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HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 08/12/2008JL East Valley Water District 3654 HIGHLAND AVE., SUITE #12, HIGHLAND, CA REGULAR. BOARD MEETING August 12, 2008 2:30 P.M. AGENDA ------------------------------------------------------------------------- ":[n order to comply with legal requirements for posting of agenda, only those items filed with the District Secretary by 10:00 a.m. on Wednesday prior to the following Tuesday meeting not requiring departmental investigation, will be considered by the Board of Directors ". ------------------------------------------------------------------------- CALL TO ORDER PLEDGE OF ALLEGIANCE -----------•------------------------------ ----- -------------------- - - - --- Public Comments 2. Approval of Agenda CONSENT CALENDAR 3. Approval of Board Meeting Minutes for July 22, 2008 4. Accounts Payable Disbursements: Accounts Payable Checks 215630 through 215887 were distributed July 23, 2008 through August 6, 2008 in the amount of $1,510,415.35. Payroll Checks for period ending July 18, 2008 included checks and direct deposits, in the amount of S 189,713.96. Total Disbursements for the period were $1,700,129.31. OLD BUSINESS 5. headquarters Project Review and Update 6. Discussion and possible action regarding the Water & Sewer rate study analysis prepared by MimiFinancial NEW BUSINESS 7. Directors' fees and expenses for June and July 2008 8. Review and accept Financial Statements for the period ended June 30, 2008 9. Discussion and possible action regarding CSDA's 2008 Board of Directors election and ballot 10. Resolution 2008.17 — A Resolution of the Board of Directors of the East Valley Water District establishing an investment policy for public funds 11. Discussion and possible action regarding board and staff travel and reimbursement policy g1EPOR'rS 12. General Manager /Staff Reports 13. Consultant Reports 14. Committee Reports: a. Budget (Standing) b. Legislative (Standing) c. Public Outreach (Standing) — Minutes for August 5, 2008 d. Headquarters Committee 15. Oral comments from Board of Directors CLOSED SESSION 1.6. CONFERENCE WITH REAL PROPERTY NEGOTIATOR [Government Code Section 54956.8] Property: Party with whom the District will negotiate: Party who will be negotiating on behalf of the District: Under Negotiation: 22 +/- Acres of Vacant Land North of Third Street, East of Sterling Ave, South of 5a' Street San Bernardino County, State of California APN(s): 1192- 241 -01, 1192- 231 -01 IVDA Robert Martin/ Jim Cimino Price and Terms of Payment 17. CONFERENCE. WITH REAL PROPERTY NEGOTIATOR [Government Code Section 54956.8] Property: Party with whom the District will negotiate: Party who gill be negotiating on behalf of the District: Under Negotiation: 2 9 +/- Acres of Vacant Land State of California APN(s): 1191-251-02,1191-251-05 �� Robert Martin/ Jim Cimino Price and Terms of Payment 18. CONFERENCE WITH LEGAL COUNSEL — ANTICIPATED LITIGTATION Significant exposure to litigation pursuant to Government Code Section 54956.9(b): One Potential Case ANNOUNCEMENT OF CLOSED SESSION ACTION ADJOURN ------------------------------------------------------------------------- Pursuanl to Government Code Section 54954.2(a), any request for a disability- related modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above - agendize:d public meeting should be directed to the District's Administrative Manager at (909) 885- 4900 at least 72 hours prior to said meeting. -•-------•---------------------------------------- -- ---------------- - - -- -- Subiectto approval FAST VALLEY WATER DISTRICT July 22, 2008 REGULAR BOARD MEETING MINUTES President Goodin called the meeting to order at 2:32 p.m. Vice President Wilson led the flag salute. PRESENT: Directors Goodin, LeVesque, Morales, Sturgeon, Wilson ABSENT: None STAFF: Brian Tompkins, Chief Financial Officer; Justine Hendricksen, Administrative Manager LEGAL COUNSEL: Steve Kennedy GUEST(s): Charles Roberts (Highland Community News), Jo McAndrews (McAndrews & Boyd), Larry Malmberg APPROVAL OF AGENDA M/S /C (Wilson - LeVesque) that the July 22, 2008 agenda be approved as submitted. PUBLIC PARTICIPATION President Goodin declared the public participation section of the meeting open at 2:32 p.m. Mr. Malmberg inquired as to the average water bill for residents of East Valley Water District. There being no further written or verbal comments, the public participation section was closed. APPROVAL OF SPECIAL BOARD MEETING MINUTES FOR JULY 7, 2008 M/S /C (Wilson- Sturgeon) that the Special Board Meeting Minutes for July 7, 2008 be approved as submitted. Minutes: 07/22/08 APPROVAL OF JULY 8, 2008 BOARD MEETING MINUTES M/S /C (Wilson - Sturgeon) that the July 8, 2008 Board Meeting Minutes be approved as submitted. APPROVAL TO WRITE -OFF CLOSED CUSTOMER ACCOUNTS WITH BALANCES OF LESS THAN $18.00 (FORTY -SEVEN ACCOUNTS TOTALING $438.64) M/S /C (Wilson- Sturgeon) that the Board approve the request to write -off closed customer accounts with balances of less that $18.00. RESOLUTION 2008.16 — A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT, SAN BERNARDINO COUNTY, STATE OF CALIFORNIA, ADDING DELINQUENT NON -PAID CHARGES TO ANNUAL TAXES LEVIED UPON THE PROPERTY FOR WHICH THE CHARGES ARE DELINQUENT AND UNPAID M/S /C (Wilson- Sturgeon) that Resolution 2008.16 be approved. APPROVAL OF GENERAL MANAGERS REQUEST TO BUY BACK SIXTY (60) HOURS OF VACATION TIME M/S /C (Wilson - Sturgeon) that the Board approve the General Managers request to buy back sixty (60) hours of vacation time. DISBURSEMENTS M/S /C (Wilson- Sturgeon) that General Fund Disbursements #215433 through 215629 distributed during the period of July 9, 2008 through July 16, 2008 in the amount of $660,909.82 and Payroll Fund Disbursements for the period ended June 30, 2008, and July 4, 2008 in the amount of $3,296.24 and $177,047.73 totaling $841,253.79 be approved. HEADQUARTERS PROJECT REVIEW AND UPDATE Ms Hendricksen reported that the initial study is out for public review and that GMID will be meeting with the City of San Bernardino planning department on Thursday regarding the project. Information only. 2 Minutes: 07/22/08 REVIEW AND APPROVAL OF ENGAGEMENT LETTER FROM ROGERS, ANDERSON, MALODY & SCOTT, LLP (RAMS) FOR ANNUAL AUDITING SERVICES PURSUANT TO GOVERNMENT AUDITING STANDARDS Mr. Tompkins stated that this is a single year audit; that he made a few inquires as to what other water agencies were paying for single year audits; that the fees were comparable to what is being proposed by RAMS. Mr. Tompkins stated that the board could form an audit committee next year to solicit and review RFP's for auditing services. Vice President Wilson concurs with Mr. Tompkins suggestion to form an audit committee and request RFP's for auditing services. Director LeVesque suggested that the budget committee handle this item. Mr. Kennedy stated that an audit committee would be for the purpose of soliciting RFP's and retaining services and not to review what the auditors are assessing. Director Morales is in favor of any process that increases the transparency in the District's operations. Mr. Tompkins stated for the record that he did request the engagement letter from RAMS in May and just recently received it. M/S /C (Wilson- Sturgeon) that the engagement letter from Rogers, Anderson, Malody & Scott, LLP (RAMS) for annual auditing services be approved. DISCUSSION AND POSSIBLE ACTION REGARDING THE CONSOLIDATION OF ELECTIONS FOR BOARD MEMBERS WITH THE STATEWIDE GENERAL ELECTIONS Director Morales stated that he will recuse himself from the discussion as he believes that this topic could be construed as a conflict of interest as he works for the San Bernardino County Board of Supervisors. Let the minutes reflect that Director Morales left the board table and did not participate in any discussion relating to item #11. Director Sturgeon stated that this item has been brought to the board on previous occasions. President Goodin stated that he does not know how much money the District would save if the elections were changed to even years so he is opposed to this item. M/S /C (LeVesque- Sturgeon) to affirm that the Board is opposed to the consolidation of elections for board members with the statewide general elections. Minutes: 07/22/08 Directors Goodin, LeVesque, Sturgeon voted YES. Director Wilson voted NO. Director Morales abstained from the vote. DISCUSSION AND POSSIBLE ACTION REGARDING THE APPROVAL TO BID THE NORTH FORK PIPELINE PHASE II Director Morales would like to know if the Board is comfortable moving forward with this proposal. M/S /C (Sturgeon - Wilson) that the Board approve the request to bid the North Fork Pipeline Phase II portion of the project. DISCUSSION AND POSSIBLE ACTION REGARDING THE CANCELING OR RESCHEDULING OF THE OCTOBER 14TH 2008 BOARD MEETING M/S /C (Sturgeon - LeVesque) that the October 14`h 2008 board meeting be canceled. DISCUSSION AND POSSIBLE ACTION REGARDING THE CANCELING OR RESCHEDULING OF THE NOVEMBER 24TH 2008 BOARD MEETING No action taken. REVIEW AND ACCEPT THE QUARTERLY INVESTMENT REPORT FOR THE PERIOD ENDED JUNE 30, 2008 Mr. Tompkins reviewed the Quarterly Investment Report with the board. Director Sturgeon would like to know if the District has any accounts that are not insured by the FDIC. Director Sturgeon would also like information brought back to the board regarding investing with LAIF. Director Morales requested the CFO's perspective on yields and current information regarding LAIF. M/S /C (Wilson - LeVesque) that the Quarterly Investment Report for the period ended June 30, 2008 be accepted. Minutes: 07/22/08 GENERAL, MANAGER / STAFF REPORTS No reports at this time. CONSULTANT REPORTS No reports at this time. COMMITTEE REPORTS Director LeVesque reported on the July 17'h, 2008 Legislative Committee meeting. ORAL COMMENTS FROM BOARD OF DIRECTORS Director Sturgeon would like to set up a Public Outreach Committee meeting and requested that the Inland Empire Solar Challenge be on the agenda. Information only. LITTLE LEAGUE BASEBALL WESTERN REGION OPEN HOUSE AND THE SAN BERNARDINO AREA CHAMBER OF COMMERCE "BUSINESS AFTER IIOURS ", SAN BERNARDINO, JULY 24, 2008 YUCAIPA VALLEY REGIONAL WATER FILTRATION FACILITY DEDICATION, YUCAIPA, AUGUST 6, 2008 WATER EDUCATIONS FOUNDATION'S NORTHERN CALIFORNIA TOUR, SACRAMENTO, SEPTEMBER 10- 12,2008 UNDERSTANDING THE STATE CONTROLLER'S REPORT: NUTS & BOLTS WORKSHOP FOR SPECIAL DISTRICTS, VARIOUS DATES ADJOURN The meeting was adjourned at 3:30 p.m. until the next regularly scheduled Board Meeting. Robert E. Martin, Secretary Donald D. Goodin, President 5 Minutes: 07/22/08 OEastValley Water District Board Memorandum Front: Brian W. Tompkins / Chief Financial O icer Subject: Disbursements. Recommendation: Approve the attached list of accounts payable checks and payroll issued during the period July 23, 2008 through August 06, 2008. Background: DATE: AUGUST 12, 2008 Accounts payable checks are shown on the attached listing and include numbers 215630 to 215887 for A total of $1,510,415.35. The source of funds for this amount is as follows: Unrestricted Funds $1,510,415.35 Payroll disbursed was for the period ended July 18,2008 and included checks and direct deposits totaling $189,713.96. Total disbursements $1,700,129.31. Date: Wednesday, August 06, 2008 Time: 02:39PM User, KATHY Bank Account: Citizens Business Bank East Valle Water District y Check Register - Standard As of: 81612008 13110 00 -00- 000 -0- 000 -00 -00 Page: Report : Company: 1 of 5 20600.rpt EVWD Check V� JI Tn Check Payee Clear Period Nor Tp Tp Y Date ID Payee Name Date Post Amount 000001 - 215629 Missing 215630 AP CK 7/23/2008 ADP002 ADP 8/1/2008 01 -08 242.98 215631 AP CK 7/2312008 AGU031 AGUILAR- MARTHA 8/4/2008 01 -08 66.38 215632 AP CK 7/2312008 AIR005 AIRGAS WEST 7/28/2008 01 -08 135.70 2.15633 AP CK 7123/2008 AME026 AMERIGAS 7/29/2008 01 -08 77.73 215634 AP CK 7/23/2008 ARM002 ARMORCAST 7/30/2008 01 -08 8,619.80 215635 AP CK 7/23/2008 ARRO09 ARROWHEAD UNITED WAY 01 -08 105.00 215636 AP CK 7/2312008 ATT007 AT &T 7/30/2008 01.08 1,049.11 215637 AP CK 7/23/2008 BAL005 BALLARD PLUMBING HEATIP 7/29/2008 01 -08 110.00 215638 AP CK 7123/2008 BAR061 BARBOZA- JAVIERA 7/29/2008 01 -08 30.62 215639 AP CK 7/23/2008 BAR074 BARRY'S SECURITY SERVIC 7/29/2008 01 -08 7,799.82 2.15640 AP CK 7/23/2008 BAS009 BASIN WATER 7/2912006 01 -08 22,747.11 215641 AP CK 7/23/2008 BAT002 BATTEEN -JOHN W 7/29/2008 01 -08 3,850.00 215642 AP CK 7/23/2008 BR0001 BRUNICK, MCELHANEY & BE 7/30/2008 01 -08 2,675.00 215643 AP CK 7/23/2008 BUS014 BUSS - DUSTIN 7/31/2008 01 -08 4,500.00 215644 - 215648 Missing 215649 AP CK 7123/2008 CHE007 CHEM -TECH INTERNATIONA 8/1/2008 01 -08 5,453.82 215650 AP CK 7/23/2008 CIT018 CITISTREET 7/30/2008 01 -08 8,140.50 215651 AP CK 7/23/2008 COL036 RIDGE- COLDWELL BANKER 01 -08 11.40 215652 AP CK 712312008 C00025 COUNTY OF SAN BERNARDI 811/2008 01 -08 700.00 215653 AP CK 712312008 DIA010 DIAZ- IRVING F 01 -08 77.34 2.15654 AP CK 7/23/2008 DIB001 DIB'S SAFE & LOCK SERVICE 8/1/2008 01 -08 53.57 215655 AP CK 7/23/2008 DIE001 DIETZ -DAN 7/28/2008 01 -08 150.00 2.15656 AP CK 7/23/2008 DIE007 DIETERICH -POST 7/29/2008 01 -08 60.00 215657 AP CK 7/23/2008 DNCO01 LAUNDRY -D & N COIN 7/30/2008 01 -08 889.28 215658 AP CK 7/23/2008 EAS003 East Valley Water District 7/28/2008 01 -08 672.50 2.15659 AP CK 7/23/2008 EC0002 AGENCY - ECONOMIC DEV 01 -08 2,600.64 2.15660 AP CK 7/23/2008 ELR001 EL RANCHO SHELL 8/5/2008 01 -08 226.00 215661 AP CK 7/23/2008 ESB001 E.S. BABCOCK & SONS, INC 7/29/2008 01 -08 18,778.00 215662 AP CK 7/23/2008 ESC011 ESCUTIA -ROSA M 01 -08 31.82 215663 AP CK 7/23/2008 EVA010 EVANGELISTO- DENNIS 8/1/2008 01 -08 70.35 215664 AP CK 7/23/2008 FIR008 FIRST AMERICAN CORELOG 8/1/2008 01 -08 315.00 215665 AP CK 7/2312008 GO1001 GOINS JANITORIAL SERVICE 7/30/2008 01 -08 2,135.00 215666 AP CK 7/23/2008 GRA035 GRAND PACIFIC CONTRACT 01 -08 105.72 215667 AP CK 7/23/2008 HAR009 HARPER AND ASSOCIATES, 01 -08 644.99 215668 AP CK 7/23/2008 HER103 HERNANDEZ- GERARDO 7/29/2008 01 -08 28.26 215669 AP CK 7/23/2008 HIG018 HIGHLANDS STAR CENTER, 7/30/2008 01 -08 11,804.00 215670 AP CK 7/2312008 HUB001 HUB CONSTRUCTION SPECI 7/29/2008 01 -08 441.55 215671 AP CK 7/23/2008 IDE002 IDEARC MEDIA CORP. 7/31/2008 01 -08 22.00 215672 AP CK 7/23/2008 IMB002 IMBERT -FRANK 7129/2008 01 -08 342.02 215673 AP CK 7/23/2008 INL005 INLAND WATERWORKS SUF 7129/2008 01 -08 15,540.49 215674 AP CK 7/23/2008 INT005 INTERSTATE BATTERY 8/4/2008 01 -08 192.84 215675 AP CK 7/23/2008 JOH001 JOHNSON MACHINERY CO 7/29/2008 01 -08 58.04 215676 AP CK 7/23/2008 JRF001 J.R. FREEMAN CO., INC 7/29/2008 01 -08 76.20 215677 AP CK 7/2312008 KEN018 KENNEDY- -MICAH 7/28/2008 01 -08 242.72 215678 AP CK 7/23/2008 LAW003 LAWSON PRODUCTS,INC 7/30/2008 01 -08 442.93 215679 AP CK 7/23/2008 LIF001 LIFECOM, INC. 7/29/2008 01 -08 1,557.83 215680 AP CK 7/2312008 MAR127 MARABLE -MIKE 01 -08 60.82 215681 AP CK 7/23/2008 MIL001 MILOBEDZKI -JACEK 7/29/2008 01 -08 800.00 215682 AP CK 7/23/2008 MON045 MONTOYA- RUDOLPH M 8/5/2008 01 -08 39.85 215683 AP CK 7/23/2008 MUL013 MULLENNIX -GAIL 7/30/2008 01 -08 65.65 215684 AP CK 7/23/2008 NEGO01 NEGRETE- EDWARD S 7/25/2008 01 -08 1,635.20 215685 AP CK 7/2312008 NET005 NETCOMP TECHNOLOGIES, 01 -08 450.00 215686 AP CK 7/2312008 OFF007 OFFICETEAM 7/28/2008 01 -08 2,454.40 215687 AP CK 7/23/2008 ONL001 ONLINE RESOURCES CORP( 7/31/2008 01 -08 33.65 215688 AP CK 7/23/2008 PEN004 PENHALL COMPANY 811/2008 01 -08 920.00 215689 AP CK 7/23/2008 PRE020 CENTERS - PREGNANCY SUF 7 /30/2008 01 -08 385.45 215690 AP CK 7/23/2008 QUE008 QUEVEDO- ALONDRA 01 -08 11.88 Date: 02:39P East i Wednesday, August 06, 2008 5 Time: 02:39P Et Valle Water District Report: 20600.rp User: KATHY Check Register - Standard Company: EVWD As of: 816/2008 Bank Account: Citizens Business Bank 13110 00 -00- 000 -0- 000 -00 -00 Check JI Tn Check Payee Clear Period Nbr Tp Tp Date ID Payee Name Date Post Amount 215691 AP CK 7/23/2008 QWE001 QWEST 7/31/2008 01 -08 28.53 215692 AP CK 7/23/2008 RAM070 RAMOS- GERARDO 01 -08 92.35 215693 AP CK 7123/2008 REF001 REFUSE DEPT CITY OF S B 8/112008 01 -08 715.00 215694 AP CK 7/23/2008 REY037 REYES -MARIO 01 -08 148.68 215695 AP CK 7/23/2008 RIM001 RIMROCK TECHNOLOGIES,117 /29/2008 01 -08 4,714.00 215696 AP CK 7/23/2008 ROQ001 ROQUET PAVING 7/29/2008 01 -08 16,705.04 215697 AP CK 7/23/2008 RUE004 RUEDAS- MARTHA 7/30/2008 01 -08 80.04 215698 AP CK 7/23/2008 SAN007 SAN BDNO PUBLIC EMPLOY 7/3012008 01 -08 665.25 215699 AP CK 7/23/2008 SAN072 SAN BERNARDINO COUNTY 8/4/2008 01 -08 60.00 215700 AP CK 7/23/2008 SCH049 PLAZA - SCHANARRE 8/412008 01 -08 30.74 215701 AP CK 7/23/2008 S00019 SCOTT -MARIE 7/29/2008 01 -08 74.96 215702 AP CK 7/23/2008 SER019 SERRANO -JUAN 01 -08 27.08 215703 AP CK 712312008 SITY001 SITYPTYCKI- RAYMOND 7/30/2008 01 -08 360.00 215704 AP CK 7/2312008 S00002 SO CAL GAS COMPANY. 7/31/2008 01 -08 49.44 215705 AP CK 7/23/2008 S00003 SO CAL PUMP & WELL SER\j 7/29/2008 01 -08 29,799.82 215706 AP CK 7/23/2008 STA055 STATE DISBURSEMENT UNI' 7/30/2008 01 -08 1,177.00 215707 AP CK 7/23/2008 STA073 CORPORATION - STALWART 7/30/2008 01 -08 89.25 215708 AP CK 7/23/2008 STUO12 STURKIE- MATTHEW B 7/29/2008 01 -08 40.28 215709 AP CK 7/23/2008 TAY013 KEN TAYLOR 8/5/2008 01 -08 80.80 215710 AP CK 7/23/2008 TOL006 BROTHERS -TOLL 7/31/2008 01 -08 67.43 215711 AP CK 7/23/2008 TOP001 TOP PRODUCERS REALTY 8 01 -08 88.52 215712 AP CK 712312008 UNI002 UNITED PARCEL SERVICE 7/29/2008 01 -08 34.00 215713 AP CK 7/23/2008 UN1023 United States Treasury 7/31/2008 01 -08 100.00 215714 AP CK 7/23/2008 USA006 USA MOBILITY WIRELESS, It 7130/2008 01 -08 141.81 215715 AP CK 7/23/2008 VAL055 VALERIO- EDUARDO 8/1/2008 01 -08 79.32 215716 AP CK 7/23/2008 VER004 VERIZON CALIFORNIA 7/31/2008 01 -08 90.41 215717 AP CK 7/2312008 VIL029 VILLATORO -DIGNA R 7/29/2008 01 -08 52.53 215718 AP CK 7/23/2008 VUL001 VULCAN MATERIALS COMPF 7/28/2008 01 -08 1,885.02 215719 AP CK 7/23/2008 WEL016 INC -WELLS TAPPING SERVI 01 -08 1,250.00 215720 AP CK 7/23/2008 WIR003 WIRELESS WATCHDOG, LLC 8/1/2008 01 -08 256.00 215721 AP CK 7/23/2008 WRIO17 WRIGHT- ALEXANDRIA 01 -08 65.70 215722 AP CK 7/23/2008 ZEE001 ZEE MEDICAL INC. 814/2006 01 -08 156.36 215723 AP CK 7/23/2008 CAL092 CALDERON -LUIS 01 -08 9.02 215724 AP CK 7/23/2008 CAM004 CAMP DRESSER & MCKEE It 7/29/2008 01 -08 144,772.21 215725 AP CK 7/23/2008 CAM036 CAMBEROS- MICHAEL 7/28/2008 01 -08 110.00 215726 AP CK 7/23/2008 CAM038 PROPERTIES -CAMPA 01 -08 25.21 215727 AP CK 7/23/2008 CHAO82 CHAVEZ- EVERARDO 7/28/2008 01 -08 62.21 215728 AP CK 7/30/2008 ADP002 ADP 01 -08 550.10 215729 AP CK 7/30/2008 ADVO01 ADVANCED TELEMETRY SY! 01 -08 600.00 215730 AP CK 7/3012008 AIR005 AIRGAS WEST 8/4/2008 01 -08 240.45 215731 AP CK 7/3012008 ALL001 ALLIED REFRIGERATION 8/5/2008 01 -08 90.59 215732 AP CK 7/3012008 AON001 AON INC 8/4/2008 01 -08 1,670.37 215733 AP CK 7/30/2008 APP004 INTERNATIONAL INC -APPLE 01 -08 48.12 215734 AP CK 7/30/2008 ATT007 AT &T 8/5/2008 01 -08 178.74 215735 AP CK 7130/2008 AVA005 AVAYA FINANICIAL SERVICE 01 -08 2,577.70 215736 AP CK 713012008 AVA008 AVAYA/CUSTOMER CARE CE 01 -08 795.91 215737 AP CK 7/3012008 BAR074 BARRY'S SECURITY SERVIC 8/4/2008 01 -08 3,593.94 215736 AP CK 713012008 BIR001 BIRD REFRIGERATION CO.,II 01 -08 4,113.00 215739 AP CK 713012008 BRIO10 BRISTOL BABCOCK INC 01 -08 88.71 215740 AP CK 7/30/2008 BUC015 BUCIO- AGUSTIN 01 -08 51.89 215741 AP CK 7/30/2008 BUR022 BURGESS MOVING & STORF 8/5/2008 01 -08 588.87 215742 AP CK 7130/2008 CHRO18 CHRISTIANSEN -JOHN 01 -08 45.33 215743 AP CK 7/30/2008 CLI003 CLIFFORD L UTLEY 01 -08 365.00 215744 AP CK 7/30/2008 DIB001 DIB'S SAFE & LOCK SERVICE 01 -08 1,661.04 215745 AP CK 7/30/2008 DON001 DONEGAN TREE SERVICE 01 -08 2,000.00 215746 AP CK 7/30/2008 EQ0004 REALTY - EQUITY PLUS 01 -08 32.65 215747 AP CK 7/30/2008 ESP022 ESPINOZA -ROCK) 01 -08 61.01 215748 AP CK 7/30/2008 FED001 FEDERAL EXPRESS 01 -08 78.78 Date: 'time: 02:3 9PM as Y Page: 3 of 5 Wednesday, August 06, 2008 Et Valle Water District Report: 20600.rpt 02:3 User: KATHY Check Register - Standard Company: EVWD As of: 816/2008 Bank Account: Citizens Business Bank 13110 00 -00- 000 -0- 000 -00 -00 Check JI Tn Check Payee Clear Period Nbr Tp Tp Date ID Payee Name Date Post Amount 215749 AP CK 7/30/2008 GAB001 GABRIEL EQUIPMENT CO 814/2008 01 -08 1,196.51 215750 AP CK 7/30/2008 GEL001 GELLER -ALLEN 01 -08 18.86 215751 AP CK 7/30/2008 GEN007 GENUINE PARTS COMPANY 8/4/2006 01 -08 138.20 215752 AP CK 7/30/2008 GOV001 GOVERNMENT FINANCE OF] 01 -08 155.00 215753 AP CK 7/30/2008 GUT037 GUTIERREZ -JOSE G 01 -08 71.79 215754 AP CK 7/30/2008 HAC001 HACH COMPANY 01 -08 65.87 215755 AP ZC 7/30/2008 HIG007 HIGHLAND AREA CHAMBER 7130/2008 01 -08 0.00 215756 AP CK 7/30/2008 HON003 HONEYFIELD -JAY CARL 8/5/2008 01 -08 7,003.75 215757 AP CK 7/30/2008 HUB001 HUB CONSTRUCTION SPECI 8/4/2008 01 -08 28.03 215758 AP CK 7/30/2008 HUR001 HURT - GERALD E 8/5/2008 01 -08 512.00 215759 AP CK 7/30/2008 IG0001 IGUALATE -JESUS 8/5/2008 01 -08 30.76 215760 AP CK 7/30/2008 IMB002 IMBERT -FRANK 01 -08 68.96 215761 AP CK 7/30/2008 INL005 INLAND WATER WORKS SUF 8/5/2008 01 -08 6,242.97 215762 AP CK 7/30/2008 JAC039 JACOME- CHRISTINA 01 -08 12.52 215763 AP CK 7/3012008 JAN004 JANG -JASON 8/5/2006 01 -08 49.74 215764 AP CK 7/30/2008 KEE002 KEENAN SUPPLY 8/4/2008 01 -08 124.38 215765 AP CK 7/3012008 MACO25 MACHARELLI- MICHAEL 01 -08 117.72 215766 AP CK 7/30/2008 MAR144 MARINO -PAUL DI 01 -08 19.35 215767 AP CK 7/30/2008 MAT012 MATICH CORP 8/5/2008 01 -08 1,370.66 215768 AP CK 7/30/2008 MCA001 MC ANDREWS & BOYD 8/5/2008 01 -08 9,910.00 215769 AP CK 7130/2008 MCC001 MC CRAY ENTERPRISES 8/4/2008 01 -08 60.00 215770 AP CK 7/30/2008 MCM002 MCMASTER -CARR 01 -08 124.51 215771 AP CK 7/30/2008 MON046 MONIN- -KAREN 01 -08 11.59 215772 AP CK 7/30/2008 MOR078 MOREDOCK- WENDELL 8/4/2008 01 -08 70.97 215773 AP CK 7/30/2008 MOS005 MOSES- DESIREE 01 -08 8.26 215774 AP CK 7/30/2008 NE0005 NEUMANN- MEAGAN 01 -08 10.22 215775 AP CK 7/30/2008 NOR023 NORTH AMERICAN RESIDEN 01 -08 42.48 215776 AP CK 7/30/2008 NOV007 NOVAK- RICHARD 01 -08 90.20 215777 AP CK 7130/2008 OAK001 MGT -OAK PROJECT 814/2008 01 -08 63.63 215778 AP CK 7/30/2008 OFF007 OFFICETEAM 8/4/2008 01 -08 2,454.40 215779 AP CK 7/30/2006 PAC010 PACIFIC TITAN INC. 8/4/2008 01 -08 21,738.70 215780 AP CK 7/30/2008 PAD009 PADILLA- DANIEL 01 -08 60.00 215781 AP CK 7/30/2008 PEN004 PENHALL COMPANY 01 -08 170.00 215782 AP CK 7/30/2008 RAM074 RAMIREZ -PEDRO 01 -08 37.41 215783 AP CK 7/30/2008 REE017 RELATION, LLC -REEB GOVE 01 -08 6,000.00 215784 AP CK 7/3012008 ROD071 RODRIGUEZ III-ANGEL 01 -08 58.83 215785 AP CK 7/30/2008 ROY004 ROYBAL- RAYMOND 01 -08 50.00 215786 AP CK 7/30/2008 SAN009 SAN BERNARDINO -CITY OF 01 -08 2,431.00 215787 AP CK 7/30/2008 SAN015 SAN BDNO CO FIRE DEPT 01 -08 432.00 215788 AP CK 7/3012008 SOT016 SOTOMAYOR- CLAUDIA 8/5/2008 01 -08 31.35 215789 AP CK 7/30/2008 SYC001 SYCIP- JOSEPH 01 -08 42.03 215790 AP CK 7/30/2008 UNI021 UNITED SITE SERVICES OF 1 01 -08 232.06 215791 AP CK 7130/2008 UNI025 MANAGEMENT - -UNITED PRC 8/4/2008 01 -08 43.66 215792 AP CK 7130/2006 USP006 U.S. PIPE & FOUNDRY CO 01 -08 65,428.95 215793 AP CK 7/30/2008 UT1001 UTILITY SUPPLY OF AMERIC 01 -08 193.54 215794 AP CK 7/30/2008 VER004 VERIZON CALIFORNIA 01 -08 195.33 215795 AP CK 7/30/2008 VUL001 VULCAN MATERIALS COMPF 814/2008 01 -08 8,217.63 215796 AP CK 7/30/2008 WAL039 WALTON -SARAH 01 -08 7.09 215797 AP CK 7/30/2008 WAX001 WAXIE SANITARY SUPPLY 8/5/2008 01 -08 773.86 215798 AP CK 7/30/2008 WIL096 WILLDAN FINANCIAL SERVIC 8/4/2008 01 -08 11,100.00 215799 AP CK 7/3012008 ZAR007 ZARAGOZA -FELIX 8/5/2008 01 -08 20.00 215800 AP CK 7/30/2008 ZEE001 ZEE MEDICAL INC. 01 -08 103.17 215801 AP CK 7/30/2008 ZUC003 ZUCKER -CHANA 81512008 01 -08 53.28 215802 AP CK 8/1/2008 SAN038 SAN BERNARDINO COUNTY 02 -08 676.00 215803 AP CK 8/6/2008 AFR001 AFRAM -MIKE 02 -08 13.43 215804 AP CK 8/6/2008 AIR005 AIRGAS WEST 02 -08 46.03 215805 AP CK 8/6/2008 AME005 AMERICAN RED CROSS 02 -08 600.00 215806 AP CK 8/6/2008 ARR009 ARROWHEAD UNITED WAY 02 -08 105.00 Date: Wednesday, August 06, 2008 Time: 02:39PM User: KATHY Bank Account: Citizens Business Bank East Valley Water District Check Reqister - Standard As of: 8/6/2008 13110 00 -00- 000 -0- 000 -00 -00 Page: Report: Company: 4 of 5 20600.rpt EVWD Check JI Tn Check Payee Clear Period Nbr Tp Tp Date ID Payee Name Date Post Amount 215607 - AP CK 8/6/2008 BAR024 BARR LUMBER CO INC 02 -08 110.31 215808 AP CK 8/6/2008 BAR081 BARRIGA- RAMIRO 02 -08 12.09 215809 AP CK 8/6/2008 BAT003 BATDORF -EARL 02 -08 295.01 215810 AP CK 8/6/2008 BAU007 BAUTISTA- MONICA 02 -08 45.26 215811 AP CK 8/6/2008 BOM002 BOMEI CONSTRUCTION 02 -08 1,622.00 215612 AP CK 8/6/2008 BUR045 BURNETT- CHRISTIAN 02 -08 4.62 215813 AP CK 8/6/2008 CAS042 CASTANEDA -GRETE 02 -08 62.22 215814 AP CK 8/6/2008 CER011 CERVANTES- JAVIER 02 -08 65.26 215815 AP CK 8/6/2008 CIT013 CITY OF SAN BERNARDINO/ 02 -08 50.00 215816 AP CK 8/6/2008 CIT018 CITISTREET 02 -08 8,140.50 215817 AP CK 8/6/2008 COA003 COAST & COUNTRY REAL E: 02 -08 36.90 215818 AP CK 8/6/2008 COR047 CORE 02 -08 53.20 215819 AP CK 816/2008 COU004 COURTNEY'S ELECTRIC, INC 02 -08 162.90 215820 AP CK 8/6/2008 CRE001 CREST CHEVROLET 02 -08 137.27 215821 AP CK 8/6/2008 DAN016 DAHN -KIM T 02 -08 71.14 215822 AP CK 8/6/2008 DEL045 DELTA DENTAL OF CALIFOR 02 -08 1,674.24 215823 AP CK 81612008 DEN005 ROUSE - TRAVIS 02 -08 250.00 215824 AP CK 8/6/2008 EAS003 East Valley Water District 02 -08 672.50 215825 AP CK 8/6/2008 FA1002 FAIRVIEW FORD SALES,INC 02 -08 20.31 215826 AP CK 8/6/2008 FAR001 FARMER BROS COFFEE 02 -08 222.84 215827 AP CK 8/6/2008 FAR022 FARIAS- RENATO 02 -08 22.78 215828 AP CK 8/6/2008 FOX001 FOX -JANA 02 -08 369.77 215829 AP CK 8/6/2008 FUE005 FUENTES -SAUL 02 -08 3.69 215830 AP CK 8/6/2008 GAB001 GABRIEL EQUIPMENT CO 02 -08 464.11 215831 AP CK 8/6/2008 GAL023 GALLEGOS- SHANNAH 02 -08 30.82 215832 AP CK 8/6/2008 GAL029 GALLEGOS- LETICIA 02 -08 1.85 215833 AP CK 8/612008 GAM008 GAMBOA- PHYLIS 02 -08 95.09 215834 AP CK 8/6/2008 GAV001 GAVILANEZ- JOHANA 02 -08 39.02 215835 AP CK 8/6/2008 GEN007 GENUINE PARTS COMPANY 02 -08 582.92 215836 AP CK 8/6/2008 GIB009 GIBSON -HUEY 02 -08 38.00 215837 AP CK 8/6/2008 HAR001 HARVEY - RANDAL 02 -08 413.44 215838 AP CK 8/6/2008 HAR033 HARRIS COMPUTER SYSTEP 02 -08 2,250.00 215839 AP CK 8/6/2008 HDS001 HD SUPPLY WATERWORKS, 02 -08 25,418.55 215840 AP CK 8/6/2008 HER104 HERNANDEZ -JORGE 02 -08 30.36 215841 AP CK 8/6/2008 HER105 HERNANDEZ- ROSEMARIE 02 -08 43.13 215842 AP CK 8/6/2008 HUB001 HUB CONSTRUCTION SPECI 02 -08 860.87 215843 AP CK 8/6/2008 HUN015 HUNT -WENDI S 02 -08 20.38 215844 AP CK 8/6/2008 INF005 INFOSEND, INC 02 -08 9,963.00 215845 AP CK 8/6/2008 INL005 INLAND WATER WORKS SUF 02 -08 19,396.77 215846 AP CK 8/6/2008 INW001 INWESCO INC 02 -08 10,697.01 215847 AP CK 8/6/2008 IRO001 SERVICES - IRONMAN PART: 02 -08 800.00 215848 AP CK 8/612008 JAR009 JARAMILLO- LEOBARDO 02 -08 2.61 215849 AP CK 8/6/2008 LAW003 LAWSON PRODUCTS,INC 02 -08 1,491.96 215850 AP CK 8/6/2008 LEN004 LENOCKER -RYAN 02 -08 61.01 215851 AP CK 8/612008 MAT012 MATICH CORP 02 -08 1,395.49 215852 AP CK 8/6/2008 MET002 METROPOLITAN LIFE INS CC 02 -08 409.59 215853 AP CK 8/6/2008 NOV008 NOVAK - SMITH -MIKE 02 -08 158.46 215854 AP CK 8/6/2008 OAK002 MANAGEMENT -OAK PROJEI 02 -08 148.78 215855 AP CK 8/6/2008 OFF007 OFFICETEAM 02 -08 2,454.40 215856 AP CK 8/6/2008 OL1001 OLIVE - KENNETH 02 -08 283.93 215857 AP CK 8/6/2008 OSO004 OSORES- LAZARO 02 -08 15.42 215858 AP CK 8/6/2008 PAT005 PATTERSON -ROY 02 -08 350.00 215859 AP CK 8/612008 PER007 PERFORMANCE METERS INI 02 -08 38,980.15 215860 AP CK 8/6/2008 PGA001 REALTY -PGA 02 -08 84.65 215861 AP CK 8/6/2008 PHO001 PHOENIX HOME LIFE 02 -08 191.94 215862 AP CK 8/6 /2008 RAM070 RAMOS- GERARDO 02 -08 78.22 215863 AP CK 8/6/2008 REA013 SERVICES - REALPRO REO 02 -08 86.94 215864 AP CK 8/6/2008 SAF005 COMPANY - SAFETY COMPLI 02 -08 500.00 Date: Wednesday, August 06, 2008 East Valley Water District Page: 5 of 5 Time: 132:39PM Period Post Report : 20600.rpt User: KATHY Check Register - Standard Company: EVWD 02 -08 As of: 81612008 215866 AP CK Bank Acatunt: Citizens Business Bank 13110 00 -00- 000 -0- 000 -00 -00 SAN BDNO PUBLIC EMPLOY, 02 -08 Check Nbr �. A Tn TIP Tp Check Date Payee ID Clear Payee Name Date Period Post Amount 215865 AP CK £3/6/2008 SAN004 SAN BERNARDINO —CITY OF 02 -08 475,293.19 215866 AP CK 8/6/2008 SAN007 SAN BDNO PUBLIC EMPLOY, 02 -08 674.50 215867 AP CK 8/6/2008 SAN013 SANTINI —STEVE 02 -08 400.00 215868 AP CK 8/6/2008 SER020 SERRATO— ISREAL 02 -08 51.41 215669 AP CK 8/6/2008 SEV001 SEVERSON -RON 02 -08 231.63 2.15870 AP CK 8/6/2008 SIN010 CORRAL- SINGH— REBECCA 02 -08 67.38 2.15871 AP CK 8/6/2008 S00003 SO CAL PUMP & WELL SER\, 02 -08 150.60 215872 AP CK 8/6/2008 S00004 SO CAL EDISON COMPANY 02 -08 257,052.28 215873 AP CK 8/6/2008 SOM003 SOMOSO —GRACE 02 -08 58.24 215874 AP CK 8/612008 803001 SOSA ^GABRIELA 02 -08 66.29 215875 AP CK 8/6/2008 STA055 STATE DISBURSEMENT UNI- 02 -08 1,027.00 2.15876 AP CK 8/6/2008 TH0010 THOMPSON PUBLISHING GF 02 -08 428.50 215877 AP CK 8/6/2008 UNI002 UNITED PARCEL SERVICE 02 -08 23.73 215878 AP CK 8/6/2008 UNI013 UNION BANK OF CALIFORNL 02 -08 137,839.50 215879 AP CK 8/6/2008 UNI023 United States Treasury 02 -08 100.00 215880 AP CK 8/6/2008 VER003 VERIZON WIRELESS 02 -08 362.61 215881 AP CK 816/2008 VER004 VERIZON CALIFORNIA 02 -08 33.44 215882 AP CK 8/6/2008 VIL043 DAVILA —MARIA 02 -08 11.56 215883 AP CK 8/6/2008 VUL001 VULCAN MATERIALS COMPF 02 -08 858.55 215884 AP CK 8/6/2008 WHI005 WHITEHEAD —ROGER 02 -08 350.00 215885 AP CK 8/6/2008 WOR009 WORLD SAVINGS 02 -08 45.61 215886 AP CK 8/6/2008 WRI018 WRIGHT- TRAVIS H 02 -08 59.32 215887 AP CK 8/6/2008 ZAL002 ZALE —JODIE L 02 -08 5.48 Check Count: 253 Bank Account Total 1,510,415.35 Count Amount Paid Regular 252 1,510,415.35 Hand 0 0.00 Void 0 0.00 Stub 0 0.00 Zero 1 . 0.00 Mask 0 0.00 Outstanding 0 0.00 Unused 0 0.00 253 1,510,415.35 �AoWater 3654 East Highland Avenue, Suite 18 EastYalley Highland CA 92346 District P.O. Box 3427 San Bernardino CA 92413 NOTICE TO PROPERTY OWNERS AND TENANTS OF REAL PROPERTY WHO ARE DIRECTLY LIABLE TO PAY WATER BILLS OF A PUBLIC HEARING ON PROPOSED WATER & SEWER RATE INCREASE REASONS FOR PROPOSING RATE INCREASES Like many water agencies, the East Valley Water District is facing significant near -term capital upgrade and replacement costs. This is due to increasingly strict water quality regulation, expensive new requirements for monitoring wastewater collection systems, and depreciation of the District's existing facilities and infrastructure; much of it at or near 50 years old. The District's current Capital Improvement Program identifies project expenditures totaling $18.7 million to be completed during fiscal year 2008 -09, and an additional $42.4 million for fiscal year 2009 -10. Specifically, the improvements include: Construction of new District headquarters current facilities have been leased since 2004 at which time former administrative offices were deemed unhealthy for occupants Complete Districts primary surface water intake pipeline (approx. 4 miles); federal funding is also being utilized for this important project Expanding capacity and updating technology for District's surface water treatment plant Installing pipelines to enhance District's capability for transfer of water between pressure ones Replace water pipelines that with repetitive leaks or sewer pipelines that have the potential for spills. During recent reviews of the proposed operating budget for 2008 -09 and the Capital Improvement Program, all costs were evaluated. In addition, all methods of financing the budget, including 1) drawing money from reserves, 2) rate increases, and 3) issuing debt were considered. Having reviewed all options and the magnitude of the Capital Projects that must be started in the current fiscal year, the Board of Directors and management of East Valley Water District arc proposing a $47,000,000 bond issue, accompanied by a 12.5% increase in water and sewer rates. Increased revenue from rates will allow the District to make incremental debt service payments for 2008 -2009. BASIS FOR PROPOSED WATER AND SEWER RATES The proposed water and sewer rate increases are consistent with rate studies performed by an independent consulting firm. Those studies took into account 1) expected increases in demand for District services, 2) infrastructure replacements and upgrades based on the District's Capital Improvement Program, and 3) inflationary pressure on routine operating and administrative costs. Copies of the rate studies may be viewed on the District's web site or at the District's administrative office. PROTESTING PROPOSED RATE INCREASES Property owners and tenants of real property within the District who are directly liable to pay water and sewer bills and who are opposed to the proposed rate increases described herein may file a written and signed protest with the District Secretary prior to the close of the public hearing. Protests must be submitted in writing even if you plan to attend the hearing. Written protests must include: (I) a description of the property owned, or being rented, sufficient to identify the property (the service address shown on this mailing is sufficient); (2) your East Valley Water District utility account number, and (3) a statement identifying you as owner of record or tenant. If you own or rent more than one parcel within the District, you may file a single protest, but it must identify each parcel you own or rent. Written protests may be mailed to: East Valley Water District Attn: Board Secretary P.O. Box 3427 San Bernardino, C4,924.13 Written protests may also be mailed or delivered in person to East Valley Water District, Board Secretary, 3654 E. Highland Avenue, Suite 18, Highland, California 92346. Written protests may also be presented to the Board Secretary of East Valley Water District prior to the close of the public hearing on October 1, 2008. The District Board of Directors will consider all protests received. If a majority of property owners and tenants of real property directly liable for paying water bills file written protests in opposition to the rate increases, the increases will not be imposed. 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ST(I aqj I 'U>Il UO[ju3i3tjou JVULIo3 su aA.tas 11m4s luautnoop still jvgj posinpu oq osuaid `sni L •pazapisuoo oq Iiim sosuazoui oluz posodold oqj 3o uoildopu uoium Iv 2uuUoq oilgnd v of aoizd sXtp s{, Isuat ju X31odoid sill of ooiAJOs camas io/puu zalum .toj Xud of acquit i( powip oq pjnom oqm uatu ooiAJos s,loplsi(I atll uiglim kltadotd I-ew jo slu-mol put, szaumo IIt, of ost?azout oj-v posodoid u jo uolluoUllou pugs joi4si(I atlj jut;l saunboi uoilnlilswo utuzo31tuo ogj3o QIIIX aioilIV .LN31wanIfloaa HaIZON aI'IgIId 80oz`8Isf1gov :gDljom- 1vioads LZb£-£IbZ6 VD `OUIPIRWag �S LZb£ xO3'O'd M.4s10 ieIVM 42119A 7se3 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY EAST VALLEY WATER DISTRICT WATER RATE ANALYSIS FINAL DRAFT REPORT JULY29, 2008 E40 East Valley Water [district Corporate Office 27368 Via Industria Suite 110 Temecula, CA 92590 Tel: (951) 587 -3500 Tel: (800) 755 -MUNI (6864) Fax: (951) 587 -3510 s Office Locations Anaheim, CA Lancaster, CA Oakland, CA www.muni.com Orlando, FL Sacramento, CA Seattle, WA DRAFTREPORT— FORDISCUSSIONPURPOSES ONLY TABLE OF CONTENTS Tahle of Contents ................................................................................. ............................... i Executive Summary ............................................................................. ..............................1 Assumptions................................................................................. ............................... 1 Findings........................................................................................ ............................... 2 Recommendations........................................................................ ............................... 2 Chart El: Projections Using Current Rates ................................ ............................... 3 Table El: Proposed Water Rate Schedule ................................... ............................... 4 Chart E2: Projections Using Proposed Rates ............................. ............................... 5 Introduction......................................................................................... ............................... 6 CurrentRates ............................................................................... ............................... 6 Table 1: Current Water Rates ...................................................... ............................... 6 CurrentCustomers ....................................................................... ............................... 7 Table 2: Number of Customer Accounts (FY 200712008) ........... ............................... 7 Table 3: Monthly Water Consumption by Customer Class (FY200712008) .............. 8 Annual Revenue Requirements .......................................................... ............................... 9 Approaches to Determining Revenue Requirements ................... ............................... 9 Current and Future Revenue Requirements ............................... ............................... 10 Historical Revenues and Expenses ............................................ ............................... 11 Table 4: Historic Financial Results ........................................... ............................... 11 Future Revenue Requirements ................................................... ............................... 12 Table 5: Estimated Debt Service ................................................ ............................... 13 Water Revenue Requirements .................................................... ............................... 15 Table 6: Water Utility Revenue Requirements ........................... ............................... 16 Allocationof Water Costs ................................................................. ............................... 17 Cost of Service Procedure .......................................................... ............................... 17 Classification of Expenses to Cost Components ....................... ............................... 18 Table 7: Functionalization of Water Utility Revenue Requirements ........................ 19 Table 8: Allocation of Water Utility Revenue Requirements ..... ............................... 20 Developmentof Water Rates ............................................................. ............................... 21 Table 9: Projected Number of Equivalent Meters ..................... ............................... 22 Table 10: Calculation of Water Rates ....................................... ............................... 23 Table 11: Proposed Water Rate Schedule ................................. ............................... 24 Conclusion......................................................................................... ............................... 25 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY EXECUTIVE SUMMARY _ This study of water rates was conducted for the East Valley Water District (EVWD) to determine water revenue requirements, costs of services, appropriate, fair and equitable rates and rate structure, and to maintain the water utility on a financially sound and stable basis over the next ten fiscal years. The study was conducted using historical and projected data on operating and non - operating expenses, debt service, and capital expenditures. The EVWD retained MuniFinancial to prepare a water rate analysis that will include a new water rate schedule that meets current and near -term projected system revenue requirements. For purposes of determining annual revenue requirements as a basis to set future water rates, we used a projection period of ten years, spanning fiscal years 2008/2009 through 2017/2018 (the study period). Assumptions This section presents the assumptions used in the water rate analysis. 1. The budget for fiscal year ending June 30, 2009 was used as the base year. 2. The beginning operating fund balance for fiscal year 2008/2009 is estimated at $4,708,589. 3. The annual customer growth rate for the system as a whole is assumed to average one percent (1.0 %) throughout the study period. 4. An inflation factor of six percent (6 %) was used to project all operating expenses. 5. The water utility currently pays debt service on: Certificates of Participation - Series 2001 Certificates of Participation - Series 1996 2004 Project Installment Sale Note Department of Water Resources Construction Loan 2006 Project Installment Sale Note 2008 Headquarters, Water, and Wastewater Projects 6. The EVWD current water rate structure consists of fixed monthly meter charge, a fire standby charge, and a consumption charge. MuniFinancial East Valley Water District Water Rate Analysis 1 DRAFT REPORT— FOR DISCUSSIONPURPOSES ONLY Findings This section presents the findings of the water rate analysis. 1. Water acquisition costs are expected to significantly increase during the study period. 2. Due to increasing expenses, the current revenues are insufficient to finance the utility's operations. 3. Projections indicate that the utility operating fund balance will become negative during fiscal year 2009/2010. The deficit will continue to accumulate thereafter unless water rates are adjusted to meet revenue requirements (see Chart ES1 on page 3). 4. Existing rates will not adequately fund system replacement and major capital project needs. 5. Existing rates will not adequately fund recommended reserve fund balances. Recommendations Based on the findings of this water rate analysis, we recommend that the EVWD adopt the following items: 1. The proposed water rate structure (see Table ES -1 on page 4). The rate structure adequately provides for ongoing costs and debt service and allows for funding of reserves for unscheduled expenses (see Chart ES -2 on page 5). 2. A policy of targeting an operating fund balance of 90 days of annual operations and maintenance expenses to ensure that funds are available for emergency purposes and to mitigate future rate shocks. 3. A policy of setting aside funds annually in a repair & replacement reserve account to provide for unscheduled system maintenance and rehabilitation. MuniFinancial East Valley Water District Water Rate Analysis 2 rq W 0 y a U o� R i O W y y a d a Y d U y 5 Q Y d N a W fi fi W O a Q a y O W a v W i W j M r o r r r o r r M t 0 6 M C- lO 6 rt O t 0 (D M W M (V f9 M W CN O t O m m A M M �N Mi( M p r N O N M N 'p t9 w m— 7 m M O M N O g m 1: N � N M W d N r N M N M Vi OJ m O (O N m M m c r V N �O eNeyy W M N M t,i W N � M moNCM�rm o N W M N O O M 1p N O i r O M N l V N NN V �NM.rd. � H W a� -7Omv �<D O r N M V N O V M m h N m CO M r M M 1n (D V N A N N V t00 A N C M M Or On r m C o N >W WNmt.OM m V O O M M M M N N N V O N t7 V vN OmN<om r W a0t0 �-mN Mm � N M R M �nM�o vmv a �n V N GO M m N V .6 O p 6 M V rl p I� F9 E9 Z U � LL U Fm- 2Z W T J U U � U a m y fi d Q Y d U 5 Q Y d N w Q W h Q W h a U 5 Q l d d W O .s s DRAFT REPORT — FOR DISCUSSIONPURPOSEs ONLY INTRODUCTION This report documents the results of the water rate study conducted for the East Valley Water District (EVWD) by MuniFinancial. The primary purpose of this study is to develop a water rate structure that will adequately fund the annual operations and capital needs of the water utility. The rate study incorporates utility revenues, operating expenses, debt service, and capital expenditures data provided by the EVWD. The objective of the rate study is to develop rate schedules for the water utility during the ten -year study period. The projected rate schedule is designed to produce revenues for the water utility to pay administrative, operations, maintenance, capital improvement, and debt service expenditures, in addition to maintaining fund balances at reasonable levels and within guidelines endorsed by the American Water Works Association (AWWA). The results of the rate study are derived from projected financial analyses of the water utility based upon the budgeted revenues and expenses of fiscal year ending June 30, 2009 (the base year). A ten -year projection of operating results to determine future revenue requirements was developed for the water utility for the fiscal years ending June 30, 2009 through 2018 (the study period). The projections also determine the amounts required to maintain sufficient balances in the Water Utility Fund. Current Rates The EVWD current water rate structure consists of fixed monthly meter charge, a fire standby charge, and a consumption charge. Note that each unit represents one hundred cubic feet (HCF) of water. Table 1 illustrates the current water rate schedule. (:Urrent Warer KareS METER RATES $1.20 Per 100 Cubic Feet plus System Charge 3/4" $8.40 /mo 1" $15.70/mo 11/2" $33.00 /mo 2" $47.60/mo 3" $83.50/mo 4" $139.00/mo 6" $270.00 /mo 8" $405.00 /mo Initiation of Service Charge: $25.00 /Service Address FIRE STANDBY CHARGE: Per Inch Diameter per Month $5.60 Temporary Service Charge: $1800.00 deposit plus $1.20 per HCF* of metered water *HCF - hundred cubic feet MuniFinancial East Valley Water District Water Rate Analysis 6 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY Current Customers Table 2 shows the current number of water customer accounts for fiscal year 2007/2008 by meter size. Table 3 depicts the monthly water consumption for fiscal year 2007/2008 for each customer class. Table 2: Number of Customer Accounts (FY 200712008) Total 20,359 Source: East Valley Water District. MuniFinancial East Valley Water District Water Rate Analysis FY 2007/2008 _ Meter Size Customer Count 5/8 ", 3/4" 15,692 1" 4,023 1 1/2" 236 2" 271 3" 92 4" 21 6" 14 8" 10 Total 20,359 Source: East Valley Water District. MuniFinancial East Valley Water District Water Rate Analysis a. O W c� h O W 5 y U 0 U pq e R m N N W a N m {°{((J�� m 0 I N f O N O! m y 0 O m N m Q YI mm Mr,_JIIIN tG W f <MyM N CIF am0 Q N Q Q N' m m A 00 O'l W O O r N m O (O N Oi O O V' V m `NON tMG It o O h m O N N ' O mh r tON M M W W O N Q W N N N N Q Q r r W N m [O W m N m M f0 Q N Q M Q m 0 m M M W W Q M ti N W O O W M� W M M M ti O fV O r tD N 10 fV N R M m m S U N N N v M ONI m m N � Q b O m m M O N r r W N m W m i1 Z a _ W N M ti r R N M N N N N Y1 W 16.6 cli Q�m j� N O r M m W m m I r ro N O N Q m OWi M (O M N Mp 0 N N N V o m M O v m N 6N f m m W m Q O J Q (O � fQOyiII W N N M Q P N °mmNlm O�mN fvMW r V 6a T Q N N N E N� (ND N Oml N 9 W W W o m m m = m m W o H 0 o N m2 �2 N c v a m g Y fi .Q N ry Q o � @ o c Z a u c U m a M m s E m 0 v m U W K m y 0 S 0 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY ANNUAL REVENUE REQUIREMENTS _� The EVWD water utility fund must receive sufficient total revenue to ensure proper operation and maintenance of the department as well as preserve the financial integrity of the utility and the fund. Adequacy of water revenues can be measured by comparing the water system's revenue requirements to be met from the water rates it charges to its customers. Approaches to Determining Revenue Requirements In order to develop adequate revenues from a system of water rates, the annual revenue requirements of the water utility must be determined. There are two commonly accepted bases for determining annual revenue requirements in order to develop a financially sound water rate structure. These approaches are the "cash needs" approach and the "utility" approach. Both approaches are endorsed by the AWWA. The "cash needs" basis is typically used by public water utilities when establishing rates for their customers. Under this approach, the basic revenue - requirement components include: • Operating and maintenance (O &Av expenses • Debt service costs (principal and interest on water utility- related debt instruments) • Capital expenditures funded directly from current revenues or accruals on a pay -as- you -go basis • Other elements such as interdepartmental expenses (cost allocation), in -lieu taxes, and interest earnings (considered as a credit to the expenses) The "utility" basis for determining annual revenue requirements is typically used by regulated investor -owned utilities and regulated municipal utilities. Items normally included in annual revenue requirements based on this approach include: • Operating and maintenance (O&M) expenses • In -lieu taxes • Depreciation expense • Fair rate of return on the rate base As the East Valley Water District is a public water agency, we have used the "cash" basis in this analysis. MuniFinancial East Valley Water District Water Rate Analysis 9 DRAFT REPORT— FOR DISCUSSIONPURPOSES ONLY Current and Future Revenue Requirements The annual revenue requirements are derived from maintenance and operations costs, debt service expenses, and projected capital expense items. Interest earnings, fines and forfeitures, and other miscellaneous income may offset some of these expenses, but the majority of the costs should be recovered via customer rates and charges. The EVWD prepares an annual budget for the water system that itemizes all the expenditures for each fiscal year. These expenses include personnel costs, maintenance and operations, equipment repair and replacement, and Capital Improvement Program (CIP) costs. For the study we also established two new reserves and added line items within the budget analysis to account for the collection of funds in these reserve accounts. The two reserve funds are as follows: 1. A Repair & Replacement Reserve Collection - to set aside funds for the replacement of major systems in the EVWD's facilities 2. An Operating Reserve - to ensure that funds are available for emergency purposes and to mitigate rate shocks The water system activities included in our analysis were gathered from the EVWD annual operating budget and audited financial statements. MuniFinancial East Valley Water District Water Rate Analysis 10 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY Historical Revenues and Expenses Base year income and expense data for the water system were obtained for fiscal year 2008 /2009 using the water system budget for that year, in addition to audited financial statements for fiscal years 2002 through 2007. The historic financial results of the water system are shown in Table 4. Table 4: Historic Financial Results TOTAL NON- OPERATING EXPENSES $ 592,869.00 $ 658,086.00 $ 719,090.00 $ 1,375,381.00 $ 1,205,212.00 $ 2,423,298.00 INCOME BEFORE CONTRIBUTIONS $ 2007 Actual 2006 Actual 2006 Actual 2004 Actual 2003 Actual 2002 Actual OPERATING REVENUES Water sales $ 12,928,581.00 $ 11,681,350.00 $ 10,629,544.00 $ 10,369,032.00 $9,670,505 $ 9,685,235.00 Bulk sales $ 182,758.00 $ 125,696.00 $ 225,374.00 $ 221,547.00 $ 175,701.00 $ 232,095.00 Connection charges $ 425,825.00 $ 266,817.00 $ 326,584.00 $ 181,527.00 $ 301,222.00 $ 264,926.00 Other water services $ 289,978.00 $ 304,573.00 S 378,750.00 $ 251.888.00 $ 273,170.00 $ 262,585.00 TOTAL OPERATING REVENUES $ 13,827,142.00 $ 12,378,436.GD $ 11,560,252.00 $ 11,023,994.00 $ 10,420,598.00 $ 10,444,841.00 OPERATING EXPENSES $ $ $ - $ $ 20.035.00 $ 29,450.00 Source of Supply $ 390,124.00 $ 639,948.00 $ 568,306.00 $ 616,986.00 $ 734,001.00 $ 360,827.00 Pumping $ 3,451,376.00 $ 2,987,709.00 $ 2,839,783.00 $ 2,824,273.00 $ 3,003,996.00 $ 2,748,623.00 Water Treatment $ 626,770.00 $ 381,846.00 $ 405,668.00 $ 344,407.00 $ 279,918.00 $ 273,029.00 Transmission and Distribution $ 766,082.00 $ 695,088.00 $ 682,225.00 $ 571,027.00 $ 574,447.00 $ 587,833.00 Customer Accounts $ 403,493.00 $ 397.014.00 $ 391,700.00 $ 390,095.00 $ 368,594.00 $ 333969.00 Administrative and General $ 3,812,194.00 $ 3,964,444.00 $ 3,924,142.00 $ 3,390,016.00 $ 2,890,789.00 $ 2,488,534.00 OPERATING EXPENSES BEFORE DEPRECIATION $ 9,450,039.00 $ 9,066,049.00 $ 8,811,824.00 $ 8,136,804.00 $ 7,851,745.00 $ 6,792,815.00 Depreciation $ 2,192.052.01) $ 2040,938.00 $ 1977,242.00 $ 1,764,996.00 $ 1,585,450.00 $ 1,492,700.00 TOTAL OPERATING EXPENSES $ 11,642,091.00 $ 11,106,987.00 $ 10,789,066.00 $ 9,901,800.00 $ 9,437,195.00 $ 8,285,515.00 OPERATING INCOME $ 2,185,051.00 $ 1,271,449.00 $ 771,186.00 $ 1,122,194.00 $ 983,403.01) $ 2,159,326.00 NON - OPERATING REVENUE Investment income $ 323,256.00 $ 208,893.00 $ 144,775.00 $ 58,932.00 $ 205,051.00 $ 539,227.00 Rents $ - $ - $ 5,000.00 $ 30,000.00 $ 31,221.00 $ 41,722.00 Perchlorate research grant $ - $ - $ - $ 626,014.00 $ 510,451.00 $ 1,498,040.00 Gain from disposition of fixed assets $ 15,855.00 $ 1,245,794.00 $ 118,996.00 $ - $ 2,817.00 $ - Miscellaneous $ 106.269.00 $ 14,144.00 $ 68434.00 3 14,760.00 $ 98.337.00 $ 18,489.00 TOTAL NON- OPERATING INCOME $ 445,380.00 $ 1,466,831.00 $ 337,205.00 $ 729,706.00 $ 847,877.00 $ 2,097,478.00 NON- OPERATING EXPENSES Interest expense $ 554,914.00 $ 620,130.00 $ 681,134.00 $ 695,616.00 $ 607,321.00 $ 803,530.00 Loss from disposition offered assets $ - $ - $ - $ 15,795.00 • $ 57,106.00 Perchlorate research administration $ - $ - $ - $ 626,014.00 $ 559,936.00 $ 1,496,040.00 Amortization - issuance costs $ 35,280.00 $ 35,280.00 $ 35,280.00 $ 35,280.00 $ 35,280.00 $ 35,280.00 Amortization expense - lease costs $ 2,675.00 $ 2,676.00 $ 2,676.00 $ 2,676.00 $ 2,675.00 $ 2,675.00 Loss on lease temnination $ $ $ $ $ - 667`00 $ 26,667.00 TOTAL NON- OPERATING EXPENSES $ 592,869.00 $ 658,086.00 $ 719,090.00 $ 1,375,381.00 $ 1,205,212.00 $ 2,423,298.00 INCOME BEFORE CONTRIBUTIONS $ 2,037,562.00 $ 2,082,194.00 $ 389,301.00 $ 476,519.00 $ 626,068.00 $ 1,833,506.00 CONTRIBUTIONS Utility plant dedicated $ 1,737,873.00 $ 1,151,890.00 $ 717,423.00 $ 1,066,279.00 $ 2,020,846.00 $ 817,741.00 Capacity charges $ 516,619.00 $ 467,687.00 $ 967,048.00 $ 1,121,038.00 $ 758,770.00 $ 705,190.00 Grant $ 195,069.00 $ 77,886.00 $ 597,751.00 $ - $ - $ - LocalGovernments $ - $ - $ - $ 133,648.00 $ 170,890.00 $ - Perchlorate Conference $ $ $ - $ $ 20.035.00 $ 29,450.00 TOTAL CONTRIBUTIONS $ 2,449,581.00 $ 1,697,463.00 $ 2,282,222.00 $ 2,320,965.00 $ 2,970,541.00 $ 1,552,381.00 CHANGE IN NET ASSETS $ 4,487,143.00 $ 3,779,657.00 $ 2671523.00 $ 2797484.00 $ 3,596609.00 $ 3,385887.00 Source: East Valf�y Mter Distnct MuniFinancial East Valley Water District Water Rate Analysis 11 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY Future Revenue Requirements An evaluation of future revenue requirements should focus on four specific areas. These areas are increases in operating expenses, capital improvement costs, requirements for debt service, and the maintenance of reserves. The following sections discuss the impact of these four factors on the water utility revenue requirements. Operating Expense Projections For the purpose of determining annual revenue requirements as a basis to set future water rates, we used a projection period of ten years. During this period (FY 2008/2009 through FY 2017/2018), costs are naturally assumed to increase due to inflationary pressures. In projecting future expenses, we have used the cost estimates provided by the EVWD. Per EVWD direction, we are using an expenditure growth rate of six percent (6 %) to project the future costs of the system. This is in line with our experience with similar -sized utility systems. Capital Improvement Costs The EVWD maintains a Capital Improvement Plan (CIP) for the funding of annual capital projects. The capital improvement costs are expected to be paid through funds that have been accumulated in the EVWD Capital Improvement Reserve. Debt Service The water utility currently pays debt service on: Certificates of Participation - Series 2001 Certificates of Participation - Series 1996 2004 Project Installment Sale Note Department of Water Resources Construction Loan 2006 Project Installment Sale Note 2008 Headquarters, Water, and Wastewater Projects It is assumed that the EVWD will issue new debt to fund an additional $25,000,000 in capital improvement projects in FY 2009/2010. The total new debt issuance is estimated at $28,740,000 with an annual debt service payment of $1,764,000 (based on financing $25,000,000 in construction costs, an interest rate of 4.5 %, an underwriter's discount of 2 %, a cost of issuance of 1 %, a reserve fund requirement of 10 %, and a 30 -year term). Total estimated debt service for the study period is summarized below in Table 5. MuniFinancial East Valley Water District Water Rate Analysis 12 \ ) ( % \ \ t \ \ \ \ \ A )� Q� ] \ \ \ } #(!» !k §; !e !§[ §« §! / ) \ /\ ) {; ) « {J \{!!§ H NEE ou if)!!.00 \ / / 2 ) ) k \ DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY Reserve Funds Repair & Replacement Reserve Collection Fund We recommend that the EVWD establish a repair and replacement reserve collection to set aside funds for the construction and replacement of major systems in the EVWD water facilities. Developing adequate reserves allows for emergency cash for the system and helps mitigate future rate shocks. Water Operating Fund. The operating fund for the water utility is projected to have a balance of $$4,708,589 as of July 1, 2008, according to the EVWD. We recommend that the EVWD adopt a policy of maintaining a balance of 90 days of operating expenses in the operating fund in order to satisfy expense obligations as cash flow fluctuates during the year. This reserve fund target is within industry standards for similar -sized utility systems. MuniFinancial East valley Water District Water Rate Analysis 14 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY Water Revenue Requirements Table G presents the ten -year projected revenue requirements for the water utility. This table includes annual revenues projected to be raised using the current rate structure, the additional revenue required to meet projected water utility expenditures utilizing rate increases, the projected operating and non - operating expenses, and fund balance information based on the revenues generated from rate and fee increases. Row 3 of this table shows the revenue generated using current rates and fees. We utilized a population growth factor of one percent (1 %) to project operating revenues. Current rates and fees do not produce enough revenue to maintain a positive operating fund balance. The section below the current revenues (rows 5 through 17) incorporates the revenue generated by the proposed rate and fee increases. As the table illustrates, in order to maintain a positive cumulative fund balance during the study period, total system revenues must be increased by twelve and a half percent (12.5 %) in fiscal year 2008/2009, thirty -eight and a half percent (38.5 %) in fiscal year 2009/2010, and three percent (3 %) each fiscal year thereafter. Total operating expenses are shown in row 28, net income is presented in row 51, and the ending operating fund balance is detailed near the bottom of the table in row 57. Row 59 shows the targeted operating fund balance, which is the minimum amount of funds the EVWD should maintain in its operating fund to address any emergency requirements that may arise for the water utility. MuniFinancial East Valley Water District Water Rate Analysis 15 W qO a y a Ah "4 a 0 w a w d 3 co SL gamn °�onm n _ $o e' o rf�o"'� °. His �e $ 0 ry �A �P r � _ �o ry�N� ose,el� mho apca �1Nn n _29 e 1= a m 1a e e o E m 1e Eil -J lIi X o � � � 1� I lY ? m oVnee: ______ �W = 3XXX XXXXXXXY z° z °a p °p �° �Em° q�z pin nnnmmn,;a ' s $.1 E of ENmx .� n`E a" mna 3p •�� 3 0 $ _6= Ea g q- �op @��s o° e5�w °e Eu'nc o.°.«`o `000..�A S u u °t$cL'Lm cErQ t o •v E S xmI, pu Fp° $Sa xzrc u e E ebe° u c rcn` `�• LL� grcae 3 9 a=g :" 'eEO ;s 'LLLLLLLLLLL'LLx'.g aF =2 „��= o N =80 Nn. » n.n ________ _ _ry „ „rvrvrvrvrvry ry nnmM��nnn n .<........» n n n » » »n n» b e a d 0 w fi DRAFT REPORT — FOR DISCUSSwivPURPOSES ONLY ALLOCATION OF WATER COSTS In Bighorn - Desert View Water Agency v. Verjil, the California Supreme Court held water agency's rates were subject to repeal by initiative pursuant to Section 3 of Article XIIIC of the California Constitution. Because of the Bighorn decision, water rates in California are now considered property - related fees, therefore the substantive and procedural requirements of California Constitution Articles XIIIC and XIIID (Proposition 218) apply to water rate setting. Section 6 of Article XIIID states: The amount of a fee or charge imposed upon any parcel or person as an incident of property omnersbip shall not exceed the proportional cost of the service attributable to the parcel. This utility rate study was performed to allocate the costs of providing service to users in order to ensure that rates are equitable and not unduly discriminatory, thereby satisfying the Proposition 218 requirements. The total cost of serving each customer class is determined by distributing each of the utility cost components among the user classes based upon the respective service requirements of each customer class. Therefore, a true cost of service rate study enables a water utility to adopt rates based on the true costs to each user class. The purposes of this water utility cost of service study include: Proportional allocation of the costs of service to users. Derivation of unit costs to support the development of water rates. Cost of Service Procedure To design equitable water rates, it is necessary to allocate costs among the various customer classes commensurate with the cost of providing service. Revenue requirements are allocated to customer functional characteristics in the first step of a three -step process and then distributed to customers proportionate to their share of each of the functional characteristics. The second step of the allocation process classifies operating and non - operating expenses to the cost components of water costs and customer costs. Water costs are those that are associated with the consumption of water by users. Customer costs vary with the number of customers served by the system, or number of equivalent meters connected to the system. The final step of the process translates these costs of service into water rates. MuniFinancial East Valley Water District Water Rate Analysis 17 DRAFTREPORT— FOR DISCUSSIONPURPOSES ONLY Classification of Expenses to Cost Components Operating and non - operating expenses are allocated directly to functional cost components to distribute the costs to the various user classes. Table 7 presents the allocation of each expense component based on its functional category of water or customer -based costs. Customer costs are costs that occur regardless of the amount of water used, such as customer service or administrative costs. We recommend that customer costs be covered by the customer's monthly meter charge. Water costs are usage -based costs, such as water supply, pumping, treatment, and transmission and distribution costs, and are addressed by the customer's monthly consumption charge. Table 8 presents the allocation of the revenue requirements calculated for each year of the study period into their customer and water components. This allocation is based on the functionalization percentages calculated in Table 7. MuniFinancial East Valley Water District Water Rate Analysis 18 �r W Oj a h W �v a a. n Va Q lti wi AI h` `m N m U v U � E O � � E UE U U 3 Wa � C Q N 0 Uiv d e (J E o c Ua s U � d 3" e a W Q N W N P W m r N M W (O N N P M O P N N W N O O N O) N m N P W m e O a O O Y W W Q N N P I% O W b h W O O) O p 1 r N Q N W O M1 W W b P W N W M W w 'A It I `O W rI W b rrrr r r r m o rr �rrrr W W N N W fG N M N of di r r P w w r r r� r r p r r r r r pW W r M W O w 'A OI Q O' r W Q W P r N Q m M N N P O Q r N b NON m W N W N P P m e M O W N N C) (V N W h Q e e e e e o o e e o e o e e e 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o y 0 0 0 0 0 0 6666666 N 0 0 h Q v s o o v e e o e e e e e e 0 0 0 0 0 0 0 o 0 o y o 00 d e a e e o e o o e e e s o o O O O O O .00. O O O M (y eves o aoeeeee ee e o0 0 Ti d a` a � m v Z Z a N m ac y l m a S] C a r b y LL NT r m U .. N .q N Y C Z N£ IL O U K O Z C y .0 F 6 N NI E C C� J !^ A m c 0 q �r F cv �O 6 2 my m )U °^'mv m E g m c o 0 rn o F o 0 o LL F r F N N d - w DRAFT REPORT— FOR DISCUSSIONPURPOSES ONLY Table 8: Allocation of Water Utility Revenue Requirements Water Costs Customer Costs Customer Meters & Base Extra-Capacity Billing /Admin _ Services Fundionalization Factors 76.3% 4.3% 16.6% 2.9% Water Costs Customer Costs Customer Meters & Extra- Capacity Base FY 08/09 $ 12,158,076 FY 09110 17,007,325 FY 10/11 17,692,720 FY 11/12 18,405,736 FY 12/13 19,147,488 FY 13/14 19,919,131 FY 14/15 20,721,872 FY 15/16 21,556,964 FY 16/17 22,425,709 FY 17118 23,329,465 Extra- Capacity Billing /Admin Services Total $ 687,187 $ 2,638,541 $ 454,829 $ 15,938,633 961,272 3,690,922 636,238 22,295,757 1,000,011 3,839,667 661,878 23,194,276 1,040,312 3,994,405 688,552 24,129,005 1,082,236 4,155,380 716,301 25,101,404 1,125,850 4,322,841 745,168 26,112,991 1,171,222 4,497,052 775,198 27,165,345 1,218,422 4,678,283 806,438 28,260,108 1,267,525 4,866,818 838,938 29,398,990 1,318,606 5,062,951 872,747 30,583,770 Sources: East Valley Water District; MuniFinanciai. MuniFinancial East Valley Water District Water Rate Analysis 20 DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY DEVELOPMENT OF WATER RATES Following the distribution of the revenue requirements to the classification factors, these requirements are used in the development of new water rates. The water costs are accounted for through each customer's monthly consumption charge. Customer costs are allocated based on the number of equivalent meter ratios within the entire system. Table 9 illustrates the projected number of equivalent meters for each year of the study period. Equivalent meter factors represent the burden each user group places upon the water utility as measured by an equivalent meter index. This index should reflect the level of service to each customer group based on their potential commodity demand (the index used in the study was obtained from the AWWA M1 Manual). The total number of equivalent meters was used in determining the monthly meter charges shown in Table 10. The proposed water rates are designed to increase the water system's revenue in order to meet rising operating costs, to enhance the financial condition of the water utility, and to provide funds for needed rehabilitation of the water system infrastructure. The proposed rates are expected to recover all of the customer and water costs of the system. Table 10 illustrates the calculation of the proposed water rates. The baseline (5/8" and 3/4 ") meter charge is calculated by dividing all customer costs of the water system by the total number of equivalent meters. The monthly meter charge for all other meter sizes are calculated by multiplying the baseline meter charge by each meter size's respective meter - equivalent ratio. The consumption charge is calculated by dividing the water - related costs by the estimated total water consumption for the water system (the projected usage was calculated by multiplying the base year billable usage illustrated in Table 3 by the annual customer growth factor of 1% for each year of the study period). The resulting water rate schedule is illustrated in Table 11. MuniFinancial East Valley Water District Water Rate Analysis 21 Z� O W Q U W 4. O Z n_ p N OI m W N N OI N O M N< W� CJ M CNJ N N LL do m NOf mm�m W N N PTp W On0'�M� � O N Y LL A O N N O N C I C N j O Q O t+Wi O V o O m W p W O m W N 8 p m O m O O W F p W O m N N 01 t0 N N pO � m m p N n r m I m m N W N m m W m m 10 p I� q. N N (� N N N l0 N p p O I N OI N N W O1 W W N v N p _ d m`� N N Y Q fi d Q �i \d S U i Q v ti a w fi fi �Y 2 W O W d L w 0 Q U 0 F2 M o M M n o r n n o n N r n O O m b V (OM o oNa Nm�m� v r a t[1 r M W 01 O b n n M b M Cli m N N � w w N w N N b M W Ol M O N m b M N C C' N O O1 01 r M N N n Q M M MN ' VtN00 h ON M N v NMb r N b N o U r M M Oi O fO N OI M N b � Mo> r rgNbb W MN m r N N l0 N M d m R N C O M M N N V N M . b N O w w w w w b M m O N O m N N M M N O O M M m m (O N O N M d O O b N O o d r b b o N d m a cor m m.- dmmdsb N m e (O N 1n N r �NNd'NMb N M d m N m M m V m N w w N w N r r b b O d M m m M r m M m b� M M bw4 m m d N Vd b O a m N h " N N w v N y mN NMV m V m w w w w w b b n M M r m d O O N tp Of m m N m 01 c O N N N V N M V m V n I? n d m m w w w w N U m r r b b r O N N r m r b m n m ^ m a; I 1� V N N r N tbV d C 0 0 N M d m ro M m b V � m w w w w w O m u9 b M OR O d m d d M (O m M M r fq V d m m M m N V V O d m Ci m V a M 0 u1 N mN O NM V m N b M � m w w w w w E U W _ d d Lu N N d Q L p 0-C1 N a W E P W d o d N O U o c a r O O o N O 2 a c 3 y c U y E O m O f Z O W U � U M N ti fi m d U Q d a° �v fi fi V h y F LP a' d V w Rj L w I� M nornror r � N N h 0� Oro CJ N N N M N W N O m r M r N M N M M N M`—O CM OOi7 N c N M N � M M W O (O O W M N c M M to N M V M M W N r N M V MO N <M M rco O N M M N O O M tC N Oi r O W N N N m�vW; °i � po �N NN t7 N o] N M � N O V M m O M r N M H l0 h M OI V N O) n M M r O< O N � M W N A (O O M O? c O f0 M M OJ M N r V N O� N m rn. m c0 (O m N M W r In M O V A V' C O v: lD W M M N< O M LU (D � w � U a � F m- U 22 O V M V (O M W a s y( N Lu <7 co C U g a N h .y ti r d a C Y m U .y 5 Q Y w ti w�. w i h DRAFT REPORT — FOR DISCUSSIONPURPOSES ONLY CONCLUSION �- The proposed water rate schedule is based on the EVWD projected revenue requirements over the next ten fiscal years. The proposed rates are designed to generate additional water revenues to promote revenue adequacy throughout the ten fiscal year planning period. In addition, the rates were designed to satisfy Proposition 218 regulations. We recommend that the EVWD adopt the proposed rate structure to ensure that the water system has a stable cash flow stream in order to provide for ongoing costs and debt service and allow for the funding of reserves for unscheduled expenses. We also recommend setting a policy of targeting an operating fund balance of 90 days of annual operations and maintenance expenses to ensure that funds are available for emergency purposes and to mitigate future rate shocks. Finally, we recommend setting a policy of collecting funds annually in a reserve account to provide for future system repairs and replacement. MuniFinancial East Valley Water District Water Rate Analysis 25 Draft Report — For Discussion Purposes Only EAST VALLEY WATER DISTRICT SEWER RATE ANALYSIS FINAL DRAFT REPORT July 29, 2008 LODEastVailey Water District '` MuniFinancial Corporate Office: 27368 Via Industria Suite 110 Temecula, CA 92590 Tel: (951) 587 -3500 Tel: (800) 755 -MUNI (6864) Fax: (951) 587 -3510 Office Locations: Anaheim, CA Lancaster, CA Oakland, CA www.muni.com Sacramento, CA Orlando, FL Memphis, TN Draft Report — For Discussion Purposes Only TABLE OF CONTENTS TABLEOF CONTENTS ............................................................................. ............................... i EXECUTIVESUMMARY .......................................................................... ............................... I Assumptions................................................................................. ............................... 1 Findings........................................................................................ ............................... 2 Recommendations........................................................................ ......................— ...... 2 Chart El: Projections Using Current Rates ................................ ............................... 3 Table El: Proposed Sewer Collection Charge Schedule ............ ............................... 4 Chart E2: Projections Using Proposed Rates ............................. ............................... 5 INTRODUCTION..................................................................................... ............................... 6 CurrentRates ............................................................................... ............................... 6 Table 1: Current Sewer Collection Charges ............................... ............................... 6 CurrentCustomers ....................................................................... ............................... 7 Table 2: Estimated Annual Sewer Discharge by Customer Class (FY 200612007) ... 7 Annual Revenue Requirements .......................................................... ............................... U 8 Approaches to Determining Revenue Requirements ................... ............................... Current and Future Revenue Requirements ................................. ......................I....0... 9 Historical Revenues and Expenses .............................................. .........0..................... 9 Table 3: Historic Financial Results ........................................... ............................... 10 Future Revenue Requirements ................................................... ....................0.......... 10 Table 4: Estimated Debt Service ................................................ ............................... 12 Revenue Requirements Analysis ................ ............................... ...0.............0............0 13 Table S: Revenue Requirements.......— ....................................... ............................... 14 ALLOCATION OF SEWER COSTS .......................................................... ............................... 15 Cost of Service Procedure .......................................................... ............................... 15 Cost Classification Methodology ............................................... ............................... 16 Table 6: Functionalization of Sewer Utility Revenue Requirements ........................ 17 Table 7: Calculation of Flow Factors ....................................... ............................... 18 Table 8: Required Revenue Allocat ions ..................................... ............................... 18 DEVELOPMENT OF SEWER RATES ................ ............................... Projected Number of Connections and Sewer Discharge... Table 9: Projected Number of Residential Connections..... Table 10: Projected Commercial Sewer Discharge (HCF) Sewer Collection Charge Calculations ............................... Table 11: Proposed Sewer Collection Charge Schedule.... CONCLUSION ISMuniFinancial .... .............................19 .. ............................... 19 .. ............................... 20 .. ............................... 20 .............. 21 .22 23 Draft Report — For Discussion Purposes Only EXECUTIVE SUMMARY This study of sewer rates was conducted for the East Valley Water District (EVWD) to determine sewer revenue requirements, costs of services, appropriate, fair and equitable rates and rate structure, and to maintain the sewer utility on a financially sound and stable basis over the next ten fiscal years. The study was conducted using historical and projected data on operating and non - operating expenses, debt service, and capital expenditures. The EVWD retained MuniFinancial to prepare a sewer rate analysis that will include a new sewer rate schedule that meets current and near -term projected system revenue requirements. For purposes of determining annual revenue requirements as a basis to set future sewer rates, we used a projection period of ten years, spanning fiscal years 2008/2009 through 2017/2018 (the study period). Assumptions This section presents the assumptions used in the sewer rate analysis. 1. The budget for fiscal year ending June 30, 2009 was used as the base year. 2. The beginning operating fund balance for fiscal year 2008/2009 is estimated at $523,177. 3. The annual customer growth rate for the system as a whole is assumed to average one percent (1.0 %) throughout the study period. 4. An inflation factor of four percent (4 0/6) was used to project all operating expenses. 5. The sewer utility currently pays debt service on: 2004 Project Installment Sale Note 2008 Headquarters, Water, and Wastewater Projects 6. The EVWD's current sewer rate structure consists of a monthly fixed charge per equivalent dwelling unit for residential customers and a volumetric rate per hundred cubic feet (HCF) of water based on type of use in one of two areas (West of City Creek or East of City Creek) for commercial users. MuniFinanciai Draft Report — For Discussion Purposes Only Findings This section presents the findings of the sewer rate analysis. 1. Expenses are expected to significantly increase during the study period. 2. Due to these increasing expenses, the current revenues are insufficient to finance the utility's operations. 3. Projections indicate that the utility operating fund balance will become negative during fiscal year 2008/2009. The deficit will continue to accumulate thereafter unless sewer rates are adjusted to meet revenue requirements (see Chart ES1 on page 3). Recommendations Based on the findings of this sewer rate analysis, we recommend that the EVWD adopt the following items: 1. The proposed sewer rate structure (see Table ES -1 on page 4). The rate structure adequately provides for ongoing costs and allows for funding of reserves for unscheduled expenses (see Chart ES -2 on page 5). 2. A policy of targeting an operating fund balance of 90 days of annual operations and maintenance expenses to ensure that funds are available for emergency purposes and to mitigate future rate shocks. 3. A policy of setting aside funds annually in a repair & replacement reserve account to provide for unscheduled system maintenance and rehabilitation. MMuniFinandal O� a 0 O A Y I O l U) wca c: i� Q LLI0 61 a� �' U Q N LL r ti a 1 Ofm N f N r LL r 7 N ! LL ! r r a � 7 M O / LL ! ! N s J N o ! o N LL r ! v w o� a9 U 4 " W a" m I m 0 W�t' _ y m 0 \ k T, } [_ ƒ ` \ \ \�� \ \�� \ ( I - § $ § $ [ § \ @ = m 2 % ■ @ 2 $ / / k \ � \ K $ 5 % )_- k - a §;] \ ! 0 .. - t \ of )! § � \ k T, k C � m % \ 0 \ � \ � § [ \ _ \ D � I \ � } � ® t } J u $ k 2 Draft Report — For Discussion Purposes Only INTRODUCTION This report documents the results of the sewer rate study conducted for the East Valley Water District (EVWD) by MuniFinancial. The primary purpose of this study is to develop a sewer rate structure that will adequately fund the annual operations of the sewer utility. The rate study has used utility revenues, operating expenses, debt service, and capital expenditures data provided by the EVWD. The objective of the rate study is to develop a rate schedule for the sewer utility during the ten -year study period. The projected rate schedule is designed to produce revenues for the sewer utility to pay administrative, operations, maintenance, capital improvement, and debt service expenditures, in addition to maintaining fund balances at reasonable operating levels and within guidelines endorsed by the American Water Works Association (AWWA). The results of the rate study are derived from projected financial analyses of the sewer utility based upon the budgeted revenues and expenses of the fiscal year ending June 30, 2008 (the base year). A ten -year projection of operating results to determine future revenue requirements was developed for the sewer utility for the fiscal years ending June 30, 2009 through 2018 (the study period). The projections also determine the amounts required to maintain sufficient balances in the sewer utility's operating fund. Current Rates The EVWD's current sewer rate structure consists of a monthly fixed charge per equivalent dwelling unit for residential customers and a volumetric rate per hundred cubic feet (HCF) of water for commercial users. Table 1 illustrates the current sewer collection charges. Table 9: Current Sewer Collection Charges Current Sewer Customer Class Collection Charge Residential $ 9.75 Commercial 0.49 Note: Residential rate is per customer account per month, commercial rates are per one hundred cubic feet (HCF) monthly consumption of water for sewage flow purposes. Sources: East Valley Water District. IMMuniFinancial Draft Report — For Discussion Purposes Only Current Customers There were 18,900 residential sewer connections estimated for fiscal year 2006/2007. Table 2 depicts the estimated annual sewer discharge for fiscal year 2006/2007 for each customer class. Table 2: ,estimated Annual Sewer Discharge by Customer Class (FY 200612007) Customer Class Residential Commercial Total FY 2006 -2007 4,728,105 2,262,181 6,990,286 Sources: East Valley Water District; MuniFinancial Draft Report — For Discussion Purposes Only Annual Revenue Requirements The EVWD sewer utility fund must receive sufficient total revenue to ensure proper operation and maintenance of the utility as well as preserve the financial integrity of the utility and the fund. Adequacy of sewer revenues can be measured by comparing the sewer system's revenue requirements to be met from the sewer rates it charges to its customers. Approaches to Determining Revenue Requirements In order to develop adequate revenues from a system of sewer rates, the annual revenue requirements of the sewer utility must be determined. There are two commonly accepted bases for determining annual revenue requirements in order to develop a financially sound sewer rate structure. These approaches are the "cash needs" approach and the "utility" approach. Both approaches are endorsed by the AWWA. The "cash needs" basis is typically used by public sewer utilities when establishing rates for their customers. Under this approach, the basic revenue - requirement components include: • Operating and maintenance (O&M) expenses • Debt service costs (principal and interest on sewer utility - related debt instruments) • Capital expenditures funded directly from current revenues or accruals on a pay -as- you -go basis • Other elements such as interdepartmental expenses (cost allocation) and interest earnings (considered as a credit to the expenses) The "utility" basis for determining annual revenue requirements is typically used by regulated investor -owned utilities and regulated municipal utilities. Items normally included in annual revenue requirements based on this approach include: • Operating and maintenance (OW expenses • Depreciation expense • Fair rate of return on the rate base As the East Valley Water District is a public sewer agency, we have used the "cash" basis in this analysis. MunQFnandal Draft Report — For Discussion Purposes Only Current and Future Revenue Requirements The annual revenue requirements are derived from maintenance and operations costs, debt service expenses, and required fund balances. Interest earnings, fines and forfeitures, and other miscellaneous income may offset some of these expenses, but the majority of the costs should be recovered via customer rates and charges. The sewer utility prepares an annual budget that itemizes all the expenditures for each fiscal year. These expenses include personnel costs, maintenance and operations, and equipment repair and replacement, and Capital Improvement Program (CIP) costs, if applicable. For the study we also established two new reserves and added line items within the budget analysis to account for the collection of funds in these reserve accounts. The two reserve funds are as follows: 1. A Repair & Replacement Reserve Collection - to set aside funds for the replacement of major systems in the EVWD facilities 2. An Operating Reserve - to ensure that funds are available for emergency purposes and to mitigate rate shocks The sewer system activities included in our analysis were gathered from the EVWD annual operating budget and audited financial statements. Historical Revenues and Expenses Base year income and expense data for the sewer utility were obtained for fiscal year 2008/2009 using the sewer utility budget for that year, in addition statements for fiscal years 2003 through 2007. This analysis is not EVWD audits or budgets, but does rely heavily on these data sources. results of the sewer system are shown in Table 3 ElNluniFinandal to audited financial a restatement of the The historic financial Draft Report — For Discussion Purposes Only Table 3: Historic Financial Results Sewage Treatment S 5,607,172.00 $ 5,473.390.00 S 5288,212.00 S 4,771,339.00 S 4,557,909.00 $ 4,495,040.00 Administrative and General S 500,774.00 2007 2006 2005 2004 2003 2002 OPERATING REVENUES S 8,139.600.00 $ 7,733,908.00 $ 7,423,533.00 $ 6,622,588.00 $6,085,516 S 6,001,710.00 Sernce Charges S 11,087.00 S 9,746.00 S 106,325.00 $ 44,062.00 $ 18,082.00 $ 23,534.00 Other sewer services $ 8,150,687.00 $ 7,743,654.00 $ 7,529,858.00 $ 6,666,650.00 $ 6,103,598.00 $ 6,025,244.00 Total Operating Revenues $ 72,938.00 Outside services $ 29,099.00 S 30,773.00 S 26,801.W S 34.127.00 $ OPERATING EXPENSES $ 23,927.00 Legal and accounting S 18,224.00 S 47,053.00 $ 19,609.00 $ 23,238.00 S Sewage Collection: S 204 ?0800 $ 192368.00 $ 182,815.00 $ 155,583.00 $ 156.260.00 $ 169.240.00 Salaries am wages 5 6,067.00 $ 1.472.00 S 3,321.00 S 3.254.00 $ 1,842.00 $ 2.357.00 Uncollectible accounts $ 41,924.00 $ 68,350.00 $ 37,875.00 S 29.052.00 S 32,743.00 $ 31,23300 Operating supplies $ 125,820.00 $ 68,981.00 $ 86.496.00 $ 60,353.00 $ 72,055.00 $ 73,383.00 Repairs and maintenance $ 377,919.00 $ 336,171.00 $ 312.50700 $ 248,242.00 $ 262,900.00 $ 276,213.00 Sewage Treatment S 5,607,172.00 $ 5,473.390.00 S 5288,212.00 S 4,771,339.00 S 4,557,909.00 $ 4,495,040.00 Administrative and General S 500,774.00 $ 473,534.00 S 459.90800 S 432403.00 $ 405,440.00 S 376.515.00 Balance and wages $ 350,595.00 S 305,852.00 $ 282,197.00 $ 209,063.00 $ 172,023.00 S 98.171.00 Taxes and benefits $ 34,906.00 $ 33,230.00 $ 45,022.00 $ 32,924.00 $ 40,665.00 $ 36,143.00 Utilities $ 147,478.00 S 181,642.00 $ 110,536.00 S 118,551.00 $ 67,200.00 $ 72,938.00 Outside services $ 29,099.00 S 30,773.00 S 26,801.W S 34.127.00 $ 24,561.00 $ 23,927.00 Legal and accounting S 18,224.00 S 47,053.00 $ 19,609.00 $ 23,238.00 S 25,362.00 $ 23,094.00 Director's fees $ 115,654.W S 201,340.00 $ 165,253.00 $ 142,749.00 S 115,469.00 $ 176,030.00 Insurance $ 107,715.W $ 62,527.00 $ 65.76600 $ 76,142.00 S 61,888.00 S 61,599.00 Office supplies and expense $ 51,789.00 $ 45,856.00 $ 32,80100 $ 41,596.00 $ 21,357.00 $ W,381W Meetings, seminars, and travel $ 29,903.W $ 25,606.00 S 40,017.00 $ 28789.00 $ 33,783.00 $ W.1661W Equipment maintenance and Supplies $ 19,585.00 $ 26,328.00 $ 43,160.00 $ 33,754.00 S 39616.00 $ 39,219.00 Vehicle and equipment $ 6,655.00 S 1,891.00 S 8,162.00 S 735.00 S 415.00 $ 90.00 Regulatory fees $ 1,193.00 S 2263.00 S 62.704.W S 1,265.00 $ - $ 150.00 Disastenemergency expense S 16,263.00 $ 12,830.00 S 14,990.00 is 16,600.00 $ 9,083.00 $ 7,615.W Dues and subscriptions $ 15,436.00 $ 13.001.00 $ 12,244.W S 13,219.00 $ 12.484.W S 24,094.00 General plant maintenance S 39,764.00 $ 37.330.00 $ 33,360.00 5 4.920.00 It - $ 8.051.00 Rent S 13,781.W $ 11154.00 S 13,570.0) S 6.826.00 $ 4,640.00 $ 2,852.00 Bank service charges Miscellaneous expenses 5404000 4988 1 .00 $ 1,512,221 $ 1.436,32.2.0 $ 1222195.00 $ 1.033.230.00 S 1,017,281.00 OPERATING EXPENSES BEFORE DEPRECIATION $ 7,483,935.W $ 7,321.782.00 $ 7,037,041.0) $ 6,241,776.00 $ 5,854,039.00 $ 5,788,534.00 5 622,778.00 S 612,865.00 S 582,150.0) S 568,453.00 S 560,912.00 $ 532,155.00 Depreciation $ 6100,713.00 $ 7,934,647.00 S 7.619191.00 $ 6,810,239.00 $ 6,414,951.00 $ 6.320,689.00 Total Operating Expenses S 43,974.00 S (190,993.00) $ (89,333.00) $ (143,589.00) $ (311,353.00) $ (295,445.00) Operating Income NON - OPERATING REVENUE (EXPENSES) S 216,464.W $ 132,344.0 S 97,290.0) S 41.318.0 $ 102433.00 S 71,030.00 Investment income $ S4,219.W $ 37,246.00 $ 26,013.00 S 26.332.00 $ 20,927.00 $ Penalties and shut off charges $ (14.00) S (143.00) $ (73.W) $ (53.00) $ (16.00) $ (22.00) Miscellaneous Gain from disposition offixed assets S 12,287.00 $ 661,533.00 S 115,044.00 $ (255.00) $ 41,960.00 S 878.00 71,886.W Total Non-Operating Income (Expenses) $ 262,956.W S 830.980.00 $ 238,274.00 $ 67,342.00 $ 165,304.00 $ S 306,930.W $ 639,987.00 S 148,941.W S (76,247.00) $ (146,49.00) $ (223,559.00) Income Before ConinbutOns CONTRIBUTIONS Utility dedicated $ 947,525.00 $ 1188,740.00 $ 592,857.00 S 605,561.00 $ 747,525.00 $ 656.600.0 plant Capacity charges $ 133,309.W $ 145.886.0 $ 265,05SW S 278,872.00 $ 361,419.00 $ 145,454.W 802,054.W $ 1080,834.W S 1334,626.00 $ 85B,916.W S 886,433.00 $ 11W,944.00 $ CHANGE IN NET ASSETS $1387764.00 51974613.00 $1007,85700 S 80818600 $ 962895.00 $ $78,495.00 Sourca:Eaat Valle Water DisMcf Future Revenue Requirements An evaluation of future revenue requirements should focus on three specific areas. These areas are increases in operating expenses, requirements for debt service, and the maintenance of reserves in the operating fund. The following sections discuss the impact of these factors on the sewer utility revenue requirements. operating Expense Projections For purposes of determining annual revenue requirements as a basis to set future sewer rates, we used a study period of ten years. During this period (FY 2008/2009 through FY MuniFinancial 10 Draft Report — For Discussion Purposes Only 2017/2018), costs are naturally assumed to increase due to inflationary pressures. In projecting future expenses, we have used the cost estimates provided by the EVWD. Per EVV D direction, we are using an expenditure growth rate of four percent (4 %) to project the future costs of the system. This is in line with our experience with similar -sized utility systems. Debt Service The sewer utility currently pays debt service on: 2004 Project Installment Sale Note 2008 Headquarters, Water, and Wastewater Projects Total estimated debt service for the study period is summarized below in Table 4. M=Financiat 11 O .Q v A 0 Q C4 Q W U v♦ 0 a tCi 7Y Y N N F N O1 Y y (9 f9 H O M N } N (9 LL NO mml� O N M N h N N } M � LL O O N N N 0 N N h N } M � LL v M m o m o 0 N O1 r N � M (p M T N N N N n � N m N N N p n N O N f0 O N O - N Y K Yi LL N n N H O M V N NO mMln O N M N W W IR M I. V a` R O V a` �3 U 9 2 � m `w .. m Y Y Z N v v a10i o 22 ` a M o N N N �U f0 Draft Report — For Discussion Purposes Only Reserve Funds Repair & Replacement Reserve Collection Fund We recommend that the EVWD establish a repair and replacement reserve collection to set aside funds for the construction and replacement of major systems in the EVWD sewer facilities. Developing adequate reserves allows for emergency cash for the system and helps mitigate future rate shocks. Sewer Operating Fund The operating fund for the sewer utility is projected to have a balance of $523,177 as of July 1, 2008, according to the EVWD. We recommend that the EVWD adopt a policy of maintaining a balance of 90 days of operating expenses in the operating fund in order to satisfy expense obligations as cash flow fluctuates during the year. This reserve fund target is within industry standards for similar -sized utility systems. Revenue Requirements Analysis Table 5 presents the ten -year projected revenue requirements for the sewer utility. This table includes annual revenues projected to be raised using the current rate structure, the additional revenue required to meet projected sewer utility expenditures utilizing rate increases, the projected operating and non - operating expenses, and fund balance information based on the revenues generated from rate and fee increases. Row 4 of this table shows the revenue generated using current rates and fees. We utilized a population growth factor of one percent (1 %) to project operating revenues. Current rates and fees do not produce enough revenue to maintain a positive operating fund balance. The section below the current revenues (rows 5 through 17) incorporates the revenue generated by the proposed rate and fee increases. As the table illustrates, in order to maintain a positive cumulative fund balance during the study period, total system revenues must be increased by eighteen percent (18 %) in fiscal year 2008 /2009, thirty -five percent (35 %) in fiscal year 2009/2010, and three percent (3 1/o) each fiscal year thereafter. Total operating expenses are shown in row 32, net income is presented in row 49, and the ending operating fund balance is detailed near the bottom of the table in row 55. Row 57 shows the targeted operating fund balance, which is the minimum amount of funds the EVWD should maintain in its operating fund to address any emergency requirements that may arise for the sewer utility. MuniFinancial 13 k \ k \ % \ d / \ { _ N k \ R k ( � % 3 § ]� / e / / j� ]� ]� / / ) _ { \ / \ \\ \ \/ \ \ - )� \ \} \ ( \[ \ \ / \} ( )\( ) ( /( \ |( / \ \ }\ .• /; \ }! / \ \ {( \ \ \ }\ � \ \\ ) § ; - / \ ® § ` / ! _ - / \ \ \\\ : z \ §` {\! \ . .. ... , .. . )/\ ,_.••� /; _!,_ ;_,,, , ,,, , • ,�. - •........ , ,!„ , ,. ) _ { \ / \ \\ \ \/ \ \ - )� \ \} \ ( \[ \ \ / \} ( )\( ) ( /( \ |( / \ \ }\ .• /; \ }! / \ \ {( \ \ \ }\ � \ \\ ) § ; Draft Report — For Discussion Purposes Only ALLOCATION OF SEWER COSTS Sewer rates in California are considered property - related fees and are, consequently, subject to repeal by initiative pursuant to Section 3 of Article XIIIC of the California Constitution. Furthermore, the substantive and procedural requirements of California Constitution Articles XIIIC and XIIID (Proposition 218) apply to sewer rate setting. Section 6 of Article XIIID states: The amount of a fee or cbarge imposed upon any parcel orperson as an incident ofproperC, on,nersbip sball not exceed the proportional cost of the service attributable to the parcel. This utility rate study was performed to allocate the costs of providing service to users in order to ensure that rates are equitable and not unduly discriminatory, thereby satisfying the Proposition 218 requirements. The total cost of serving each customer class is determined by distributing each of the utility cost components among the user classes based upon the respective service requirements of each customer class. Therefore, a true cost of service rate study enables a sewer utility to adopt rates based on the true costs to each user class. The purposes of this sewer utility cost of service study include: • Proportional allocation of the costs of service to users. • Derivation of unit costs to support the development of sewer rates. Cost of Service Procedure A cost of service analysis converts enterprise - related financing documents to costs incurred by user classes for which rates can be developed. The cost of service study for the EVWD is performed in three basic steps. The first step is called functionalization, which categorizes cost data in terms of functions performed by a sewer utility system. The functions identified in this study include operating costs, capital projects to be funded by rates, debt service, and reserve requirements. The second step classifies operating and non - operating expenses of the utility to the cost components of flow and strength of sewer effluent. The cost components are defined as follows: • Flow Costs: Volume or flow related costs vary with the discharge of sewer by users over a specified period of time, typically a year. • Strength Costs: Strength costs vary with the quality of sewer discharged as measured by the biochemical oxygen demand (BOD) and suspended solids (SS) content of the discharged sewage. The final step in this analysis allocates costs of service to each customer class. This step is accomplished through the development of volume and strength related allocation factors for each customer class. IHMuniFnancia! 15 Draft Report — For Discussion Purposes Only Cost Classification Methodology For compliance with State and Proposition 218 guidelines, a sewer utility is required to utilize a cost allocation approach that fairly allocates costs among customer classes. This is accomplished by allocating costs into the treatment parameters of flow and strength. These costs are to be allocated in proportion to the percentage that each cost parameter represents. When divided by the sewer loadings of each user class, unit costs of service are obtained. All costs incurred by a sewer utility system can be allocated to one or more cost parameters. The allocation of each cost item between flow, BOD, and SS is based on industry standards of treatment parameter data. As the purpose of this study is to determine collection - related charges, all of the costs included in this study are assumed to be flow related (and not driven by BOD or SS factors). Tables 6 and 7 present the functionalization and flow - loading calculations, respectively, used to determine the required revenue allocations for each customer class (shown below in Table 8 for each year of the study period). MuniFnancial 16 O a 0 h A O Y °a ^ `V i Q a s a va 0 d n R{ C Z= 4. M r- M r M "Q °) t° M Q - M 0) N e O N M M t° 0000 r N` t° r V' N M M W N N r M N r N O W O M M M C6 V N N 'Q M O V m r N W O N M M r N M � M � O O O O M � M r k '° W M M N M Ml° (° O O O I� V N M O r M � rWyy O O M rf00O - M A r NM ci V N N V V V W I C N M O M N M M r M N 0 lee o o e e e e e o e o 0O O O 00 0 0 0 0 00 00 00 OOO 00000000 00 00 O O O O 0 0 0 0 0 0 O O O O eeee ee ee ee 0000 OOOOOO 00 00 e e e e e e e e e e ee ee 0000 000000 00 00 eeee eeeeee ee ee 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0000 000000 00 00 v 0 a AL v a 12 2 y v n a"iv�g?ncc�^%%' ZaaH� vv v li cc Z c °•'' N c° W N N E - mxU a mo m v o vo6a n vv L 0 6 5 w C 0` O N == O M Q O O M d F N Q M 3 U C7 y NN mUK 0 m LL 0 .N O IL (9 C C Y Draft Report - For Discussion Purposes Only Table 7: Calculation of Flow Factors Estimated FY 06/07 Discharge to the Customer Class Sewer System (hc� Flow Factor Residential 4,432,598 66.2% Commercial 2,262,181 33_8% Total 6,694,779 100.0% Sources: East Valley Water District; MuniFinancial Table S: Required Revenue Allocations Residential Commercial Flow Factors 66.2% 33.8% Residential Commercial Revenue Required FY 08/09 $ 2,507,520 $ 1,279,716 $ 3,787,236 FY 09/10 3,419,004 1,744,892 5,163,896 FY 10/11 3,556,790 1,815,211 5,372,001 FY 11/12 3,700,129 1,888,364 5,588,493 FY 12/13 3,849,244 1,964,465 5,813,709 FY 13/14 4,004,368 2,043,633 6,048,002 FY 14/15 4,165,744 2,125,992 6,291,736 FY 15/16 4,333,624 2,211,669 6,545,293 FY 16/17 4,508,269 2,300,800 6,809,068 FY 17/18 4,689,952 2,393,522 7,083,474 Sources: East Valley Water District; MuniFinancial. SMuniFinancial 18 Draft Report —For Discussion Purposes Only DEVELOPMENT OF SEWER RATES Based on the analysis conducted for the sewer utility in this rate study, a rate schedule has been developed which, if implemented by the EVWD, should generate enough revenue to cover estimated expenses and maintain the desired sewer fund balances depicted in Table 5. Projected Number of Connections and Sewer Discharge Tables 9 and 10 show the projected number of residential sewer connections and the projected amount of commercial discharge, respectively. Note that the number of connections and discharge for each customer class were projected using a growth factor of one percent (1 %). MuniFnar6ai 19 L ^�S ,WA v/ i d U 0 a n n N m p N N } LL O f0 NI P Q N N } LL O m N ci N r C ° N N } LL O N N � n o �°o N N LL O � N N O N N N LL N U m `m N U U N C W m 0 0 N _ r N O N } LL ° Onl W N m W N N LL W m o � N _ N ° N O N } LL N W O Q N V N N } LL p N O N N m N O N } LL 'O a o W N ° N N O } N LL � N ° W O N W � yy } LL ` W O W O N W � m O _ N N y ci O O Iw N LL W N N O W m 'L' N O W O y O ti N �y Q IV O O W N O � O N LL N A L ^�S ,WA v/ i d U 0 a n n N m p N N } LL O f0 NI P Q N N } LL O m N ci N r C ° N N } LL O N N � n o �°o N N LL O � N N O N N N LL N U m `m N U U N C Draft Report — For Discussion Purposes Only Sewer Collection Charge Calculations The required revenue from the residential customer class (shown in Table 8) are first divided by the number of residential connections (shown in Table 9) and then divided by twelve (12) to calculate the monthly residential rates. The rates for the commercial customer classes are determined by dividing the required revenue from the commercial class (shown in Table 8) by its projected discharge (shown in Table 10). The proposed Sewer Collection Charge Schedule is shown below in Table 11 (note that the residential rates shown in the table are per customer, while the commercial rates are per 100 cubic feet monthly consumption of water for sewage flow purposes). EMuniFinancial 21 R W d in N R ti r= V N Uh O � C� N o] O c r O N ry } LL � O 0 O' r O) N O o °' O1 3 � O N N � 3 � 3 N O } LL fA C O r0 �' N —W O V C O U } LL L C d v O E : o � OR u. N co o M U x N � LL O m � 9 � U Co } L m � o V O N E V LL o ,ti d N v o a o � U fn LL ^I O m u E N O O O ^1 O O O N o a v R � N t U N ' ° '� A c r d w K ) U U f Z K R W d in N R ti r= V Draft Report — For Discussion Purposes Only CONCLUSION The proposed sewer rate schedule is based on the EVWD projected revenue requirements over the next ten fiscal years. The proposed rates are designed to generate additional sewer revenues to promote revenue adequacy throughout the ten fiscal year planning period. In addition, the rates were designed to satisfy Proposition 218 regulations. We recommend that the EVWD adopt the proposed rate structure to ensure that the sewer system has a stable cash flow stream in order to provide for ongoing costs and debt service and allow for the funding of reserves for unscheduled expenses. We also recommend setting a policy of targeting an operating fund balance of 90 days of annual operations and maintenance expenses to ensure that funds are available for emergency purposes and to mitigate future rate shocks. Finally, we recommend setting a policy of collecting funds annually in a reserve account to provide for future system repairs and replacement. JaMuniFinancial 23 Q) w S (n ° w 0 a tt F� 0 0 Wq (0n 0 [C W n O (3 N U W m N O O O O m O m O V O N M N w 0 W LLI 6. 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O LL LLI F Q LLI LL O EAST VALLEY WATER DISTRICT DIRECTOR'S FEES AND EXPENSE REPORT DIRECTOR: Don Goodin MONTH OF: July 2008 Board Meetings: 22 Conferences and Other Meetings Date:_.___ 7 Organization EVWD Description Spec Mtq, Budget Date:___ 9 Organization SBACC Description Wed Morning Mtq Date:_,____ 21 Organization Special Districts Description Monthly Meeeting Date:-----24 Organization SAWPA Description Tiered Rates Date:_,__ 25 Organization Highland Sr Center Description Volunteer Awards Date:.,.___ Organization Date:,____ Organization Description Date:,__ Organizati Description Date:...___ Organization Descripti Date:.,__ Organization Description TOTAL # OF MEETINGS 7 @125.00 each_ $ 875.00 Ti tal Lod,:ings, Meals & Other: (Details on Back) $ 28.00 Signed Date of Board Approval August 12 2008 Total Director's Expenses $_ 28.00 Total Director's Meetings & Expenses $ 903.00 Less any Advance Payments $ TOTAL DUE DIRECTOR $_ 903.00 Lodgings: (Receipts attached) Date: Function Attended Date: Function Attended Date: Function Attended Date: Function Attended Date: Function Attended SUB TOTAL Personal Auto: Date: Function Attended Miles: Parking Fees $ Date:_ _ Function Attended Miles: Parking Fees $ Date:_ Function Attended Miles: Parking Fees $ Total Miles 112 x . 505 per mile $ SUB TOTAL $ _Meals: (Receipts attached) Date:_ 21 Function Attended Special Districts $ 28.00 Date: Function Attended $ Date: Function Attended $ Date: Function Attended $ Date:_ Function Attended $ Das:e: Function Attended $ Date: Function Attended $ SUB TOTAL $ 28.00 Other: (Receipts attached) Date: Taxi Fare Function Attended ACWA. $ $ Dat.e: Function Attended $ Date: Function Attended SUB TOTAL $_ TOTAL LODGINGS, MEALS AND OTHER $ 28.00 (Enter this total on the front of form) DIRECTOR: Sturgeon Board Meetings: EAST VALLEY WATER DISTRICT DIRECTOR'S FEES AND EXPENSE REPORT 7 - 8 - 22 Conferences and Other Meetings MONTH OF: July 2008 Datc,:-_ 2 5 Organization Highland Sr. Ctr. Description Volunteer Breakfast Date:__ __Organization Description Date:_ Organization Description Date:__ _Organization Description Date: s Organization: Description Date:.-- Or anizatio Description Date: Description Date.:_ n i p F:aivcrpt(wKa I k, ev Date:__ aniz l hoescqption F2!N 14"MI. wr 7- MA V e f- Date: n1. DatEe:--__Organization Description Date:_,_ Organization Description Date!:__ Organization Description Date:__ Organization Description Date:__ Organization Description Date:_._ _Organization Description TOTAL # OF MEETINGS 3 @125.00 each_ $ 375.00 Total Lodgings, Meals & Other: (Details on Back) Total Director's Expenses $ Signed Total Director's Meetings & Expenses $. Less any Advance Payments 375.00 Date of Board Approval August 12, 2008 TOTAL DUE DIRECTOR- $__375 -00 EAST VALLEY WA I ER UIS I RIU I DIRECTOR'S FEES AND EXPENSE REPORT DIRECTOR: W !� _So, MONTH OF: Y 2008 Board Meetings: 2/9 1; 7 -/2Z- Conferences and Other Meetings Date:_._? #- Organization r/ A c c- Description Pavo d Date:_ "T � Z Organization E V 0-0 Description Date:__1I Organization SAW Phi Description-77F-p- fla/e //2 Date:_ I l3 Organization A/—' 0A Description c D 0 s G Date:____ Organizations Description Date: Orqanizatio Description Description Date:_.____ Organization Description Date:___ Organization Description Date:___ Organization Description Date:__ Organization Description Date:_____ Organization Description TOTAL # OF MEETINGS @125.00 each_ $ 7s`0 Total Lodgincs. Meals & Other: (Details on Back) 9­5-3 Total Director's Expenses $ /69,53 Signed Date of Board Approval Directors Fees and EH:oense Reo n 2007.Eac Total Director's Meetings & Expenses $ q ) 8 , S Less any Advance Payments $ TOTAL DUE DIRECTOR $ '71 8 • S3 Lod ig ngs: (Receipts attached) Date:__? /-S Function Attended g! A- — 5 D 0 Date: Function Attended $ Date: _ Function Attended $ Date: Function Attended $ Date::_ _ Function Attended $ SUB TOTAL $ �G�• s� Personal Auto: Date:__ Function Attended Miles: Parking Fees $ Date:__ _ Function Attended Miles: Parking Fees $ Dat(,:__ _ Function Attended Miles: Parking Fees $ Total Miles x .505 per mile $ Meals: (Receipts attached) Date: Function Attended $ Date: Function Attended $ Date: _ Function Attended $ Date: Function Attended $ Date: _ Function Attended $ Date: _ Function Attended $ Date: _ Function Attended $ SUB TOTAL $ Other: (Receipts attached) Date:_ __ F unction Attended $ Date: _ Function Attended $ Date: Function Attended $ SUB TOTAL $__ TOTAL LODGINGS, MEALS AND OTHER $ 16 9•-q3 (Enter this total on the front of form) Directors Fees and'_mense ReDort 2007.doo EAST VALLEY WATER DISTRICT DIRECTOR'S FEES AND EXPENSE REPORT DIRECTOR: Matt Le Vesque MONTH OF: June 2008 Board Meetings: 10,23 Confererces and Other Meetings Date: June 2 Organization EVWD Description Spec. Mtq. -HQ Date: June 3 Organization " Description Customer Service Date: _)une 5 Organization " Description Solar Challenge Date: June 6 Organization " Description Solar Challenge Date: June 10 Organization Highland Chamber Description Chamber Breakfast Date: June 18 Organization WRI Description Landscape Alliance Date: _June 20 Organization EVWD Description Budget Mt i. Date_June27 -_Organization Highland Chamber Description Morning Mtq /coffee Date: -_ _Organization Description Date::___ __Organization Description Date;:___ Organization Description Date:___ Organization Description Date::___ Organization Description Date;:__ Organization Description Date::__ _Organization Description DatES:___ Organization Description TOTAL # OF MEETINGS 10 @125.00 each_ $ 1250.00 Total Lodgings. Meals & Other: (Details on Signed Date of Board Approval EVWD Exo 6A6 do:. Total Director's Expenses $ Total Director's Meetings & Expenses $ 1250.00 Less any Advance Payments $ TOTAL DUE DIRECTOR $ 1250.00 Lod p1gs: (Receipts attached) Date: Function Attended. Date: Function Attended $ Date: Function Attend Date: Function Attended $ Date: _ Function Attended $ SUB TOTAL Personal Auto: Date Function Attended Miles: Parking Fees $ Date: Function Attended Miles: Parking Fees Date: Function Attended Miles: Parking Fees $ Total Miles x.485 per mile $ Meals: (receipts attached) Date::_ ._, Function Attended $ Date: . Function Attend Date: Function Attended $ Date:_ Function Attended $ Date: Function Attended $ Date: Function Attended $ SUB TOTAL $ Other: (Receipts attached) Date: Function Attended $. Date: Function Attended $ Date: Function EV W D ExD 6 -08 aoc SUB TOTAL $ TOTAL LODGINGS, MEALS AND OTHER $ (Enter this total on the front of form) EAST VALLEY WATER DISTRICT DIRECTOR'S FEES AND EXPENSE REPORT DIRECTOR: Matt Le Vesque MONTH OF: July 2008 Board Meetings: 8,22 Conferences and Other Meetings Date:.July�l Organization EVWD Description Spec Mtg.- Budget Date: ... July 17 Organization EVWD Description Legis. Comm. Date:.Jul]22 Organization Lorman Description LEED Webinar Date: .July_31 Organization Sage Software Description Mtg re security software Date: N% Omanizationk Description Description _ DescripQon; M P 6De cription Of, °" Date: OlrganizatOii _ ' + =uescpuon z r° VV P tl�G V1 : tY NOV,* Date:. -___ Organization Description Date:..___ Organization Description Date:..__ Organization Description Date:.____ Organization Description Date:..___ Organization Description Date:..___ Organization Description TOTAL # OF MEETINGS 5 @125.00 each_ $ 625.00 Total Lod�Yings Meals & Other: (Details on Back) $ Signed Date of Board Approval EWVD ExD 7 -08 (3).dx Total Director's Expenses $ Total Director's Meetings & Expenses $ 625.00 Less any Advance Payments $ TOTAL DUE DIRECTOR $_ 62500 EAST VALLEY WATER DISTRICT DIRECTOR'S FEES AND EXPENSE REPORT DIRECTOR: James Morales ------ Organizat ion MONTH OF: July 2008 Board Meetings: 7 8 22 __Organization Description Conferences and Other Meetings Organization Description Date: 16 Organization EVWD Description w /counsel re: odd year elections Date:_17 Organization EVWD Description Legislative Committee Date:, 23 Organization SIB Chamber Description Regular weekly meeting Date:.24 Organization SAPWA Description Tiered Rate Conference Date: 30 ts. Organization" SB_Chamber Description Regular weekly meeting Date: Date: Description Description, - _� Dbe Vpti in c E` Date:__ ------ Organizat ion Date:_ __Organization Description Date:__ Organization Description Date:__ Organization Description Date:_ Organization Description Date:__ Organization Description Date:__ Organization Description TOTAL # OF MEETINGS 8 @125.00 each_ $ 1000.00 Total LcAoings, Meals & Other: (Details on B Signed Date of Board Approval Ev 0 E. 0' 06 Total Director's Expenses $ 106.67 Total Director's Meetings & Expenses $ 1106.67 Less any Advance Payments TOTAL DUE DIRECTOR $-110667 Lodgings: (Receipts attached) Date: Function Attend Date:_ _ Function Attended $ Date: Function Attended $ Date: Function Attended Date: Function Attended SUB TOTAL Personal Auto: Date Function Attended Miles: Meals: Other: parking Fees $ Date: Function Attended Miles: larking Fees $ Date: Function Attended Miles: Parking Fees $ Total Miles (Receipts attached) $ x.485 per mile $ Date: Function Attended $ [:)ate: Function Attended $ Date: Function Date: Function Attended Date: Function Attended Date: Function Attended (Receipts attached) SUB TOTAL $ [)ale: June 18 _ Function Attended Subscription: Wall Street Journal $ 106.67 Date:_ Function Attended _WSJ = National Legislative Issues $ Date:_ Function Attended $ SUB TOTAL $ 106.67 TOTAL LODGINGS, MEALS AND OTHER $ 106.67 (Enter this total on the front of form) FWfO Exo 07 08 East Valley Water District Balance Sheet - Unaudited June 30, 2008 ASSETS UTILITY PLANT - at cost: Utility Plant in Service - water department $105,188,468 Utility Plant in Service - sewer department 25,958,322 131,146,790 Less: Accumulated Depreciation (39,665,059) 91,481,731 Construction in Progress 21,512,413 112,994,144 RESTRICTED ASSETS: Emergency Reserve 2,192,925 COIF' Debt Service Funds - Trust Accts 814,483 Construction Funds 3,163,727 6,171,135 CURRENT ASSETS: Cash and Investments 12,419,364 Less: Restricted Cash and Investments 6,171,135 6,248,229 Accounts Receivable (net of allowance) 1,533,210 Other Receivables (net of allowance) 254,165 Allowance for Uncollectibles (3,656) Grants Receivable 34.7,528 Inventory 1,020,709 Prepaid Expenses 135,502 9,535,627 OTHER ASSETS AND DEFERRED COSTS (Net of Amortization): Bland discount and incidental bond expenses 6,711 Deferred financing charges 214,573 221,284 TOTAL ASSETS 128,922,190 East Valley Water District Balance Sheet - Unaudited June 30, 2008 LIABILITIES AND EQUITY LONG-TERM TERM DEBT: Certificates of Participation due after one year $7,026,888 Installment Payment Obligations 14,454,105 DWR Loan Less: Deferred amount on refunding of COPS 152,147 (332,156) Accrued interest payable 21,300,984 CURRENT LIABILITIES: Accounts Payable 2,156,874 Accrued payroll and benefits 856,413 Customer service deposits 1,611,821 Accrued interest payable 264,785 Deposits - refundable 111,500 Certificates of Participation due within one year 1,715,379 6,716,782 'TOTAL LIABILITIES 28,017,766 EQUITY: Contributed Capital: Invested in Utility Plant 37,037,286 Other Contributed Capital 3,695,064 Retained Earnings: Reserved for water bond funds 6,475 Reserved for emergencies 2,170,000 Reserved for Unemployment Insurance 16,450 Unreserved 49,720,667 Net Income for current year 8,258,482 T017AL EQUITY 100,904,424 TOTAL LIABILITIES AND EQUITY 128,922,190 nr0 V (D W M O r N r. m�C'��- WrVNNf+^i Lnm M U, mco r N O M O �O M tO n O m Md'rnMn MOJW O t{ m MnCO V fO N N (O tU W MMMC7N�- mm��tl)NM U O]�N M N V O r N r co 'ri rin.- oor�ui of uiv N ((�� N r tO ro i O O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 O 000 O O O O O O V O 00000000000000 (O O O V(ON N O M O N N m000000000000 m n O j> ICON O M (p O sf' m n M OWfO OOJ�OVChV ONM O � � NC'tU N M m N �O n O N tOMM(O tO V'.- �nNO)d'N N M Ld r ui r r M rr0 V [t N n O r N m mmtOm�NnlO COW tnm V to N mw r m n M M O m w —NM 12 MrN�n��M CO(q N NMO w M O 0 m m O O ZN Mn —1 eCli M O ro tON� M O � O t0 < Oi CNN WOO(Orm�(pn M Lh O n00 MOtO W O n M O O N M f0 M V V O N M rr Nam MhntnN MtOM (O NNE i0 O N .�- �MVMV N C M N of N M vi •- •- n IO 13 tD :3 n NV DNNOJ ml m 9 NmiZAmm M (rO IO MmNeON O M W �{ N O �mCOOCO tO .-NN N r C6 O 6 rtOran N(ON M...M V N r v' i) N ;3 (j Z3 000 Mtno 0 M �n N o 0 m 0 o 0 O m 0 000vv>0000000o m0tn MmooN m r m � � m co N o. -oma M�ornacom N ... 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L: (U E: G) •. ns ui N �p N D U U G ac a` c en H y y c nE W W U a o N a` d o'er 7 Q m a s w „�, W w Z k=- m c Z o mO c'c �p C cma`5 cm W W F= E oo ui .`._�i- my croHA3Z m� ir W m Ir li �0 N�� �a )Cm n.a��Nin wE OX m W W d cc ry H ry00d° Wr .2 mN`�O�wli W C) 0 CL O C mm0 moo fgmUm� ..(a a�'3 no m -s —c c_+� �� c Z Z j =OFFICIALBALLOT REGION FIVE 0 Seat C - term ends 2011 Signature: Member District: E) James Acosta* Saticoy Sanitary District Alan Dyer blast Valley Water District E] Elaine L. Freeman Rancho Simi Recreation and Park District Henry M. Morgan San Gabriel Valley Mosquito and Vector Control District Ray Marquez Chino valley Independent Fire District Susie Paxton Embarcade o Municipal Improvement District ` incumbent L �Lt ' � CSDA CALIFORNIA SPECIAL DISTRICTS ASSOCIATION 2008 BOARD ELECTIONS MAIL BALLOT INFORMATION Dear Member: A mail ballot has been enclosed for your district's use in voting to elect a representative to the CSDA Board of Directors in Region 5, Seat C. Each of CSDA's six (6) regional divisions has three seats on the Board. Each of the candidates is either a board member or management -level employee of a member district located in your geographic region. Each Regular Member (district) in good standing shall be entitled to vote for one (1) director to represent its region. We have enclosed the candidate statements for each candidate who submitted one. Please vote for only one candidate to represent your region in Seat C and be sure to sign, date and fill in your member district information (in some regions; t&7-e may onlyAe one cana'&a'to. If any part of the ballot is not complete, the ballot will not be valid and will not be counted. You may choose to send back the ballot via either certified or first class mail. Please utilize the enclosed return envelope to return the completed ballot. Ballots must be received at the CSDA office at 1 1 12 1 Street, Suite 200, Sacramento, CA 95814 by 5:00pm on Thursday, September 18, 2008. Please mail in your ballot to: California Special Districts Association Attn: 2008 Board Elections 1112 1 Street, Suite 200 Sacramento, CA 95814 Please contact Diana Zavola toll -free at 877.924.CSDA or dianoz @csda.nef with any questions. Candidate Statement for Susan Paxton (Koesterer) California Special Districts Association's Board of Directors Region 5 Dear Special District Member, Thank you for the opportunity to introduce myself as a candidate for the Board of Directors, Region 5, of the California Special Districts Association. I feel that I am uniquely qualified to fill this important position partially due to my extensive experience over the past twenty seven years as both a Special District Director and a Special District General Manager, as well as my strong belief in Special Districts' role as the third leg of local government providing effective, efficient, and grass roots service to its constituents. I have had the opportunity to work continuously for the past 27 years as General Manager for The Embarcadero Municipal Improvement District (EMID) in Santa Barbara County. EMID was created by a Special Act of the California State Legislature in 1960 to provide the municipal services unavailable to that rural area at the time. I have been directly involved in every aspect of administration and operation. I have had the honor of serving as Director of the Channel Islands Beach Community Service District (CIBCSD) in Ventura County for the past four years. My current term expires in three years. CIBCSD was established in 1982 to provide water, sewer, and solid waste removal, along with certain other community services, to the beach communities located within Oxnard City and an unincorporated area of Ventura County. I have the experience, the enthusiasm and the time to be a positive and proactive representative, establishing and monitoring the implementation of the policies of the California Special Districts Association statewide. Thank you for your time and support Sincerely, Susan Paxton (Koesterer) Re -Elect James Acosta CSDA Board of Directors Region 5 My name James Acosta and I am currently the president of CSDA. I am seeking re- election to the CSDA board of directors representing region 5. . . I am proud of the accomplishments of CSDA during my tenure on the board. Working in conjunction with the rest of the directors, we have increased membership numbers by targeting small districts, offering incentives to become members of CSDA. We have increased member benefit programs with six new programs brought on line during the past twelve months. These benefit programs enhance the membership value to the individual district by allowing them to pick and choose those programs that fit their need. We have continued in have influence in Sacramento by participating in different coalitions and advisory groups on issues that affect special districts. One of our focuses for CSDA is keeping members informed of issues that are of utmost importance to districts. To this end, the CSDA magazine and e -NEWS have been developed and continue to seek ways to improve in order to have up -to -date news to our subscribers. It has been a great pleasure to be part of the team that has brought along the association during these past few years. I have served on many different boards through the years, with Special Districts having a "Special" place in my heart. I respectfully ask for your vote to continue the work for you and CSDA. James Acosta Candidate Statement — Region 5 Alan G. Dyer 855 W. Baseline Rd. Rialto, CA 92376 Telephone: (909) 875 -1804 Residential: (909) 873 -1843 I was born in San Diego CA, and have been a Board Member for the West Valley Water District for over sixteen years. I have my Bachelor's Degree in Sociology as well as my Masters Degree in Education /Sociology. I have also completed some post graduate studies in School Administration at Cal State University San Bernardino. I have extensive teaching and administrative work in University /Community College and Public Adult Schools for the past thirty -seven years but have just recently retired. In short students and school administrators have appreciated knowing me as an "honest' and "caring" teacher. I was a past board member for the Inland Empire West Resource Conservation District for twelve years as well as serving on the Special District Workers Compensation for ten years. I am currently serving on the Rialto North Municipal Advisory Committee representing the West Valley Wager District as a community liaison member. I am also retired military Master Sergeant Grade United States Navy and Air force Reserve for a total of 22 years of honorable services. My desire to serve on the CSDA Board stems from a sincere, ethical concern to support all CSDA activities that come from my previous and current West Valley Water District Board activities serving as a Board Member, Past President and Vice President. I thank you for the opportunity to apply for the vacant CSDA Board seat. CSDA Statement Elaine L. Freeman It is a privilege to be nominated to serve on the CSDA Board of Directors. I am a Board member of the Rancho Simi Recreation & Park District and we provide park and recreation services for over 150,000 residents from the City of Simi and the unincorporated area of Oak Park. I firmly believe that special districts are the best providers of service to residents. The services are well defined and residents have a greater access to special district providers than most other levels of government. As background, I have a degree in Urban Studies from US Riverside and owner of a land use /government policy consulting business. I was appointed to the Board of the Rancho Simi Park District in 2003 and subsequently elected in 2004. I served as Vice Chair in 2004 and chair in 2005. Over the past two years I have participated in the CSDA :Legislative Committee. Other current and past history includes Chair of the Simi Valley Chamber Legislative Committee, member of the Ventura County Special District's Association, member board of directors for the Simi Valley Police Foundation, member of the Hospital Strategic Planning Committee, member of the Simi Valley Tree Advisory Board, former President of the Simi Sunrise Rotary, selected as the 38s' Assembly District Woman of the Year for 2002, received the Community Advocate of the Year Bravo Award from the National Association of Woman Business Owners, received the Spirit Award for 2004 from the Free Clinic of Simi Valley. I would be proud to serve as a director for CSDA. Thank you for your support Susan Paxton Koesterer 116 San Clemente Avenue Oxnard, CA 93117 Subject: California Special Districts Association's Board of Directors; Region 5 ,o Dear Special District Member, Within the next few days you will be receiving a ballot to vote for your choice of a person to represent you as one of the three Region 5 directors for the next three years on the California Special District Association Board of Directors. I am writing to you to ask for your support to allow me to represent you in establishing and monitoring the implementation of CSDA policies statewide. For the past 27 years I have been General Manager of the Embarcadero Municipal Improvement District (EMID) in Santa Barbara County. EMID was created by a Special Act of the California State Legislature in 1960 to provide the municipal services unavailable to that rural area at the time. I have been directly involved in every aspect of administration and operation. For the past 4 years I have served as Director of the Channel Islands Beach Community Service District ( CIBCSD) in Ventura County. My current term expires in three years. CIBCSD was established in 1982 to provide water, sewer, and solid waste removal service, along with certain other community services, to the beach communities located within Oxnard City and an unincorporated area of Ventura County. I believe that I am uniquely qualified to fill this important position, partially due to my extensive experience over the past 27 years as both a Special District Director and a Special District General Manager representing two Counties, but more importantly because of my strong belief in Special Districts' role as the third leg of local government providing effective, efficient, and grass roots service to its constituents. CSDA plays an important part in accomplishing this mission with its legislative, education, finance, and insurance programs. However, it takes money and member ` growth to maintain the forward motion of the organization. There has been a void in the area of balancing staff, adding new members, and bringing in revenue from new projects. I believe I will bring a new, proactive, and enthusiastic approach to the challenges local government faces today. I am available to answer any questions you may have or hear your comments at 805- 968 -5885 (office phone), or 805 -570 -1359 (cell). I appreciate your support. Sincerely, REcEI ED . JUL 2 8 2009 --st Valley Wader TISMart RESOLUTION 2008.17 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT ESTABLISHING AN INVESTMENT POLICY FOR PUBLIC FUNDS WHEREAS, 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 5360 et seq.; and WHEREAS, 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. NOW, THEREFORE, BE IT RESOLVED 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. BE IT FURTHER RESOLVED that the General Manager 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. BE IT FURTHER RESOLVED that this Resolution supersedes Resolution No. 2007.23 adopted by the Board of Directors of the District on August 28, 2007. This Resolution shall take effect immediately upon its adoption. ADOPTED this 12a' day of August 2008 Ayes: Noes: Abstain: Absent: Attest: Robert E. Martin, Board Secretary Donald D. Goodin, Board President Board Memorandum Date: August 12, 2008 From: Brian W. Tompkins, CFO/Treasurer Subject: Investment Policy Recommendation: Approve Resolution No. 2008.17 adopting the attached investment policy for the 2008 -09 fiscal year Background: Government Code section 53646(a) requires that the Treasurer of a local agency annually render to the legislative body a Statement of Investment Policy for consideration at a public meeting. Attached and submitted for your consideration is East Valley Water District's investment policy as adopted in previous years. The District's policy is more restrictive than the Government Code in that certain types of investments allowed by Code section 53601 are not incorporated into the attached policy. The excluded investment types are: Banker's acceptances — maximum 180 -day maturity Commercial paper — restricted to highest Moody's rating; issued by US Corporations with in- excess-of $500 million in assets — maximum 270 -day maturity. Repurchase and reverse repurchase agreements Mortgage securities Medium term corporate notes — maximum of 5 years maturity Staf' is not recommending any substantive changes to the policy at this time. v stvailey ater District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE MANUAL POLICY NO. 8/28/2007 FISCAL POLICIES MANUAL APPROVED BY POLICY TITLE 1. EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 1 of 1 INVESTMENT POLICY: Purpose: The purpose of this policy is to establish uniform procedures for investing District funds in a manner that will provide the highest investment return, with the maximum security, while meeting the daily cash flow demands of the District. This policy is intended to conform to all statutes governing the investment of East Valley Water District funds. Scope: This policy applies to all financial assets of the East Valley Water District. These funds are accounted for in the annual District audit. There are no funds excluded from this policy. Prudence: A. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs; not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. S. The standard of prudence to be used by investment officials shall be the "prudent investor" standard (CGC §53600.3) and shall be applied in the context of managing an overall portfolio. C. Investment officers acting in accordance with written procedures and the investment: 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 vo East _u Water er District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE MANUAL POLICY NO. 8/28/2007 FISCAL POLICIES MANUAL APPROVED BY POLICY TITLE EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 2 of 2 Objectives A. As specified in CGC §53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and managing public funds, the primary objectives, in priority order, of the 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. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 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 a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and the cash flow characteristics of the portfolio. Delegation Of Authority A. Authority to manage the investment program is derived from California Government Code Sections 53600, et seq. Management responsibility for the investment program is hereby delegated to the General Manager, who shall establish written procedures for the operation of the investment program consistent with this investment policy. B. Procedures should include references to: safekeeping, repurchase agreements, wire transfer agreements, collateral /depository agreements and banking services contracts, as appropriate. _ *t Di Water _ District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE —MANUAL POLICY NO. 8/2812007 FISCAL POLICIES MANUAL APPROVED BY POLICY TITLE EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 3 of 3 C. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the General Manager. The General Manager shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. D. Under the provisions of California Government Code 53600.3, the General Manager is a trustee and a fiduciary subject to the prudent investor standard. Ethics And Conflicts Of Interest A. Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Authorized Financial Institutions And Dealers A. The General Manager and /or Financial Officer will maintain a list of financial institutions, selected on the basis of credit worthiness, financial strength, experience and minimal capitalization authorized to provide investment services. In addition, a list will also be maintained of approved security broker /dealers selected by credit worthiness who are authorized to provide investment and financial advisory services in the State of California. No public deposit shall be made except in a qualified public depository as established by state laws. B. For brokers /dealers of government securities and other investments, the designated official shall select only broker /dealers who are licensed and in good standing with the California Department of Securities, the Securities and Exchange Commission, the National Association of Securities Dealers or other applicable self - regulatory organizations. C. Before engaging in investment transactions with a broker /dealer, the General Manager shall have received from said firm a signed Certification Form. This OEastvalley _" _ Water District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE MANUAL POLICY NO. FISCAL POLICIES MANUAL _8/28/2007 APPROVED BY POLICY TITLE EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 4 of 4 form shall attest that the individual responsible for the East Valley Water District's account with that firm has reviewed the East Valley Water District's Investment Policy and that the firm understands the policy and intends to present investment recommendations and transactions to the East Valley Water District that are appropriate under the terms and conditions of the Investment Policy. Authorized and Suitable Investments: A. The East Valley Water District as empowered by California Government Code §53601, et. Seq., established the following as authorized investment: 1. Bonds and Certificates of Participation issued by the East Valley Water District. 2. United States Treasury Bills, Notes & Bonds 3. Registered state warrants or treasury notes or bonds issued by the State of California 4. Bonds, Notes, warrant or other evidence of debt issued by a local agency within the State of California. 5. Negotiable Certificates of Deposit issued by federally or state chartered banks or associations. Not more than 30% of surplus funds can be invested in certificates of deposit 6. Shares of beneficial interest issued by diversified management companies (Money Market Mutual Funds) investing in the securities and obligations authorized by this section. Such funds must carry the highest rating of at least two of the three largest national rating agencies. Not more than 15% of surplus funds can be invested in Money Market Mutual funds. 7. Funds held under the terms of a Trust Indenture or other contract or agreement may be invested according to the provisions of those indentures or agreements. Fast Water er District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE MANUAL POLICY NO. 8128/2007 FISCAL POLICIES MANUAL _ APPROVED BY POLICY TITLE EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 5 of 5 8. Collateralized bank deposits with a perfected security interest in accordance with the Uniform Commercial Code (UCC) or applicable federal security regulations. B. Prohibited Investments. Under the provision of CGC §53601.6 and §53631.5, the East Valley Water 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. Coll lateralization: A. All certificates of deposit must be collateralized by U.S. Treasury Obligations. Collateral must be held by a third party trustee and valued on a monthly basis Safekeeping And Custody: A. All security transactions entered into by the East Valley Water District shall be conducted on a delivery- versus - payment (DVP) basis. B. All securities purchase or acquired shall be delivered to East Valley Water District by book entry, physical delivery, or by third party custodial agreement as required by CGC §53601. Diversification: A. The East Valley Water District will diversify its investment by security type and institution. It is the policy of the East Valley Water District to diversify its investment portfolio. Assets shall be diversified to eliminate the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer or a specific class of securities. B. Diversification strategies shall be determined and revised periodically. In establishing specific diversification strategies, the following general policies and constraints shall apply: i — WE tvalley Water District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE MANUAL POLICY NO. FISCAL POLICIES MANUAL _ _8128/2007 .APPROVED BY POLICY TITLE 1. EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 6 of 6 1. Portfolio maturities shall be matched versus liabilities to avoid undue concentration in a specific maturity sector 2. Maturities selected shall provide for stability of income and liquidity. 3. Disbursement and payroll dates shall be covered through maturities investments, marketable U.S. Treasury bills or other cash equivalent instruments such as money market mutual funds. Reporting: A. In accordance with CGC §53646(b)(1), the General Manager and /or Financial Officer shall submit to each member of the Board of Directors a quarterly investment report. The report shall include a complete description of the portfolio, the type of investments, the issuers, maturity dates, par values and the current market values of each component of the portfolio, including funds managed for EVWD by third party contracted managers. The report will also include the source of the portfolio valuation. B. As specified in CGC §53646(e), if all funds are placed in LAIF and /or FDIC insured accounts, the foregoing report elements may be replaced by copies of the latest statement from such institutions. C. The report must also include a certification that (1) all investment actions executed since the last report have been made in full compliance with the Investment Policy and (2) the East Valley Water District will meet its expenditures obligations for the next six months is required by CGC §53646(b)(2) and (3) respectively. The General Manager and /or Financial Officer shall maintain a complete and timely record of all investment transactions. Investment Policy Adoption: A The Investment Policy shall be adopted by resolution of the East Valley Water District. Moreover, the Policy shall be reviewed on an annual basis, and modifications must be approved by the Board of Directors. 1 *Water Fast Valley _in District POLICY AND PROCEDURE EAST VALLEY WATER DISTRICT APPROVAL DATE MANUAL POLICY NO. Auth. Limit % FISCAL POLICIES MANUAL 53601 (a) _ _8/28/2007 APPROVED BY POLICY TITLE EFFECTIVE DATE BOARD OF DIRECTORS INVESTMENT POLICY August 28,2007 Page 7 of 7 None None Table 1 Investments Authorized By East Valley Water District In Accordance With California Government Code §53601 1:;(; C § Investment Tye Mairimum Maturity Auth. Limit % Required Rating 53601 (a) Local Agency Bonds 5 Years None None 53601 (b) U.S. Treasury Bills, Notes, Bonds 5 Years None None 5'1601 (c) State Registered Warrants, Notes or Bonds 5 Years None None 53601 (d) Notes, Bonds of Other Local Calif. Agencies 5 Years None None 51601 (e) U.S. Agencies 5 Years None None 51601 (h) Negotiable Certificates of Deposit 5 Years 30% None 52601 (k) Money Market Mutual Funds & Mutual Funds 5 Years 15% 2 -AAA 5.601 (m) Collateralized Bank Deposits 5 Years None None 5c:601 (d) Local Agency Investment Fund (LAIF) N/A None None Malual funds maturity may be defined as the weighted average maturity ; money market mutual funds must have an average maturity of 90 days or less, per SEC regulations Memo To: EVWD Board From: Don Goodin CC: Bob Martin Cate: 8/6/2008 Re: Proposed Policy Changes Recent events caused me to consider changes to our policy regarding travel and expense reports as well as vacations for the General Manager. I also believe policy for Board Members for official travel should be changed. Accordingly I met with our General Manager on Monday August 3 and discussed the following proposals. These are presented here to the Board for discussion and possible action at the next Board Meeting. • The GM will request Board pre - approval for all absences from the District and local area. This includes all official travel and vacation. The 2 American Express cards will be cancelled. • The GM will submit an expense report to Board for approval of reimbursement of expenses. • Board Members will request Board approval for all official travel outside of the Local Area. Don Goodin President Subiee -to Avnroval EAST VALLEY WATER DISTRICT August 5, 2008 ,PUBLIC OUTREACH COMMITTEE MEETING MINUTES Director Wilson called the meeting to order at 9:05 a.m.. Justine Hendricksen led the flag salute. PRESENT: Directors: Sturgeon, Wilson ABSENT: None STAFF: Robert Martin, General manager; Justine Hendricksen, Administrative Manager GUEST (S): Jo McAndrews (McAndrews & Boyd), Matt LeVesque PUBLIC PARTICIPATION There being no verbal or written comments the public participation section was closed. DISCUSSION AND REVIEW OF THE INLAND EMPIRE SOLAR CHALLENGE Ms. McAndrews stated that the Inland Empire Solar Challenge was a success and she is looking forward to next year's event. The General Manager reviewed the solar challenge sponsors, donations and overall expenses with the committee. Director Sturgeon stated that he was quite impressed with the overall event. Director Sturgeon inquired as to whether EVWD should be the lead sponsor for future events of this nature or whether agencies such as San Bernardino Valley Municipal Water District, Yucaipa Water District, the Water Resource Institute or the Water Education Foundation should be the lead sponsor(s) in the future. DISCUSSION REGARDING THE DISTRICT'S WATER QUALITY CONFERENCE The General Manger reviewed the District's upcoming Water Quality Conference with the committee. Topics included: sponsorships, income and expense projections, proposed agendas and donation letters. DISCUSSION REGARDING ACWA's OUTREACH PROGRAMS Director Wilson would like to know what types of collaborative efforts the District is undertaking with agencies such as ACWA. DISCUSSION REGARDING THE HIGHLAND LIBRARY AND ENVIRONMENTAL LEARNING CENTER Director Sturgeon would like a status update regarding the Highland Library and Environmental Learning Center as it relates to East Valley Water District (contributions and exhibits). ]DISCUSSION REGARDING DISTRICT HOLIDAY CARDS Director Sturgeon suggested that a unified card (from the Directors and General Manager) be sent to employees, vendors etc. during the holiday season. SCHEDULE THE NEXT PUBLIC OUTREACH COMMITTEE MEETING The next Public Outreach committee meeting has been scheduled for September 10`h at 9:00 a.m. ADJOURN The meeting was adjourned at 9:43 a.m. until the next scheduled Meeting Robert E. Martin, Secretary