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HomeMy WebLinkAboutAgenda Packet - Finance & Human Resources Committee - 04/14/2026FINANCE & HUMAN RESOURCES COMMITTEE APRIL 14, 2026 East Valley Water District was formed in 1954 and provides water and wastewater services to 108,000 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. COMMITTEE MEMBERS Phillip R. Goodrich Governing Board Member James Morales, Jr. Governing Board Member Finance & Human Resources Special Committee Meeting April 14, 2026 ­ 10:00 AM 31111 Greenspot Road, Highland, CA 92346 www.eastvalleywater.gov 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. 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. 1.Approve the February 19, 2026 Finance & Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 2.Review Investment Policy 7.6 3.Review Purchasing/Procurement Policy 7.1 REPORTS 4.Finance Activities 5.Human Resource Activities ADJOURN FINANCE & HUMAN RESOURCES COMMITTEEAPRIL 14, 2026East Valley Water District was formed in 1954 and provides water and wastewater services to108,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5­member elected Board.COMMITTEE MEMBERS Phillip R. Goodrich Governing Board Member James Morales, Jr. Governing Board Member Finance & Human Resources Special Committee Meeting April 14, 2026 ­ 10:00 AM 31111 Greenspot Road, Highland, CA 92346 www.eastvalleywater.gov 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. 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. 1.Approve the February 19, 2026 Finance & Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 2.Review Investment Policy 7.6 3.Review Purchasing/Procurement Policy 7.1 REPORTS 4.Finance Activities 5.Human Resource Activities ADJOURN FINANCE & HUMAN RESOURCES COMMITTEEAPRIL 14, 2026East Valley Water District was formed in 1954 and provides water and wastewater services to108,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5­member elected Board.COMMITTEE MEMBERSPhillip R. GoodrichGoverning Board Member James Morales, Jr.Governing Board MemberFinance & Human Resources Special Committee MeetingApril 14, 2026 ­ 10:00 AM31111 Greenspot Road, Highland, CA 92346www.eastvalleywater.govPLEASE 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. 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. 1.Approve the February 19, 2026 Finance & Human Resources Committee Meeting Minutes INFORMATIONAL ITEMS 2.Review Investment Policy 7.6 3.Review Purchasing/Procurement Policy 7.1 REPORTS 4.Finance Activities 5.Human Resource Activities ADJOURN Agenda Item #1 April 14, 20261 Meeting Date: April 14, 2026 Agenda Item #1 Consent Item Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Approve the February 19, 2026 Finance & Human Resources Committee Meeting Minutes RECOMMENDATION That the Finance & Human Resources Committee approve the February 19, 2026 meeting minutes. DISTRICT PILLARS AND STRATEGIES V - Community Engagement, Advocacy, and Leadership a. Utilize Effective Communication Methods to Foster Exceptional Community Relations FISCAL IMPACT There is no fiscal impact associated with this agenda item. Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS February 19 2026 Minutes Page 1 of 2 2 6 1 6 Draft pending approval EAST VALLEY WATER DISTRICT February 19, 2026 FINANCE & HUMAN RESOURCES COMMITTEE MEETING MINUTES PUBLIC COMMENTS APPROVAL OF CONSENT CALENDAR Page 2 of 2 2 6 1 6 UNFUNDED ACCRUED LIABILITY POLICY COMPLIANCE ANALYSIS The Chief Financial Officer presented an overview of the District’s unfunded accrued liability (UAL) and evaluated options to reduce long-term pension obligations. The discussion included recent strong CalPERS investment returns and the potential for an additional payment of approximately $3.0 to $4.5 million to achieve the District’s UAL Management Policy target of 85% funded status. The Committee supported presenting this item to the Board for approval. The Chief Financial Officer reported that the District received a clean energy tax credit of $23.8 million from the Internal Revenue Service (IRS). He discussed the allocation of the funds across reserves within the Reclamation Fund and recommended making payments to the City of San Bernardino from the newly established reserves while earning interest. Information only, no action required. The Committee agreed to hold meetings on the second Tuesday of every odd month at 1:30 p.m., beginning in March. The Finance Manager reported ongoing work on the FY 2026-27 budget and coordination with program managers. The Director of Administrative Services provided updates on recruitment, the classification study, and educational pathways. The meeting adjourned at 2:45 p.m. James Morales, Jr. Phillip R. Goodrich Governing Board Member Governing Board Member Agenda Item #2 April 14, 20261 Meeting Date: April 14, 2026 Agenda Item #2 Informational Item 1 8 1 1 Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Review Investment Policy 7.6 RECOMMENDATION That the Finance & Human Resources Committee recommend that the Board of Directors Adopt Resolution 2026.05, Updating the Investment Policy for Fiscal Year 2026-27. BACKGROUND / ANALYSIS California Government Code section 53646(a) requires that the CFO/Treasurer of a local agency annually render to the legislative body a Statement of Investment Policy for consideration at a public meeting. Accordingly, a proposed Statement of Investment Policy for fiscal year 2026-27 is attached. The policy submitted to and approved by the Board on May 14, 2025 was subsequently submitted to the California Municipal Treasurers Association (CMTA) for peer review. The reviewers at CMTA scored the policy and gave their remarks and awarded the District the CMTA Investment Policy Certification. This Certifications recognizes that the District’s Policy adheres to the State of California Government Code and meets program requirements within 18 different topic areas deemed to be best practices for investment policies. A copy of the Certification is attached. The policy submitted herewith shows the changes recommended by the CMTA as a result of their peer review. DISTRICT PILLARS AND STRATEGIES II - Sustainability, Transparency, and Accountability a. Uphold Transparent and Accountable Fiscal and Resource Management Agenda Item #2 April 14, 20262 Meeting Date: April 14, 2026 Agenda Item #2 Informational Item 1 8 1 1 FISCAL IMPACT There is no impact to the current budget. The aspirational targets of the Policy may affect future budget recomendations to be presented to the Board of Directors. Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS Resolution 2026.05 Exhibit A - Investment Policy 7.6 CMTA Certification 2026 East Valley Water District 2 2 1 6 RESOLUTION NO. 2026.05 , the Board of Directors of the East Valley Water District (the “District”) desires to maintain a formal policy regarding the investment of public funds pursuant to the requirements of Government Code Sections 5921 and 53600 et seq.; and , the Board of Directors of the District has employed qualified staff to invest those funds in accordance with the law and the terms of the District’s investment policy, as well as in a manner that advances the District’s investment objectives of safety, liquidity and yield; and by the Board of Directors of the District that the East Valley Water District Investment Policy attached hereto as Exhibit “A” and incorporated in full herein by this reference is hereby adopted as the formal investment policy of the District; and that the General Manager/CEO and the Treasurer/Chief Financial Officer of the District are hereby authorized and directed to invest the District’s funds in a manner consistent with the terms hereof and in accordance with any further directions of the District’s Board of Directors; and that this Resolution supersedes Resolution No. 2025.01 adopted by the Board of Directors of the District on May 14, 2025. This Resolution shall take effect on July 1, 2026. this 22 nd day of April 2026. Ayes: Noes: Absent: Abstain: Ronald L. Coats Board President East Valley Water District 2 2 1 6 ATTEST: Michael Moore Secretary, Board of Directors April 22, 2026 I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2026.05 adopted by the Board of Directors of East Valley Water District at its Regular Meeting held April 22, 2026. Michael Moore Secretary, Board of Directors EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 1 of 15 Purpose The purpose of this policy is to establish guidelines for the prudent investment of East Valley Water District (District) funds in conformance with California Government Code requirements. Funds will be managed to provide for daily cash flow requirements and to meet the objectives of this policy. Policy It is the policy of the District to invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonably anticipated operating needs, achieving a reasonable rate of return, and conforming to all state and local statutes governing the investment of public funds. Scope This policy applies to the investment of all operating funds; it does not apply to investments held in trust for the District retirement plan, or post-employment health benefits, as these investments are subject to policies established by the plan trustees. Indenture agreements specify how bond proceeds will be invested, but generally they will be invested in securities permitted by this policy. Invested funds are accounted for, and are identified in, the District’s Annual Comprehensive Financial Report. Objectives As specified in CGC §53600.5, when investing and managing public funds, the primary objectives, in priority order, of the District’s investment activities shall be: 1.Safety: Safety of principal is the foremost objective of the investment program. Investments of the East Valley Water District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio by mitigating certain risks. Some of those risks are: A.Interest Rate Risk – the District will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates by: Exhibit "A" EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 2 of 15 Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operation and avoiding the need to sell securities on the open market prior to maturity. Investing operating funds primarily in short-term securities, money market mutual funds, or investment pools. B.Credit Risk – the risk that an issuer or other counterparty to an investment will not fulfill its obligations, will be reduced by: Limiting investments to higher rated securities as further described in this policy. Diversifying the investment portfolio so that potential losses on individual securities will be reduced. 2.Liquidity: The investment portfolio will remain sufficiently liquid to enable the East Valley Water District to meet all operating requirements that might be reasonably anticipated. 3.Return on Investments: The investment portfolio shall be designed with the objective of attaining the best yield or returns on investments, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives. Prudence The standard of prudence to be used by District officials involved in the investment program shall be the “prudent investor” standard and shall be applied in the context of managing the overall portfolio. The meaning of the standard of prudent investor is explained in CGC Section 53600.3, which states that “when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 3 of 15 character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” The CFO/Treasurer and delegated investment officers, acting in accordance with written procedures and this Policy and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. Delegation of Authority The authority of the District’s Board of Directors to invest District funds is derived from California Government Code (CGC) section 53601. Section 53607 of the CGC grants the Board the authority to delegate that authority to the District’s Chief Financial Officer (CFO)/Treasurer. The authority to invest District funds is hereby delegated to the CFO/Treasurer. The CFO/Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials in the absence of the Treasurer. All transactions will be reviewed by the Treasurer on a regular basis to ensure compliance with this Policy. No Person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the Treasurer. Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the District’s General Manager/CEO any material financial interest in financial institutions that conduct business within the District, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the District. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 4 of 15 All bond issue participants, including but not limited to, underwriters, bond counsel, financial advisors, brokers, and dealers will disclose any fee sharing arrangements or fee splitting to the CFO/Treasurer prior to the execution of any transaction. Authorized Broker-Dealers The CFO/Treasurer will maintain a list of approved financial institutions authorized to provide investment services to the District. These may include primary dealers authorized to buy and sell government securities in direct dealings with the Federal Reserve Bank of New York, or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule). The list of approved financial institutions will be reviewed by the CFO/Treasurer on an annual basis. All Broker Dealers who desire to conduct investment transactions with the District must supply the CFO/Treasurer with the following:  Audited Financial Statements  Proof of Financial Industry Regulatory Authority (FINRA) certification  Proof of State of California registration  Completed broker/dealer questionnaire (except Certificate of Deposit counterparties)  Certification of having read the District’s investment policy and depository contracts Authorized and Suitable Investments The East Valley Water District as empowered by California Government Code (CGC) §53600, et. Seq., establishes the following as authorized investments: A. Local Agency Investment Fund (LAIF). The District may invest in the Local Agency Investment Fund established by the State Treasurer for the benefit of local agencies (CGC §16429.1). The fund must have 24-hour liquidity. There is no limitation on the percentage of the District portfolio that may be invested with LAIF, however, LAIF does impose a maximum deposit of $75 million. B. United States Treasury Securities. United States Treasury notes, bonds, or bills for which the full faith and credit of the United States is pledged for the payment of principal and interest (CGC §53601(b)). There is no limitation as to the percentage of EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 5 of 15 the District’s portfolio that may be invested in these securities, however, maximum investment maturities are limited to five years from the date of purchase. C. Federal Agency Obligations. The District is permitted to invest in federal agency or United States government sponsored enterprise obligations, participations, mortgage-backed securities or other instruments, including those issued by or fully guaranteed as to principal and interest by Federal agencies or United States government sponsored enterprises (CGC §53601(f)). Maximum maturity is limited to five years from the settlement date of purchase. There is no limitation as to the percentage of the District’s portfolio that may be invested in agencies. D. Bank Depository Accounts. The District may invest in insured or collateralized certificates of deposit, savings accounts, market rate accounts, or other bank deposits issued by a state or national bank, savings and loan associations, or state or federal credit unions located in California (CGC §53630 et. Seq.). A written depository contract is required with all institutions that hold District deposits requiring that deposits be collateralized in accordance with the California Government Code. Under provisions of the Code, California banks and savings and loan associations are required to secure the District’s deposits by pledging government securities with a value of 110% principal and accrued interest. State law also allows financial institutions to secure the District deposits by pledging first trust deed mortgage notes having a value of 150% of the District’s total deposits. The Treasurer may waive collateral requirement for the portion of any deposit insured pursuant to federal law. Securities placed in a collateral pool must provide coverage for at least 110% of all deposits that are placed in the institution. Acceptable pooled collateral is governed by CGC §53651. Real estate mortgages are not considered acceptable collateral by the District, even though they are permitted in CGC §53651(m). E. All financial institutions holding District deposits are required to provide the District with a regular statement of pooled collateral. This report will state that they are meeting the 110% collateral rule, a listing of all collateral with location and market value, plus an accountability of the total amount of deposits secured by the pool. D. Deposits are allowable in any institution that insures its deposits with the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 6 of 15 (NCUA), and a maximum deposit of up to the federal insurance limits may be deposited in any one institution without collateral. No bank shall receive District deposits in excess of the federal insurance limits that has a long-term debt rating by Moody’s investors Service, Standard & Poor’s, or Fitch Ratings of less than ”A”. The maximum maturity is restricted to three years. In accordance with CGC §53638, no deposit shall exceed the shareholder’s equity of any depository bank, nor shall a deposit exceed the total net worth of any institution. No deposits shall be made at a state or federal credit union if a member of the Board of Directors or the General Manager/CEO or CFO/Treasurer of the District serves on the Board of Directors or a committee of the credit union. F.E. Municipal Securities. Registered treasury notes or bonds issued by the State of California or any of the other 49 states, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any states (CGC §53601 (c)(d)). Bonds, notes, or other evidence of debt issued by a local agency within the State of California, including issues by East Valley Water District if allowed under the bond indenture. This includes bonds payable solely out of revenue form from a revenue- producing property owned, controlled, or operated by the local agency, or by an authority of the local agency (CGC §53601 (a)(e)). Securities must have a debt rating of at least ”AA” by a Nationally Recognized Statistical Rating Organization (NRSRO). Maximum maturity is limited to five years from the settlement date of purchase, and holdings of this type of security are limited to a maximum of 20% of the District’s investment portfolio. G.F. Commercial Paper. Commercial paper of ”prime” quality of the highest ranking of the highest letter and number rating as provided for by a NRSRO and must be issued only by general corporations that are organized and operating within the United States and have total assets in excess of $500 million. The general corporation must have an ”A” rating or better on debt other than commercial paper, if any, assigned by an NRSRO (CGC §53601(h)). Purchases shall not exceed 5% of the outstanding paper of the issuing corporation, and maximum maturity is restricted to 270 397 days. This type of investment shall EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 7 of 15 not exceed 15% of the District’s investment portfolio. H.G. Placement Service Deposits. The District may invest in Certificates of Deposit placed with a private sector entity that assists in the placement of deposits with eligible financial institutions located in the United States (CGC §53601.8). The full amount of the principal and the interest that may be accrued during the maximum term of each deposit shall at all times be insured by federal deposit insurance. Placement Service Deposits, in combination with bank certificates of deposit shall not exceed 25% of the value of the District’s investments at any time. The maximum investment maturity will be restricted to three years. The District may invest in brokered or negotiable certificates of deposit through qualified brokers or deposit-placement services, provided the full amount of principal and interest is insured by the FDIC or collateralized as required by law, and subject to the limits and maturity restrictions of Government Code §§53601(i), 53601.8, and 53601.9. I.H. Medium Term Notes. The District may invest in corporate and depository institution debt securities issued by corporations organized and operating within the United States, or by depository institutions licensed by the United States or any state and operating within the United States (CGC §53601(k)). Securities eligible for investment under this section shall be rated ”AA” or better by an NRSRO. The maximum maturity is restricted to five years, and investment in this category of security shall not exceed 30% of the District’s investible funds, and not more than 5% from a single issuer. J.I. Money Market Funds. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission (CGC §53601(l)(2)). The Company shall either 1) have attained the highest ranking or the highest letter and numerical rating provided by not less than two NRSROs or 2) retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years of experience managing money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000). A maximum of 15% of the District’s investible funds can be invested in Money Market Mutual funds. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 8 of 15 K.J. Local Government Investment Pools. Shares of beneficial interest in an investment pool created by a joint powers authority organized pursuant to CGC §6509.7 and that invest in securities and obligations authorized in the California Government Code (CGC §53601(p)). Investment is limited to pools that seek to maintain a stable Net Asset Value (NAV) and must be rated at least ”AA” or better by a NRSRO. A maximum of 25% of the District’s portfolio may be invested in Local Government Investment Pools. L.K. Prohibited Investments. Under the provision of CGC §53601.6 and §53631.5, the District shall not invest any funds covered by this Investment Policy in inverse floaters, range notes, interest-only strips derived from mortgage pools or any investment that may result in a zero-interest accrual if held to maturity. Notwithstanding the prohibition above, the District may invest in securities issued by, or backed by, the United States government that could result in zero or negative- interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates (CA SB 998). Review of Investment Portfolio The securities held by East Valley Water District must be in compliance with the above section, ”Authorized and Suitable Investments” at the time of purchase. If a security falls out of compliance with this section subsequent to the date of purchase, the CFO/Treasurer shall report this change to the District’s Board of Directors with the following monthly Investment Transaction report. Discussion in the monthly report will include the reasons for the change, prognosis for recovery, and a recommended course of action. Investment Pools / Mutual Funds When the District’s investment portfolio includes Investment Pools and Mutual Funds, as permitted in the section, ”Authorized and Suitable Investments” the CFO/Treasurer shall as a matter of due diligence, monitor the assets held by the pools/funds. At least quarterly, the CFO/Treasurer will conduct an investigation to determine the following: 1. A description of eligible investment securities, and a written statement of investment policy and objectives. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 9 of 15 2. A description of interest calculation and how it is distributed, and how gains and losses are treated. 3. A description of how the securities are safeguarded (including the settlement processes), how often the securities are priced, and the program audited. 4. A description of who may invest in the program, how often, what size deposit and withdrawal are allowed. 5. A schedule for receiving statements and portfolio listings. 6. Are reserves, retained earnings, etc. utilized by the pool/fund? 7. A fee schedule, and when and how it is assessed. 8. Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 10 of 15 Collateralization Certificates of Deposit (CDs) - the District shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security. Bank Deposits – the District shall ensure that all deposits of public funds are held only by a qualified bank or financial institution as established by California law. Deposits will be insured by the Federal Deposit Insurance Corporation (FDIC), or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with California law. Collateral will always be held by an independent third party with whom the financial institution has a current custodial agreement. Safekeeping and Custody Agreements To protect against potential losses caused by collapse of individual securities dealers, all securities owned by the East Valley Water District shall be kept in safekeeping by a third- party bank trust department, acting as agent for the District under the terms of a custody agreement executed by the bank and the District. All securities will be received and delivered using standard delivery versus payment (DVP) procedures with the District’s custodial bank, and evidenced by safekeeping receipts. Diversification and Maximum Maturities The District will diversify its investment by security type and institution. With the exception of the US Government, its agencies and instrumentalities, and the Local Agency Investment Fund, no more than 5% of the District’s total investment portfolio will be invested in a single security type with a single financial institution. To the extent possible, East Valley Water District will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the District will not directly invest in securities maturing more than 5 years from the date of purchase. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 11 of 15 Reserve funds may be invested in securities exceeding 5 years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds. Internal Controls The CFO/Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the District are protected from loss, theft, or misuse. The internal control structures shall be designed to provide reasonable assurance that these objectives are met. Internal controls shall be in writing and shall address the following: separation of transaction authority from accounting and record keeping, safekeeping of assets and written confirmation of telephone transactions for investments and wire transfers. The external auditors will annually review the investments and general activities associated with the investment program. This review will provide internal control by assuring compliance with the Investment Policy and District policies and procedures. Performance Standards The investment portfolio will be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints, and the cash flow needs. The District’s investment strategy is passive. The performance of the District’s investment portfolio will be evaluated and compared to an appropriate benchmark in order to assess the success of the investment portfolio relative to the District’s Safety, Liquidity, and Return on Investments’ objectives. Investment Reporting In accordance with California Government Code §53607, the CFO/Treasurer will submit a monthly report to the Board of Directors showing all investment transactions occurring in the previous month. Further, in accordance with California Government Code §53646, the CFO/Treasurer will also prepare a quarterly Investment Report and render the report to the Board of Directors no later than 30 days after the close of each calendar quarter. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 12 of 15 The report shall provide the type of investment, issuers, the date of maturity, par values and market values of each investment, transactions occurring during the reporting period, and identification of funds managed by third party managers. The report will also include 1) certification that all investment transactions have been made in compliance with the District’s Investment Policy, and 2) a statement that the District has the ability to meet all of its expenditure requirements during the next six months. Policy Adoption Adoption. This policy shall be reviewed annually with the Board of Directors and adopted by Board Resolution. Amendments. Any changes to the policy, or persons charged with maintaining internal controls over investments, must be approved by the Board. Glossary of Terms (Note: All words of a technical nature should be included. The Ffollowing is anare examples of common treasury terminology.) Agencies: Federal agency securities and/or Government-sponsored enterprises. Annual Comprehensive Financial Report (ACFR): The official annual report of the (East Valley Water District). It includes four combined financial statements prepared in conformity with Generally Accepted Accounting Principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section. Benchmark: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments. Broker: A broker brings buyers and sellers together for a commission. Certificate of Deposit (CD): A time deposit with a specific maturity evidenced by a Certificate. Large-denomination CDs are typically negotiable. Collateral: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 13 of 15 Coupon: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a payment date. Dealer: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. Delivery versus Payment (DVP): There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. Discount: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below the original offering price shortly after sale is also considered to be at a discount. Diversification: A Dividing investment funds among a variety of securities offering independent returns. Duration: A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices. Federal Credit Agencies: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals (e.g., S & L’s, small business firms, students, farmers, farm cooperatives, and exporters). Federal Deposit Insurance Corporation (FDIC): A federal agency that insures bank deposits, currently up to $250,000 per entity. Federal Reserve System: The central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, D.C., 12 regional banks, and about 5,700 commercial banks that are members of the system. Liquidity: A liquidity asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. Local Government Investment Pool (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 14 of 15 Market Value: The price at which a security is trading and could presumably be purchased or sold. Maturity: The date upon which the principal or stated value of an investment becomes due and payable. Money Market: The marker in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded. Offer: The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Asked and Bid. Portfolio: Collection of securities held by an investor. Primary Dealer: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms. “Prudent Investor” Standard: A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.” Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. Safekeeping: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection. Securities and Exchange Commission: Agency created by Congress to protect investors in securities transactions by administering securities legislation. Treasury Bills: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Investment Policy Original Approval Date: July 22, 2015 Last Revised: March 24, 2021 Policy No: 7.6 Page: 15 of 15 Treasury Bonds: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. Treasury Notes: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. Uniform Net Capital Rule: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. Yield: The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price for the security. (b) Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. Board Approved: 5/14/25 5/22/24 4/12/23 4/27/22 3/24/21 5/13/20 4/24/19 4/25/18 4/12/17 4/27/16 California Municipal Treasurers Association Investment Policy Certification Issued on 3/13/2026 East Valley Water District The California Municipal Treasurers Association certifies that the investment policy of the East Valley Water District complies with the current State statutes governing the investment practices of local government entities located within the State of California. President 3/13/2026 Date Agenda Item #3 April 14, 20261 Meeting Date: April 14, 2026 Agenda Item #3 Informational Item 1 8 1 2 Regular Meeting TO: Committee Members FROM: Chief Financial Officer SUBJECT: Review Purchasing/Procurement Policy 7.1 RECOMMENDATION That the Finance & Human Resources Committee recommend that the Board of Directors Approve the Attached Updated Purchasing/Procurement Policy. BACKGROUND / ANALYSIS East Valley Water District (District) is an organization that strives for transparency and to practice sound stewardship over the public funds with which it is entrusted. As such, it is prudent that the District periodically review key financial policies that provide guidance to staff in the performance of their day-to-day functions. One such policy is the District’s Purchasing/Procurement Policy (Policy). The current Policy, adopted in August 2011, has served the District well. However, due to ongoing changes in legal requirements, particularly those affecting Public Works projects, staff has identified necessary revisions to ensure the District’s policy remains current and compliant. The revised Policy updates spending authority, clarifies procurement requirements, and incorporates current Public Works and contracting standards. These changes strengthen internal controls and ensure continued compliance with applicable laws and best practices. Red text in the attached Policy identifies substantive revisions from the previously adopted Policy. Staff recommends that the Board adopt the attached, revised Purchasing/Procurement Policy. DISTRICT PILLARS AND STRATEGIES II - Sustainability, Transparency, and Accountability a. Uphold Transparent and Accountable Fiscal and Resource Management FISCAL IMPACT There is no fiscal impact associated with this agenda item. Agenda Item #3 April 14, 20262 Meeting Date: April 14, 2026 Agenda Item #3 Informational Item 1 8 1 2 Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS Purchasing Procurement Policy 7.1 Purchasing Policy (chart) EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 1 of 14 Purpose 1.1 The East Valley Water District Purchasing Policy (“Policy”) establishes procedures for acquiring services and materials, equipment and supplies (referred to collectively as “materials”), and for public works projects, for the East Valley Water District (the “District”), pursuant to Government Code Sections 54201, 54202, and 54204 and the Office of Management and Budget Uniform Grants Guidance Title 2, Subtitle A, Chapter II, Part 200, Subpart D (UGG 2 CFR 200). 1.2 This Policy establishes the Board of Directors’ (“Board”) approved policies with respect to the procurement of services and materials and for public works projects, including expenditure authorization and limits, competitive proposal and bidding requirements, and general procurement procedures. All purchases of services or materials and public works projects to be paid for by the District must adhere to the authority level and dollar limits of this Policy as set forth in Section 2, except as otherwise provided by specific terms and exceptions set forth in this Policy. Authorization 2.1 By adopting this Policy, the Board is authorizing the General Manager/CEO, or his/her designated representatives, to exercise certain duties and responsibilities that are essential for the day-to-day operation of the District. 2.2 The General Manager/CEO may delegate the procurement of services and materials and the provision of public works projects to those staff members given specific authority, consistent with the terms of this Policy. 2.3 Delegation of purchasing authority may be through the authorized use of purchasing cards, purchase orders, check requests, or other written authorization. All such purchases will be made in conformity with the policies and procedures prescribed within this Policy. 2.4 The Board-established procurement limits and contract signatory authority are listed in Table 1. These limits are applicable on a per-expenditure/per-contract basis, not on an aggregated basis, for unrelated activities. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 2 of 14 Table 1 Procurement Limits and Contract Signature Authority Title Expenditures Contract Signature Authority General Manager/CEO Up to $150,000$100,000 $150,000$100,000 and over with Board authorization Up to $150,000$100,000 without Board authorization Executive Management, Senior Management Up to $25,000 Up to $25,000 Management, Supervisors, Network Administrator Up to $10,000 Up to $10,000 Leads / Admin. Personnel Up to $5,000 None General Procurement Policies 3.1 Procurement practices shall comply with laws, regulations, and guidelines of the State of California and any other applicable law, and the provisions of grant or funding contracts, if applicable. 3.2 Any employee/individual affecting any procurement action outside of the policies and procedures established by this Policy, and without General Manager/CEO or Board authorization to do so, shall be subject to disciplinary action and/or termination in accordance with District policies. 3.3 Expenditures and contract awards must be authorized by the appropriate authorization level indicated in Table 1. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 3 of 14 3.3.1 Separating or dividing contracts into smaller components for the purpose of bringing the cost of one or more contracts below any specified sum to avoid a requirement in any section of this Policy or any policy incorporated herein is strictly prohibited. Contracts may be divided only to meet unique scheduling of a project or to accommodate necessary time frames. In addition, no specifications shall be drafted in such a manner as to limit competitive bidding or solicitation directly or indirectly to any one specific vendor, or any specific brand, product, thing, or service, except for those items that are approved as exempt from competitive bidding or solicitation requirements as provided in Section 6.1.2. 3.4 Purchase amounts include taxes and the cost of shipping, freight fees and any other charges billed by the supplier or contractor for purposes of the authorization limits under this Policy. 3.5 Purchase authorization and expenditure limits in Table 1, and competitive solicitation requirements in Table 2 and as further set forth in this Policy, are on a per purchase/per contract basis and shall not be applied as an aggregate limit to any vendor, supplier, contractor, or consultant. 3.6 With the exception of the General Manager/CEO, in the absence of an authorized signatory for a given request, authorization will be obtained from the next highest authority in Table 1. 3.7 The District may use electronic commerce whenever practicable or cost-effective. The District may accept electronic signatures and records in connection with District procurement, as permitted by applicable law. Procurement Methods The following methods are available to initiate a purchase request or to pay for materials, services or Public Works: 4.1 Requisition/Purchase Order (PO): Staff that require materials or services to carry out the defined duties of their positions shall submit Requisitions, in advance, for purchases in accordance with this Policy and other applicable procedures and policies of the District. The Finance Department will generate a PO from the Requisition. 4.2 Check Request: A check request can be used to initiate payment for certain limited materials or services without a PO. Check requests can be used to request payment EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 4 of 14 for Non-Discretionary Purchases, services rendered, subscriptions, membership dues, workshop/seminar/conference registrations, use of facilities, etc. 4.3 CAL-Card and Other Purchasing Cards: Designated staff may be assigned a CAL-Card for miscellaneous purchases of goods and limited services. Services acquired using the CAL-Card shall be restricted to low-risk, non-recurring services (e.g., training, conference registrations, and software subscriptions) that do not require a formal Agreement (Contract) and are within established spending limits. All other services shall require a written Agreement (Contract) in accordance with this Policy. Purchases using the CAL-Card are subject to the terms of this Policy, the District Cardholder Agreement, and any other applicable District CAL-Card policies or procedures. CAL-Card purchases may exceed individual card limits or standard purchasing thresholds, provided the purchase is reviewed and approved in advance by staff with appropriate authorization in accordance with Table 1. CAL-Card limits may be increased temporarily or permanently with approval by authorized staff. CAL-Cards should not be used if a purchase order or other form of procurement is more appropriate. 4.4 Purchase Order: A Purchase Order is used to authorize payment to a supplier, contractor, or consultant for anticipated expenditures during a fiscal year or contract term. Purchase Orders typically expire at the end of the fiscal year or upon expiration or termination of the associated contract. 4.5 Agreement (Contract): Provisions shall be made, either through specifications or procedures established by the District, for verification of the references and financial responsibility of the contracting parties prior to the award of a contract. After award, all contracts shall be executed on behalf of the District by the appropriate authorized signatory indicated in Table 1. In no case shall any contract be made if sufficient funds are not budgeted and not available to make payment promptly upon delivery or completion, or in accordance with a progress payment schedule, unless otherwise authorized and approved by the Board or approved by the General Manager/CEO as provided for in Section 5.2 (Emergency). 4.5.1 An Agreement (Contract) will be executed when an expenditure exceeds $25,000 or will require a vendor to work at District sites. 4.5.2 Multiple Year Contracts are allowed when in the best interests of the District as determined and executed by the General Manager/CEO. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 5 of 14 For purposes of procurement authorization, the dollar value of a Multiple Year Contract shall be the total contract value, including optional renewal periods, and shall state the annual maximum for expenditure in each contract year. Once initially approved in accordance with the Policy requirements, any optional renewals may then be authorized by the General Manager/CEO at the time of renewal, regardless of the dollar amount, provided the pre-priced option is consistent with the terms of the contract as initially approved. Exceptions to Pre-Authorization 5.1 Non-Discretionary Purchases do not require Board approval for payment, including those that exceed the General Manager/CEO limit of $150,000$100,000. Purchase Orders are not required for Non-Discretionary Purchases. 5.2 Emergency Work/Services: The General Manager/CEO may authorize Emergency expenditures for work, services, and/or supplies where the cost exceeds $150,000$100,000 without prior Board approval. The Board shall be notified of any expenditures for Emergency work, services, and/or supplies exceeding the General Manager/CEO’s authorization limit at the next regularly scheduled Board meeting. 5.3 Purchase requests to replenish the District’s warehouse inventory within established inventory re-order levels require no prior authorization or signatory approval under Table 1. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 6 of 14 Competitive Selection Process 6.1 General - A competitive selection process for procurement of services, materials, and Public Works projects, is required, in accordance with the limits set forth in Table 2 below (subject to certain exceptions, qualifications, or limitations as further set forth below). Table 2 Selection Process Procurement Method Equipment, Vehicles, Software, etc. Professional or General Services Public Works / Capital Improvement Projects N/A N/A ≤$5,000 N/A N/A Informal Quotes PO $5,000 - $10,000 ≤$10,000 N/A Written Quotes PO ≥$10,000 $10,000 - $75,000 ≤$75,000 Written Bids (RFP, RFQ, ITB) Written Agreement, PO N/A ≥$75,000 ≥$75,000 6.1.1 Competitive Solicitation – Quote, Proposal, and Bid Submissions i. Informal Quotes - For qualifying purchases (Table 2), quotes may be obtained through an informal process (e.g. web browsing or phone calls). Documentation of the bids is recommended for all purchases, but is required for purchases over $5,000. A requisition and purchase order may be issued to document small purchases, but are required for purchases over $5,000. In the event a Purchase Order is not issued, the accounts payable process will require that the invoice be signed by an authorized signor before payment is released. ii. Written Quotes - For purchases qualifying for written quotes (Table 2), a minimum of three written quotes are required. The quotes must be documented and retained with the Purchase Order. The request for quotes must be made in a consistent manner for all vendors meaning that all vendors EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 7 of 14 must receive the same information regarding specifications and requirements of the product or service. The request must also be transmitted to the vendors in a consistent manner (e.g. mail, email). iii. Written Bids (RFP, RFQ, or ITB) - For purchases falling into this category based on Table 2, Bids/Proposals shall be solicited from a minimum of three vendors and should be posted on the District’s online bid portal. A Request for Proposal (RFP), Request for Qualifications (RFQ), or Invitation to Bid (ITB) must be used to document the specifications and requirements of the product or service. Bids must be received from the vendors in written form and retained on file by the manager of the requesting department in accordance with the District’s retention policy. All bids are confidential until the deadline for bid submission or bid changes has elapsed. Under an RFP, proposers must meet specific requirements set forth by the District. Among others, they must show independence, experience, firm capacity and certain level of insurance coverage. California Public Contract Code (PCC) sets forth strict standards for public works contracts. Public works is defined as the erection, construction, alteration, repair or improvement of any public structure, building, road, or other public improvement of any kind. Contracts shall be awarded in a manner most beneficial to the District. The District shall strive to obtain the best value in awarding contracts, service agreements, and purchase agreements. 6.1.2 Exceptions from Competitive Solicitation Process - Generally solicitation of bids or proposals is preferable whenever practicable. In addition, to the exceptions stated under Section 6.3.2, the competitive solicitation requirements set forth under Table 2 may be waived when any of the following is applicable: Sole Source Purchases. Single Source Purchases. Emergency expenditures. Supplies, materials, or equipment procured through a Cooperative Purchasing program with federal, state, county, or other public agencies. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 8 of 14 After a reasonable attempt has been made to obtain competitive quotes/responses and it has been determined that no additional suppliers/providers/contractors/consultants can be located; the District has a lack of response from suppliers/providers/contractors/consultants to a competitive solicitation; or, when sufficient, satisfactory bids/proposals are not received, based on the District’s sole discretion. Purchases to replenish the District’s warehouse inventory within established inventory re-order levels. As dictated by law. 6.1.3 It shall be at the discretion of the General Manager/CEO or the Department Head to determine whether an expenditure meets the qualifications listed herein to be exempt from a competitive solicitation, subject to any Board authorization. 6.2 Public Works - Contracts for Public Works projects shall conform to applicable requirements for Public Works contracts under state law, including but not limited to requirements relating to listing of subcontractors, posting of a payment bond in an amount not less than 100% of the total contract amount (for all Public Works contracts over $25,000), contractor registration with the Department of Industrial Relations, and payment of prevailing wages (for all contracts for Public Works exceeding $1,000), or as otherwise required by statute. In addition, the District is authorized to utilize alternative project delivery methods, including design-build and progressive design-build, in accordance with applicable provisions of the California Public Contract Code. Progressive design-build projects shall be procured through a competitive best value Request for Qualifications (RFQ) process. Unless specifically waived by the District with the approval of the General Manager/CEO and District’s legal counsel, the District shall require performance bonds for all Public Works Contracts in an amount not less than 100% of the total contract amount. Public Works Contracts procured by an Invitation to Bid shall be awarded to the lowest responsive, responsible bidder. 6.3 Professional and General Services - RFPs will be initiated pursuant to the limits set forth in Table 2 when the contract is anticipated to exceed $75,000, unless the District’s needs mandate uniquely qualified services, in which case only one proposal from a qualified firm may be solicited. Professional Services shall be engaged in accordance EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 9 of 14 with California Government Code Section 4525 et seq., on the basis of demonstrated competence and qualifications for the types of services to be performed and at fair and reasonable prices to the District. 6.3.1 Exceptions from Competitive Solicitation Process - Professional Services. In addition to the exception for “uniquely qualified services” set forth under Section 6.3, the following criteria shall apply as exceptions to the competitive solicitation requirements set forth under Table 2 for Professional Services where such requirements would otherwise apply: For Professional Services estimated to cost $25,000 or less, staff may request a proposal from one (1) qualified consultant selecting from the list of qualified consultants on file with the District. For Public Works projects where the project design is scheduled in phases, the related Professional Services may be negotiated with the consultant that performed the work for a prior phase, if the consultant performed satisfactory work on the prior phase(s) in terms of quality, schedule, estimated design costs, and a satisfactory contract can be negotiated. For Professional Services in which it is impracticable to comply with the selection process because of the unique, exploratory, or experimental nature of the project, staff may request a proposal from one (1) qualified consultant selecting from a list of qualified consultants on file with the District. Prior to commencing any tasks outlined in a proposal, the consultant shall execute a Master Services Agreement ensuring that all requirements for performing work for the District have been met. 6.4 Rejecting Competitive Responses - In response to an Invitation to Bid, RFQ, or RFP, the District may reject a bid or other response which is in any way incomplete, irregular, amplified, unqualified, conditional or otherwise not in compliance with the solicitation documents in all material respects, and in accordance with law. The District may waive any informality, irregularity, immaterial defects or technicalities in any bids or other responses received; and/or cancel an invitation to bid or RFP/RFQ, or reject all bids or responses for any other reason, which indicates the cancellation or rejection of all bids or responses is in the best interest of the District, and in accordance with law. Rejection of all bids or responses or cancellation of competitive solicitations, including determinations to re-bid, or re-solicit are subject to the same level of EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 10 of 14 authority which is required to award a contract as provided under Table 1, and as required by law. 6.5 In the case of RFPs and RFQs, the General Manager/CEO and the Board reserve the right to award contracts based upon the best interests of the District, as determined by the District in its sole discretion. Change Orders Change Orders may be issued from time to time as required by changes in the specifications or conditions of a project, services performed or materials issued. 7.1 Change Orders – PO Only. Change Orders up to 10% of the original PO amount may be issued by the Purchasing or Finance Department without further approvals. A revised Purchase Order Requisition must be completed and approved at the appropriate authorization levels under Table 1 for any Change Order request exceeding the original amount by more than 10%. 7.2 Change Orders – Formal Contracts and Amendments. i.For Contracts and Amendments under $150,000$100,000: a. Change Orders up to 10% of the original contract amount can be approved by the appropriate authorization levels as outlined in Table 1 up to a maximum total contract amount of $150,000$100,000 without Board approval. b.Board approval is required for Change Order requests exceeding the original contract amount by more than 10%, or resulting in a total contract amount over $150,000$100,000. ii.For Contracts and Amendments $150,000$100,000 and over: a. Change Orders up to 10% of the original contract amount can be approved by the appropriate authorization levels as outlined in Table 1 without Board approval. b. Board approval is required for Change Order requests exceeding the original contract amount by more than a 10% increase. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 11 of 14 7.3 A Change Order exceeding the Change Order limits set forth in this article may be authorized by the General Manager/CEO prior to Board approval if, in the General Manager/CEO’s determination, any of the following circumstances exist: i. A delay in Change Order authorization could result in a negative financial impact to the District. ii. A delay in Change Order authorization could result in damage to or impairment of the operations of a District facility. iii. An Emergency exists which requires immediate work/services. The Board shall be notified of any Change Order authorization exceeding the General Manager/CEO’s authorization limit at the next regularly scheduled Board meeting. Conflict of Interest Board members, District officers, and employees shall not be financially interested in any contract made by them in their official capacity. (Government Code Section 1090). Board Members, officers, and employees shall not participate in any way to influence a governmental decision in which he/she knows or has reason to know that he/she has a financial interest. (Government Code Section 87100). 8.1 Any District employee authorized under this Policy to make or enter into purchases on behalf of the District will complete a Statement of Economic Interests (Form 700) and comply with the District’s Conflict of Interest Code. 8.2 Confidential or proprietary information must be handled with due care and proper consideration of ethical and legal ramifications and governmental regulations. 8.3 Purchasing activities must be performed in accordance with all applicable laws and District policies. 8.4 Any employee/individual who violates the standards set forth in this Section shall be subject to disciplinary action consistent with District personnel policies. California Water District Status Notwithstanding anything to the contrary in this Policy, the District is a California Water District and therefore is not mandated by state law to competitively bid any purchases, including those for Public Works projects and/or capital expenditures. The District is free to enter into non-bid contracts for Public Works, to purchase materials, services and supplies, EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 12 of 14 to contract for design-build work, to utilize job-order contracting and to enter into Cooperative Purchasing arrangements for the design, construction and maintenance of Public Works, or undertake any other form of contracting determined to be in the District’s best interest, except as otherwise expressly restricted by law. Policy Revisions This document will be maintained and revised by the General Manager/CEO with his/her designated representatives in consultation with the District’s legal counsel, subject to approval by the Board. Revisions will occur whenever applicable federal, state, or local regulations change or otherwise as the need arises and in the discretion of the Board. Definitions The terms referenced in this Policy shall have the meanings as defined below: 9.1 Administrative Personnel - District administrative employees or leads authorized by staff with Contract Signature Authority to purchase miscellaneous items, food and travel in support of District functions; includes Administrative Assistant, Analyst, Coordinator, Specialist, and any other administrative position. 9.2 Agreement (Contract) - For purposes of this Policy, the terms “Agreement” and “Contract” are used interchangeably and refer to a written, legally binding contract. It authorizes a contractor, consultant, supplier, or service provider to provide materials, services, or Public Works in accordance with the terms of the contract. 9.3 Amendment - A written change or addition to a legal document which, when properly executed, has the same legal validity of the original document. 9.4 Board - The Board of Directors of East Valley Water District. 9.5 Change Order - A written Amendment modifying the terms of an existing contract or Purchase Order. 9.6 Consultant - An individual, firm, or entity that provides or offers to provide Professional Services to the District. 9.7 Contingency - A predetermined amount or percentage of a contract held for changes in a Public Works project. 9.8 Cooperative Purchasing - Participation with other agencies in cooperative purchasing arrangements and programs to leverage the benefits of volume purchases, delivery and EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 13 of 14 supply chain advantages, best practices, and the reduction of administrative time and expenses. 9.9 Emergency - A situation in which unforeseen circumstances present an immediate risk of harm or hazard to the public health, safety, and welfare, or to the District property, or threaten serious interruption of District operations. 9.10 Invitation to Bid (ITB)- A formal process for soliciting sealed bids from qualified prospective suppliers or Public Works contractors. Typically involves a formal bid opening, and the awarding of a contract to a responsive and responsible supplier or contractor based on price and other specified factors, and as otherwise required by law. 9.11 Multiple Year Contract - A contract for the purchase of services or materials, or for Public Works for a multiple year term or that may contain provisions to extend performance by exercising optional renewal periods. A Multiple Year Contract does not obligate the District beyond the initial award period and shall not provide for a cancellation payment to the contractor if options are not exercised. 9.12 Non-Discretionary Purchases - Payments to utilities, temporary employment services, insurance providers, healthcare providers, and national, state, or local agencies that relate to routine obligations and expenses essential to the District’s ability to provide service to customers and that have been approved in fiscal year operating or capital budgets. 9.13 General Services - Services other than Professional Services, including supply and maintenance services. 9.14 Procurement - The purchase or lease of materials, supplies, equipment, services, or Public Works. 9.15 Professional Services - Any type of special service or advice in financial, economic, accounting, engineering, legal or administrative matters by persons specially trained and experienced and competent to perform the special services required. (Government Code Section 53060.) Such services include but are not limited to architectural; engineering; environmental; financial; land surveying; construction management; audits; training services; legal services; preparation of planning or studies; technology application development; and personnel, job classification, and benefit studies. 9.16 Public Works - As defined by California Public Code Section 22002, public projects include construction, reconstruction, alteration, renovation, improvement, demolition, EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Purchasing/Procurement Policy Original Approval Date: August 9, 2011 Last Revised: October 11, 2017 Policy No: 7.1 Page 14 of 14 and repair work involving any publicly owned, leased, or operated facility. Maintenance work is not considered a public project for purposes of this definition. 9.17 Purchase Order (PO) - An authorization, under a standardized form in which the party designated as the “Provider” is to provide materials and/or services for which the District agrees to pay. 9.18 Purchasing Card - A form of charge card that allows materials and services to be purchased without using a Purchase Order. The District participates in the CAL-Card, Lowe’s, and Valero credit card programs. 9.19 Request for Proposal (RFP) - A solicitation used for the procurement of Professional Services and General Services. Prospective suppliers or consultants submit requested information and are evaluated/awarded based on pre-established criteria. 9.20 Request for Quotes (RFQ) - A solicitation used for procurement of supplies, materials, equipment, or services. 9.21 Requisition - The procedural method by which departments may request a PO for the purchase of materials, supplies, or equipment. Requisitions are entered into the District’s ERP system application. 9.22 Single Source Purchase - Procurement where: (1) there is a compelling reason for only one source, a preferred brand, like material, etc., to be procured; or (2) the commodity is unique, including, but not limited to, acquisition of data processing, telecommunications and word processing equipment, goods and services; or (3) the purchase of a specific brand name, make or model is necessary to match existing District equipment or facilitate effective maintenance and support; or (4) when it is in the best interest of the District to extend or renew a contract from a previous contract period, based on satisfactory service, reasonable prices, avoidance of start-up costs, avoidance of interruptions to District business, or good business practices. 9.23 Sole Source Purchase - Procurement where only one viable source exists. This is usually due to legal restrictions of patent rights, a proprietary process, warranty issues, original equipment, copyrights, etc. START Define Need (goods/services) + estimate total cost (Including tax and freight) Vendor already under an approved Contract/Master Agreement? NO Issue PO against approved contract (encumber funds) YES Goods or Services? Is purchase eligible for Calcard / Direct Pay? Is this a Professional Service? Calcard / Direct Pay (if allowed)YES NO Classify purchase type ServicesGoodsYES YES Is the service one- time, low risk, and within administrative authority? NO END Execute Professional Services Agreement NO Attachment A - Purchasing Workflow (Overview) to the East Valley Water District 2026 Purchasing Policy Update Execute General Services Agreement This workflow is provided for administrative guidance only and does not replace or supersede the Purchasing Policy, Board action, Delegation of Authority, or applicable law. PO Required Obtain Services Accept Work Process Invoice Obtain Insurance Certificates (if required) YES