish and agree to a framework for sharing costs associated with the preparation of the Feasibility Study and related facilitation services. Page 2 of 5 Agreements NOW, THEREFORE, the Parties agree as follows: 1. Term. This Agreement shall be effective on the date of the last signature to this agreement, and shall remain in effect until December 31, 2024, unless terminated earlier as provided herein. Termination or expiration of this Agreement will not excuse any Party from payment of costs incurred under this Agreement prior to the termination or expiration date. 2. Feasibility Study Steering Committee. The Parties will collaborate via committee made up of the General Managers of each of the four Parties, or their designees (“Steering Committee”), the purpose of which to be shall oversee and direct the selection of a consultant and preparation of the Feasibility Study. To support the work of the committee, the Parties intend to engage a consultant to provide facilitation services. The costs of the Feasibility Study preparation and of the associated facilitation services will be shared equally among the parties. All decisions shall be made on a unanimous basis. 3. Agreement to Share Costs. Each Party will be responsible for 25% of the invoiced costs associated with the development of the Feasibility Study, the associated facilitation services, and grant assistance services. Upon selection of final consultants for this work product, this Agreement will be amended to include as an exhibit the final scope of work and estimated budget for each of those consultant services. 4. Administering Agency: An Administering Agency will be appointed by the members of the Steering Committee by unanimous agreement of each Party’s designated representative. The Administering Agency will be responsible for day-to-day oversight of the consultant, invoicing of costs, and providing progress reports to the Steering Committee. Valley District will be the initial Administering Agency. 5. Contracting for Feasibility Study. The Administrating Agency shall, in cooperation with the Steering Committee, prepare a Request for Proposals, identify appropriate consultant(s), and enter into a contract for the preparation of the Feasibility Study. 6. Contracting for Grant Assistance. The Parties agree to pursue qualifying grants to assist with potential funding for planning, design, and future construction of the regional desalter project. The Parties agree to apply any potentially awarded grants towards the costs of the regional desalter project. 7. Invoicing and Payment of Costs. The Administering Agency will submit invoices to each of the Parties for work based on the cost-share percentages specified in Section 3 of this Agreement. Invoices will be provided to the Parties quarterly, and are payable within 30 days of receipt. 8. Amendment. This Agreement may be amended from time to time. No alteration, amendment, or variation of this Agreement shall be valid unless made in writing and signed by all Parties. Page 3 of 5 9. Notice. All notices, requests, demands, or other communications required or permitted under this Agreement shall be addressed as follows: SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT Heather Dyer, General Manager 380 East Vanderbilt Way San Bernardino, CA 92408 heatherd@sbvmwd.com EAST VALLEY WATER DISTRICT Michael Moore, General Manager/CEO 31111 Greenspot Road Highland, CA 92346 mmoore@eastvalley.org CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT Miguel Guerrero, General Manager PO Box 710 San Bernardino, CA 92402 Miguel.Guerrero@sbmwd.org CITY OF REDLANDS John Harris, Director, Municipal Utilities & Engineering Department 35 Cajon St Suite 15A Redlands, Ca 92374 10. Attorneys’ Fees. In the event of a civil action to enforce any obligation under this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs (including but not limited to reasonable expert witness fees and costs) incurred in connection with such litigation. 11. Entire Agreement. This instrument constitutes the entire agreement and understanding between the Parties with respect to the subject matters hereof, and supersedes and replaces any prior agreements and understandings, whether oral or written, by and between them with respect to such matters. 12. Arms Length Negotiation. The Parties acknowledge and agree that this Agreement is the product of mutual arms-length negotiations and accordingly, the rule of construction, which provides that the ambiguities in a document shall be construed against the drafter of that document, shall have no application to the interpretation and enforcement of this Agreement. Page 4 of 5 13. Titles & Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope of the intent of the Agreement or any of its terms. Reference to section numbers are to sections in the Agreement unless expressly stated otherwise. 14. No Third Party Beneficiary. Nothing contained in this Agreement shall be deemed or construed by the Parties or by any third person to create the relationship of principal and agent, or partnership or joint venture, or any association between the Parties, and none of the provisions contained in this Agreement or any act of the Parties shall be deemed to create any relationship other than as specified herein, nor shall this Agreement be construed, except as expressly provided herein, to authorize either Party to act as the agent for the other 15. Counterparts. This Memorandum may be executed in any number of counterparts, each of which shall be deemed to be an original instrument, but all of which together shall constitute one and the same instrument. 16. Authority to Execute. Each person executing this Agreement represents and warrants that he or she is duly authorized and has legal authority to execute and deliver this Agreement for or on behalf of the parties to this Agreement. Each Party represents and warrants to the other(s) that the execution and delivery of the Agreement and the performance of such Party’s obligations hereunder have been duly authorized. IN WITNESS WHEREOF, the parties hereto have entered into this instrument as of the Effective Date set forth above. Page 5 of 5 SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT EAST VALLEY WATER DISTRICT CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT CITY OF REDLANDS : Page 1 of 2 COST SHARE AGREEMENT FOR BUNKER HILL-B MANAGEMENT ZONE FEASIBILITY STUDY – AMENDMENT 01 Amendment 01 for this Cost Sharing Agreement for the preparation of a Feasibility Study related to the Mitigation of Total Dissolved Solids (TDS, Salt) Loading in the Bunker Hill-B Management Zone is entered into and effective on the 17th day of October 2023 among the following listed Signatories: San Bernardino Valley Municipal Water District (“Valley District”), East Valley Water District (“EVWD”), City of San Bernardino Municipal Water Department (“San Bernardino”), and City of Redlands (“Redlands”), collectively referred to as the “Parties”. WHEREAS, the Parties entered into Cost Sharing Agreement for the Bunker Hill-B Management Zone Feasibility Study, dated March 9, 2023 (“Agreement”), which provides for a 25% cost share of the invoiced costs associated with the development of the Feasibility Study; and WHEREAS, Section 1 of the Agreement establishes the expiration date of the agreement as December 31, 2024; and WHEREAS, Section 3 of the Agreement directs that upon selection of final consultants for this work product, this Agreement will be amended to include as an exhibit the final scope of work and estimated budget for each of those consultant services; and WHEREAS, on June 21, 2023, the Parties selected WSC/Trussell as the final consultant team for development of the Feasibility Study. The Parties and WSC/Trussell agreed to a final cost of $304,731 for consultant services. The consultant team has estimated a project delivery timeline of November 2023 – April 2025. WHEREAS, the Feasibility Study seeks to: 1. Complete a robust analysis of feasible salinity management strategies to inform confident decisions making, 2. Achieve strong consensus and alignment on the preferred strategy to enable effective implementation, and 3. Define a lasting solution with a clear path forward that can adapt to changing conditions, which may include a regional desalter. NOW, THEREFORE, the Parties agree as follows: 1. Section 1 of the Agreement shall extend the effective date of this agreement to December 31, 2025 to allow for completion of the Feasibility Study and submittal of follow-up materials to the Santa Ana Regional Water Quality Control Board. Page 2 of 2 2. The final scope of work and estimated budget for WSC/Trussell’s services attached hereto shall be incorporated into the Cost Sharing Agreement as Exhibit A. IN WITNESS WHEREOF, the parties hereto have entered into this instrument as of the Effective Date set forth above. SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT By: Name: Date: EAST VALLEY WATER DISTRICT By: Name: Date: CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT By: Name: Date: CITY OF REDLANDS By: Name: Date: Exhibit A Feasibility Study Final Scope and Cost Estimate 1 Scope of Work The following Scope of Work is consistent with the scope of services included in the RFP and includes refinements and additional detail where needed. Task 0 Project Management Meetings 0.1 PROJECT MANAGEMENT ▪ Manage project efforts including budget and schedule updates. ▪ Conduct internal project coordination and manage resources. ▪ Prepare monthly invoices and progress reports. ▪ Project duration is assumed to be 18 months, with the Final Feasibility Study complete within 16 months followed by two months of limited work during USBR review. 0.2 ROUTINE COORDINATION WITH COALITION ▪ Conduct one hour, monthly virtual meetings with the Coalition to provide updates on project progress, discuss project methodologies, review data needs, present interim results, and other coordination needs. The budget is based on 11 monthly meetings; additional Coalition meetings during the project will be used for workshops scoped in other tasks. ▪ Conduct 30 minute bi-weekly check-in meetings with the Project Manager to discuss project status and coordination needs. The budget is based on 32 check-in meetings. 0.3 ALTERNATIVES REFINEMENT WORKSHOP Conduct a three-hour in-person Alternatives Refinement Workshop with the Coalition. The purpose of the workshop will be to: Review and discuss preliminary alternatives developed in Task 2.1. Discuss potential refinements to preliminary alternatives and identify new preliminary alternatives, as needed. Select up to five alternatives for further evaluation and review data needs and identify data sources that may be needed for further evaluation of alternatives. Develop a comprehensive list of evaluation criteria and associated numerical scoring rubric to be applied during the alternatives analysis in Task 2.2. 0.4 ALTERNATIVES SCREENING WORKSHOP Conduct a three-hour in-person Alternatives Screening Workshop with the Coalition. The purpose of the workshop will be to: ▪ Review and discuss results of the Draft Alternatives Analysis developed in Task 2.2. Discuss potential refinements to the Draft Alternatives Analysis, as needed. ▪ Review preliminary results of alternatives evaluation scoring and discuss whether adjustments to scoring or weighting factors are needed to calibrate the evaluation. ▪ Discuss alternative weighting factors to be used for a sensitivity analysis, if desired. 2 0.5 ALTERNATIVES SELECTION WORKSHOP Conduct a two-hour in-person Alternatives Selection Workshop with the Coalition. The purpose of the workshop will be to: ▪ Review and discuss the Updated Alternatives Analysis developed in Task 2.2, incorporating feedback from the Alternatives Screening Workshop. ▪ Review results of updated alternatives evaluation scoring and sensitivity analysis. ▪ Select a preferred alternative to be carried forward. ▪ For the selected alternative, discuss options for adaptive management and potential offramps to other strategies in response to actual future conditions, as appropriate. 0.6 DRAFT FEASIBILITY STUDY REVIEW WORKSHOP Conduct a two-hour in-person Draft Feasibility Study Review Workshop with the Coalition. The purpose of the workshop will be to review the content of the Draft Feasibility Study and receive comments and feedback from the Coalition. 0.7 STAKEHOLDER MEETINGS Prepare presentation materials and conduct up to six (6) meetings with regional stakeholders. Meetings are assumed to be one-hour virtual meetings. The purpose and agenda of the meetings will be defined in collaboration with the Coalition but could be conducted at key project milestones. It is assumed that the Facilitator will coordinate strategy and schedule meetings and the WSC Team will prepare and present slides with technical content. 0.8 QA/QC Perform comprehensive quality control of all work items being prepared for delivery to the Coalition. Task 1 Kickoff and Data Collection 1.1 KICKOFF MEETING ▪ Participate in a one-hour virtual kickoff meeting. Prepare short presentation on strategy for project delivery, data request, and other relevant items. ▪ Key outcomes of the meeting will be: Shared goals and objectives for the project, including salt removal targets/ranges. Preliminary list of conceptual salinity management alternatives to be explored. 1.2 DATA COLLECTION ▪ Review materials associated with the project, including Bunker Hill Basin Regional Recycled Water Coalition Memorandum of Understanding, Cost Share Agreement, Cumulative Antidegradation Analysis, SNRC Engineering Report and Report of Waste Discharge (ROWD), San Bernardino Water Reclamation Plant ROWD, Redlands Water Reclamation Plant ROWD, and other documents as provided. 3 Task 2 Alternative Salt Mitigation Strategies 1.2 ALTERNATIVES DEVELOPMENT ▪ Beginning with preliminary alternatives discussed at the Kickoff Meeting, identify conceptual alternative salt mitigation strategies for consideration by the Coalition, including, but not limited to, construction of a regional recycled water advanced water treatment (AWT) facility, disposal of brine, expansion of surface water recharge, creation of regional pretreatment program, and others. ▪ Develop preliminary planning-level concepts for each alternative, including potential location, sizing, infrastructure, treatment technology, brine disposal requirements, and phasing/timing. Articulate the specific objective and water supply and water quality benefits from the implementation of each alternative. ▪ Compile explanatory charts, maps and graphics to support the discussion and refinement of alternatives at the Alternatives Refinement Workshop. Deliverables: Preliminary alternative materials will be provided to the Coalition for review two weeks prior to the Alternatives Refinement Workshop. 2.2 ALTERNATIVES ANALYSIS ▪ Refine alternatives as discussed in the Alternatives Refinement Workshop. ▪ Complete benefit/cost analysis for up to four (4) alternatives, including planning level cost estimates for capital costs, annual operation (including brine disposal fees), maintenance, replacement cost estimate, and life cycle costs. ▪ Applying the evaluation criteria developed in the Alternatives Refinement Workshop, evaluate and score the various alternatives to support selection of the preferred alternative moving forward. ▪ Update the Draft Alternatives Analysis to incorporate feedback from the Alternatives Screening Workshop. Deliverables: Provide the Draft Alternatives Analysis to the Coalition for review two weeks prior to the Alternatives Screening Workshop. Deliverables: Provide the Updated Alternatives Analysis to the Coalition for review two weeks prior to the Alternative Selection Workshop. Task 3 Draft Feasibility Study Due to potential grant funding for the project from the United States Bureau of Reclamation (USBR), the Feasibility Study will be prepared in compliance with the USBR Reclamation Manual, Directives and Standards (WTR 11-01). Compile identification and analysis of alternative salinity management strategies into a Draft Feasibility Study. The Feasibility Study will include the following components: ▪ Introduction. Identification of project sponsors and description/definition of study area showing the regional recycled water systems. ▪ Statement of Problems and Needs. Describe key water resource management problems and needs for which the regional project will solve. Describe current and projected water supplies, including water rights, and potential sources of additional water other than the project. 4 Describe current and projected water demands, including imbalances. Describe water quality concerns for the current and projected recycled water supply and recharge activities. ▪ Water Reuse Opportunities. Identify the sources of water available for reclamation in the study area, including the three planned recycled water projects in the regional program. Describe or categorize all uses for recycled water and identify associated water quality and treatment requirements. Summarize the current water market available, including existing and potential users, expected use, peak use, on-site conversion costs and, if necessary, desire to use reclaimed water, any consultation with potential reclaimed water customers, and the market assessment procedures used for the three projects. − Assumption: the Regional Recycled Water Concept Study and the respective ROWDs will be used to provide this content and that no additional analysis of recycled water markets is needed. Discuss water quality considerations of what may prevent implementation of the proposed recycled water recharge, as well as water quality improvements (TDS and other constituents of concern) that may accrue from a regional salinity management program. Identify methods or community incentives for salinity management associated with water reclamation and methods to eliminate obstacles which will inhibit the recharge of reclaimed water. Identify all jurisdictional water and wastewater agencies in the service area and the role they might play in salinity management. Describe any current salinity management in the study area and the projected wastewater and disposal options. Summarize current water reclamation and demineralization technology in use in the study area and opportunities for the development of improved technologies. ▪ Description of Alternatives. Describe the range of salinity management alternatives considered in Task 2.1. State the specific objectives all alternatives are designed to address, including groundwater replenishment, reuse, and water quality improvement. Quantify the water supply and water quality benefits of the alternatives, including TDS and other constituents of concern as applicable. − Assumption: Groundwater replenishment alternatives and benefits will be based on the SNMP modeling scenario results and new model runs will not be performed for this project. Describe the proposed project including cost estimate, annual operation, maintenance, replacement cost estimate, and life cycle costs. Estimated costs to be presented in terms of dollars per million gallons (MG), and/or dollars per acre-foot of capacity, to facilitate comparison of alternatives. Describe any necessary waste-stream discharge treatment and disposal requirements. Describe one or more alternative technologies, including emerging technologies. ▪ Economic Analysis. Analyze the proposed project relative to other water supply alternatives that could be implemented by the Coalition in lieu of a salt mitigation project needed to support groundwater recharge with reclaimed water. Describe conditions that exist in the area and provide future projections with and without the project. Provide a cost comparison of salt 5 mitigation alternatives. Describe other salt mitigation alternatives with appraisal level cost estimates. Provide a description of the qualitative benefits of the project. ▪ Selection of the Proposed Project. Include justification of why the proposed project is the selected salinity management alternative. Analysis of whether the proposed project would address the reduction, postponement, or elimination of development of new or expanded water supplies; reduction or elimination of the use of existing diversions from natural watercourses or withdrawals from aquifers; reduction of demand on existing Federal water supply facilities; and reduction, postponement, or elimination of new or expanded wastewater facilities. ▪ Environmental Consideration and Potential Effects. Include sufficient information to assess the compliance with National Environmental Protection Act, Endangered Species Act, and Clean Water Act. Discuss how the project will affect water supply and quality. Discuss public involvement and potential effects the project will have on historical resources, including mitigation measures. − Assumption: Existing environmental documents for the recycled water projects and the Upper SAR HCP will be referenced to provide the information needed for this section. If supplementary environmental information is needed, WSC can obtain the support of an environmental subconsultant. ▪ Legal and Institutional Requirements. Identify any legal or institutional, state, and/or local requirements or barriers to implement the salinity management project. Analysis of any water rights issues potentially resulting from implementation of the project. Discuss the need for multi- jurisdictional or interagency agreements, any coordination undertaken, and any planned coordination activities. Discuss permitting procedures. Describe any unresolved issues associated with implementation and how and when such issues will be resolved. Identify current and projected wastewater discharge requirements. Describe rights to wastewater discharges. − Assumption: It is assumed that there will be no water rights issues resulting from the implementation of the project. Should potential water rights issues be identified, it is assumed that legal counsel for the Coalition members can provide legal support to inform this section of the Feasibility Study. ▪ Financial Capability of Sponsor. Demonstrate financial capability of the Coalition prior to construction. Proposed schedule and milestones for project implementation. Describe the willingness of the Coalition partners to each pay for its share of capital costs and the full operation, maintenance, and replacement costs. Describe the funding plan including analysis of the project’s construction, operation, maintenance, and replacement costs. Describe all Federal and non-Federal sources of funding and any restrictions on such sources. − Assumption: WSC will coordinate with the Coalition’s Facilitator to incorporate the results of their funding and financing evaluation. ▪ Research Needs. Describe any research needs and objectives to be accomplished for the salt mitigation project. Describe the basis for Reclamation participation. Identify parties who will administer and conduct research. Identify the research timeframe. Deliverables: Provide the Draft Feasibility Study to the Coalition for review three weeks prior to the Draft Feasibility Study Review Workshop. 6 Task 4 Final Feasibility Study 4.1 FINAL FEASIBILITY STUDY ▪ Review and incorporate Coalition comments on the Draft Feasibility Study. Prepare and circulate a Final Feasibility Study for review and approval by USBR for funding under the Title XVI Water Reclamation and Reuse Program. ▪ Provide additional information and/or necessary additions should USBR staff deem the Feasibility Study inconsistent or incomplete during their review. ▪ Coordinate with USBR staff as needed to facilitate the submission and review of the Feasibility Study. ▪ It is assumed that any final edits from the Coalition or USBR comments will be discussed at one of the routine meetings in Task 0.2 and that a separate Final Feasibility Study Review Workshop will not be needed. Deliverables: Provide the Final Feasibility Study to the Coalition for review prior to submitting it to USBR. Deliverables: If comments are received from USBR, update the Feasibility Study and provide a Revised Final Feasibility Study to the Coalition and USBR. Bunker Hill Basin Salinity Feasibility Study 7/19/2023 P r i n c i p a l i n C h a r g e P r o j e c t M a n a g e r D e p u t y P r o j e c t M a n a g e r R e g u l a t o r y / B a s i n C o n t e x t Q A / Q C R e g u l a t o r y S u p p o r t E n g i n e e r i n g S u p p o r t E n g i n e e r i n g S u p p o r t F e a s i b i l i t y S t u d y S u p p o r t P r o j e c t A d m i n G r a p h i c s S u p p o r t WSC Labor Fee Labor Hours Labor Fee Total Labor Hours Total Labor Fee Expenses Total Fee Jeffery Szytel Laine Carlson Aaron Morland Michael Cruikshank Robert Morrow Antonia Estevez-Olea Patricia Parks Heather Freed Justin Sutton Kay Merrill Frederick Franklin Billing rates, $/hr $380 $335 $185 $295 $335 $220 $175 $220 $220 $170 $140 0 Project Management and Meetings 0.1 Project Management 6 12 40 20 17,100$ 78 17,100$ -$ 17,100$ 0.2 Routine Coordination with Coalition 46 60 6 28,280$ 16 3,696$ 128 31,976$ -$ 31,976$ 0.3 Alternatives Refinement Workshop 10 20 10 4 10,560$ 12 3,607$ 56 14,167$ 1,200$ 15,367$ 0.4 Alternatives Screening Workshop 10 20 10 4 10,560$ 12 3,607$ 56 14,167$ 1,200$ 15,367$ 0.5 Alternative Selection Workshop 10 20 10 4 10,560$ 8 2,452$ 52 13,012$ 1,200$ 14,212$ 0.6 Draft Feasibility Study Review Workshop 8 12 4 4 6,640$ 8 2,452$ 36 9,092$ 1,200$ 10,292$ 0.7 External Stakeholder Coordination 12 12 12 9,780$ 8 2,310$ 44 12,090$ -$ 12,090$ 0.8 QA/QC 12 4,020$ 12 4,020$ -$ 4,020$ SUBTOTAL 6 108 184 52 12 0 0 0 0 20 16 97,500$ 64 18,123$ 462 115,623$ 4,800$ 120,423$ 1 Kickoff and Data Collection 1.1 Kickoff Meeting 6 4 6 2 4,800$ 13 3,035$ 31 7,835$ -$ 7,835$ 1.2 Data Collection 6 6 6 4,890$ 3 809$ 21 5,699$ -$ 5,699$ SUBTOTAL 0 12 10 12 0 0 0 0 0 0 2 9,690$ 16 3,843$ 52 13,533$ -$ 13,533$ 2 Alternative Salt Mitigation Strategies 2.1 Alternatives Development 22 32 20 24 24,470$ 64 15,152$ 162 39,622$ -$ 39,622$ 2.2 Alternatives Analysis 32 64 22 20 8 35,210$ 70 15,414$ 216 50,624$ -$ 50,624$ SUBTOTAL 0 54 96 42 0 44 0 8 0 0 0 59,680$ 134 30,566$ 378 90,246$ -$ 90,246$ 3 Draft Feasibility Study 3.1 Draft Feasibility Study 16 60 8 12 40 12 16 33,340$ 120 27,216$ 284 60,556$ -$ 60,556$ SUBTOTAL 0 16 60 8 0 12 40 0 12 0 16 33,340$ 120 27,216$ 284 60,556$ -$ 60,556$ 4 Final Feasibility Study 4.1 Final Feasibility Study 8 24 6 6 8 4 8 13,610$ 29 6,363$ 93 19,973$ -$ 19,973$ SUBTOTAL 0 8 24 6 0 6 8 0 4 0 8 13,610$ 29 6,363$ 93 19,973$ -$ 19,973$ COLUMN TOTALS 6 198 374 120 12 62 48 8 16 20 42 213,820$ 363 86,111$ 1269 299,931$ 4,800$ 304,731$ 0 363 Task No. Task Description WSC Trussell ALL FIRMS