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Home My WebLink About2019-10-08 - Board of Directors Meeting Agenda Packet (B) Yorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, October 8, 2019, 6:30 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Brooke Jones, President Phil Hawkins, Vice President Andrew J. Hall, Director J. Wayne Miller, Director Al Nederhood, Director 4. ADDITIONS/DELETIONS TO THE AGENDA Items may be added to the agenda upon determination by a two-thirds vote of the Board, or a unanimous vote if only three Directors are present, that there is a need to take immediate action which came to the District's attention subsequent to the agenda being posted. (GC 54954.2(b)(2)) 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports 5.2. Federal and State Legislative Update 6. PUBLIC COMMENTS Any individual wishing to address the Board or Committee is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Chair will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited to three minutes and must be related to matters of public interest within the jurisdiction of the Water District. (GC 54954.3) 7. CONSENT CALENDAR All items on the consent calendar are considered routine and may be approved by a single motion. There will be no discussion of these items unless a member of the Board, staff, or public requests separate consideration. 7.1. Minutes of Board of Directors Special and Regular Meetings Held August 27, 2019 Recommendation: That the Board of Directors approve the minutes as presented. Page 1 of 244 7.2. Minutes of Board of Directors Special and Regular Meetings Held September 10, 2019 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Payment of Bills, Refunds, and Wire Transfers as of September 24, 2019 and October 08, 2019 Recommendation: That the Board of Directors ratify and authorize the disbursements for September 24, 2019 and October 08, 2019 in the amount of $4,361,675.66. 7.4. 2018 Orange County Regional Water and Wastewater Multi-Hazard Mitigation Plan Recommendation: That the Board of Directors adopt Resolution No. 19-XX Adopting the 2018 Orange County Regional Water and Wastewater Multi- Hazard Mitigation Plan. 7.5. Terms and Conditions for Sewer Service with Jack R. Franklyn III, 5819 Lakeshore Lane, Yorba Linda Recommendation: That the Board of Directors approve the Terms and Conditions for Sewer Service with Mr. Jack R. Franklyn Ill, 5819 Lakeshore Lane, Job No. 201815S. 8. ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action. 8.1. Audit Report for Fiscal Year Ending June 30, 2019 Recommendation: That the Board of Directors receive and file the Yorba Linda Water District Comprehensive Annual Financial Report for Fiscal Year Ending June 30, 2019, the report on Internal Control, and the Communication to Those in Governance Letter. 8.2. Adjourn to Yorba Linda Financing Authority Regular Meeting Recommendation: That the Board of Directors adjourn to the Yorba Linda Financing Authority Regular Meeting. 8.3. Debt Financing of Treatment Facilities Recommendation: That the Board of Directors: (1) defer adoption of the Debt Financing/Reimbursement Agreement for up to 6 months, (2) shift the proposed bond financing from FY21 to FY22 and adjusting the CIP projects accordingly; and (3) defer commencement of the new Water and Sewer Rate Study to FY21 for implementation of new rates effective January 2022. Page 2 of 244 9. DISCUSSION ITEMS This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action of the Board of Directors at the meeting, such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Board of Directors. Time permitting, it is generally in the District's interest to discuss these more complex matters at one meeting and consider formal action at another meeting. This portion of the agenda may also include items for information only. 9.1. Status of Engineering Activities 9.2. Budget to Actual Reports for Month Ending August 31, 2019 9.3. Cash and Investment Report for Period Ending August 31, 2019 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports 10.2. General Manager's Report 10.3. General Counsel's Report 10.4. Future Agenda Items and Staff Tasks 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Jones/Hawkins) • Minutes of the meeting held Thursday, September 26, 2019 at 4:00 p.m. • Next meeting is scheduled Monday, November 25, 2019 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Jones/Hawkins) • Minutes of the meeting held Monday, September 16, 2019 at 4:00 p.m. • Next meeting is scheduled Monday, December 16, 2019 at 3:00 p.m. at YL City Hall. 11.3. Joint Agency Committee with City of Placentia (Jones/Hawkins) • Next meeting is scheduled Tuesday, October 29, 2019 at 3:30 p.m. at Placentia City Hall. 12. BOARD OF DIRECTORS ACTIVITY CALENDAR 12.1. Meetings from October 9 - November 30, 2019 13. ADJOURNMENT Page 3 of 244 13.1. The next Regular Board Meeting will be held Tuesday, October 22, 2019. Closed Session (if necessary) will begin at 5:30 p.m. and regular business at 6:30 p.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Nonexempt materials related to open session agenda items that are distributed to a majority of the Board or Committee less than seventytwo (72) hours prior to the meeting will be available for public inspection in the lobby of the District’s Administrative building located at 1717 East Miraloma Avenue, Placentia CA 92870 during regular business hours. When practical, these materials will also be available on the District’s website (http://www.ylwd.com/). (GC 54957.5) Accommodations for the Disabled Requests for disabilityrelated modifications or accommodations, including auxiliary aids or services, required for participation in the above posted meeting should be directed to the Board Secretary at (714) 7013020 at least 24 hours in advance. (GC 54954.2(a)) Page 4 of 244 ITEM NO. 7.1. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary SUBJECT:Minutes of Board of Directors Special and Regular Meetings Held August 27, 2019 RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: 1.Draft Meeting Minutes (Special) 2.Draft Meeting Minutes (Regular) Page 5 of 244 Minutes of the YLWD Board of Directors Special Meeting Held August 27, 2019 at 5:30 p.m.1 2019-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Tuesday, August 27, 2019, 5:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1.CALL TO ORDER The meeting was called to order at 5:30 p.m. 1.1.TELECONFERENCE SITE 4869 Royal Coachman Dr, Elkridge MD 21075 General Counsel Andrew Gagen indicated that Director Nederhood was participating via teleconference and that the meeting was being conducted pursuant to GC § 54953. He noted that the teleconference location had been identified in the notice and agenda for this meeting in accordance with the Ralph M. Brown Act. At Mr. Gagen’s request, Director Nederhood confirmed that he could hear at his location, that he had posted a copy of the agenda at his location, that his location was reasonably accessible to the public, and that there were no members of the public present. Mr. Gagen asked any member of the Board to notify him if they were unable to hear Director Nederhood and stated that if any votes were to take place they would need to be performed by roll call. 2.ROLL CALL DIRECTORS PRESENT STAFF PRESENT Brooke Jones, President Marc Marcantonio, General Manager Phil Hawkins, Vice President Brett Barbre, Assistant General Manager J. Wayne Miller, PhD Kaden Young, Senior Mgmt Analyst/Asst Board Secretary Al Nederhood (Via Teleconference) DIRECTORS ABSENT ALSO PRESENT Andrew J. Hall Andrew Gagen, General Counsel, Kidman Gagen Law LLP 3.PUBLIC COMMENTS None. Page 6 of 244 Minutes of the YLWD Board of Directors Special Meeting Held August 27, 2019 at 5:30 p.m.2 2019-XXX 4.CLOSED SESSION The meeting was adjourned to Closed Session at 5:31 p.m. All Directors in attendance were present and Director Nederhood participated via teleconference. Also present were General Manager Marc Marcantonio, Assistant General Manager Brett Barbre, and General Counsel Andrew Gagen. 4.1.Conference with Legal Counsel – Existing Litigation Pursuant to Paragraph (1) of Subdivision (d) of Section 54956.9 of the California Government Code Name of Case:Irvine Ranch Water District v. Orange County Water District, et al. (Los Angeles County Superior Court – Case No. BS168278) General Manager Marcantonio and Assistant General Manager Barbre left the meeting prior to discussion of the next item. 4.2.Public Employee Performance Evaluation Pursuant to Section 54957 of the California Government Code Title:General Manager The Board reconvened in Open Session at 6:00 p.m. General Counsel Gagen reported that no action was taken during Closed Session that was required to be reported under the Brown Act. 5.ADJOURNMENT 5.1.The meeting adjourned at 6:01 p.m. Kaden Young Assistant Board Secretary Page 7 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held August 27, 2019 at 6:30 p.m.1 2019-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, August 27, 2019, 2019, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1.CALL TO ORDER The meeting was called to order at 6:30 p.m. 1.1.TELECONFERENCE SITE 4869 Royal Coachman Dr, Elkridge MD 21075 2.PLEDGE OF ALLEGIANCE Vice President Hawkins led the pledge. General Counsel Andrew Gagen indicated that Director Nederhood was participating via teleconference and that the meeting was being conducted pursuant to GC § 54953. He noted that the teleconference location had been identified in the notice and agenda for this meeting in accordance with the Ralph M. Brown Act. 3.ROLL CALL DIRECTORS PRESENT STAFF PRESENT Brooke Jones, President Marc Marcantonio, General Manager Phil Hawkins, Vice President Brett Barbre, Assistant General Manager Andrew J. Hall (Arrived 6:37 p.m.)John DeCriscio, Operations Manager J. Wayne Miller, PhD Gina Knight, Human Resources and Risk Manager Al Nederhood (Via Teleconference)Delia Lugo, Finance Manager Pasquale Talarico, Director of Public Affairs Rosanne Weston, Engineering Manager Danielle Logsdon, Senior Engineer Anthony Manzano, Senior Project Manager Kaden Young, Senior Mgmt Analyst/Asst Board Secretary ALSO PRESENT Andrew Gagen, General Counsel, Kidman Gagen Law LLP Greg Davidson, Director, NBS Page 8 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held August 27, 2019 at 6:30 p.m.2 2019-XXX At Mr. Gagen’s request, Director Nederhood confirmed that he could hear at his location, that he had posted a copy of the agenda at his location, that his location was reasonably accessible to the public, and that there were no members of the public present. 4.ADDITIONS/DELETIONS TO THE AGENDA None. 5.INTRODUCTIONS AND PRESENTATIONS 5.1.Sewer Assessment and Community Facilities Districts Greg Davidson from NBS provided an overview of the company’s history and services. He then reviewed details of the District’s project as a whole, a sample project, financing options, and estimated costs. Mr. Davidson also displayed a map identifying 625 parcels on septic within the District’s boundaries, two options for transitioning the parcels to YLWD’s sewer collection system, and the pros and cons of both scenarios. Discussion regarding the process for setting up a Community Facilities District followed. Greg Schultz, resident, commented on the legal requirements and timeframe for converting parcels on septic systems to sewer service. John Koeller, resident, thanked Mr. Davidson for his presentation and thanked staff for their efforts related to this matter. He also commented on the proposed sample project on Sandra Drive. The group then discussed alternative financing options to assist parcel owners, the level of parcel owner interest, and the estimated costs for proposed polling and outreach efforts. Staff suggested that if the District was to move forward with this endeavor, the Board consider amending the District’s reserves policy in the 1st quarter of FY20 to create a restricted reserve for this project. Mr. Davidson and staff then responded to questions from the Board. 5.2.Elected Official Liaison Reports None. Page 9 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held August 27, 2019 at 6:30 p.m.3 2019-XXX 5.3.Federal and State Legislative Update Director of Public Affairs Pasquale Talarico briefed the Board regarding some important dates on the State’s legislative calendar, the passage of Assembly Bill 756, and recent departmental activities. 6.PUBLIC COMMENTS None. 7.CONSENT CALENDAR President Jones noted that as Director Nederhood was participating in the meeting via teleconference, all votes would be taken by roll call. Director Nederhood and President Jones requested to remove Item Nos. 7.1. and 7.3. respectively from the Consent Calendar for separate consideration. Director Hawkins made a motion, seconded by Director Hall, to approve the remainder of the Consent Calendar. Motion passed 5-0-0-0 on a Roll Call vote. 7.2.Terms and Conditions for Water Service with HQT Homes for Tract 18129 Recommendation: That the Board of Directors approve the Terms and Conditions for Water Service with HQT Homes for Tract 18129, Job No. 201942. 7.4.Payment of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $1,148,792.25. ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION 7.1.Unaudited Financial Statements for Fourth Quarter of FY 2019 Staff responded to questions from Director Nederhood regarding the ProForma in the Fiscal Year 2019 Unaudited Financial Statements, ProForma in the Fiscal Year 2020-21 Financial Summaries, and year-end budget projections for Fiscal Year 2019. Director Hall made a motion, seconded by Director Hawkins, to receive and file the Unaudited Financial Statements for Fourth Quarter of FY19. Motion carried 5-0-0-0 on a Roll Call vote. Page 10 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held August 27, 2019 at 6:30 p.m.4 2019-XXX 7.3.Amendment to the Water and Sewer Facilities Agreement Between the Yorba Linda Water District and North County BRS, LLC for the Cielo Vista Development Project A copy of the document was distributed at the meeting. General Counsel Andrew Gagen reviewed the purpose of the amendment and terms contained therein. Director Jones made a motion to defer consideration of this matter to the regular meeting on September 10, 2019. Motion failed for lack of a second. Director Hawkins made a motion, seconded by Director Miller, to approve the First Amendment to the Cielo Vista Project Water and Sewer Facilities Agreement dated August 1, 2018, conditioned on the Property Owners’ signatures to the Amendment within 30 days of this approval. Motion carried 4-1-0-0 on a Roll Call vote with Director Jones voting No. 8.ACTION CALENDAR 8.1.Performance of Water/Sewer Rate Study – Board Questionnaire The Board provided feedback to staff regarding matters related to the preparation of a new rate study. The consensus of the Board was as follows: Engage Raftelis to perform the rate study rather than issue a Request for Proposals. The period to be covered by the rate study will be 4 years. That Raftelis present two options for the effective date of a proposed rate adjustment: January 2021 and July 2021. That Raftelis utilize a uniform rate structure with separate rate structures to address emergencies and potential mandates such as water treatment. That the rate study focus on maintaining the District’s credit rating at the minimum of AA and maximum of AA+. Debt funding will be issued on a project basis. That future rate adjustments be applied to both the monthly base fee and water usage charge, not just one category. That all pass-through expenses as legally defined would be considered eligible for calculating future pass-through adjustments and consider adding energy adjustments as a pass-through in the commodity rate (water usage charge). Page 11 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held August 27, 2019 at 6:30 p.m.5 2019-XXX 9.DISCUSSION ITEMS Staff reviewed key information contained in the following financial reports. 9.1.Budget to Actual Reports for the Month Ending July 31, 2019 9.2.Cash and Investment Report for Period Ending July 31, 2019 10.REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1.Directors' Reports The Directors noted their attendance at the listed meetings and events. Director Nederhood disconnected from the meeting part way through the discussion of the following item. 10.2.General Manager's Report General Manager Marc Marcantonio asked each of the managers to report on activities within their respective departments. 10.3.General Counsel’s Report None. 10.4.Future Agenda Items and Staff Tasks President Jones requested an item on a future agenda to discuss debt funding alternatives for critical Capital Improvement Projects. He also asked about scheduling a future joint agency meeting with the City of Placentia and noted that the ballot for the upcoming ACWA Region 10 Election would be on the agenda for the September 10, 2019 regular meeting. Director Miller requested staff look into including new, used, and/or rental backup generators in the 5-year Capital Improvement Plan. Page 12 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held August 27, 2019 at 6:30 p.m.6 2019-XXX 11.COMMITTEE REPORTS 11.1.Interagency Committee with MWDOC and OCWD (Jones/Hawkins) Minutes of meeting held July 25, 2019 at 4:00 p.m. were included in the agenda packet. Next meeting is scheduled September 26, 2019 at 4:00 p.m. 11.2.Joint Agency Committee with City of Yorba Linda (Jones/Hawkins) Next meeting is scheduled September 16, 2019 at 4:00 p.m. at Yorba Linda City Hall. 11.3.Joint Agency Committee with City of Placentia (Jones/Hawkins) Next meeting is yet to be scheduled. 12.BOARD OF DIRECTORS ACTIVITY CALENDAR 12.1.Meetings from August 28 – October 31, 2019 The Board made no changes to the activity calendar. 13.ADJOURNMENT 13.1.The meeting was adjourned at 9:29 p.m. Kaden Young Assistant Board Secretary Page 13 of 244 ITEM NO. 7.2. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary SUBJECT:Minutes of Board of Directors Special and Regular Meetings Held September 10, 2019 RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: 1.Draft Meeting Minutes (Special) 2.Draft Meeting Minutes (Regular) Page 14 of 244 Minutes of the YLWD Board of Directors Special Meeting Held September 10, 2019 at 5:30 p.m.1 2019-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Tuesday, September 10, 2019, 5:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1.CALL TO ORDER The meeting was called to order at 5:30 p.m. 2.ROLL CALL DIRECTORS PRESENT STAFF PRESENT Brooke Jones, President Marc Marcantonio, General Manager Phil Hawkins, Vice President Brett Barbre, Assistant General Manager Andrew J. Hall Annie Alexander, Executive Asst/Board Secretary J. Wayne Miller, PhD Al Nederhood ALSO PRESENT Andrew Gagen, General Counsel, Kidman Gagen Law LLP 3.PUBLIC COMMENTS None. 4.CLOSED SESSION The meeting was adjourned to Closed Session at 5:30 p.m. All Directors were present. Also present were General Manager Marc Marcantonio, Assistant General Manager Brett Barbre, and General Counsel Andrew Gagen. 4.1.Conference with Legal Counsel – Existing Litigation Pursuant to Paragraph (1) of Subdivision (d) of Section 54956.9 of the California Government Code Name of Case:Irvine Ranch Water District v. Orange County Water District, et al. (Los Angeles County Superior Court – Case No. BS168278) General Manager Marcantonio and Assistant General Manager Barbre left the meeting prior to discussion of the next item. Page 15 of 244 Minutes of the YLWD Board of Directors Special Meeting Held September 10, 2019 at 5:30 p.m.2 2019-XXX 4.2.Public Employee Performance Evaluation Pursuant to Section 54957 of the California Government Code Title:General Manager The Board reconvened in Open Session at 6:33 p.m. General Counsel Gagen reported that no action was taken during Closed Session that was required to be reported under the Brown Act. 5.ADJOURNMENT 5.1.The meeting adjourned at 6:33 p.m. Annie Alexander Board Secretary Page 16 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held September 10, 2019 at 6:30 p.m.1 2019-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, September 10, 2019, 2019, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1.CALL TO ORDER The meeting was called to order at 6:33 p.m. 2.PLEDGE OF ALLEGIANCE 3.ROLL CALL DIRECTORS PRESENT STAFF PRESENT Brooke Jones, President Marc Marcantonio, General Manager Phil Hawkins, Vice President Brett Barbre, Assistant General Manager Andrew J. Hall John DeCriscio, Operations Manager J. Wayne Miller, PhD Gina Knight, Human Resources and Risk Manager Al Nederhood Delia Lugo, Finance Manager Pasquale Talarico, Director of Public Affairs Rosanne Weston, Engineering Manager Annie Alexander, Executive Asst/Board Secretary Tony Arambarri, Records Management Administrator Robyn Hollinshead, Senior Info Systems Administrator Marcus Millen, Records Management Specialist Freddie Ojeda, Operations Superintendent Kaden Young, Senior Management Analyst ALSO PRESENT Andrew Gagen, General Counsel, Kidman Gagen Law LLP George Murdoch, Director, East Orange County Water District (EOCWD) Anna Sarabian, Principal, Fieldman Rolapp & Associates Lora Carpenter, Assistant Vice President, Fieldman Rolapp & Associates Chris Brussow, Certified Asset Management Consultant, Miller Spatial 4.ADDITIONS/DELETIONS TO THE AGENDA General Manager Marc Marcantonio noted that George Murdoch, Director at EOCWD, was present to address the Board regarding his candidacy in the Association of California Water Agencies (ACWA) Region 10 Election (Item No. 8.2.). He suggested the Board consider hearing Director Murdoch’s comments before the scheduled presentations. President Jones agreed. Page 17 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held September 10, 2019 at 6:30 p.m.2 2019-XXX Director Murdoch provided the Board with an overview of his work experience, service on EOCWD’s Board, and interest in serving as a Board Member for ACWA Region 10. 5.INTRODUCTIONS AND PRESENTATIONS 5.1.Elected Official Liaison Reports None. 5.2.Capital Improvement Plan (CIP) for Fiscal Years 2020-24 Staff reviewed the draft CIP and proposed funding strategies for water and sewer projects. Staff responded to questions regarding the classification of the Advanced Metering Infrastructure (AMI) project as Emergency Preparedness and the cost versus benefit of same. Staff will be bringing a presentation to the Board with a cost-benefit analysis of AMI. Director Nederhood requested the presentation include the percentage water loss districtwide. Staff then explained the process for prioritizing the listed projects. 5.3.Debt Funding Alternatives for Critical Capital Improvement Projects Anna Sarabian, Principal of Fieldman Rolapp & Associates, provided a presentation to the Board regarding funding options for critical projects in the District’s CIP. This included an overview of: YLWD’s outstanding debt and credit rating; alternatives, estimated debt service, and projected operating results for issuing additional bonds; estimated cost of issuance, timeframe, and financing milestones; and recommended next steps. 5.4.Status of District’s Physical Information Assets Staff provided an overview of the Records Division’s efforts to preserve the District’s vital, permanent, and historic physical records. Project highlights included the development of a vault-specific disaster response plan and improvements to protect against potential flooding and fire damage. 5.5.Overview of District’s Computerized Maintenance Management System (CMMS) Staff summarized the purpose of Cityworks (CMMS) and the benefits provided to the District. Staff also reviewed efficiencies achieved since installation, planned enhancements, and future integration with other software programs. Staff and Chris Brussow from Miller Spatial then demonstrated various query and reporting functions of Cityworks. Page 18 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held September 10, 2019 at 6:30 p.m.3 2019-XXX 5.6.Federal and State Legislative Update Staff briefed the Board regarding the status of Senate Bill 1, a scheduled coalition meeting with CalMutuals in Sacramento to discuss per- and polyfluoroalkyl substances (PFAS), and the District’s upcoming infrastructure tours. The Board briefly discussed cancelling the next regular meeting as Director Miller may be attending the meeting in Sacramento and Vice President Hawkins would be out of town. 6.PUBLIC COMMENTS None. 7.CONSENT CALENDAR Director Nederhood requested to remove Item No. 7.2. from the Consent Calendar for separate consideration. Director Hall made a motion, seconded by Director Hawkins, to approve the remainder of the Consent Calendar. Motion carried 5-0-0-0. 7.1.Minutes of Board of Directors Regular Meeting Held August 13, 2019 Recommendation: That the Board of Directors approve the minutes as presented. ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION 7.2.Payment of Bills, Refunds, and Wire Transfers Staff responded to questions from Director Nederhood and President Jones regarding some expenses on the check register and credit card summary. Director Nederhood made a motion, seconded by Director Jones, to ratify and authorize disbursements in the amount of $1,128,311.88. Motion carried 5-0-0-0. Page 19 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held September 10, 2019 at 6:30 p.m.4 2019-XXX 8.ACTION CALENDAR 8.1.Scope of Work for Water and Sewer Rate Study Staff reviewed the rate study objectives and scope of work. Following discussion, the Board came to a consensus to revise the time period covered from 4 to 5 years and set January 1, 2021 as the target implementation date for a potential rate adjustment. Director Miller made a motion to approve the proposed Scope of Work as amended and direct staff to prepare a Professional Services Agreement with Raftelis Financial Consultants, Inc. (Raftelis) for preparation and development of a new Water and Sewer Rate Study. The Board then discussed emergency rates and budget based rate structures. Director Nederhood seconded the motion, which carried 5-0-0-0. 8.2.Associate of California Water Agencies (ACWA) Region 10 Election of Officers and Board Members for 2020-2021 Term (Continued) The Board briefly discussed the Nominating Committee’s recommended slate and the individual candidates. Director Jones made a motion, seconded by Director Hawkins, to vote for the Nominating Committee’s recommended slate of candidates in the ACWA Region 10 Board Election. Motion carried 4-1-0-0 with Director Nederhood voting No. 9.DISCUSSION ITEMS 9.1.Status of Operations Activities Staff reported on the status of the new CCTV vehicle and repairs following the main break on Maple Leaf Lane. 10.REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1.Directors' Reports The Directors noted their attendance at the listed meetings and events. Page 20 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held September 10, 2019 at 6:30 p.m.5 2019-XXX 10.2.General Manager's Report General Manager Marc Marcantonio distributed a copy of his report. 10.3.General Counsel’s Report None. 10.4.Future Agenda Items and Staff Tasks Director Miller requested an item on a future agenda to discuss smoothing capital expenditures. Director Nederhood requested staff provide a presentation at a future meeting on the results of the most recent AWWA Benchmarking Survey. President Jones inquired as to the status of scheduling a joint agency committee meeting with the City of Placentia. Staff is working on finalizing the date. 11.COMMITTEE REPORTS 11.1.Interagency Committee with MWDOC and OCWD (Jones/Hawkins) Next meeting is scheduled September 26, 2019 at 4:00 p.m. 11.2.Joint Agency Committee with City of Yorba Linda (Jones/Hawkins) Next meeting is scheduled September 16, 2019 at 4:00 p.m. at Yorba Linda City Hall. 11.3.Joint Agency Committee with City of Placentia (Jones/Hawkins) Next meeting is yet to be scheduled. 12.BOARD OF DIRECTORS ACTIVITY CALENDAR 12.1.Meetings from September 11 – October 31, 2019 The Board made no changes to the activity calendar. Page 21 of 244 Minutes of the YLWD Board of Directors Regular Meeting Held September 10, 2019 at 6:30 p.m.6 2019-XXX 13.ADJOURNMENT 13.1.The meeting was adjourned at 9:56 p.m. Annie Alexander Board Secretary Page 22 of 244 ITEM NO. 7.3. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Delia Lugo, Finance Manager Richard Cabadas, Accounting Assistant II SUBJECT:Payment of Bills, Refunds, and Wire Transfers as of September 24, 2019 and October 08, 2019 RECOMMENDATION: That the Board of Directors ratify and authorize disbursements in the amount of $4,361,675.66. SUMMARY: Section 31302 of the California Water Code says the District shall pay demands made against it when they have been approved by the Board of Directors. Pursuant to law, staff is hereby submitting the list of disbursements for Board of Directors’ approval. BACKGROUND: At the September 10, 2019 regular meeting staff informed that the Board that, though the regular meeting scheduled for September 24, 2019 had been cancelled, there would still be a disbursement of payments in order for the District to meet its obligations by the listed due dates. The items on this disbursement list includes: A check of $127,804.48 to ACWA/JPIA for October medical & dental premium; a check of $86,176.22 to City of Anaheim for August 2019 electricity charges; a wire of $1,000,197.55 to MWDOC for July 2019 water purchases; a wire of $77,336.21 to So. California Edison for August 2019 electricity charges at multiple locations; a wire of $43,487.51 to So. California Gas Co. for August 2019 gas charges at multiple locations; a wire of $452,498.32 to US Bank for the 2012A Revenue Bond interest and principal payment; a wire of $61,747.40 to ACWA/JPIA for property insurance premium from July 2019 to June 2020; and a wire of $1,509,976.94 to US Bank for 2017A Revenue Bond interest and principal payment. The balance of $415,109.01 is routine invoices. The combined Accounts Payable check register total is $3,774,333.64, Payroll No. 18 total is $292,941.84, and Payroll No. 19 is $294,400.18; where the total disbursements for this Page 23 of 244 agenda report is $4,361,675.66. A summary of the disbursements is attached. PRIOR RELEVANT BOARD ACTION: The Board of Directors approves bills, refunds and wire transfers semi-monthly. ATTACHMENTS: 1.Cap Sheet 2.Check Register - 09/24/19 3.Credit Card - 09/24/19 4.Check Register - 10/08/19 5.Credit Card - 10/08/19 Page 24 of 244 Summary of Disbursements October 08, 2019 CHECK NUMBERS: 09/24/2019 Computer Checks 74886-74970 $ 338,676.38 10/08/2019 Computer Checks 74971-75029 $ 290,413.33 ____________ $ 629,089.71 WIRES: W091319 MWDOC $ 1,000,197.55 W091319A So. California Edison $ 77,336.21 W091619 So. California Gas Co. $ 43,487.51 W092419 U S Bank $ 452,498.32 W 092619 ACWA/JPIA $ 61,747.40 W093019 U S Bank $ 1,509,976.94 ____________ $ 3,145,243.93 TOTAL OF CHECKS & WIRES $ 3,774,333.64 PAYROLL NO. 18: Direct Deposits $ 180,589.81 Third Party Checks 7248-7252 $ 21,620.07 Payroll Taxes $ 49,674.37 EFT – CALPERS #18 & TASC #18 $ 41,057.59 $ 292,941.84 TOTAL OF PAYROLL $ 292,941.84 ---------------------------------------------------------------------------------------------------------------------- DISBURSEMENT TOTAL: $4,067,275.48 ================================================================== APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD MEETING OF OCTOBER 08, 2019 ==================================================================. Page 25 of 244 Check No.Date Vendor Name Amount Description 74940 09/24/2019 ACWA/JPIA 127,804.48 MEDICAL & DENTAL PREMIUM - OCTOBER 19 74941 09/24/2019 America's Instant Signs 2,586.00 TAMPER RESISTANT TAGS 74886 09/24/2019 Aqua-Metric Sales Co.5,277.44 OPERATIONS WORK MATERIAL 74942 09/24/2019 Aramark 515.29 UNIFORM SERVICE 74887 09/24/2019 AT & T - Calnet3 2,909.79 ATT CALNET 3 74888 09/24/2019 AWWA - Dues 4,141.00 ANNUAL DUES - 11/2019 - 10/2020 74889 09/24/2019 B.L. Wallace Distributor, Inc.1,939.50 METER LIDS 74890 09/24/2019 BrightView Tree Care Services Inc.7,549.00 LANDSCAPE SERVICE - MULTIPLE LOCATIONS 74943 09/24/2019 BrightView Tree Care Services Inc.1,824.70 LANDSCAPE SERVICE - SEPTEMBER 2019 74944 09/24/2019 Brooke Jones 373.64 MILEAGE AND TRAVEL EXPENSE REIMBURSEMENT - AUG 2019 74894 09/24/2019 C. Wells Pipeline 137.03 TOOLS & EQUIPMENT 74945 09/24/2019 CalCard US Bank 325.50 CREDIT CARD TRANSACTIONS 74891 09/24/2019 City Of Placentia 305.00 ENCROACHMENT PERMIT #190117 74892 09/24/2019 Clinical Lab. Of San Bern.5,030.00 WATER QUALITY LAB SAMPLES 74893 09/24/2019 Culligan of Santa Ana 1,810.00 EQUIPMENT PE SOFTENER 74946 09/24/2019 Culligan of Santa Ana 2,170.00 EQUIPMENT PE SOFTENER 74895 09/24/2019 Daniels Tire Service 4,642.50 FLEET MAINTENANCE 74896 09/24/2019 Dapper Tire Co. Inc.19.50 VEHICLE MAINTENANCE - UNIT #184 74947 09/24/2019 De Nora Water Technologies Texas, LLC 1,493.29 SWITCH FLOAT, CT50-100 SYSTEM 74899 09/24/2019 Dean Criske Trucking 1,148.09 ROAD MATERIAL 74897 09/24/2019 Delta Wye Electric, Inc.3,380.00 J2019-36 - ELECTRICAL WORK HELI-HYDRANT 74898 09/24/2019 Dick's Lock & Safe Inc.177.02 CYLINDER CHANGE AND KEY REPLACEMENT 74900 09/24/2019 Eisel Enterprises, Inc.3,367.19 METER BOX, LIDS & COVERS 74948 09/24/2019 Eisel Enterprises, Inc.511.00 J16-06 - METER BOX & LID 74949 09/24/2019 Enthalpy Analytical, Inc.1,654.00 WATER QUALITY SAMPLING - AUG 74951 09/24/2019 EyeMed 1,423.90 EYE MED - SEPTEMBER 2019 74901 09/24/2019 Factory Motor Parts 534.21 VEHICLE MAINTENANCE - MULTIPLE VEHICLES 74950 09/24/2019 Factory Motor Parts 2,001.36 VEHICLE MAINTENANCE AND MECHANIC STOCK PARTS 74929 09/24/2019 FRANKLIN MGMT 400.19 CUSTOMER REFUND 74902 09/24/2019 Fullerton Paint & Flooring 182.81 PAINTING SUPPLIES 74952 09/24/2019 Fullerton Paint & Flooring 268.84 CLEANING/PAINTING SUPPLIES 74937 09/24/2019 GOLDEN BEE MANAGEMENT LLC 431.70 CUSTOMER REFUND 74953 09/24/2019 Haaker Equipment Co.1,307.65 REPLACEMENT PARTS 74903 09/24/2019 Harrington Industrial 1,121.72 CL2 PARTS 74954 09/24/2019 Hydrex Pest Control 252.00 PEST CONTROL 74905 09/24/2019 Infosend Inc.4,937.55 BILLING & POSTAGE - CUSTOMER BILLING 74906 09/24/2019 Inland Kenworth USA Inc 493.32 VEHICLE MAINTENANCE - UNIT #197 74955 09/24/2019 International Training & Rehab Tech, Inc.6,000.00 NASSCO PACP/MACP/LACP TRAINING - OPS & ENGINEERING 74939 09/24/2019 JIANCHENG ZHANG 156.73 CUSTOMER REFUND 74930 09/24/2019 JIN MENG 58.33 CUSTOMER REFUND 74935 09/24/2019 KAI ZHANG 59.98 CUSTOMER REFUND 74907 09/24/2019 Kidman Gagen Law 28,606.50 LEGAL SERVICES - AUGUST 2019 74908 09/24/2019 Kimball Midwest 81.51 MECHANIC SHOP SUPPLIES 74909 09/24/2019 Konica Minolta Business 861.51 COPIER LEASE - C258 & C558 74956 09/24/2019 LA Networks 6,175.00 COMPLETION OF IT SERVICES - FINAL 50% 74910 09/24/2019 Liebert Cassidy Whitmore 188.00 LEGAL SERVICES - JULY 2019 74957 09/24/2019 Liebert Cassidy Whitmore 117.50 LEGAL SERVICES - AUG 2019 74904 09/24/2019 MailFinance 280.60 HASLER LEASE #N17022170 74958 09/24/2019 Managed Health Network 168.75 EAP - SEPTEMBER 2019 74959 09/24/2019 Mario S. Banuelos 770.00 WELDING SERVICE - HELI-HYDRANT 74960 09/24/2019 Mc Fadden-Dale Hardware 38.36 WATER SERVICE REPAIR PARTS 74933 09/24/2019 MOHAMMAD ABDELKARIM 9.51 CUSTOMER REFUND 74931 09/24/2019 MORI LOVE 121.92 CUSTOMER REFUND 74911 09/24/2019 Morton Salt, Inc.3,026.39 COARSE SALT 74912 09/24/2019 Municipal Water District 111.00 MWDOC WATER USE EFFICIENCY W091319 09/13/2019 Municipal Water District 1,000,197.55 WATER DELIVERIES - JULY 2019 74961 09/24/2019 Myers Tire Supply 66.47 VEHICLE MAINTENANCE - UNIT #139 74913 09/24/2019 New Pig Corporation 162.34 PPE EQUIPMENT 74962 09/24/2019 Nexus Office Environments 8,650.46 OFFICE FURNITURE 74914 09/24/2019 Nickey Kard Lock Inc 5,425.31 FUEL - 08/16/19-08/31/19 74915 09/24/2019 Office Solutions 358.88 TONER & OFFICE SUPPLIES 74963 09/24/2019 Omni Enterprise Inc.6,140.00 JANITORIAL SERVICE & FACILITY CLEANING - AUG 2019 74938 09/24/2019 ONYX PAVING CO. INC.938.80 CUSTOMER REFUND 74964 09/24/2019 P.T.I. Sand & Gravel, Inc.417.14 ROAD MATERIAL 74926 09/24/2019 PLACENTIA LINDA HOSP 8,896.02 CUSTOMER REFUND Yorba Linda Water District Check Register For Checks Dated: 09/11/2019 thru 09/24/2019 Page 26 of 244 74927 09/24/2019 PLACENTIA LINDA HOSP 2,293.56 CUSTOMER REFUND 74916 09/24/2019 Praxair Distribution 592.51 MECHANIC SHOP SUPPLIES 74967 09/24/2019 Rachel Padilla/Petty Cash 386.03 PETTY CASH - Y091219 74965 09/24/2019 RKI Engineering, LLC 5,200.00 CONTROL SUPPORT - SCADA 74917 09/24/2019 Sanders Paving, Inc.28,740.00 ASPHALT PAVING - 23 LOCATIONS 74966 09/24/2019 Security Solutions 640.00 TROUBLESHOOT ON-SITE 74918 09/24/2019 SHELF MASTER 6,486.74 MOBILE SHELF CARRIAGE SYSTEM 74932 09/24/2019 SOO NAM 72.79 CUSTOMER REFUND 74920 09/24/2019 Source 1 Environmental 3,360.00 SEWER MAIN REPAIR PARTS 74919 09/24/2019 South Coast AQMD 557.42 EMISSIONS FEES & ANNUAL RENEWAL FEES W091319A 09/13/2019 Southern Calif Edison Co.77,336.21 ELECTRICITY CHARGES - MULTIPLE LOCATIONS - AUGUST 2019 W091619 09/16/2019 Southern Calif Gas Co.43,487.51 GAS CHARGES - MULTIPLE LOCATIONS - AUGUST 2019 74928 09/24/2019 SRIHARI GANGARAJ 18.29 CUSTOMER REFUND 74921 09/24/2019 Staples 428.45 OFFICE SUPPLIES 74968 09/24/2019 Stater Bros. Markets 73.20 MEETING SUPPLIES 74936 09/24/2019 TETRA TECH BAS, INC 301.80 CUSTOMER REFUND 74922 09/24/2019 Total Administrative Service Corp 511.50 FSA - ADMIN FEES 10/01-12/31 74934 09/24/2019 TRUST A-PRANCEVIC FAMILY TRUST 123.67 CUSTOMER REFUND 74923 09/24/2019 United Industries 1,805.05 PPE EQUIPMENT 74969 09/24/2019 United Industries 405.53 PPE EQUIPMENT 74924 09/24/2019 United Water Works, Inc.6,247.30 OPERATIONS WORK MATERIAL 74970 09/24/2019 United Water Works, Inc.1,984.40 OPERATIONS WORK MATERIAL 74925 09/24/2019 YO Fire 6,114.92 OPERATIONS WORK MATERIAL 1,459,697.65 9/5/2019 PAYROLL #18 - EMPLOYEE DIRECT DEPOSIT 180,589.81 9/5/2019 PAYROLL #18 - PAYROLL TAX PAYMENT 49,674.37 9/5/2019 PAYROLL #18 - CALPERS 38,720.70 9/5/2019 PAYROLL #18 - TASC 2,336.89 7248 9/5/2019 COLONIAL LIFE 107.10 7249 9/5/2019 LINCOLN FINANCIAL GROUP 4,991.99 7250 9/5/2019 NATIONWIDE RETIREMENT SOLUTIONS 15,769.14 7251 9/5/2019 CALIFORNIA STATE DISBURSEMENT UNIT 366.92 7252 9/5/2019 CALIFORNIA STATE DISBURSEMENT UNIT 384.92 292,941.84 Payroll Checks #18 Page 27 of 244 Vendor Name Amount Description CalCard US Bank (364.50) Cancellation - GFOA course Source Media Conference 690.00 California Public Finance Conference - Young, K 325.50 24-Sep-19 Cal Card Credit Card U S Bank Page 28 of 244 Check No.Date Vendor Name Amount Description W092619 09/26/2019 ACWA/JPIA 61,747.40 JPIA PROPERTY INSURANCE PREMIUM - 7/2019 - 6/2020 74983 10/08/2019 Aramark 254.14 UNIFORM SERVICE 74991 10/08/2019 ARC 20.00 PW DOCUMENT MGMT 74984 10/08/2019 Archie's Towing 468.75 VEHICLE TOWING - UNIT#144 74985 10/08/2019 AT & T - Calnet3 5,134.82 ATT CALNET3 74986 10/08/2019 Backflow Apparatus & Valve Co., Inc 312.00 PRODUCTION REPAIR PARTS 74993 10/08/2019 C. Wells Pipeline 556.37 HYDRANT REPAIR PARTS 74988 10/08/2019 CalCard US Bank 23,705.77 CREDIT CARD TRANSACTION - AUGUST & SEPTEMBER 2019 74987 10/08/2019 Calif Water Environ Assn (CWEA)94.00 CWEA RENEWAL - COLLECTION SYSTEM 2- BRUNDAHL, J 74989 10/08/2019 City Of Anaheim 86,176.22 ELECTRICITY CHARGES - MULTIPLE LOCATIONS - AUGUST 2019 74990 10/08/2019 Clinical Lab. Of San Bern.3,685.00 WATER QUALITY - LAB SAMPLES 74971 10/08/2019 CRISTINA MCCALL 6.68 CUSTOMER REFUND 74992 10/08/2019 Culligan of Santa Ana 720.00 EQUIPMENT PE SOFTENER 74994 10/08/2019 Daniels Tire Service 19.50 VEHICLE MAINTENANCE - UNIT #184 74995 10/08/2019 Delia Lugo 79.54 TRAVEL EXPENSE - CDIAC DEBT TRAINING 74997 10/08/2019 Dion & Sons, Inc.7,731.04 OIL - STATIONARY ENGINE MAINTENANCE 74972 10/08/2019 ERIN WILSON 5.63 CUSTOMER REFUND 74998 10/08/2019 Factory Motor Parts 442.83 VEHICLE MAINTENANCE - UNIT #183 74999 10/08/2019 Federal Express 15.00 FREIGHT COST 75000 10/08/2019 Fleet Services, Inc 1,071.64 ENGINE MAINTENANCE - HIGHLAND #1 & #5 75001 10/08/2019 Hach Company 527.03 WATER SERVICE REPAIR PARTS 75002 10/08/2019 Harrington Industrial 686.96 J2019-36 - PARTS HELI HYDRANT 75003 10/08/2019 Infosend Inc.10,114.41 BILLING & POSTAGE - CUSTOMER BILLING 75004 10/08/2019 Jackson's Auto Supply - Napa 84.09 VEHICLE MAINTENANCE - UNIT #107 75005 10/08/2019 Jacqueline Segura 51.62 MILEAGE REIMBURSEMENT - AUGUST 2019 74973 10/08/2019 MARY DELEON 107.50 CUSTOMER REFUND 75006 10/08/2019 Mc Fadden-Dale Hardware 577.56 HARDWARE SUPPLIES 74980 10/08/2019 MICHAEL GOMEZ 91.49 CUSTOMER REFUND 74976 10/08/2019 MIKE ANDERSEN 81.04 CUSTOMER REFUND 75007 10/08/2019 Mobile Industrial Supply 8.00 WELDING SUPPLIES 75008 10/08/2019 Municipal Water District 30,580.00 LEAK DETETECTION SHARED SERVICES FY19/20 75009 10/08/2019 Murcal, Inc.2,397.07 STATIONARY ENGINE MAINTENANCE 75010 10/08/2019 Myers Tire Supply 426.41 MECHANIC SHOP SUPPLIES 75011 10/08/2019 NatPay Online Business Solutions 52.53 DOCULIVERY - JULY & AUGUST 2019 75012 10/08/2019 Nickey Kard Lock Inc 5,991.59 FUEL - 09/01/19 - 09/15/19 75013 10/08/2019 Occu-Med, Ltd.140.00 PRE-EMPLOYMENT PHYSICAL 75014 10/08/2019 Office Solutions 4,738.84 OFFICE EQUIPMENT - CHAIRS 75015 10/08/2019 Orange County Hose Co.725.70 TOOLS & EQUIPMENT 75016 10/08/2019 Orange County Register 350.94 OC REGISTER PAPER & ONLINE SUBCRIPTION 75017 10/08/2019 Orange County Water District 3,950.10 ADDITIONAL RA REPLENISHMENT PRIOR YEAR 75018 10/08/2019 P.T.I. Sand & Gravel, Inc.2,146.64 ROAD MATERIAL 74978 10/08/2019 RDFN VENTURES INC 57.51 CUSTOMER REFUND 75019 10/08/2019 RMJ Technologies 19,647.27 GTB MO SERVICE PRO - 9/2019 - 8/2020 75020 10/08/2019 Sanders Paving, Inc.38,203.12 CONCRETE & ASPHALT REPAIR - 19020 MAPLE LEAF 75021 10/08/2019 SKC West, Inc.340.49 SAFETY EQUIPMENT 75022 10/08/2019 Step Saver Inc 1,057.22 COARSE SALT 74977 10/08/2019 TAREK BUYS HOUSES LLC 223.31 CUSTOMER REFUND 74975 10/08/2019 THOMAS GIBBONS 48.29 CUSTOMER REFUND 74982 10/08/2019 TLG PAVING CO 1,575.40 CUSTOMER REFUND W092419 09/24/2019 U S Bank 452,498.32 12A INTEREST & PRINCIPAL - 9/2019 W093019 09/30/2019 U S Bank 1,509,976.94 17A INTEREST & PRINCIPAL -9/2019 75023 10/08/2019 Underground Service Alert 460.23 DIG SAFE BOARD FEES & DIGALERT - AUGUST 2019 75024 10/08/2019 United Industries 685.91 PPE EQUIPMENT 75026 10/08/2019 United Water Works, Inc.10,697.12 OPERATIONS WORK MATERIAL 75025 10/08/2019 UNUM Life Insurance Co. of America 4,381.71 LIFE, AD&D, STD & LTD - OCTOBER 2019 74981 10/08/2019 VVS CAPITAL REALTY 401.15 CUSTOMER REFUND 74974 10/08/2019 WANYING SONG 152.68 CUSTOMER REFUND 75027 10/08/2019 Westside Building Material 349.00 TOOLS & EQUIPMENT 74996 10/08/2019 White Nelson Diehl Evans LLP 16,000.00 J2019-26 - INTERIM BILLING - AUDIT FY19 74979 10/08/2019 XIAOJUAN WAN 123.84 CUSTOMER REFUND 75028 10/08/2019 YO Fire 1,045.63 WATER SERVICE REPAIR PARTS 75029 10/08/2019 Yorba Linda Chamber 635.00 MEMBERSHIP DUES - 07/2019 - 07/2020 2,314,635.99 Yorba Linda Water District Check Register For Checks Dated: 09/25/2019 thru 10/08/2019 Page 29 of 244 Vendor Name Amount Description Amazon.com 452.39 Plan tags rolled prints & cart Sprout Social 84.15 Sprout social media manager Tim Kearns 150.00 YLWD map & graphic presentation Powers Electric Products 266.28 Sounding equipment - SCADA Home Depot 61.93 Hardware supplies for repairs Funeral Flowers 92.85 Sympathy arrangement ARMA International 639.20 Travel expense -ARMA Info 2019 Conference - Millen, M 99 Cent Store 17.24 Retirement recognition -Dalton, D Ralphs 7.49 Retirement recognition -Dalton, D Stater Bros. Markets 148.45 Retirement recognition -Dalton, D Stater Bros. Markets 8.17 Office supplies Southwest Airlines 214.96 Travel expense - Bond Buyers Conference - Young, K Amazon.com 29.97 Retirement recognition -Dalton, D PASMA 99.00 Travel expense - PASMA 2019 Conference - Knight, G Orange County Water Assn.-Dues 30.00 OCWA Luncheon - Nederhood, A PORKY'S PIZZA 61.66 Lunch meeting Chefs Toys 109.87 Lunch room supplies Stater Bros. Markets 81.05 Retirement recognition -Dalton, D Red Wing Shoes 250.00 Safety boots - Martinez, J KB Design 117.34 (2) YLWD shirts - Operation Smart & Final 34.46 Retirement recognition -Dalton, D Costco 155.82 Retirement recognition -Dalton, D Marshalls 3.25 Retirement recognition -Dalton, D Minuteman Press 284.22 Door hangers - Excess water usage & Important Notice Francisco Meat Co 297.80 Retirement recognition -Dalton, D Amazon.com 56.80 Office supplies Gilson Company, Inc.258.66 (4) Soil pocket penetrometer GSE 76 43.48 Propane refill - Forklift Ralphs 7.98 Retirement recognition -Dalton, D El Farolito 179.21 Retirement recognition -Dalton, D Steven Engineering 553.75 Plotter supplies Farmer Boys 45.74 OT meals - crew painting office Sherwin Williams 238.65 Miraloma office paint Hilton Hotels 256.65 Travel expense - UWI Conference - Pres. Jones Amazon.com 14.29 Office supplies Amazon.com 22.50 Office supplies Liebert Cassidy Whitmore 100.00 LCW 2020 legislative update - 3 attendees Yorba Linda Chamber 17.00 YLCC - Network connection lunch - Muttaraid, M Apola Gyro Grill 53.98 New hire lunch - (4) attendees Orange County Water Assn.-Dues 30.00 Lunch meeting - (2) attendees ONLINE Information Services, Inc.722.77 Online collection & utility exchange Placentia Disposal #676 620.48 (2) front loads - disposal service Answer One Communications 630.50 Virtual receptionist service - After hours Verizon Wireless 3,133.65 Verizon Wireless - 06/21/2019 - 07/20/2019 8-Oct-19 Cal Card Credit Card U S Bank Page 30 of 244 Adobe 52.99 Monthly subscription - Adobe suite Notary Learning Center, Inc.337.32 CA Notary exam & training - Millen, M Orange County Water Assn.-Dues 45.00 OCWA Luncheon - Weston SECURE128 43.99 RapidSSL license renewal CalCard US Bank (425.00) Discount - Bond Buyers Conference Fee - Young, K Home Depot 78.01 Building repair parts - facilities Amazon.com 128.30 Keyboard replacement - Operations Eventbrite 40.00 Travel expense - Water Solutions 4 - Pres. Jones GSE 76 10.91 OT meals - Operations crew Del Taco 25.73 OT meals - Operations crew Michaels Arts & Crafts, Brea #2111 16.16 Plaque holder - GFOA award Monoprice Inc 47.98 (2) Portable speakers Monoprice Inc 52.61 Computer cables United Rentals - Fullerton 204.58 Concrete mixer and mix Big Brand Water 188.63 (4) packk hydro filter pack Flappy Jacks 58.63 Lunch meeting - (3) attendees Home Depot 544.49 (2) pallets - ready mix concrete Farmer Boys 52.21 OT meals - Operations crew Del Taco 32.84 OT meals - Operations crew East Valley Water District 360.00 EARNIE training & SAP Evaluator - Logsdon & Agrawalla HD Work Gear 165.00 (2) PPE - Industrial umbrella Minuteman Press 281.70 (5) - Business cards North American Recycling and Crushing, LLC 220.00 Road material disposal Amazon.com 44.00 (2) 24oz envirocide disinfectant Home Depot 181.75 (8) trash cans - production Baci Di Firenze 153.63 Lunch meeting - (3) attendees Starbucks Store 35.90 Safety meeting supplies Kristy's Donuts 33.50 Safety meeting supplies North American Recycling and Crushing, LLC 440.00 Road material disposal North American Recycling and Crushing, LLC 220.00 Road material disposal Red Wing Shoes 167.00 Safety boots - Agrawalla, D Southwest Airlines 575.98 Travel expense - ARMA Int'l Conference - Millen, M Amazon.com 39.45 Labels - Vault rolling shelving Gaylord Opryland Resort & Conv Ctr 266.23 Travel expense - ARMA Int'l Conference - Millen, M Baci Di Firenze 307.79 Team building - (8) attendees Panda Express 7.50 Traffic expense -CDIAC Debt Disclosure training- Lugo, D Frontier Cab 46.85 Traffic expense -CDIAC Debt Disclosure training- Lugo, D Pho Noodle House 13.27 September Lunch mob - Muttaraid, M Stater Bros. Markets 12.07 Supplies for luncheon Polly's Pies 45.47 Supplies for luncheon Amazon.com 122.55 Cellphone supplies Expedia.com 131.60 Travel expense - NEOGOV Conference - Segura, J Mouse Graphics 97.19 Scan - master sewer plan Anatolia Fresh Mediterranean 52.20 Lunch meeting - (3) attendees Gem Meats 268.11 Team building - Fairmont Pump Station dedication Bed Bath & Beyond 131.99 MRE Cooking equipment Mikuni Japanese Restaurant 33.77 Traffic expense -CDIAC Debt Disclosure training- Lugo, D Time Warner Cable 3,079.71 Internet & district tv services Yorba Linda Chamber 2,500.00 Yorba Linda State of City Sponsorship Kristy's Donuts 33.50 Safety meeting supplies Enthalpy Analytical, Inc.840.00 Water quality lab testing Page 31 of 244 Graybar Electric Co 145.27 Motor and belt replacement - HVAC Home Depot 48.28 Parts - irrigation repair Calif Special Districts Assn 575.00 Travel expense - CSDA Board Clerk Conference - Alexander Eventbrite 35.00 OC EWRI Technical Tour Hotel Irvine 65.49 Lunch meeting - (4) attendees Holiday Inn Express 220.78 Traffic expense -CDIAC Debt Disclosure training- Lugo, D Jimmy's Poke 47.82 OT meals - crew work GSE 76 15.19 OT meals - Operations crew Alea Cafe 21.33 OT meals - Operations crew Anthony's Italian Cuisine 20.44 Traffic expense -CDIAC Debt Disclosure training- Lugo, D AWWA - Dues 75.00 Webinar - Pipeline condition assessment CalCard US Bank (975.00) Cancellation - NEOGOV Confrence registration - Lim, V Yorba Linda Chamber 34.00 YLCC Breakfast club - Muttaraid, M Amazon.com 61.97 Keyboard replacement - Engineering LEHR 118.71 Laptop mount - Havis base UBER 69.76 Reimbursed district - Uber trips 23,705.77 Page 32 of 244 ITEM NO. 7.4. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Rosanne P. Weston, Engineering Manager Anthony Manzano, Sr. Project Manager SUBJECT:2018 Orange County Regional Water and Wastewater Multi- Hazard Mitigation Plan RECOMMENDATION: That the Board of Directors adopt Resolution No. 19-XX Adopting the 2018 Orange County Regional Water and Wastewater Multi-Hazard Mitigation Plan. SUMMARY: The Orange County Regional Water and Wastewater Multi-Hazard Mitigation (HMP) Plan was approved by the YLWD Board of Directors in February 2012, and is required to be updated every five years for continued eligibility of Hazard Mitigation funding. The Municipal Water District of Orange County (MWDOC) staff and Water Emergency Response Organization of Orange County (WEROC) representatives have been working with eighteen water and wastewater agencies in the County to complete the HMP. YLWD staff participated in the update process to ensure that the District qualifies for any future Federal Emergency Management Agency (FEMA) Mitigation grant money. Attached is a copy of a related presentation for reference. FISCAL IMPACT: Budgeted: N/A Total Budget: N/A Cost Estimate: N/A Funding Source: N/A Account No: N/A Job No: J201729 BACKGROUND: Page 33 of 244 YLWD and eighteen other participating water and wastewater utilities (see full list below) are updating the Orange County Regional Water and Wastewater Multi-jurisdictional Hazard Mitigation Plan, which was last approved in 2012. Hazard mitigation plans form the foundation for a community's long-term strategy to identify vulnerability to natural and man-made hazards. The plans also aim to reduce disaster losses by breaking the cycle of disaster damage, reconstruction, and repetitive damage. According to the federal Disaster Mitigation Act of 2000, State and local governments are required to develop hazard mitigation plans and update them every five years as a condition for receiving certain types of non-emergency disaster assistance, including grant funding for mitigation projects. The plan is structured to have a base plan and appendices that reflect information that is generic to all participating agencies, such as the planning process, risk assessment, mitigation strategy and plan maintenance. In addition, there are Annexes that are specific to each agency, including a description of physical infrastructure assets, potential disaster impacts, and the mitigation goals and actions for each participating agency. The Annex specific to YLWD is called "Annex S". A copy of Annex S is attached for reference. Additionally, the HMP and related documents are available on MWDOC's WEROC Google Drive through the following link: https://drive.google.com/drive/folders/1yR7Chk_s2zO- fL8q123MNnZXCn0OxfXf?usp=sharing In coordination with WEROC, YLWD has worked with a consultant to lead the process to update the plan. The process included five planning meetings, individual agency meetings for assistance, public outreach, and plan approval. Public outreach was an essential element in the process, which included inviting the public to review the plan via the YLWD website. The plan was approved by the California Office of Emergency Services, and was tentatively approved (pending each participating agency's governing body approval) by FEMA. Before FEMA can give final approval, each participating agency's governing body must approve the plan by resolution. Once approved by the governing body, the plan will be resubmitted to FEMA for final approval. Participating Water and Wastewater Utilities include: Municipal Water District of Orange County Orange County Water District Orange County Sanitation District South Orange County Wastewater Authority City of Buena Park (Utilities Division) El Toro Water District City of Garden Grove (Water Division and Wastewater Division) City of La Habra (Water Division and Wastewater Division) Laguna Beach County Water District Mesa Water District Moulton Niguel Water District City of Newport Beach (Utilities Department) City of Orange (Water and Wastewater Division) Page 34 of 244 Santa Margarita Water District Serrano Water District South Coast Water District Trabuco Canyon Water District City of Westminster (Water Division) Yorba Linda Water District PRIOR RELEVANT BOARD ACTION: On February 23, 2012, the Board approved the 2012 Orange County Regional Water and Wastewater Multi-Hazard Mitigation Plan Update. STRATEGIC PLAN INITIATIVE: SR 1-D Strengthen Existing Emergency Operations Partnerships ATTACHMENTS: 1.HazMit Presentation 2.Annex-S 3.Resolution No. 2019-XX Page 35 of 244 Orange County Regional Water & Wastewater Multi-Jurisdictional Hazard 4 Mitigation Plan Update Itri 0 AUwt ik"IKMt SPIN x �Y i J _ s �• r • • ' Michael Baker age 36 of 244 Presentation Outline ■ Hazard Mitigation Planning Overview and benefits Plan requirements and process ■ Orange County Regional Water and Wastewater Multi-Jurisdictional Mitigation Plan (OC MJHMP) Benefits of Regional Planning Framework Hazard/risk identification Mitigation strategy 2 Pace 9 • Sustained actions taken to reduce or eliminate long-term risk to life and What is Hazard property from hazards Mitigation? • Mitigation actions do NOT stop a hazard from occurring • Mitigation actions REDUCE the impact of a hazard when it occurs What is a Hazard • Identifies the natural hazards a community faces • Assesses the risk/vulnerability to the hazards Mitigation • Identifies specific actions that can be taken to reduce the risk from the hazards What is a Multi— • A hazard mitigation plan in which multiple entities join efforts into one planning process Jurisdictional • MJHMP benefit participating agencies by facilitating cross jurisdictional Mitigation Plan discussions, collaboration and planning An • Each participating agency in a MJHMP are approved as independent governing ( MJ H M P J jurisdictions I& ��A Mitigation plans are key to breaking the cycle of disaster damage, reconstruction, and repeated damage. 3 Pag16,11 8 0f 77 Benefits of an Updated and Approved HMP ■ Increases awareness of hazards, risk, and vulnerabilities ■ Identifies actions for risk reduction ■ Aligns risk reduction with other objectives ■ Builds partnerships for risk reduction ■ Focuses resources on the greatest risks Benefits of an Updated and Approved HMP - Cont. ■ Communicates priorities to potential funding sources ■ Enables action to reduce loss of life and property, lessening impact of disasters ■ FEMA-approved HMP is a condition for receiving certain types of non-emergency disaster funding 5 Page Plan Requirements and Process ■ Review and incorporate existing plans, studies , reports , and technical information ■ Document how the plan was prepared and who was involved ■ Identify how the plan will be monitored , evaluated , and updated regularly Provide for continued public participation in plan maintenance Five-year cycle for FULL updates 6 ac P 9eMI Plan Requirements and Process __W A F Public Risk Assessment Mitigation Involvemen L J" . A I • Residents/business • Identify & profile • Capabilities owners hazards • Ability to expand • Government agencies • Description • Goals • Community • History • Specific actions organizations • Location • Actions completed • Schools • Magnitude/severity since last plan • Non-profits • Likelihood • Integration into other • Identify risks planning mechanisms • Potential losses • Critical facilities 7 h Pate 9 OC Water & Wastewater Multi - Jurisdictional Hazard Mitigation Plan ( OC MJHMP) • 20 Agencies Participated in Updating the 2012 Plan to the 2018 Plan • Update Cost per Agency '" $6,000 r�— PO I 76h=I `7 a Benefits of Regional Planning ■ Standing OC Water and Wastewater Utility Best Practice ■ Historically Worked together to improve regional and local reliability and resiliency Utilize joint or collaborative capital improvement projects, planning processes and emergency management practices Developed prior plans in 2007 and 2012 ■ This Plan Focused only on the agencies that provide drinking water and wastewater services Greater analysis of the risk as it applies specifically to these services Project planning driven by the principles of economies of scale Enhance limitations on risk by working together 9 Page��o�'G�4 OC MJHMP Framework ■ Introduction — Purpose, .what's new/what changed , multi jurisdictional participation , plan organization ■ Planning Process Documentation — Process to update the plan ■ Risk Assessment — Hazard identification/ prioritization, profiles, vulnerability assessment ■ Mitigation Strategy — Goals, overview, regional considerations ■ Plan Maintenance — Monitoring , evaluating, updating and implementing the plan ■ Jurisdictional Annexes — Profile, hazards, vulnerabilities, capabilities and mitigation actions 10 Page1�oM74 Hazard Identification ■ Planning Team reviewed FEMA-identified hazards , 2012 Plan , other relevant information ■ Natural and Human-induced hazards ■ Prioritized hazards Probability — likelihood of occurrence Location — size of potentially affected area Extent — intensity of damage Secondary impacts — impacts to the community 11 PageVoYM Risk I ■ GIS mapping of water/wastewater infrastructure overlaid with hazard CaunLy maps � Wildfires _ RNonitlo Lqx {JrJrff Flood - . s Fault ru ptu re -„ Earthquakes Liquefaction/landslides r” r Tsunamis - ;__l,.,r v Vftw ielrids IMraslNclure ■ Replacement cost and value to . NPoMr om the community �°SLI WT aq.L� Fire Hazard —l,ocal5nvc innSrn Pkgo-Gounb Severity Zones —_ BudN Dim M647MIR x 1- Worst-case scenario assuming ASE." M�HO complete cost of replacement Relative measure of the impacts of the various hazards 12 POI 76h 9 Yorba Linda Water District's Hazards & Risks High Significance Hazards Infrastructure Risks ■ Wildland/Urban Fire Booster Pump ■ Human-Caused Stations , Reservoirs Hazards and Radio ■ Power Outage Communication Sites 13 PageVoMT4 Yorba Linda Water District Top Priorities Mitigation Actions ■ Proposed Significant Mitigation Actions Harden facilities, clear vegetation , develop wildfire fighting system . Install physical security at all District facilities, including but not limited to: fencing , lighting , alarms and cyber security surveillance. Install reservoir seismic retrofit improvements including flexible piping , seismic valves, etc. Reinforce existing communications structures to withstand high winds. 14 PageV"674 Action Required Today ■ Today: Adopt the Orange County Regional Water and Wastewater Multi-Jurisdictional Mitigation Plan Date of first agency's adoption starts 5-year update timeline ■ Over the Next 5 Years: Work on and Implement mitigation actions APPLY for mitigation grant funds for projects! ! ! Monitor implementation of the plan Continue community and partner agency involvement ■ In 5 Years: Work with MWDOC on updating the OC MJHMP 15 page Question s ? ANNEX S Yorba Linda Water District Draft | May 2019 S-1 YORBA LINDA WATER DISTRICT ANNEX The Yorba Linda Water District (YLWD) is a participant (Member Agency [MA]) in the Orange County Water and Wastewater Multi-Jurisdictional Hazard Mitigation Plan (HMP or Plan). As a participant MA, YLWD representatives were part of the HMP Planning Process and served on the Planning Team responsible for the Plan Update; refer to Section 2 of the Plan. The primary Plan, including the hazard mitigation plan procedural requirements and planning process apply to YLWD. This Annex supplements information contained in the primary Plan and describes how YLWD’s risks vary from the planning area. The Risk Assessment (Section 3) summarizes the hazards and risks that pose a threat to Orange County. The primary Plan treats the entire County as the planning area and identifies which MAs are subject to a profiled hazard. The purpose of this Annex is to provide additional information specific to YLWD with a focus on the risk assessment and mitigation strategy. HAZARD MITIGATION PLAN POINT OF CONTACT AND DEVELOPMENT TEAM The following representatives attended the Planning Team meetings on behalf of YLWD and coordinated the hazard mitigation planning efforts with YLWD staff: Primary Point of Contact Alternate Point of Contact Anthony Manzano Danielle Logsdon Senior Project Manager Senior Engineer 714-701-3106 714-701-3105 amanzano@ylwd.com dlogsdon@ylwd.com In addition to participating on the Planning Team, an internal team was also formed to support Planning Team representatives and provide information for the Plan update. The following staff served as YLWD’s internal hazard mitigation planning development team. Representative Title How Participated Anthony Manzano Sr. Project Manager Reviewed and commented on Hazard Mitigation Plan Danielle Logsdon Associate Engineer Reviewed and commented on Hazard Mitigation Plan JURISDICTION PROFILE (Service Population: approximately 80,000) YLWD is an independent special district that provides water and sewer service to residents and businesses within its service area. The District’s history dates to 1909, when local farmers and ranchers formed the Yorba Linda Water Company. In 1959, the voters elected to create a public utility with the assets of the Water Company, and the YLWD was formed under the California Water District Law, Division 13 of the Water Code of the State of California. The District is governed by a publicly elected Board of Directors comprised of five Directors who serve four-year terms. The Directors set District policies and programs, provide general oversight of District activities, set water and sewer rates, and employ the general manager to direct the activities of the District. Page 52 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-2 YLWD provides water and sewer services to most of Yorba Linda, and to portions of Placentia, Anaheim, Brea, and unincorporated Orange County. From 1959 through the mid-1970s, the District experienced a gradual transition from a rural, agriculturally orientated area to a suburban community. In 1978, YLWD Board of Directors agreed to annex lands to the east of then current boundaries that more than doubled the District’s size. YLWD purchases imported water from Metropolitan through MWDOC to provide up to approximately 30 percent of its demand for its 25,000+ potable water service connections. The remaining water comes from the District’s local production wells which are pumped from the OCWD groundwater basin. HAZARDS Detailed hazard profiles for the planning area are provided in Section 3. YLWD is located inland and therefore is not subject to coastal hazards, such as coastal storms/erosion and tsunami. However, the District is subject to most of the other hazards identified for the planning area. Many of these hazards are dispersed and may affect the entire region, including climate change, drought, ground shaking from earthquakes, geologic hazards, and high wind. The eastern portion of the district contains areas in the high or very high fire hazard severity zones and areas susceptible to landslides. Portions of the District adjacent to the Santa Ana River are located within the 100-year flood zones. The Prado Dam poses potential inundation hazards, as portions of the District are located within its inundation zone. Human- caused hazards and power outages are also hazards that could impact the District. There are no hazards that are unique to YLWD. Based on the risk assessment, YLWD’s development team identified the following hazards that affect YLWD and summarized their geographic extent, probability of future occurrence, magnitude/severity and significance; refer to Table S-1. Page 53 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-3 Table S-1 YLWD Hazard Identification Hazard Geographic Extent Probability of Future Occurrences Magnitude/Severity Significance Climate Change Limited Occasional Limited Low Coastal Storm/Erosion Limited Occasional Negligible Low Contamination/ Salt Water Intrusion Limited Unlikely Negligible Low Dam/Reservoir Failure Limited Unlikely Negligible Low Drought Significant Likely Limited Low Earthquake Fault Rupture & Seismic Hazards Extensive Likely Critical High Flood Limited Occasional Limited Low Geologic Hazards Limited Likely Critical Medium High Winds/ Santa Ana Winds Significant Likely Limited Medium Landslide/Mudflow Limited Occasional Limited Medium Wildland/Urban Fire Significant Likely Limited High Human-Caused Hazards Extensive Likely Critical High Power Outage Limited Occasional Critical High Geographic Extent Limited: Less than 10% of planning area Significant: 10-50% of planning area Extensive: 50-100% of planning area Probability of Future Occurrences Highly Likely: Near 100% chance of occurrence in next year, or happens every year. Likely: Between 10 and 100% chance of occurrence in next year, or has a recurrence interval of 10 years or less. Occasional: Between 1 and 10% chance of occurrence in the next year, or has a recurrence interval of 11 to 100 years. Unlikely: Less than 1% chance of occurrence in next 100 years, or has a recurrence interval of greater than every 100 years. Magnitude/Severity Catastrophic—More than 50 percent of property severely damaged; shutdown of facilities for more than 30 days; and/or multiple deaths. Critical—25-50 percent of property severely damaged; shutdown of facilities for at least two weeks; and/or injuries and/or illnesses result in permanent disability. Limited—10-25 percent of property severely damaged; shutdown of facilities for more than a week; and/or injuries/illnesses treatable do not result in permanent disability. Negligible—Less than 10 percent of property severely damaged, shutdown of facilities and services for less than 24 hours; and/or injuries/illnesses treatable with first aid. Significance Low: Minimal potential impact Medium: Moderate potential impact High: Widespread potential impact The identification of hazards provided in Table S-1 is highly dependent on the location of facilities within each agencies jurisdiction and takes into consideration the history of the hazard and associated damage (if any), information provided by agencies specializing in a specific hazard (e.g., FEMA, California Geological Survey), and relies upon each agencies’ expertise and knowledge. Page 54 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-4 Hazard Maps The following maps show the location of hazard zones within the jurisdiction relative to potable water and wastewater systems, as applicable. Page 55 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-5 Figure 1 Fire Hazard and Yorba Linda Water District Potable Water Infrastructure Page 56 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-6 Figure 2 Fire Hazard and Yorba Linda Water District Wastewater Infrastructure Page 57 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-7 Figure 3 Flood Hazard and Yorba Linda Water District Potable Water Infrastructure Page 58 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-8 Figure 4 Flood Hazard and Yorba Linda Water District Wastewater Infrastructure Page 59 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-9 Figure 5 Ground Shaking Hazard and Yorba Linda Water District Potable Water Infrastructure Page 60 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-10 Figure 6 Ground Shaking Hazard and Yorba Linda Water District Wastewater Infrastructure Page 61 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-11 Figure 7 Landslide Hazard and Yorba Linda Water District Potable Water Infrastructure Page 62 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-12 Figure 8 Landslide Hazard and Yorba Linda Water District Wastewater Infrastructure Page 63 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-13 Figure 9 Liquefaction Hazard and Yorba Linda Water District Potable Water Infrastructure Page 64 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-14 Figure 10 Liquefaction Hazard and Yorba Linda Water District Wastewater Infrastructure Page 65 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-15 Figure 11 Earthquake Hazard and Yorba Linda Water District Wastewater Infrastructure Page 66 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-16 This page intentionally left blank. Page 67 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-17 VULNERABILITY AND RISK ASSESSMENT Assets Susceptible to Hazard Events Table S-2, YLWD Infrastructure and Exposure to Hazards, identifies YLWD’s water and wastewater infrastructure assets that are located within the mapped hazard zones, identified above. Table S-2 YLWD Infrastructure and Exposure to Hazards Hazard Infrastructure Type Interties (#) Pump Stations (#) Reservoirs (#) Wells (#) Potable Pipeline (miles) Wastewater Pipeline (miles) Fire Hazard Zone Moderate 1 3 2 0 3.8 0.4 High 0 0 5 0 6.6 1.0 Very High 0 6 5 1 21.6 0.7 FEMA Flood Zone 100-Year 1 0 0 0 1.6 1.8 500-Year 1 0 0 0 4.8 1.7 Alquist-Priolo Rupture Zone 0 0 0 0 3.8 0 Ground Shaking Moderate 0 0 0 0 0 0 High 0 0 0 0 0 0 Extreme 9 11 13 9 71.0 17.1 Liquefaction Moderate 5 0 0 0 6.2 2.4 High 2 1 0 9 9.1 0.3 Very High 0 0 0 0 0 0 Unknown 0 0 0 0 4.9 2.9 Landslide Zone 0 1 6 0 2.2 0.1 Tsunami Zone 0 0 0 0 0 0 Much of YLWD’s potable water and wastewater pipeline systems are located in very high fire hazard areas and extreme ground shaking hazard areas. Additionally, the district contains infrastructure or pipelines in all hazard areas except the tsunami zone. CAPABILITIES ASSESSMENT The capabilities assessment is designed to identify existing local agencies, personnel, planning tools, public policy and programs, technology, and funds that have the capability to support hazard mitigation activities and strategies outlined in this Plan. YLWD’s internal development team revised the capabilities identified in the 2012 plan and collaborated to identify current local capabilities and mechanisms available to the MA for reducing damage from future hazard events. Tables S-3a through S-3d assess the authorities, policies, programs, and resources that the jurisdiction has in place that are available to help with the long-term reduction of risk through mitigation. These capabilities include planning and regulatory tools, administrative and technical resources, financial resources, and education and outreach programs. The agency has the ability to create or expand existing policies and programs to implement mitigation programs. Page 68 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-18 Table S-3a Planning and Regulatory Capabilities Summary Ordinance, Plan, Policy, Program Responsible Agency or Department Description/Comments Building Code City of Yorba Linda, City of Placentia, City of Anaheim and Orange County Fire Authority (OCFA) Standards for constructed facilities such as buildings and non-building structures. Continually updated and maintained Update will occur. Zoning Ordinance City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange Requirements for constructed (structures) and non- constructed properties (agricultural, etc.). Continually updated and maintained Update will occur. Subdivision Ordinance or Regulations City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange Special Purpose Ordinance Floodplain Management: SAWPA, OCFCD Stormwater Management: CoYL & OCFCD Slope Ordinances: CoYL Wildfire Ordinances: OCFA State Fire Standards for constructed facilities such as buildings and non-building structures. Continually updated and maintained Update will occur. Growth Management Ordinances City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange YLWD complies with applicable growth management ordinances and works within the District service area. Site Plan Review Requirements City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange Standards for properties. Continually updated and maintained Update will occur. General Plan City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange YLWD complies with applicable General Plans and works with the cities within the District service area. Capital Improvements Plan City of Yorba Linda, City of Placentia, City of Anaheim, Yorba Linda Water District Standards for infrastructure. Continually updated and maintained Update will occur. Economic Development Plan City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange YLWD complies with applicable economic development plans and works with the cities within the District service area. Emergency Response Plan City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Emergency Management resource. Continually updated and maintained Update will occur. Post-Disaster Recovery Plan City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Emergency Management resource. Continually updated and maintained Update will occur. Post-Disaster Recovery Ordinance City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Emergency Management resource. Continually updated and maintained Update will occur. Real Estate Disclosure Requirements City of Yorba Linda, City of Placentia, City of Anaheim and County of Orange Standards for properties. Continually updated and maintained Update will occur. Air Quality Emissions Air Quality Management District Emission Standards and Permit requirements. Continually updated and maintained Update will occur. Construction Safety Practices California Division of Occupational Safety and Health, City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Standards for construction. Continually updated and maintained Update will occur. Pressure Vessels City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Standards set by jurisdictional agency. For non- occupied structures, YLWD may be sole agency. Wildlife California Department of Fish and Wildlife, City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Federal and jurisdictional agency standards. Continually updated and maintained Update will occur. Page 69 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-19 Table S-3a [continued] Planning and Regulatory Capabilities Summary Ordinance, Plan, Policy, Program Responsible Agency or Department Description/Comments Seismic/Geology City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Standards for property development. Continually updated and maintained Update will occur. Archeologist/Paleontologist City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Standards for property development. Continually updated and maintained Update will occur. Water Discharge Requirements City of Yorba Linda, City of Placentia, City of Anaheim, County of Orange and Yorba Linda Water District Standards for construction and development. Continually updated and maintained Update will occur. How can these capabilities be expanded and improved to reduce risk? Conduct a Risk and Resilience Assessment (RRA) and corresponding Emergency Response Plan (ERP) per the America’s Water Infrastructure Act of 2018 (AWIA). Consider this plan as a resource to meet the AWIA requirements. Conduct disaster response fuel analysis and contingency planning with WEROC as a component of the CA Southern California Catastrophic Plan. Evaluate ability to contract with local fuel distributors and gas stations for emergency backup supply. Work with State Water Resources Control Board regarding water quality planning and response. Work with the State on SSO (Sanitary Sewer Overflow) Plans and incorporate mitigation actions as appropriate. Incorporate hazard information into the next generator plan and CIP update. Table S-3b Administrative and Technical Capabilities Summary Staff/Personnel or Type of Resource Responsible Agency or Department Description/Comments Planner(s) or Engineer(s) with Knowledge of Land Development and Land Management Practices Hunsaker & Associates, Planning, Engineering, Surveying Planners with expertise in land development practices. Collaborate with Engineering and cities to comply with all requirements. Engineer(s) or Professional(s) Trained in Construction Practices Related to Buildings and/or Infrastructure Various Consulting Civil Engineers Licensed Civil Engineers and certified building evaluators (Safety Assessment Program certified by Cal OES). Planners or Engineer(s) with an Understanding of Natural and/or Human - Caused Hazards Carollo Engineers and other Consulting Civil Engineers Outside Contractor. Floodplain manager County of Orange, Storm Water Department Work with the County Floodplain Manager. Surveyors On-Call Geotechnical Survey Consultant: Hushmand Associates, Inc. Certified surveyor on staff. Staff with Education or Expertise to Assess the Community’s Vulnerability to Hazards City of Yorba Engineering Staff, Rick Yee, Assistant City Engineer Yorba Linda Water District Engineering Staff, Anthony Manzano, Sr. Project Manager Work with engineers and WEROC to assess vulnerabilities. Personnel Skilled in GIS and/or HAZUS YLWD Analyst for GIS; DCSE Consulting, for HAZUS. Works with outside consultant for this service. Emergency Manager County of Orange Fire Authority; Kelly Hubbard, WEROC coordinator; Marc Marcantonio, GM Yorba Linda Water District Work with the county and WEROC for this expertise. Grant Writers Townsend Public Affairs Search for available grants when applicable. How can these capabilities be expanded and improved to reduce risk? Evaluate participation in MWDOC Water Loss Control Program, including meter testing and leak detection through training of internal staff or through MWDOC’s Choice program. Have all agency registered engineers and other qualified individuals attend CalOES Safety Assessment Program (SAP) training for building inspections. Coordinate with department managers to regularly review the HMP and progress towards implementation. Identify information that should be included in future updates. Tabulate HMP actions in MS Outlook for following. Page 70 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-20 Table S-3c Financial Capabilities Summary Financial Resources Agency or Department Description/Comments Capital Improvements Project Funding Finance Department, Yorba Linda Water District YLWD Capital Budget 5 yr. Authority to Levy Taxes for Specific Purposes Finance Department, Yorba Linda Water District Special Assessment Areas Fees for Water, Sewer, Gas, or Electric Service Finance Department, Yorba Linda Water District For Reimbursement of Water Impact Fees for Homebuyers or Developers for New Developments/Homes Finance Department, Yorba Linda Water District Water Development Fees Incur Debt Through General Obligation Bonds Finance Department, Yorba Linda Water District For Capital Projects Incur Debt Through Special Tax and Revenue Bonds Finance Department, Yorba Linda Water District For Capital Projects How can these capabilities be expanded and improved to reduce risk? Learn about how to utilize post disaster mitigation grants (Section 406) and incorporate it into the utility’s disaster recovery strategy. Work with Southern California Electric (SCE) and Southern California Gas Company on energy reduction programs and rebates for resiliency. Work with FEMA on grant funding to enhance physical and cyber security (upgrades to facilities). Table S-3d Education and Outreach Capability Summary Resource/Programs Agency or Department Description/Comments Education and Outreach Public Affairs Department, Yorba Linda Water District Public Outreach and Public Information How can these capabilities be expanded and improved to reduce risk? Participate in WEROC lead efforts to develop standardized messaging for water outages, dam events and general disaster response. Ensure that messaging will work for the general community, as well as the Access, Disability, and Functional Needs community specific to our utility. Develop outreach materials on mitigation to include on the district website, in social media, and in water bills. MITIGATION STRATEGY Mitigation Goals YLWD adopts the hazard mitigation goals developed by the Planning Team; refer to Section 4. Mitigation Actions The internal development team reviewed the mitigation actions identified in the 2012 plan and the updated risk assessment to determine if the mitigation actions were completed, require modification, should be removed because they are no longer relevant, and/or should remain in the Plan Update. New mitigation actions to address the updated risk assessment and capabilities identified above were also considered and added. Table S-4, YLWD Mitigation Actions, identifies the mitigation actions, including the priority, hazard addressed, risk, timeframe, and potential funding sources. Page 71 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-21 Table S-4 YLWD Mitigation Actions Priority (High, Medium, or Low) Action/Task/Project Description Location/ Facility Risk (High, Medium, or Low) Cost Responsible Timeframe (Immediate, Short Term, or Long Term) Possible Funding Sources Status/ Progress (New, Existing, Modified) Status Rationale Multi-Hazard 1g. High Increase ground & import water deliveries to provide a redundant water supply during natural hazard events. Drill and equip new Well 23 along with new transmission main. Increase MWD Connection Flowrates Medium $3M Operations Long Term Capital Improve ment Plan New Mitigate major losses in water supply. Wildfire, Flood, Power Outage. 2c. Medium Develop Evacuation Plan to relocate all Richfield mobile equipment. 913 S. Richfield Rd., Placentia, CA Medium $2K Operations Immediate Dept. Budget Existing Have available equipment for Recovery process. Wildfire, Flood. 5 Add remote Emergency Operations Center One room within new Fairmont Booster Pump Station. Medium $200k Operations Short Term Capital Improve ment Plan New Existing EOC Back- up. Wildfire, Flood, Power Outage, Contamination. 3g. Medium Update the existing Emergency Response Plan to include all- natural hazards in the District service area. Replace the current 2007-08 ERP Medium $35K Emergency Management Immediate Dept. Budget Modified Required per OES and FEMA. High Winds/Santa Ana Winds 7c. High Construct a Redundant Data /SCADA communications site. In the future Fairmont Pump Station Upgrade Project High $75K Operations/IT Short Term Capital Improve ment Plan New Insure Continuity and Emergency planning effectiveness. 7d. Medium Reinforce existing communications structures to withstand high wind or micro burst conditions. Eighteen (18) radio communication sites High $144K Operations/IT Short term Capital Improve ment Plan Modified Insure reliability of Radio equipment. Page 72 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-22 Table S-4 [continued] YLWD Mitigation Actions Priority (High, Medium, or Low) Action/Task/Project Description Location/ Facility Risk (High, Medium, or Low) Cost Responsible Timeframe (Immediate, Short Term, or Long Term) Possible Funding Sources Status/ Progress (New, Existing, Modified) Status Rationale Earthquakes 1a. Medium Provide training for in-house staff for visually identifying structural defects of critical facilities. 14 reservoirs, transmission mains over 30" dia., 11 production wells, 42 PR stations & 12 Pump Stations. Low $10k Engineering Immediate Dept. Budget New Create manual. 1c. High Install flexible piping, seismic monitors, earthquake valves, and flow meters on (9) reservoirs in high risk zone. Fairmont, Springview, Little Canyon, Chino Hills, Santiago, Elk Mountain, Bryant Ranch, Camino de Bryant & Hidden Hills Reservoirs. High $1.8M Operations Long Term Capital Improve ment Plan New Maintain emergency water supply in reservoir. 1d. Medium Develop a policy and protocol for evaluating any structural damage of critical structures and facilities. For all reservoirs, operations and administration buildings and pump stations structures Low $3K Engineering Immediate Dept. Budget New Insure integrity of critical structures and facilities. 1e. Medium Obtain a structural evaluation for the District’s oldest reservoir. Fairmont Reservoir and Pump Station built in 1972. Low $5K Engineering Immediate Dept. Budget Modified; Pump Station being re- built. In High Risk Earthquake zone. 1f. High Perform a Cathodic Protection Survey on the District’s Oldest Critical Transmission Mains. 39" Zone 4 Transmission Main from MET OC-66 Turnout to Fairmont High $25K Engineering Immediate Dept. Budget Existing Insure integrity of critical structures and facilities. Flood 2d. Medium Identify alternate sites for relocation of Richfield’s mobile equipment during flood event. Highland and Lakeview Reservoir sites Low $1k Operations Immediate Dept. Budget Modified Part of the latest Emergency Response Plan. Landslide 6a. Medium Identify District facilities currently within the high-risk landslide or mudslide areas. 12 Reservoirs except Highland and Lakeview Reservoir Low $10k Emergency Management Short term Capital Improve ment Plan Modified Understand vulnerabilities. Page 73 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-23 Table S-4 [continued] YLWD Mitigation Actions Priority (High, Medium, or Low) Action/Task/Project Description Location/ Facility Risk (High, Medium, or Low) Cost Responsible Timeframe (Immediate, Short Term, or Long Term) Possible Funding Sources Status/ Progress (New, Existing, Modified) Status Rationale 6b. Medium Protect District assets with a high relative vulnerability to the effect of landslide or mudslide. 12 Reservoirs except Highland and Lakeview Medium $10K Operations Long Term Dept. Budget Modified Maintain landscaping to reduce risk. Wildland/Urban Fire 3f. Low Participate in City of Yorba Linda and OCFA mutual aid response teams training exercises. City of Yorba Linda Emergency Team and OCFA Station #10 Low $1K Emergency Management Immediate Dept. Budget Existing Maintain effective communication with other responders. Wildfire. 5a. Low Provide a list to OCFA of District facilities in High Fire Threat Zone. 14 out of 14 Reservoir/Pump Stations High $2k Emergency Management Immediate Dept. Budget Modified New Fire Maps issued by OCFA. 5b. High Provide a list of all new District facilities to local, county, fire, and MWDOC agencies. Well Nos. 21 & 22 sites High $1K Emergency Management Immediate Dept. Budget New Both in High Risk area. 5b. Medium Identify District facilities that need redundant communication systems. Reservoir/pump stations in high fire zone Medium $2k Emergency Management/ Operations Immediate Dept. Budget Existing Understand vulnerabilities. 5c. High Harden facilities as required. Clear vegetation. Develop wildfire fighting system. YLWD facilities within fire hazard zones High TBD Emergency Management/ Operations Immediate Grants and Budget New Protect Assets. Human-Caused 11b. Low Provide on-going training for District employees to identify danger signs of any systems failures. All Maintenance and Operations personnel Low $1k Emergency Management Immediate Dept. Budget Modified Protect Assets. High Identify required physical security at all District facilities (fencing, lighting, alarm, landscaping, etc.). Incorporate cyber security and surveillance (live cameras, cyberlocks, etc.) All YLWD facilities High $8M Immediate Grants, Loans, Budget New Protect Assets Notes: Timeframe to Completion of Project: “Immediate” is up to 1 year; “Short Term” is 1 to 3 years; “Long Term” is 3 years or longer. Status: “New” refers to a mitigation initiative newly created as part of the plan update process; “Existing” refers to an unfinished initiative that is carried over from the 2012 plan; “Modified” refers to an existing initiative that carried over from the previous plan, but has changed to limit or expand its scope of ac tivities Status Rationale: A statement of justification as to why the project is currently in the status it is in. Page 74 of 244 ANNEX S Yorba Linda Water District Draft | May 2019 S-24 Completed or Removed Mitigation Initiatives The following mitigation actions from the 2012 plan have been completed or are in progress and therefore are removed from the Plan update. Mitigation: Replace/Update Nextel phones and Motorola radios to insure reliable communications. Status: In progress. Mitigation: Replace the 1909 Highland Reservoir and design its replacement to latest UBC Seismic Codes. Status: Complete. Mitigation: Obtain a structural evaluation for the Districts oldest reservoir. Status: Complete. Mitigation: Provide NIMS and SEMS Emergency Response training for all existing and new employees. Status: Complete. Mitigation: Conduct annual emergency response exercises. Status: Complete. Mitigation: Provide personnel to represent YLWD on the Water Emergency Response Organization of Orange County (WEROC) team. Status: Complete. PLAN INTEGRATION YLWD’s capital budget, Water Master Plan, Wastewater Master Plan and Annual Operating Budget are used to implement mitigation initiatives identified in this annex. YLWD also works with the City of Yorba Linda through its General Plan, Capital Improvement Plan, Municipal Code, Emergency Operations Plan, and annual budget process to identify other opportunities to implement mitigation initiatives identified in this annex. After adoption of the HMP, YLWD will continue to integrate mitigation priorities into these documents. Since the previous Plan Update, Yorba Linda incorporated information from the HMP in its CIP, in addition to the following planning mechanisms: • The risk assessment and mitigation actions were used to inform the City’s Water and Wastewater Master Plans and Urban Water Management Plan. • Mitigation actions were identified and incorporated into the Capital Budget for completion. Page 75 of 244 Resolution No. 2019-XX Adopting OC Regional Water and Wastewater Hazard Mitigation Plan 1 RESOLUTION NO. 2019-XX RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT APPROVING AND ADOPTING THE 2018 ORANGE COUNTY REGIONAL WATER AND WASTEWATER HAZARD MITIGATION PLAN WHEREAS,the United States Congress passed the Disaster Mitigation Act of 2000 emphasizing the need for pre-disaster mitigation of potential hazards; and WHEREAS,the Disaster Mitigation Act of 2000 requires all cities, counties and special districts to develop and adopt a Hazard Mitigation Plan (HMP) to be eligible to receive federal grants pertaining to disaster preparedness; and WHEREAS,Yorba Linda Water District recognizes that the threat from natural hazards poses a risk to water and wastewater utilities and the individuals they serve, and impacts can result in regional economic and public health consequences; and WHEREAS,by planning for natural and manmade hazards and implementing projects that mitigate risk, utilities can reduce costly damage and improve the reliability of service following a disaster; and WHEREAS,the Municipal Water District of Orange County, Yorba Linda Water District, and 18 other member agencies participated in development of the HMP in conjunction with a consultant; and WHEREAS,the resources and information within the HMP will allow Yorba Linda Water District and the member agencies to identify and prioritize future mitigation projects, meet the requirements of federal assistance programs and grant applications, and encourage coordination and collaboration in meeting mitigation goals; and Page 76 of 244 Resolution No. 2019-XX Adopting OC Regional Water and Wastewater Hazard Mitigation Plan 2 WHEREAS,a Planning Team was formed to participate in the FEMA-prescribed mitigation planning process to prepare the HMP; and WHEREAS,a public outreach strategy was employed as a required component of developing the HMP, including posting information on member agency websites, email and social media distribution, community survey, and presentations at the Orange County Business Council and Orange County Emergency Management Organization meetings; and WHEREAS,the HMP was made available for public review from August 10, 2018 to September 10, 2018, and WHEREAS,on October 15, 2018 the HMP was provided to the California Department of Emergency Services (CalOES) for review; and WHEREAS,the HMP was revised based on CalOES feedback and was submitted to the Federal Emergency Management Agency (FEMA) for review on February 20, 2019; and WHEREAS,the HMP received FEMA Approval Pending Adoption on July 16, 2019 subject to the member agencies adopting resolutions approving and adopting the HMP; and WHEREAS,the Board of Directors of Yorba Linda Water District has reviewed the HMP; and WHEREAS,the HMP identifies and assesses hazards most likely to affect the Yorba Linda Water District and provides actions to mitigate them. Page 77 of 244 Resolution No. 2019-XX Adopting OC Regional Water and Wastewater Hazard Mitigation Plan 3 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Yorba Linda Water District that: Section 1:The 2018 Orange County Regional Water and Wastewater Hazard Mitigation Plan attached as Exhibit “A” is hereby approved and adopted by the Yorba Linda Water District. Section 2:That Resolution No. 12-03 is hereby rescinded. PASSED AND ADOPTED this 24th day of September 2019 by the following called vote: AYES: NOES: ABSTAIN: ABSENT: Brooke Jones, President Yorba Linda Water District ATTEST: Annie Alexander, Board Secretary Yorba Linda Water District Reviewed as to form by General Counsel: Andrew B. Gagen, Esq. Kidman Gagen Law LLP Page 78 of 244 ITEM NO. 7.5. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Rosanne P. Weston, Engineering Manager Ricardo Hipolito Jr., Engineering Technician II SUBJECT:Terms and Conditions for Sewer Service with Jack R. Franklyn III, 5819 Lakeshore Lane, Yorba Linda RECOMMENDATION: That the Board of Directors approve the Terms and Conditions for Sewer Service with Mr. Jack R. Franklyn III, 5819 Lakeshore Lane, Yorba Linda, Job No. 201815S SUMMARY: Mr. Jack R. Franklyn III, requested to connect his home at 5819 Lakeshore Lane, Yorba Linda, to the public sewer system. The property is approximately 0.697 acres and is located within the District's Western Service Area. An exhibit depicting the project location is attached for your reference. FISCAL IMPACT: Funding Source: Developer Funded Account No: 2-2600 Job No: 201815S BACKGROUND: The applicant, Mr. Jack R. Franklyn III, is currently on a septic system. Due to significant home improvements, Mr. Franklyn is required to extend the sewer main along the existing frontage of his property and connect to the existing 8-inch public sewer at the southerly end of Lakeshore Lane, in conformance with the District Rules and Regulation for Sewer Service. The existing and proposed sewer mains are shown on the attached exhibit. Additionally, Mr. Franklyn is required to install a terminal manhole and one lateral stub-out Page 79 of 244 for future connection at the northerly end of Lakeshore Lane, in accordance with the District Rules and Regulation for Sewer Service. The applicant will be entitled to reimbursement if a future lateral connection to the sewer extension is made. The proposed project is located in Drainage Area "1" within the District's Western Service Area. The Terms and Conditions for Sewer Service with Mr. Jack R. Franklyn III are attached for the Board's consideration. ATTACHMENTS: 1.Terms and Conditions 2.Exhibit Page 80 of 244 Date: October 8, 2019 YORBA LINDA WATER DISTRICT TERMS AND CONDITIONS FOR SEWER SERVICE NAME OF APPLICANT: JACK R. FRANKLYN III LOCATION OF PROJECT: 5819 LAKESHORE LN., YORBA LINDA TRACT NUMBER: N/A JOB NUMBER: 201815S LOT(S): 1 The applicant will be required to complete to the satisfaction of the District the following items that have an “X” following the number. 1) ☒ The applicant shall provide the District with a copy of the Grant Deed or Title Report of the property to be served. 2) ☒ The applicant shall include information deemed necessary by the District in the event the applicant is required to file a Department of Real Estate Tax Disclosure statement. 3) ☒ The applicant shall submit two (2) sets of the improvement plans to the District for plan check processing. a) Improvement Plans b) Grading Plans c) Tract, Parcel or Vesting Map d) Landscaping Plans 4) ☒ Improvement Plans submitted for plan check shall comply with the submittal requirements established by the YLWD Engineering Department. 5) ☒ The applicant shall dedicate or obtain all easements deemed necessary by the District in accordance with the Rules and Regulations of the District. All easement documents shall be prepared under the supervision of and stamped by a Professional Land Surveyor or a Registered Civil Engineer (licensed prior to January 1, 1982) licensed to practice in the State of California. 6) ☒ The applicant shall provide the District with a copy of the Recorded Tract/Parcel Map(s) or Easement Documents illustrating all District easements required by Term and Condition No. 7, prior to requesting occupancy releases. Page 81 of 244 Page 2 of 5 NAME OF APPLICANT: JACK R. FRANKYLN III LOCATION OF PROJECT: 5819 LAKESHORE LN., YORBA LINDA 7) ☒ The applicant shall furnish the District with a 24-hour emergency telephone number prior to the District’s approval of the construction plans. 8) ☒ The applicant shall notify the District 48 hours prior to initiating any work related to required or proposed improvements. 9) ☒ The applicant shall complete a Temporary Construction Meter Permit application for all water to be used in construction work and all water used under such permit shall be taken from the approved construction meter. 10) ☒ The applicant shall provide, per the District specifications, the "As Built" AutoCAD file (version 2016 or earlier) of the Water and/or Sewer facilities. 11) ☒ The applicant shall complete an Application to and Agreement with the Yorba Linda Water District for Sanitary Sewer Service. 12) ☒ The applicant shall comply with the Rules and Regulations for Sewer Service of the Yorba Linda Water District. 13) ☒ The applicant shall pay all of the sewer fees as required by the Rules and Regulations for Sewer Service of the District. 14) ☒ The applicant shall have all sewer facilities designed in accordance with the District's Sewer Master Plan and the Standard Specifications and Drawings for Construction of Domestic Water and Sewer Facilities. All design plans shall be prepared under the supervision of and stamped by a Registered Civil Engineer licensed to practice in the State of California. 15) ☒ The applicant shall provide a completed Surety Bond for the sewer facilities prior to the District signing the Sewer Improvement Plans. The applicant shall also provide to the District an estimate of the construction costs of the proposed sewer facilities. 16) ☒ The applicant’s sewer facilities (on-site) shall be Privately owned and maintained. 17) ☒ The applicant shall construct a sewer main and appurtenances in conformance with the approved plans and the District’s Standard Specifications and Drawings for Construction of Domestic Water and Sewer Facilities. 18) ☒ The applicant shall adjust and raise to grade all sewer manhole covers within the limits of this project. Page 82 of 244 Page 3 of 5 NAME OF APPLICANT: JACK R. FRANKYLN III LOCATION OF PROJECT: 5819 LAKESHORE LN., YORBA LINDA 19) ☒ The applicant shall install a sewer backflow prevention valve on all sewer service connections in which the pad elevations of the property being served is lower than the rim elevation of the upstream manhole. Installation of the backflow device shall comply with all requirements of the Building and Plumbing Codes of the appropriate agency having jurisdiction. 20) ☒ The applicant shall submit a video inspection report of their sewer project in DVD format. The video of the sewer facilities shall be conducted in the presence of the District inspector, which will include stationing locations of manholes, cleanouts, wyes, laterals, backflow devices and appurtenances. (END OF STANDARD TERMS AND CONDITIONS) PROJECT SPECIFIC TERMS AND CONDITIONS 21) ☒ The applicant shall construct approximately 150 feet of new 8-inch PVC sewer main with one terminal manhole, one sewer lateral and one sewer lateral stub-out, per approved plans and District Specifications. The applicant shall be reimbursed per District Rules and Regulations for Sewer Service, when neighboring homes connect to the lateral stub-out. 22) ☒ The applicant shall submit the plumbing fixture unit count and estimated peak wastewater flow to confirm the adequacy of the proposed 4-inch lateral. I hereby certify that the foregoing Terms and Conditions were approved at the September 24, 2019 Regular Meeting of the Board of Directors of the Yorba Linda Water District. The approved Terms and Conditions shall become void six (6) months from the approval date if a formal Water and Sewer Service Agreement between Yorba Linda Water District and the applicant is not executed for the project under consideration. Marc Marcantonio, General Manager Page 83 of 244 5811 LAKESHORE LANE / PROPOSED 4"SEWER / — LATERAL STUB-OUT / i PR�/'ER � �5819 Laka shara Lana ��/NE — PROPOSED / c? SEWER MANHOLE / <v ® // EX.20'WIDE YLWD ` 5819 LAKESHORE LANE / 0J f EASEMENT `r PROP.6'WIDE YLWD +1 cl EASEMENT ; PROPOSED 4" / sr SEWER LATERAL EXIST. / WATER MAIN \ PROPOSED / PROPOSED 8"SEWER SEWER ,MAIN(APPROX.750 L.F.) \ MANHOLE / \ 5831 LAKESHORE LANEQ / /� VICINITY MAP IT / EXISTING CLEANOUT \ REMOVED AND RE / REPLL ACED WITH A MANHOLE EXISTING 8"VCP / SEWER MAIN ABANDONED WATERLINE LOCATION MAP s� I'J PREPARED BY: EXHIBIT SCALE: N.T.S. YORBA LINDA WATER DISTRICT SEWER MAIN EXTENSION DATE: el 1717 E. MIRALOMA AVENUE FOR 10-08-2019 PLACENTIA, CALIFORNIA 92870 5819 LAKESHORE LN FILENAME: (714) 701-3100 J-201815S I"v 31 J 24- ITEM NO. 8.1. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Delia Lugo, Finance Manager SUBJECT:Audit Report for Fiscal Year Ending June 30, 2019 RECOMMENDATION: That the Board of Directors receive and file the Yorba Linda Water District Comprehensive Annual Financial Report for Fiscal Year Ending June 30, 2019, the report on Internal Control, and the Communication to Those in Governance Letter. BACKGROUND: Staff is pleased to present the Board of Directors with Yorba Linda Water District's Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ending June 30, 2019. White Nelson Diehl Evans LLP, the District's external auditing firm, has completed their audit of the Yorba Linda Water District for the fiscal year ending June 30, 2019. Ms. Daphnie Munoz, Partner of White Nelson Diehl Evans LLP, will be in attendance to present the CAFR. She will discuss key factors that contributed to the District's reported Change in Net Position and report on the required disclosures in the Communication to Those in Governance Letter. Staff will submit the FY19 CAFR for consideration of the GFOA Certificate of Achievement for Excellence in Financial Reporting. Staff is expecting that this CAFR will merit the highest level of recognition as obtained by the CAFR for the Fiscal Year Ending June 30, 2018. ATTACHMENTS: 1.FY19 CAFR 2.ACL Letter 3.GAS Letter Page 85 of 244 YORBA LINDA WATER DISTRICT of Yorba Linda, California Comprehensive Annual Financial Report WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS For the Year Ended June 30, 2019 Prepared by: The Yorba Linda Water District Finance Department Delia Lugo, Finance Manager Kelly McCann, Senior Accountant Maria Trujillo, Accountant Richard Cabadas, Accounting Assistant II Page 86 of 244 This page intentionally left blank Page 87 of 244 YORBA LINDA WATER DISTRICT For the Fiscal Year Ended June 30, 2019 Table of Contents Page Number INTRODUCTORY SECTION: Letter of Transmittal i Board of Directors and Executive Staff ix Organization Chart x District Boundaries xi Certificate of Achievement for Excellence in Financial Reporting xii FINANCIAL SECTION: Independent Auditors’ Report 1 Management’s Discussion and Analysis (Required Supplementary Information) 5 Basic Financial Statements: 15 Statement of Net Position 16 Statement of Revenues, Expenses, and Changes in Net Position 18 Statement of Cash Flows 19 Notes to Basic Financial Statements 21 Required Supplementary Information: 55 Schedule of Proportionate Share of the Net Pension Liability 56 Schedule of Contributions - Defined Benefit Pension Plans 57 Schedule of Changes in the Net OPEB Liability and Related Ratios 58 Schedule of Contributions - OPEB 59 Supplementary Information: 60 Combining Schedule of Net Position - 2019 61 Combining Schedule of Revenues, Expenses, and Changes in Net Position - 2019 63 Combining Schedule of Cash Flows - 2019 64 Schedule of Operating Expenses by Cost Center and Nature of Expenses for Water and Sewer - 2019 66 Schedule of Capital Assets - 2019 67 Combining Schedule of Net Position - 2018 68 Combining Schedule of Revenues, Expenses, and Changes in Net Position - 2018 70 Combining Schedule of Cash Flows - 2018 71 Schedule of Operating Expenses by Cost Center and Nature of Expenses for Water and Sewer - 2018 73 Schedule of Capital Assets - 2018 74 Page 88 of 244 YORBA LINDA WATER DISTRICT For the Fiscal Year Ended June 30, 2019 Table of Contents Page Number STATISTICAL SECTION: 75 Description of Statistical Section 77 Financial Trends: Changes in Net Position 78 Revenue Capacity: Number of Connections 80 Ten Largest Customers 81 Debt Capacity: Ratio of Outstanding Debt 82 Debt Coverage 83 Demographic and Economic Information: Demographics 84 Ten Largest Employers 85 Operating Information: Number of Employees 86 Operating and Capacity Indicators 87 Page 89 of 244 INTRODUCTORY SECTION Page 90 of 244 i September 13, 2019 Members of the Board of Directors Yorba Linda Water District Introduction It is our pleasure to submit Yorba Linda Water District’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2019. This report was prepared pursuant to the guidelines set forth by the Governmental Accounting Standards Board (GASB). District staff prepared this financial report in conjunction with an unmodified opinion issued by the independent audit firm White, Nelson, Diehl, Evans LLP. The independent auditor’s report is located at the front of the financial section of this document. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. This report consists of management’s representations concerning the finances of Yorba Linda Water District. Consequently, management assumes responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, the District has established a comprehensive internal control framework that is designed both to protect the District’s assets from loss, theft or misuse, and to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal control should not outweigh its benefits, the District’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements. Management asserts that to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Yorba Linda Water District for its comprehensive annual financial report for the fiscal year ended June 30, 2018. In order to be awarded a Certificate of Achievement, a governmental entity must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one Page 91 of 244 ii year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program requirements and we are submitting it to the GFOA to determine its eligibility for certificate again this year. District Structure and Leadership The Yorba Linda Water District is an independent special district, which operates under the authority of Division 12 of the California Water Code. The Yorba Linda Water District has provided water and sewer services to the residents of the City of Yorba Linda, portions of Placentia, Brea, Anaheim, and nearby unincorporated areas since 1959, the year it was formed to take over the assets and water service responsibilities of the Yorba Linda Water Company, a mutual formed in 1909. The District is governed by a five- member Board of Directors, elected at large from within the District’s service area. The General Manager administers the day-to-day operations of the District in accordance with policies and procedures established by the Board of Directors. The Yorba Linda Water District employs a full-time staff of 81 employees. The District’s Board of Directors meets on the second and fourth Tuesday of each month. Meetings are publicly noticed and citizens are encouraged to attend. The District provides water, sewer or a combination of both services to residents and businesses within its service area, which includes approximately 14,475 acres of land comprising 22.6 square miles. The District serves a population of approximately 81,000 and currently provides water service through approximately 25,200 residential, commercial, and light industrial connections. District Services Residential customers make up approximately 93% of the District’s customer base and consume approximately 75% of the water provided annually by the District. The District obtains about 25% of its water supply from the Metropolitan Water District (MWD) through the Municipal Water District of Orange County (MWDOC) and the 75% from groundwater wells within the area. In FY19 the District provided 18,025 acre-feet of water to its customers. Economic Condition and Outlook The District’s administrative offices are located in the City of Placentia in Orange County. The economic outlook for the area shows moderate growth, which is projected to continue with new commercial business and a steadily improving housing market. On May 9, 2016, the Governor Jerry Brown issued a new Executive Order (B-37-16) “Making Water Conservation a California Way of Life”. This made permanent some water use restrictions and further extended emergency conservations measures through Page 92 of 244 iii January 2017. In May of 2018, the Governor signed Assembly Bill (AB) 1668 and Senate Bill (SB) 606, which are jointly designed to overhaul California’s approach to conserving water. The measures impose a number of new or expanded requirements on state water agencies and local water suppliers, and provide for significantly greater state oversight of local water suppliers’ water use, even in non-drought years. Among other things, AB 1668 and SB 606 require the State Water Resources Control Board (SWRCB), in coordination with the Department of Water Resources (DWR), to establish long-term urban water use efficiency standards by June 30, 2022. Those standards will include components for indoor residential use, outdoor residential use, water losses and other uses. As a result, the Operating Budget for FY19 was predicated upon the assumption that customer water consumption will mirror that of FY18 due to permanent landscaping changes, water use efficiency awareness, and a growing culture of drought sensitivity. Experiencing a year of greater than anticipated rain fall and cooler climate, actual customer consumption for FY19 resulted at 12% below budget. As of May 2014, the District was granted annexation of the remaining 26% of its service area into the Orange County Water District (OCWD). It was anticipated that with full annexation the District will be able to pump the maximum groundwater allowable each year, at a lower cost than purchasing the same amount of import (MWD) water. An existing annexation agreement limited the District from producing OCWD’s Basin Production Percentage (BPP) of 75% to 70% annually until October of 2018. The completion of Fairmont Booster Pump Station in January 2019 provided the District the ability to pump approximately 83% groundwater (8% of total allocated to the Coastal Pumping Transfer Program) for the reporting fiscal year. California’s water supply continues to be a concern due to projected population increases, and environmental and regulatory restrictions that threaten the State’s water supply and conveyance system through the Sacramento-San Joaquin Delta, all of which lead to increasing supply costs. Within the District’s boundaries, population growth is expected to increase only minimally in the next 5-10 years. Additionally, the District’s area is primarily “built out”, and an influx of residents from outside the area is expected to remain fairly low. The State of California, however, is projected to increase by 20 million people over the next 40 years. Mission/Vision Statement and Major Initiatives The activities of the Board and District staff are driven by its Mission Statement: “Yorba Linda Water District will provide reliable water and sewer services to protect public health and the environment with financial integrity and superior customer service,” and its Vision Statement: “Yorba Linda Water District will accomplish its mission to improve the quality of life for those we serve by: embracing proven technology; improving customer satisfaction; providing efficient and responsive operations; ensuring reliable infrastructure.” The Mission and Vision Statements dictate the following six core values of the District. Page 93 of 244 iv 1. Integrity– We demonstrate integrity every day by practicing the highest ethical standards and by ensuring that our actions follow our words. 2. Accountability– We acknowledge that both the Board and the staff of the District are accountable to the public that we serve, as well as to each other. 3. Responsibility– We take full responsibility for our actions. We maintain a commitment of courtesy, assessment and resolution with all customer concerns. 4. Transparency – We listen to our customers and communicate openly about our policies, processes, and plans for the future. 5. Teamwork –We work together by sharing information and resources to achieve common goals. 6. Respect – We ensure every voice, of the District, is treated with dignity and civility; differences are valued and individual abilities and contributions are recognized. Future Years AB1668 and SB606 will establish a new foundation for long-term improvements in water conservation and drought planning. In the forthcoming FY20, this new framework will assist the District in using water more wisely (developing a water budget), eliminating water waste, and strengthening local drought resiliency. The goals, objectives and initiatives within the District’s Strategic Plan and Asset Management Plan will pave the way as to how the District continues to move forward. The forthcoming FY20 budget is predicated upon the assumption that customer water consumption will remain the same as the prior year due to permanent landscaping changes, water use efficiency awareness, and a growing culture of drought sensitivity. As we continue to adapt to the State’s mandated water conservation regulations, and with the projected consumption, our ability to maintain a high level of service while holding costs down will be a challenge. District staff, with the assistance of Raftelis, has developed financial models for the water and sewer enterprises to ensure financial sufficiency that includes the establishment of adequate reserve balances, meets the operation and maintenance costs, and ensures sufficient funding for capital refurbishment and replacement needs. Policies and procedures have been revised to ensure financial strength. On August 23, 2019, the SWRCB/DWR updated guidelines for local water agencies to follow in detecting and reporting the presence of per-fluoro octanoic acid (PFOA) and per- fluoro octane sulfonic acid (PFOS) in drinking water. The State also announced it has Page 94 of 244 v begun the process of establishing regulatory standards for these chemicals. The updated guidelines are part of the State’s comprehensive effort to assess the scope of contamination of drinking water supplies by PFOA and PFOS, chemicals that have been widely used in grease and stain-resistant coatings for consumer products and in firefighting foams. Due to their potential adverse health effects, these chemicals pose an emerging risk to drinking water sources nationwide. The updated guidelines lowered the current notification levels from 14 parts per trillion (ppt) to 5.1 ppt for PFOA and from 13 ppt to 6.5 ppt for PFOS. Notification levels are a nonregulatory, precautionary health- based measure for concentrations in drinking water that warrant notification and further monitoring and assessment. Public water systems are encouraged to test their water for contaminants with notification levels. If the systems do test, they are required to report exceedances to their governing boards and the State Water Board and are urged to report this information to customers. While the State Water Board continues to assess the scope of contamination based on initial data reporting from statewide assessment, the response levels for PFOA and PFOS remain at 70 ppt for the total combined concentration of both contaminants, consistent with the U.S. Environmental Protection Agency’s health advisory level. The response levels will be updated in the fall. Response levels are nonregulatory, precautionary health- based measures that are set higher than notification levels. However, for exceedances of the response levels, water systems should consider taking the water source out of service or provide treatment if that option is available to them. Recent testing of District wells for the PFOA/PFOS chemicals presented results within the Stated acceptable levels. Should the State Water Board lower the response levels, the District may be forced to shut all 11 wells down and import water from Metropolitan Water District of Southern California to serve as our water source until a treatment plant can be built. This change in water resource can have a significant effect on the District’s FY20 budget operating plan. Long-term Financial Planning and Policies The District perpetually maintains a five-year Financial Forecast to identify and focus on current and projected economic conditions. The purpose of the forecast is to identify the District’s ability over the next five years to continue current services, maintain existing assets and fund new initiatives or acquire new capital assets. The Board of Directors also annually reviews and adopts a five-year forecast of Capital Improvement Projects. These investments reflect the Board of Directors commitment to maintain and improve the District, in order to provide citizens the highest possible service. The District’s Debt Management Policy has a significant impact on the District’s water and sewer rates set by the Board of Directors on an annual basis. District annual rates and charges shall be set to maintain an annual debt coverage ratio of at least 225% to retain Page 95 of 244 vi a AA rating from bond rating agencies. Therefore, having an impact on the District’s reportable net position for each fiscal year end. As a means to prefund Net Pension and Other Post Employment Benefit (OPEB) obligations, the District established a Public Agencies Post-Employment Trust made available by PARS. In support of this, staff developed the Pension Rate Stabilization Program (PRSP) and Other Post-Employment Benefits (OPEB) Funding Policy that addresses the methodology and process for funding current and future contractual obligations to provide pension and retiree medical benefits as set forth in the District’s personnel rules and regulations. The policy also establishes procedures that are formulated in compliance with the requirements of Section 115 of the Internal Revenue Code for a prudent and systematic investment in support of the District’s goals. In FY19, the District contributed $1,105,248 towards the net pension obligation and $587,339 towards the OPEB obligation in efforts to comply with funding schedule established within the policy. Water and Sewer Rates With the absence of a conservation mandate from the SWRCB, staff had projected that the annual customer consumption for FY19 would increase by approximately 0.4% from the projected year-end results of FY18. This projected consumption increase enabled the District to retain the monthly service charges as set by the Board of Directors in FY17 for FY18 with the goal of meeting the District’s cost of service and providing superior customer service. Per the District’s Prop 218 of 2015, staff conducted an annual cost of service analysis based on the year-end results from FY18 to calculate an eligible pass-through adjustment for the FY19 commodity/consumption rate. The results of this analysis yielded an eligible $0.10 pass- through adjustment be added to the commodity/consumption rate. Therefore, adjusting the commodity/consumption rate from $2.70 to $2.80 per unit of water consumed per meter connection with an effective date of January 1, 2019. As such, the District’s commodity rate was adjusted from $2.70/unit for July 1 – December 31, 2018 to $2.80/unit for January 1 – June 30, 2019. The monthly service charges were set at follows: ⅝” and ¾” meters at $19.45, 1” meters at $32.49, 1 ½” meters at $64.78, 2” meters at $103.69, 3” meters at $227.04, 4” meters at $408.55 and 6” meters at $907.95. At an average of 18 units of water per month (approximately 13,500 gallons), a typical 1” metered YLWD residential classed customer would pay about $81.09 for their monthly water bill July – December 2018 or $82.89 for their monthly water bill January – June 2019. YLWD also provided wastewater service to approximately 19,191 customer connections in FY19, at a charge of $7.50 per month for traditional single-family residential customers and $7.05 per month for multi-family residential customers. For commercial customers, it is $7.50 per month plus a $0.48 per unit charge, based on water consumption above 7 Page 96 of 244 vii units. These rates are the result of a Cost of Service analysis via the FY16 Water and Sewer Rate Update Report. The District’s water supply is currently derived from both groundwater (75%) and import water (25%). Both import and groundwater prices have dramatically increased over the past five fiscal years, and it is anticipated that costs will continue to increase as supplies become more strained from projected population increases, cyclical drought conditions, and environmental and regulatory regulations. Enhanced Outreach & Communications The District continues to enhance its communications presence within the community and hired a Director of Public Affairs in March 2019. The Public Affairs division of the Administration Department develops and disseminates information to the public and supports water conservation programs with the overall goal of developing a more transparent image of the District to the community. Technological Advancements in Progress Technological advancements include the incorporation of a Computerized Maintenance & Management System (CMMS), which automates and track fieldwork orders and includes actual costs to perform work-order related functions. In addition, Automated Purchase Requisitioning System, which will provide better workflow and approvals for purchasing items have been planned. The system will have direct integration with the District’s financial software. Internal Control Structure District management is responsible for the establishment and maintenance of the internal control structure that ensures the assets of the District are protected from loss, theft or misuse. The internal control structure also ensures adequate accounting data is compiled to allow for the preparation of financial statements in conformity with GAAP. The District’s internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgetary Control The Board of Directors adopts an operating and capital budget on a biennial basis with a mid-year review The budget authorizes and provides the basis for reporting and control of financial operations and accountability for the District’s enterprise operations and capital projects. The budget and reporting treatment applied to the District is consistent with the accrual basis of accounting and financial statement presentation. Page 97 of 244 1. Safety: Safety of principal is the foremost objective of the investment program. Investments made by the District are undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required to prevent any potential loss on any individual security or depository from exceeding the income generated from the remainder of the portfolio. 2. Liquidity: The investment portfolio is to remain sufficiently liquid to enable the District to meet all operating requirements that might be reasonably anticipated. 3. Return on Investments: The investment portfolio is 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. Audit and Financial Reportinq, State Law and Bond covenants require the District to obtain an annual audit of its financial statements by an independent Certified Public Accountant. The accounting firm of White, Nelson, Diehl, Evans LLP has conducted the audit of the District's financial statements. Their unmodified (clean) Independent Auditor's Report appears in the Financial Section. Other References More information is contained in the Management's Discussion and Analysis and the Notes to the Basic Financial Statements found in the Financial Section of the report. Acknowledgements Preparation of this report was accomplished by the combined efforts of District staff. We appreciate the dedicated efforts and professionalism that these staff members contribute to the District. We would also like to thank the members of the Board of Directors for their continued support in planning and implementation of the Yorba Linda Water District's fiscal policies. Respectfully submitted, Marc Marcantonio Delia u General Manager Finance M n er Viii Page 98 of 244 ix Yorba Linda Water District Board of Directors and Executive Staff Brooke Jones, President Phil Hawkins, Vice-President Andrew J. Hall, Director Al Nederhood, Director J. Wayne Miller, Director Marc Marcantonio, General Manager Brett R. Barbre, Asst. General Manager Rosanne Weston Engineering Manager John DeCriscio Operations Manager Gina Knight HR/Risk Manager Delia Lugo Finance Manager Page 99 of 244 �, YL W PUBLIC RATEPAYERS LEGENa BOARD❑F DIRECTORS Unrepresented Bargaining Unit Management Employees Employess GENERAL €7CECUTIVE MANAGER ASSISTANT ASSISTANT Yorba Linda Water District SENIOR GENERAL MANAGEMENT MANAGER ANALYST ENGINEERING FINANCE DIRECTOR OF ❑PERATIONS INFORMATION HUMAN RESOURCES MANAGER MANAGER PUBLIC AFFAIRS MANAGER TECHNOLOGY AND Ri51C MANAGER MANAGER CUSTOMER SERVICE SENIQR RECQRDS HUMAN SENIOR PUBLlCAFFAIRS SAFETY&TRAINING INTERN BILLING ACCOUNTANT REPRESENTATIVE ANALYST INFORMATION SYSTEMS MANAGEMENT RESOURCES ADMINISTRATOR ADMINISTRATOR ADMINISTRATOR ANALYST CUSTOMER INFQRMATlDN INFQRMATION RECORDS HUMAN SENIOR PRINCIPAL SENIQR PR07ECT PRODUCTION OPERATIONS MAINTENANCE ENGINEER ENGINEER MANAGER SERVICE REP 1iI ACCOUNTANT SUPERINTENDENT SUPERINTENDENT SUPERINTENDENT SYSTEMS SYSTEMS MANAGEMENT RESOURCES [g] ADMINISTRATORIIIIIIIII114imHNICIAN I SPECIALIST T€CHNICIAN SENIQR ENGINEERING CUSTOMER ACCQUNTlNG SENIOR CD ASSOCIATE SENlQR SCADA WATER QUALITY OPERATIONS CQNSTRUCTIQN ENGINEER TECHNICIAN II SERVICE REPlI ASSISTANT Ii TECHNICIAN TECHNICIAN II ASSISTANT MAINTENANCE WORKER INSPECTOR [2] [3] [2] [4] CONSTRUCTION Gi5 SENIQR FIELD CUSTOMER SENIOR PEANT FACILITIES MAINTENANCE INSPECTOR ANALYST SERVICE REP�METERS OPERATOR MAINTENANCE WDRFCER III [S] FIELD CUSTOMER PLANT SENIOR MAINTENANCE SERVICE REPS OPERATOR 11 MECHANIC WORKER Il METERS H [3] [fi] METER READER! OPERATOR i MAINTENANCE [2] [Operator-in-Training] MECHANIC Ill WORKER I [9] MECHANIC I! District Service Area Boundaries r---3 J --- F- I I BREA CITY - COUNTY OF ORANGE YORBA LINDA CITY (-` •_J BASTANCHURYRD i 1 roaexuNoaeLVD J IYORBA LINDA BLVDff i J-11 �+• _..I PLACENTIA CITY a `RAN \ � �. } �/� / /t �I� Imo._ /• '' �i 1 -LAKES -LAEI .�`- J ES� _` 'RE) � /� `may X91 F y ESPERPN� o �P ANAHEIM CITY aq�F LAPALNAAVE r SANTA ANA RIVER ----------`-- SANTAAIJA `�'l _- ---- -- pP�-G 1 RIVER LAKE S 1 YLWD z I--_J Water Boundary ORANGE CITY _ 1 Locke Ranch F ///JJJJJJ Parks h5 River Highway ® 0 0.25 D.5 1 Miles DISCLAIMER: This map represent a visual aid intended to assist Public Utility Department personnel Y RBA LINDA WATER DISTRICT Nov 2018 I ' with the management of Water System facility Data provided herecn is not a guarantee SERVICE ICE AREA NOT FOR CONSTRUCTION USE of actual field conditions nor a substitute for record drawings and field verificalicn. CD C] O N Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Yorba Linda Water District California For its Comprehensive Annual Financial Report for the Fiscal Year Ended xi June 30, 2018 ojv-�14— � P. 1—t4l� Executive Director/CEO xii Page 102 of 244 This page intentionally left blank Page 103 of 244 FINANCIAL SECTION Page 104 of 244 This page intentionally left blank Page 105 of 244 2875 Michelle Drive, Suite 300 | Irvine, California 92606 | WNDECPA.com | 714.978.1300 1 INDEPENDENT AUDITORS’ REPORT Board of Directors Yorba Linda Water District Placentia, California Report on the Financial Statements We have audited the accompanying financial statements of the Yorba Linda Water District (the District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Page 106 of 244 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the District as of June 30, 2019, and the changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Prior-Year Comparative Information The statements include summarized prior-year comparative information. Such information does not include sufficient detail to constitute a presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District’s financial statements as of and for the year ended June 30, 2018, from which such summarized information was derived. Report on Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, the schedule of changes in the net other post-employment benefit (OPEB) liability and related ratios, and the schedule of contributions - OPEB, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the GASB, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District’s basic financial statements. The introductory section, supplementary information consisting of the combining schedules, the schedules of operating expenses by cost center and nature of expenses for water and sewer, and the schedules of capital assets, and the statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining schedules, the schedules of operating expenses by cost center and nature of expenses for water and sewer, and the schedules of capital assets as of and for the year ended June 30, 2019, as listed in the table of contents, are the responsibility of management and were derived from, and relate directly to, the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining schedules, the schedules of operating expenses by cost center and nature of expenses for water and sewer, and the schedules of capital assets are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Page 107 of 244 3 Other Matters (Continued) Other Information (Continued) The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 13, 2019, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. Irvine, California September 13, 2019 Page 108 of 244 4 This page intentionally left blank Page 109 of 244 5 MANAGEMENT’S DISCUSSION AND ANALYSIS Page 110 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS For the Year Ended June 30, 2019 6 The following Management’s Discussion and Analysis (“MD&A”) of activities and financial performance of the Yorba Linda Water District (“District”) provides an introduction to the financial statements of the District for the fiscal year ended June 30, 2019. We encourage readers to consider the information presented here in conjunction with the transmittal letter in the Introductory Section and with the basic financial statements and related notes, which follow this section. Financial Highlights FY 2019  The District’s net position decreased by $440,000, or a 0.27% decrease in net position.  During the year, the District’s revenues were $37.1 million, a decrease of 2.3%.  During the year, the District’s expenses were $37.7 million, a decrease of 0.48%.  The District had net decrease to capital assets of $3.4 million. FY 2018  The District’s net position decreased by $1.1 million, or a 7% decrease in net position.  During the year, the District’s revenues were $37.9 million, an increase of 7.8%.  During the year, the District’s expenses were $37.9 million, an increase of 7.5%.  The District had net additions to capital assets of $3.6 million. Required Financial Statements This annual report consists of a series of financial statements. The Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position and Statement of Cash Flows provide information about the activities and performance of the District using accounting methods similar to those used by private sector companies. The District’s statements consist of two funds; the Water Fund and the Sewer Fund. The District’s records are maintained on an enterprise basis, as it is the intent of the Board of Directors that the costs of providing water and sewer to the customer of the District are financed primarily through user charges. Page 111 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 7 The Statement of Net Position includes all of the District’s investments in resources (assets), deferred outflows of resources, obligations to creditors (liabilities) and deferred inflow of resources. It also provides the basis for computing a rate of return, evaluating the capital structure of the District, and assessing the liquidity and financial flexibility of the District. All of the current year’s revenue and expenses are accounted for in the Statement of Revenues, Expenses and Changes in Net Position. This statement measures the success of the District’s operations over the past year and can be used to determine if the District has successfully recovered all of its costs through its rates and other charges. This statement may be used to evaluate profitability and credit worthiness. The final required financial statement is the Statement of Cash Flows, which provides information about the District’s cash receipts and cash payments during the reporting period. The Statement of Cash Flows reports cash receipts, cash payments and net changes in cash resulting from operations, investing, non-capital financing, and capital and related financing activities and provides answers to such questions as where did cash come from, what was cash used for, and what was the change in cash balance during the reporting period. Financial Analysis of the District One of the most important questions asked about the District’s finances is, “Is the District better off or worse off as a result of this year’s activities?” The Statement of Net Position and the Statement of Revenues, Expenses and Changes in Net Position report information about the District in a way that helps answer this question. These statements include all assets, deferred outflows of resources, liabilities, and deferred inflows of resources using the accrual basis of accounting, which is similar to the accounting used by most private sector companies. All of the current year’s revenues and expenses are taken into account regardless of when the cash is received or paid. These two statements report the District’s net position and changes in them. You can think of the District’s net position (the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources), as one way to measure the District’s financial health, or financial position. Over time, increases or decreases in the District’s net position is one indicator of whether its financial health is improving or deteriorating. However, one will need to consider other non-financial factors such as changes in economic conditions, conservation mandates, population growth, weather patterns, zoning and new or changed government legislation, such as changes in Federal and State water quality standards. Notes to the Basic Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the basic financial statements. The notes to the basic financial statements can be found on pages 21 through 53. Page 112 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 8 Statement of Net Position Statement of Net Position for the year ended June 30, 2019 is as follows: 2019 2018 Change Assets: Current assets $ 40,622,393 $ 41,482,969 $ (860,576) Restricted assets 1,960,797 593,767 1,367,030 Capital assets, net Not depreciable 2,730,749 10,788,120 (8,057,371) Depreciable, net of accumulated depreciation 188,179,826 183,473,005 4,706,821 Total assets 233,493,765 236,337,861 (2,844,096) Deferred Outflows of Resources: 3,148,735 3,524,983 (376,248) Liabilities: Liabilities payable from unrestricted current assets 8,163,093 7,957,100 205,993 Liabilities payable from restricted assets - 346,205 (346,205) Non-current liabilities 62,470,561 64,894,947 (2,424,386) Total liabilities 70,633,654 73,198,252 (2,564,598) Deferred Inflows of Resources: 572,180 787,723 (215,543) Net position: Net investment in capital assets 152,297,398 154,271,627 (1,974,229) Restricted 2,063,965 352,063 1,711,902 Unrestricted 11,075,303 11,253,179 (177,876) Total net position $ 165,436,666 $165,876,869 $ (440,203) Page 113 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 9 Statement of Net Position for the year ended June 30, 2018 is as follows: As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the District, assets and deferred outflows of resources of the District exceeded liabilities and deferred inflows of resources by $165.4 million and $165.8 million as of June 30, 2019 and 2018, respectively. The net change between the two reported fiscal years is primarily due in Net Position “Restricted” balance. By far the largest portion of the District’s net position (92% and 93% as of June 30, 2019 and 2018, respectively) reflects the District’s investment in capital assets (net of accumulated depreciation) less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to customers within the District’s service area; consequently, these assets are not available for future spending. For the year ended June 30, 2019, the District showed a positive balances in its unrestricted net position of $11.1 million and in its Restricted for Water Conservation and PARS Net Pension/OPEB contribution position of $2.1 million, which indicates that there are reserves to be utilized in future years and is a decrease from the stated unrestricted balance of $11.2 million for the year ended June 30, 2018. 2018 2017 Change Assets: Current assets $ 41,482,969 $ 39,924,566 $ 1,558,403 Restricted assets 593,767 5,189,724 (4,595,957) Capital assets, net Not depreciable 10,788,120 5,848,629 4,939,491 Depreciable, net of accumulated depreciation 183,473,005 184,811,581 (1,338,576) Other post-employment benefit (OPEB) asset - 411,343 (411,343) Total assets 236,337,861 236,185,843 152,018 Deferred Outflows of Resources: 3,524,983 2,366,673 1,158,310 Liabilities: Liabilities payable from unrestricted current assets 7,957,100 7,523,933 433,167 Liabilities payable from restricted assets 346,205 111,000 235,205 Non-current liabilities 64,894,947 63,076,794 1,818,153 Total liabilities 73,198,252 70,711,727 2,486,525 Deferred Inflows of Resources: 787,723 861,366 (118,609) Net position: Net investment in capital assets 154,271,627 154,273,025 (1,398) Restricted 352,063 1,222,452 (870,389) Unrestricted 11,253,179 11,483,946 (230,767) Total net position $ 165,876,869 $ 166,979,423 $ (1,102,554) Page 114 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 10 Statement of Revenues, Expenses and Changes in Net Position Statement of Revenues, Expenses and Changes in Net Position for the year ended June 30, 2019 is as follows: 2019 2018 Change Revenues: Operating revenues: Water sales $ 29,819,532 $ 32,082,152 $ (2,262,620) Sewer revenue 2,528,020 2,330,809 197,211 Other operating revenue 1,014,691 831,733 182,958 Total operating revenues 33,362,243 35,244,694 (1,882,451) Non-operating revenues: Investment income 819,522 518,600 300,922 Property taxes 1,874,688 1,749,957 124,731 Other non-operating income 1,014,495 413,465 601,030 Total non-operating revenue 3,708,705 2,682,022 1,026,683 Total revenues 37,070,948 37,926,716 (855,768) Expenses: Operating expenses: Variable costs 13,327,860 15,028,131 (1,700,271) Pesonnel services 9,538,167 9,874,212 (336,045) Supplies and services 4,592,521 4,298,863 293,658 Depreciation 7,322,753 7,465,977 (143,224) Total operating expenses 34,781,301 36,667,183 (1,885,882) Non-operating expenses: Interest expense 1,350,616 1,106,515 244,101 Other non-operating expense 1,550,378 89,021 1,461,357 Total non-operating expenses 2,900,994 1,195,536 1,705,458 Total expenses 37,682,295 37,862,719 (180,424) Net income(loss) before capital contributions (611,347) 63,997 (675,344) and special items Capital contributions 171,144 3,554,123 (3,382,979) Special item - (2,205,847) 2,205,847 Change in net position (440,203) 1,412,273 (1,852,476) Net position, beginning of year 165,876,869 166,979,423 (1,102,554) Prior-period Adjustments - (2,514,827) 2,514,827 Net position, end of year $ 165,436,666 $ 165,876,869 $ (440,203) Page 115 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 11 Statement of Revenues, Expenses and Changes in Net Position for the year ended June 30, 2018 is as follows: The statement of revenues, expenses and changes of net position shows how the District’s net position changed during the fiscal years. In the case of the District, net position decreased by $440,000 and decreased by $1.1 million for the fiscal years ended June 30, 2019 and 2018, respectively. 2018 2017 Change Revenues: Operating revenues: Water sales $ 32,082,152 $ 29,326,565 $ 2,755,587 Sewer revenue 2,330,809 2,099,947 230,862 Other operating revenue 831,733 1,033,608 (201,875) Total operating revenues 35,244,694 32,460,120 2,784,574 Non-operating revenues: Investment income 518,600 377,205 141,395 Property taxes 1,749,957 1,687,384 62,573 Other non-operating income 413,465 645,562 (232,097) Total non-operating revenue 2,682,022 2,710,151 (28,129) Total revenues 37,926,716 35,170,271 2,756,445 Expenses: Operating expenses: Variable costs 15,028,131 12,710,857 2,317,274 Pesonnel services 9,874,212 8,913,639 960,573 Supplies and services 4,298,863 4,504,054 (205,191) Depreciation 7,465,977 7,147,369 318,608 Total operating expenses 36,667,183 33,275,919 3,391,264 Non-operating expenses: Interest expense 1,106,515 1,552,896 (446,381) Other non-operating expense 89,021 403,597 (314,576) Total non-operating expenses 1,195,536 1,956,493 (760,957) Total expenses 37,862,719 35,232,412 2,630,307 Net income(loss) before capital contributions 63,997 (62,141) 126,138 and special items Capital contributions 3,554,123 2,665,462 888,661 Special item (2,205,847) - (2,205,847) Change in net position 1,412,273 2,603,321 (1,191,048) Net position, beginning of year 166,979,423 164,376,102 2,603,321 Prior-period Adjustments (2,514,827) - (2,514,827) Net position, end of year $ 165,876,869 $ 166,979,423 $ (1,102,554) Page 116 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 12 A closer examination of the sources of changes in net position reveals that: In 2019, the District’s total revenues decreased by $856,000, primarily due to a net decrease in water sales of $2.3 million resulting from decreased water usage. Total expense decrease by $180,000 primarily due to a net result of a decrease in variable water costs of $1.7 million and an increase in other non-operating expenses of $1.46 million. In 2018, the District’s total revenues increased by $2.8 million, primarily due to a net increase in water sales of $2.76 million as a result of the increase of water usage. Total expenses increased by $2.6 million primarily due to an increase in variable water costs of $2.3 million. Capital Assets At the end of fiscal year 2019 and 2018, the District’s investment in capital assets amounted to $190.9 million and $194.3 million, respectively (net of accumulated depreciation). This investment in capital assets includes land, transmission and distribution systems, reservoirs, tanks, pumps, buildings and structures, equipment, vehicles and construction-in-process, etc. Major capital assets projects in fiscal year 2018-19 include the completion of Fairmont Booster Pump Station, water and sewer line replacements, a pressure reducing station refurbishment, and the purchase of various district vehicles and equipment. Where fiscal year 2017-18 included the construction of Fairmont Booster Pump Station, Well 22, and the purchase of various district vehicles and equipment. Changes in capital asset amounts for 2019 were as follows: Balance Transfers/ Balance 2018 Additions Deletions 2019 Capital assets: Capital assets, not being depreciated $ 10,788,120 $ 5,489,806 (13,547,177) $ 2,730,749 Capital assets, being depreciated 287,511,866 13,546,292 (4,045,284) 297,012,874 Less accumulated depreciation (104,038,861) (7,322,753) 2,528,566 (108,833,048) Total capital assets, net $ 194,261,125 $ 11,713,345 $ (15,063,895) $ 190,910,575 Changes in capital asset amounts for 2018 were as follows: Balance Transfers/ Balance 2017 Additions Deletions 2018 Capital assets: Capital assets, not being depreciated $ 5,848,629 $ 11,076,270 $ (6,136,779) $ 10,788,120 Capital assets, being depreciated 281,695,381 6,201,313 (384,828) 287,511,866 Less accumulated depreciation (96,883,800) (7,465,977) 310,916 (104,038,861) Total capital assets, net $ 190,660,210 $ 9,811,606 $ (6,210,691) $ 194,261,125 Page 117 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 13 Additional information regarding capital assets can be found in Note 4 in Notes to Basic Financial Statements. Long-Term Liabilities In fiscal year 2018-19, long-term debt decreased by 1.4 million due to the principal payments on the 2012A and 2017A Revenue Bonds. Compared to fiscal year 2017-18, where long-term debt decreased by $1.5 million due to the principal payments on the 2012A and 2017A Revenue Bonds. Additional information regarding long-term liabilities can be found in note 5 in Notes to Basic Financial Statements. Changes in long-term debt amounts for the year ended June 30, 2 019 were as follows: Beginning Ending Balance Additions Reductions Balance 2012A Refunding Revenue Bond $ 6,935,000 $ - $ (310,000) $ 6,625,000 2017A Revenue Bonds 28,390,000 - (830,000) 27,560,000 Subtotal 35,325,000 - (1,140,000) 34,185,000 Add (Less): 2012A Premium 719,513 - (47,703) 671,810 2017A Premium 4,217,543 - (208,273) 4,009,270 Total Revenue Bonds 40,262,056 - (1,395,976) 38,866,080 Compensated Balances 1,755,262 840,575 (1,033,976) 1,561,861 Total Long-Term Debt $ 42,017,318 $ 840,575 $ (2,429,952) $ 40,427,941 Changes in long-term debt amounts for the year ended June 30, 2 018 were as follows: Beginning Ending Balance Additions Reductions Balance 2012A Refunding Revenue Bond $ 7,230,000 $ - $ (295,000) $ 6,935,000 2017A Revenue Bonds 29,335,000 - (945,000) 28,390,000 Subtotal 36,565,000 - (1,240,000) 35,325,000 Add (Less): 2012A Premium 767,216 - (47,703) 719,513 2017A Premium 4,425,817 - (208,274) 4,217,543 Total Revenue Bonds 41,758,033 - (1,495,977) 40,262,056 Compensated Balances 1,619,653 880,816 (745,207) 1,755,262 Total Long-Term Debt $ 43,377,686 $ 880,816 $ (2,241,184) $ 42,017,318 Page 118 of 244 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2019 14 Requests for Information This financial report is designed to provide the District’s funding sources, customers, stakeholders and other interested parties with an overview of the District’s financial operations and financial condition. Should the reader have questions regarding the information included in this report or wish to request additional financial information, please contact the District at 1717 E. Miraloma Avenue, Placentia, California 92807 or the Finance Department at (714) 701-3040. Page 119 of 244 15 BASIC FINANCIAL STATEMENTS Page 120 of 244 2019 2018 CURRENT ASSETS UNRESTRICTED ASSETS Cash and cash equivalents (Note 2) 28,978,387$ 34,795,833$ Investments (Note 2) 7,110,770 2,063,675 Accounts receivable - water and sewer services 3,837,208 4,131,858 Accounts receivable - property taxes 19,355 21,518 Accrued interest receivable 105,086 51,039 Prepaid expenses and deposits 288,064 170,557 Inventory 283,523 248,489 TOTAL UNRESTRICTED ASSETS 40,622,393 41,482,969 RESTRICTED ASSETS Cash and cash equivalents (Note 2) 1,960,797 593,767 TOTAL RESTRICTED ASSETS 1,960,797 593,767 TOTAL CURRENT ASSETS 42,583,190 42,076,736 NONCURRENT ASSETS Capital assets (Note 4): Not depreciable 2,730,749 10,788,120 Depreciable, net of accumulated depreciation 188,179,826 183,473,005 TOTAL NONCURRENT ASSETS 190,910,575 194,261,125 TOTAL ASSETS 233,493,765 236,337,861 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts from pension plans 2,335,328 2,749,826 Deferred amounts from OPEB 462,680 399,599 Deferred loss on refunding 350,727 375,558 TOTAL DEFERRED OUTFLOWS OF RESOURCES 3,148,735 3,524,983 (Continued) YORBA LINDA WATER DISTRICT STATEMENT OF NET POSITION June 30, 2019 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES (With comparative totals for June 30, 2018) See accompanying notes to basic financial statements. 16 Page 121 of 244 2019 2018 CURRENT LIABILITIES PAYABLE FROM UNRESTRICTED CURRENT ASSETS Accounts payable 5,193,196$ 4,969,190$ Accrued expenses 202,687 182,110 Compensated absences payable - current portion (Note 5) 390,465 438,816 Customer and construction deposits 583,614 553,128 Unearned revenue 224,267 268,592 Accrued interest payable 393,864 405,264 Certificates of Participation - current portion (Note 5) 1,175,000 1,140,000 TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS 8,163,093 7,957,100 PAYABLE FROM RESTRICTED ASSETS Retention payable - 346,205 TOTAL PAYABLE FROM RESTRICTED ASSETS - 346,205 TOTAL CURRENT LIABILITIES 8,163,093 8,303,305 LONG-TERM LIABILITIES (LESS CURRENT PORTION) Unearned annexation revenue 13,112,931 13,607,976 Compensated absences (Note 5) 1,171,396 1,316,446 Certificates of Participation (Note 5) 37,691,080 39,122,056 Net pension liability (Note 7) 8,449,114 8,575,054 Net OPEB liability (Note 6) 2,046,040 2,273,415 TOTAL LONG-TERM LIABILITIES (LESS CURRENT PORTION) 62,470,561 64,894,947 TOTAL LIABILITIES 70,633,654 73,198,252 DEFERRED INFLOWS OF RESOURCES Deferred amounts from pension plans 430,507 639,586 Deferred amounts from OPEB 43,597 44,966 Deferred gain on refunding 98,076 103,171 TOTAL DEFERRED INFLOWS OF RESOURCES 572,180 787,723 NET POSITION Net investment in capital assets (Note 8) 152,297,398 154,271,627 Restricted: Water conservation 103,420 104,673 Other post-employment benefits 1,960,545 247,390 Unrestricted 11,075,303 11,253,179 TOTAL NET POSITION 165,436,666$ 165,876,869$ YORBA LINDA WATER DISTRICT STATEMENT OF NET POSITION (CONTINUED) June 30, 2019 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES (With comparative totals for June 30, 2018) See accompanying notes to basic financial statements. 17 Page 122 of 244 2019 2018 OPERATING REVENUES Water sales 29,819,532$ 32,082,152$ Sewer revenues 2,528,020 2,330,809 Other operating revenues 1,014,691 831,733 TOTAL OPERATING REVENUES 33,362,243 35,244,694 OPERATING EXPENSES Variable water costs 13,327,860 15,028,131 Personnel services 9,538,167 9,874,212 Supplies and services 4,592,521 4,298,863 Depreciation 7,322,753 7,465,977 TOTAL OPERATING EXPENSES 34,781,301 36,667,183 OPERATING LOSS (1,419,058) (1,422,489) NONOPERATING REVENUES (EXPENSES) Property taxes 1,874,688 1,749,957 Investment income 819,522 518,600 Interest expense (1,350,616) (1,106,515) Other nonoperating revenues 1,014,495 413,465 Other nonoperating expenses (1,550,378) (89,021) TOTAL NONOPERATING REVENUES (EXPENSES) 807,711 1,486,486 NET INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS (611,347) 63,997 CAPITAL CONTRIBUTIONS 171,144 3,554,123 CHANGES IN NET POSITION, BEFORE SPECIAL ITEM (440,203) 3,618,120 SPECIAL ITEM (NOTE 11)- (2,205,847) CHANGES IN NET POSITION (440,203) 1,412,273 NET POSITION - BEGINNING OF YEAR 165,876,869 164,464,596 NET POSITION - END OF YEAR 165,436,666$ 165,876,869$ YORBA LINDA WATER DISTRICT STATEMENT OF REVENUES, EXPENSES, For the year ended June 30, 2019 AND CHANGES IN NET POSITION (With comparative totals for the year ended June 30, 2018) See accompanying notes to basic financial statements. 18 Page 123 of 244 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers 33,654,033$ 35,418,459$ Cash payments to employees for salaries and wages (9,924,099) (9,448,361) Cash payments to suppliers of goods and services (18,161,013) (18,576,010) Other revenues 162,240 234,874 Other expenses (38,112) (89,021) Refund to customers - (2,205,847) NET CASH PROVIDED BY OPERATING ACTIVITIES 5,693,049 5,334,094 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Proceeds from property taxes and assessments 1,873,286 1,751,697 NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 1,873,286 1,751,697 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from (payments for) annexation fees and capital contributions (40,269) 77,206 Acquisition and construction of capital assets (5,321,835) (7,351,354) Proceeds from sales of capital assets 4,454 11,556 Principal paid on long-term liabilities (1,140,000) (1,240,000) Interest paid on long-term liabilities (1,598,256) (1,509,535) NET CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES (8,095,906) (10,012,127) CASH FLOWS FROM INVESTING ACTIVITIES Sale of investments 17,009,712 15,984,982 Purchase of investments (21,696,032) (11,385,477) Interest and investment earnings 765,475 535,139 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (3,920,845) 5,134,644 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,450,416) 2,208,308 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 35,389,600 33,181,292 CASH AND CASH EQUIVALENTS - END OF YEAR 30,939,184$ 35,389,600$ (Continued) YORBA LINDA WATER DISTRICT STATEMENT OF CASH FLOWS For the year ended June 30, 2019 (With comparative totals for the year ended June 30, 2018) See accompanying notes to basic financial statements. 19 Page 124 of 244 2019 2018 RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating loss (1,419,058)$ (1,422,489)$ Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation 7,322,753 7,465,977 Other revenues 162,240 234,874 Other expenses (38,112) (89,021) Refund to customers - (2,205,847) Changes in operating assets, deferred outflows of resources, operating liabilities, and deferred inflows of resources: (Increase) decrease in assets and deferred outflows of resources: Accounts receivable 294,650 178,376 Inventory (35,034) 17,344 Prepaid expenses and deposits (117,507) 119,430 Deferred outflows of resources from pension plans 414,498 (783,542) Deferred outflows of resources from OPEB (63,081) (43,926) Increase (decrease) in liabilities and deferred inflows of resources: Accounts payable and accrued expenses (122,199) 707,319 Accrued salaries and wages 20,577 37,946 Accrued compensated absences (193,401) 135,609 Customer and construction deposits 30,486 (97,720) Net pension liability (125,940) 1,334,055 Net OPEB liability (227,375) (185,742) Deferred inflows of resources from pension plans (209,079) (113,515) Deferred inflows of resources from OPEB (1,369) 44,966 Total adjustments 7,112,107 6,756,583 NET CASH PROVIDED BY OPERATING ACTIVITIES 5,693,049$ 5,334,094$ CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION Unrestricted 28,978,387$ 34,795,833$ Restricted 1,960,797 593,767 TOTAL CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION 30,939,184$ 35,389,600$ NONCASH INVESTING, CAPITAL, AND RELATED FINANCING ACTIVITIES Amortization related to long-term debt 236,240$ 236,240$ Capital contributions 171,144$ 3,523,811$ (With comparative totals for the year ended June 30, 2018) (CONTINUED) For the year ended June 30, 2019 YORBA LINDA WATER DISTRICT STATEMENT OF CASH FLOWS See accompanying notes to basic financial statements. 20 Page 125 of 244 21 NOTES TO BASIC FINANCIAL STATEMENTS Page 126 of 244 22 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a.Organization and Description of the Reporting Entity The Yorba Linda Water District (the District) is an independent special district established in 1959, which operates under the authority of Division 12 of the California Water Code for the purpose of providing water and sewer services to properties within the District. The District is governed by a five member Board of Directors elected by the voters in the area to four-year terms. The District provides two services that include water and sewer. Water is provided to the entire service area. Sewer is provided to most of the service areas. The District’s service area includes Yorba Linda, portions of Placentia, Anaheim, and Brea, and areas of unincorporated Orange County. The District provides water service to approximately 81,000 residents and sewer service to approximately 61,700 residents. The financial statements present the District (the primary government), the Yorba Linda Water District Public Financing Corporation (the Corporation), and the Yorba Linda Water District Financing Authority (the Authority). The Corporation and the Authority meet the definition of a component unit and are presented on a blended basis, as if they are part of the primary government. Although they are legally separate entities, the governing board of the Corporation and the Authority are composed of the same membership as the District’s Board of Directors. The District may impose its will on the Corporation and the Authority, including the ability to appoint, hire, reassign, or dismiss management. There is also a financial benefit/burden relationship between the District and the Corporation and the Authority. The Corporation, a California nonprofit public benefit corporation, was formed in July 2003 for the purpose of providing assistance to the District and other public agencies in the state of California, of which the District is a member or is otherwise engaged in the financing, refinancing, acquiring, constructing, and rehabilitating of facilities, land, and equipment; the sale or leasing of facilities, land, and equipment for the use, benefit, and enjoyment of the public served by such agencies; and any other purpose incidental thereto. There are no separate financial statements for the Corporation. The Authority, a public agency, was organized pursuant to a Joint Exercise of Powers Agreement (the JPA Agreement) between the District and the California Municipal Finance Authority (CMFA), dated April 11, 2017. The Authority is statutorily authorized by Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code and is empowered under the JPA Agreement to issue its bonds for, among other things, the purposes of the plan of financing described herein. Separate basic financial statements prepared for the Authority may be obtained from the Yorba Linda Water District, 1717 East Miraloma Avenue, Placentia, CA 92870. b.Basic Financial Statements The basic financial statements are composed of the statement of net position, the statement of revenues, expenses, and changes in net position, the statement of cash flows, and the notes to the basic financial statements. Page 127 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 23 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) c.Basis of Presentation The accounts of the District are that of an enterprise fund. An enterprise fund is a proprietary type fund used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. d.Measurement Focus and Basis of Accounting Measurement focus is a term used to describe which transactions are recorded within the various financial statements. Basis of accounting refers to when transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the economic measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with these activities are included on the statement of net position. The statement of revenues, expenses, and changes in net position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. e.New Accounting Pronouncements GASB Current-Year Standards GASB 83 - Certain Asset Retirement Obligations, effective for periods beginning after June 15, 2018, and did not impact the District. GASB 88 - Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements, effective for periods beginning after June 15, 2018, and did not significantly impact the District. Pending Accounting Standards GASB has issued the following statements, which may impact the District’s financial reporting requirements in the future: GASB 84 - Fiduciary Activities, effective for periods beginning after December 15, 2018. GASB 87 - Leases, effective for periods beginning after December 15, 2019. GASB 89 - Accounting for Interest Cost Incurred before the End of a Construction Period, effective for periods beginning after December 15, 2019. GASB 90 - Majority Equity Interests - an amendment of GASB Statements No. 14 and No. 61, effective for periods beginning after December 15, 2018. GASB 91 - Conduit Debt Obligations, effective for periods beginning after December 15, 2020. Page 128 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 24 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) f.Cash and Cash Equivalents The District considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. g.Investments and Investment Policy The District has adopted an investment policy directing the District’s General Manager or Finance Manager to invest, reinvest, sell, or exchange securities. Investments are stated at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. h. Accounts Receivable The District extends credit to customers in the normal course of operations. Management has evaluated the accounts and believes they are all collectible. Management evaluates all accounts receivable and, if it is determined that they are uncollectible, they are written off as a bad debt expense. A charge of $2,860 and $4,611 was made to bad debt expense for the years ended June 30, 2019 and 2018, respectively. i.Prepaid Expenses Certain payments to vendors reflect costs or deposits applicable to future accounting periods and are recorded as prepaid items in the basic financial statements. j.Inventory Inventory consists primarily of materials and supplies used in the construction and maintenance of the water and sewer systems and are stated at cost using the average-cost method on a first-in, first-out basis. k.Capital Assets Capital assets acquired and/or constructed are capitalized at historical cost. District policy has set the capitalization threshold for reporting capital assets at $5,000 with an expected useful life of greater than one year. Contributed assets are recorded at acquisition value at the date of acquisition. Upon retirement or other disposition of capital assets, the cost and related accumulated depreciation are removed from the respective balances and any gains or losses are recognized. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets as follows: Source of Supply 30 - 75 years Pumping Plant 20 - 40 years Water Treatment Plant 12 - 40 years Sewer Plant 5 - 60 years Transmission and Distribution Plant 10 - 40 years General Plant 3 - 40 years Page 129 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 25 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) l.Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and will not be recognized as an outflow of resources (expense) until that time. The District has the following items that qualify for reporting in this category: Deferred outflow related to loss on refunding. A deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred outflow related to pensions. This amount is equal to employer contributions made after the measurement date of the net pension liability. Deferred outflow related to pensions for differences between expected and actual experiences. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans. Deferred outflow from pensions resulting from changes in assumptions. This amount is amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans. Deferred outflow related to pensions resulting from the difference in projected and actual earnings on investments of the pension plans’ fiduciary net position. This amount is amortized over five years. Deferred outflow related to pensions for the changes in proportion and differences between employer contributions and the proportionate share of contributions. This amount is amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans. Deferred outflow related to OPEB. This amount is equal to employer contributions made after the measurement date of the net OPEB liability. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The District has the following items that qualify for reporting in this category: Deferred inflow related to gain on refunding. A deferred gain on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred inflow related to pensions for differences between expected and actual experiences. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans. Deferred inflow from pensions resulting from changes in assumptions. This amount is amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans. Deferred inflow related to pensions for the changes in proportion and differences between employer contributions and the proportionate share of contributions. This amount is amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans. Page 130 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 26 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) l.Deferred Outflows/Inflows of Resources (Continued) Deferred inflow related to OPEB resulting from the difference in projected and actual earnings on investments of the OPEB plans’ fiduciary net position. This amount is amortized over five years. m. Compensated Absences The District’s policy is to permit employees to accumulate earned vacation and sick leave. The liability for vested vacation and sick leave is recorded as an expense when earned. Employees may carry forward up to one-and-a-half years of earned vacation days and an unlimited number of sick leave days. Upon termination or retirement, permanent employees are entitled to receive compensation at their current base salary for all unused eligible leave. Permanent employees that retire in accordance with California Public Employee’s Retirement System (CalPERS) qualifications are entitled to receive cash compensation at their current base salary for three-eighths of all unused sick leave, and the remaining five-eighths of the unused sick leave is contributed to the employee’s CalPERS account. The District has accrued 100% of the unused sick leave as a liability, as it expects most employees to meet CalPERS requirements when retiring or leaving the District. n.Construction Advances and Deposits Construction deposits are collected by the District to cover the cost of construction projects within the District. Funds in excess of project costs are refunded to the customer. o.Construction Bonding Deposits The District’s policy is to maintain certain bonding requirements for water and sewer construction projects performed within District boundaries to ensure the proper completion of the project. Deposited amounts are refunded upon final approval of the project. p.Unearned Revenue Unearned revenue consists of customer refunds that have not been cashed. q.Unearned Annexation Revenue The District collects a fee from newly annexed developments for all residential and commercial properties. This fee is in lieu of the District’s share of 40 years of the 1% property tax revenue that the District no longer receives post-Proposition 13. The fee is a present worth value required to generate a 40-year revenue stream equivalent to the lost property tax revenue. The fee is calculated based on the fair market value estimate of the improved property at the time the fee is collected and is based on the current rate of return on the District’s investments. The deposit balance accrues interest and provides a source of operational revenue for the District and is amortized on a straight- line basis over 40 years. This unearned revenue source may be used for capital facilities in the future if approved by the Board of Directors. Page 131 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 27 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) r.Net Position In the statement of net position, net position is classified in the following categories: Net investment in capital assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets. Restricted net position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. Amounts reported in restricted net position for the years ended June 30, 2019 and 2018, represent the following: Amounts of $103,420 and $104,673, respectively, which are the balance remaining of administrative penalty fees collected by the District that must be used for capital improvement projects that are related to conservation efforts, water use efficiency improvements, water conservation education, and regulatory compliance. Amounts of $1,960,545 and $247,390, respectively, represent funds held in a trust with PARS that are restricted for future contributions to OPEB plan. Unrestricted net position - This amount is all net position that does not meet the definition of net investment in capital assets or restricted net position. s.Net Position Flow Assumptions Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the statement of net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s practice to consider restricted - net position to have been depleted before unrestricted - net position is applied. t.Operating Revenues and Expenses Operating revenues, such as charges for services (water sales and sewer service charges), result from exchange transactions associated with the principal activity of the District. Nonoperating revenues, such as property taxes, assessments, and investment income, result from nonexchange transactions or ancillary activities in which the District receives value without directly giving equal value in exchange. Operating expenses include the costs of providing water, sewer, and related services, administrative expenses, and depreciation on capital assets. All expenses not meeting this definition are reported as nonoperating expenses. Page 132 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 28 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) u. Property Taxes and Assessments The Orange County Assessor’s Office assesses all real and personal property within Orange County each year. The Orange County Tax Collector’s Office bills and collects the District’s share of property taxes and assessments. The Orange County Treasurer’s Office remits current and delinquent property tax collections to the District throughout the year. Property taxes in California are levied in accordance with Article XIIIA of the State Constitution at 1% of countywide assessed valuations. This levy is allocated pursuant to state law to the appropriate units of local governments. Property taxes receivable at year-end are related to property taxes collected by the Orange County Tax Collector, which have not been credited to the District’s cash balance as of June 30. The property tax calendar is as follows: Lien Date January 1 Levy Date July 1 Due Dates First Installment - November 1 Second Installment - March 1 Collection Dates First Installment - December 10 Second Installment - April 10 v. Water and Sewer Sales The District recognizes water and sewer service charges based on cycle billings rendered to the customers each month. w. Capital Contributions Capital contributions represent cash and capital asset additions contributed to the District by property owners or real estate developers desiring services that require capital expenditures or capacity commitment. x.Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s CalPERS plan and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. y. Post-Employment Benefits Other Than Pensions (OPEB) For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the District’s OPEB plan and additions to/deductions from the OPEB plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, the District’s OPEB plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value. Page 133 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 29 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) z.Budgetary Policies The District adopts annual nonappropriated budget for planning, control, and evaluation purposes. Budgetary control and evaluation are affected by comparisons of actual revenues and expenses with planned revenues and expenses for the period. Encumbrance accounting is not used to account for commitments related to unperformed contracts for construction and services. aa. Use of Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on management’s best estimates and judgments. Accordingly, actual results could differ from the estimates. ab. Prior-Year Data Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Authority’s prior-year financial statements from which this selected financial data was derived. Certain amounts in the June 30, 2018 financial statements have been reclassified for comparative purposes to conform to the presentation in the June 30, 2019 financial statements. There was no change in reported net income or net position related to these reclassifications. NOTE 2 - CASH AND INVESTMENTS Cash and Investments Cash and investments as of June 30, 2019 and 2018, are reported in the accompanying statement of net position as follows: 2019 2018 Unrestricted current assets: Cash and cash equivalents 28,978,387$ 34,795,833$ Investments 7,110,770 2,063,675 Restricted assets: Cash and cash equivalents 1,960,797 593,767 Total cash and investments 38,049,954$ 37,453,275$ Page 134 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 30 NOTE 2 - CASH AND INVESTMENTS (CONTINUED) Cash and investments as of June 30, 2019 and 2018, consisted of the following: 2019 2018 Cash on hand 1,250$ 1,250$ Deposits with financial institutions 518,382 1,142,589 Investments 37,530,322 36,309,436 Total cash and investments 38,049,954$ 37,453,275$ Investments Authorized by the California Government Code and the District’s Investment Policy The table below identifies the investment types that are authorized for the District by the California Government Code (or the District’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the District’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the District, rather than the general provisions of the California Government Code or the District’s investment policy. This table does not address investments of the employer contributions to the other post-employment benefit trust that are governed by the trust agreement or the investments of funds within the other post-employment benefit (OPEB) trusts that are governed by the agreement between the District and the trustees, rather than the general provisions of the California Government Code or the District’s Investment Policy. Maximum Maturity Maximum Percentage of Portfolio Maximum Investment in One Issuer Minimum Credit Rating Bank or Savings and Loans 5 years None None FDIC or FSLIC Negotiable Certificates of Deposit 5 years 30% None A and FDIC collateralized Local Agency Investment Fund N/A None None None Orange County Commingled Investment Pool N/A None None N/A California Asset Management Program N/A (1)None N/A United States Treasury Bills, Notes and Bonds 5 years None None N/A United States Government-Sponsored Agency Securities 5 years None None N/A Corporate Bonds 5 years 30% None A Banker’s Acceptance 180 days 10%5%A-1 Commercial Paper 270 days 25%5%A-1 CalTRUST Investment Pool N/A None None N/A Money Market Funds N/A 20% 10%N/A (1) Limited to bond proceeds held by the District. N/A Not applicable Authorized Investment Type Page 135 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 31 NOTE 2 - CASH AND INVESTMENTS (CONTINUED) Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustees are governed by the provisions of debt agreements, rather than the general provisions of the California Government Code or the District’s investment policy. Investments authorized for funds held by bond trustees include, US Treasury Bills, Notes and Bonds, US Treasury Obligations, Resolution Funding Corp (REFCORP), Prefunded Municipal Bonds, US Government-Sponsored Agency Securities, Commercial Paper, Money Market Mutual Funds, Certificates of Deposits, Guaranteed Investment Contracts, Banker’s Acceptance, Repurchase Agreements, and Local Agency Investment Funds. There are no limitations on the maximum amount that can be invested in one issuer, maximum percentage allowed, or the maximum maturity of an investment, except for the maturity of Banker’s Acceptance, which are limited to one year and Repurchase Agreements, which are limited to 30 days. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the District’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following tables that show the distribution of the District’s investments by maturity as of June 30, 2019 and 2018. 12 Months 13 to 24 25 to 36 37 to 48 48 to 60 or Less Months Months Months Months Total CalTRUST Investment Pool 12,208,015$ -$ -$ -$-$12,208,015$ Local Agency Investment Fund 10,417,666 - - - - 10,417,666 OPEB Trust - PARS Pooled Trust 1,960,545 - - - - 1,960,545 Negotiable Certificates of Deposits 247,509 1,248,338 3,129,251 -486,712 5,111,810 United States Government-Sponsored Agency Securities -1,998,960 - - - 1,998,960 Money Market Mutual Funds 5,833,074 - - - - 5,833,074 Held by Bond Trustee: Money Market Mutual Funds 252 - - - - 252 Total 30,667,061$ 3,247,298$ 3,129,251$ -$ 486,712$ 37,530,322$ 12 Months 13 to 24 25 to 36 37 to 48 48 to 60 or Less Months Months Months Months Total CalTRUST Investment Pool 19,043,553$ -$ -$ -$-$19,043,553$ Local Agency Investment Fund 11,745,304 - - - - 11,745,304 OPEB Trust - PARS Pooled Trust 247,390 - - - - 247,390 Negotiable Certificates of Deposits 443,752 244,263 479,012 896,648 - 2,063,675 Money Market Mutual Funds 3,209,342 - - - - 3,209,342 Held by Bond Trustee: Money Market Mutual Funds 172 - - - - 172 Total 34,689,513$ 244,263$ 479,012$ 896,648$ -$ 36,309,436$ Investment Type Investment Type Remaining Maturity (in Months)June 30, 2019 June 30, 2018 Remaining Maturity (in Months) Page 136 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 32 NOTE 2 - CASH AND INVESTMENTS (CONTINUED) Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented in the following table are the minimum ratings required by (where applicable) the California Government Code, the District’s investment policy, or debt agreements and the actual S&P credit rating as of June 30, 2019 and 2018, for each investment type. Minimum Total Legal as of Not Rating June 30, 2019 Rated AA+ AAA CalTRUST Investment Pool N/A 12,208,015$ 10,838,552$ 1,369,463$ -$ Local Agency Investment Fund N/A 10,417,666 10,417,666 - - OPEB Trust - PARS Pooled Trust N/A 1,960,545 1,960,545 - - United States Government-Sponsored Agency Securities N/A 1,998,960 -1,998,960 - Negotiable Certificates of Deposits A 5,111,810 5,111,810 - - Money Market Mutual Funds N/A 5,833,074 5,833,074 - - Held by Bond Trustee: Money Market Mutual Funds N/A 252 - - 252 Total 37,530,322$ 34,161,647$ 3,368,423$ 252$ Minimum Total Legal as of Not Rating June 30, 2018 Rated AA+ AAA CalTRUST Investment Pool N/A 19,043,553$ 17,710,872$ 1,332,681$ -$ Local Agency Investment Fund N/A 11,745,304 11,745,304 - - OPEB Trust - PARS Pooled Trust N/A 247,390 247,390 - Negotiable Certificates of Deposits A 2,063,675 2,063,675 - - Money Market Mutual Funds N/A 3,209,342 3,209,342 - - Held by Bond Trustee: Money Market Mutual Funds N/A 172 172 - - Total 36,309,436$ 34,976,755$ 1,332,681$ -$ June 30, 2019 Investment Type June 30, 2018 Investment Type Concentration of Credit Risk The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code with the exception of banker’s acceptances, commercial paper, and money market funds, which are limited to an investment in any one issuer of 5%, 5%, and 10%, respectively. Page 137 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 33 NOTE 2 - CASH AND INVESTMENTS (CONTINUED) Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the District will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, the District will not be able to recover the value of its investment or collateral securities that are in the possession of another party. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as the Local Agency Investment Fund (LAIF) and CalTRUST Investment Pool). The California Government Code and the District’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure District deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2019 and 2018, all of the District’s deposits with financial institutions were covered by federal depository insurance limits or were held in collateralized accounts. Investment in State Investment Pool The District is a voluntary participant in LAIF that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). Investment in CalTRUST Investment Pool CalTRUST is a joint powers agency authority created by local public agencies to provide a convenient method for local public agencies to pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board of Trustees sets overall policies for the program and selects and supervises the activities of the investment manager and other agents. CalTRUST maintains and administers five pooled accounts within the program: Money Market, Short- Term, Medium-Term, Liquidity Fund, and Government Fund. The funds permit daily transactions, with liquidity ranging from same-day to two days, and with no limit on the amount of funds that may be invested. All CalTRUST accounts comply with the limits and restrictions placed on local agency investments by the California Government Code. There is no maximum investment limit. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s percentage interest of the fair value provided by CalTRUST for the CalTRUST accounts (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by CalTRUST. Page 138 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 34 NOTE 2 - CASH AND INVESTMENTS (CONTINUED) Cash and Investments - Other Post-Employment Benefit (OPEB) Trust The District established a trust account with the Public Agency Retirement Services (PARS) to hold assets that are legally restricted for use in administering the District’s OPEB health plan. The OPEB trust funds’ specific cash and investments are managed by a third-party portfolio manager under guidelines approved by the District. The District-approved guidelines are as follows: Risk Tolerance Moderate high mark plus Risk Management The portfolio is constructed to control through four layers of diversification - asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value growth), managers, and securities. Disciplined mutual fund selection and monitoring process help to drive return potential while reducing portfolio risk. Investment Objective To provide growth of principal and income. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. Strategic Ranges 0% - 20% Cash 40% - 60% Fixed Income 40% - 60% Equity Fair Value Measurements The District categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices for similar assets in active markets, and Level 3 inputs are significant unobservable inputs. Page 139 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 35 NOTE 2 - CASH AND INVESTMENTS (CONTINUED) Fair Value Measurements (Continued) The District has the following recurring fair value measurements as of June 30, 2019 and 2018: June 30, 2019 Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total United States Government-Sponsored Agency Securities -$ 1,998,960$ -$1,998,960$ Negotiable Certificates of Deposit -5,111,810 -5,111,810 Total Leveled Investments -$ 7,110,770$ -$7,110,770 CalTRUST Investment Pool*12,208,015 Local Agency Investment Fund*10,417,666 OPEB Trust - PARS Pooled Trust*1,960,545 Money Market Mutual Funds*5,833,074 Held by Bond Trustee: Money Market Mutual Funds*252 Total Investments 37,530,322$ June 30, 2018 Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total Negotiable Certificates of Deposit -$ 2,063,675$ -$2,063,675$ Total Leveled Investments -$ 2,063,675$ -$2,063,675 CalTRUST Investment Pool*19,043,553 Local Agency Investment Fund*11,745,304 OPEB Trust - PARS Pooled Trust*247,390 Money Market Mutual Funds*3,209,342 Held by Bond Trustee: Money Market Mutual Funds*172 Total Investments 36,309,436$ * Not subject to fair value measurement hierarchy. NOTE 3 - RESTRICTED ASSETS Restricted assets are provided by and are to be used for the following uses as of June 30, 2019 and 2018: Use 2019 2018 Bond proceeds Repayment of debt 252$ 172$ OPEB Trust - PARS Pooled Trust Payment of OPEB benefits 1,960,545 247,390 District funds Payment of retention - 346,205 Total restricted assets 1,960,797$ 593,767$ Source Page 140 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 36 NOTE 4 - CAPITAL ASSETS Changes in capital assets for the year ended June 30, 2019, were as follows: Balance at Deletions/ Balance at June 30, 2018 Additions Transfers June 30, 2019 Capital assets, not depreciated: Land, mineral, and water rights 287,419$ -$ -$ 287,419$ Construction in progress 10,500,701 5,489,806 (13,547,177) 2,443,330 Total capital assets, not depreciated 10,788,120 5,489,806 (13,547,177) 2,730,749 Capital assets, being depreciated: Source of supply 6,348,997 - - 6,348,997 Pumping plant 26,349,078 5,742,845 (3,663,958) 28,427,965 Water treatment plant 3,507,669 - - 3,507,669 Transmission and distribution plant 229,372,432 7,266,963 (163,802) 236,475,593 General plant 21,933,690 536,484 (217,524) 22,252,650 Total capital assets, being depreciated 287,511,866 13,546,292 (4,045,284) 297,012,874 Less accumulated depreciation for: Source of supply (2,829,966) (177,083) - (3,007,049) P umping plant (10,389,995) (937,268) 2,274,859 (9,052,404) Water treatment plant (2,108,894) (215,174) - (2,324,068) Transmission and distribution plant (77,369,754) (5,165,474) 112,853 (82,422,375) General plant (11,340,252) (827,754) 140,854 (12,027,152) Total accumulated depreciation (104,038,861) (7,322,753) 2,528,566 (108,833,048) Total capital assets, being depreciated, net 183,473,005 6,223,539 (1,516,718) 188,179,826 Total capital assets, net 194,261,125$ 11,713,345$ (15,063,895)$ 190,910,575$ Depreciation expense for the depreciable capital assets was $7,322,753 in 2019. Page 141 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 37 NOTE 4 - CAPITAL ASSETS (CONTINUED) Changes in capital assets for the year ended June 30, 2018, were as follows: Balance at Deletions/ Balance at June 30, 2017 Additions Transfers June 30, 2018 Capital assets, not depreciated: Land, mineral, and water rights 287,419$ -$ -$ 287,419$ Construction in progress 5,561,210 11,076,270 (6,136,779) 10,500,701 Total capital assets, not depreciated 5,848,629 11,076,270 (6,136,779) 10,788,120 Capital assets, being depreciated: Source of supply 6,348,997 - - 6,348,997 Pumping plant 26,332,743 48,324 (31,989) 26,349,078 Water treatment plant 3,130,572 377,097 - 3,507,669 Transmission and distribution plant 224,187,455 5,317,578 (132,601) 229,372,432 General plant 21,695,614 458,314 (220,238) 21,933,690 Total capital assets, being depreciated 281,695,381 6,201,313 (384,828) 287,511,866 Less accumulated depreciation for: Source of supply (2,652,883) (177,083) - (2,829,966) P umping plant (9,421,291) (989,764) 21,060 (10,389,995) Water treatment plant (1,930,260) (178,634) - (2,108,894) Transmission and distribution plant (72,099,253) (5,340,119) 69,618 (77,369,754) General plant (10,780,113) (780,377) 220,238 (11,340,252) Total accumulated depreciation (96,883,800) (7,465,977) 310,916 (104,038,861) Total capital assets, being depreciated, net 184,811,581 (1,264,664) (73,912) 183,473,005 Total capital assets, net 190,660,210$ 9,811,606$ (6,210,691)$ 194,261,125$ Depreciation expense for the depreciable capital assets was $7,465,977 in 2018. Page 142 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 38 NOTE 5 - LONG-TERM LIABILITIES Changes in long-term liabilities for the year ended June 30, 2019, were as follows: Balance Balance Due Within July 1, 2018 Additions Deletions June 30, 2019 One Year Certificates of Participation: 2012A Revenue Refunding Certificates of Participation 6,935,000$ -$ (310,000)$ 6,625,000$ 315,000$ 2017A Revenue Bonds 28,390,000 - (830,000) 27,560,000 860,000 Subtotal 35,325,000 - (1,140,000) 34,185,000 1,175,000 Add (Less): 2012A Premium 719,513 - (47,703) 671,810 - 2017A Premium 4,217,543 - (208,273) 4,009,270 - Total Certificates of Participation 40,262,056 - (1,395,976) 38,866,080 1,175,000 Compensated balances 1,755,262 840,575 (1,033,976) 1,561,861 390,465 Total 42,017,318$ 840,575$ (2,429,952)$ 40,427,941$ 1,565,465$ Changes in long-term liabilities for the year ended June 30, 2018, were as follows: July 1, 2017 Additions Deletions June 30, 2018 One Year Certificates of Participation: 2012A Revenue Refunding Certificates of Participation 7,230,000$ -$ (295,000)$ 6,935,000$ 310,000$ 2017A Revenue Bonds 29,335,000 - (945,000) 28,390,000 830,000 Subtotal 36,565,000 - (1,240,000) 35,325,000 1,140,000 Add (Less): 2012A Premium 767,216 - (47,703) 719,513 - 2017A Premium 4,425,817 - (208,274) 4,217,543 - Total Certificates of Participation 41,758,033 - (1,495,977) 40,262,056 1,140,000 Compensated balances 1,619,653 880,816 (745,207) 1,755,262 438,816 Total 43,377,686$ 880,816$ (2,241,184)$ 42,017,318$ 1,578,816$ 2012A Revenue Refunding Certificates of Participation In September 2012, the Corporation issued $8,330,000 of Revenue Refunding Certificates of Participation, Series 2012A (the 2012A Certificates). The 2012A Certificates were issued to provide funds (1) to advance refund all of the currently outstanding District Certificates of Participation Series 2003 (the 2003 Certificates) and (2) to pay costs of issuance of the 2012A Bonds. The District completed the refunding to reduce its total debt service payments over the next 21 years by over $1.72 million, resulting in an economic gain (difference between the present value of the old and new debt service payments) of over $1.32 million. The 2003 Certificates were paid off in October 2012. The 2012A Certificates bear interest ranging from 2% to 5%, payable semiannually on April 1 and October 1. There is no reserve requirement for the 2012A Certificates. Page 143 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 39 NOTE 5 - LONG-TERM LIABILITIES (CONTINUED) 2012A Revenue Refunding Certificates of Participation (Continued) The 2012A Certificates are obligations of the Corporation payable solely from payments received from the District pursuant to the Installment Purchase Agreement by and between the District and the Corporation. The Installment Purchase Agreement requires the District to fix, prescribe, and collect rates and charges for the water service that will be at least sufficient to yield during each fiscal year net revenues equal to 110% of the debt service for such fiscal year. For fiscal years 2019 and 2018, the net revenues are equal to 302% and 263% of the debt service, respectively. The 2012A Certificates are subject to federal arbitrage regulations. At June 30, 2019 and 2018, the 2012A Certificates’ outstanding balance was $6,625,000 and $6,935,000, respectively. The annual debt service requirements for the 2012A Certificates outstanding at June 30, 2019, are as follows: Year Ending June 30,Principal Interest Total 2020 315,000$ 268,712$ 583,712$ 2021 335,000 255,712 590,712 2022 345,000 241,250 586,250 2023 360,000 225,388 585,388 2024 375,000 208,213 583,213 2025 - 2029 2,190,000 729,680 2,919,680 2030 - 2034 2,705,000 222,021 2,927,021 6,625,000$ 2,150,976$ 8,775,976$ 2017A Revenue Bonds In May 2017, the Authority issued $29,335,000 of Revenue Bonds, Series 2017A (the 2017A Bonds). The 2017A Bonds were issued to provide funds (1) to finance the acquisition and construction of certain improvements to the District’s water system, (2) to advance refund all of the currently outstanding District Revenue Certificates of Participation Series 2008, and (3) to pay costs of issuance of the 2017A Bonds. A portion of the proceeds was deposited in an escrow fund with a trustee. The funds will be used to pay the outstanding balance of the Revenue Certificates of Participation Series 2008. The 2008 Certificates were paid off in October 2017. The District completed the refunding to reduce its total debt service payments over the next 21 years by more than $5.05 million, resulting in an economic gain (difference between the present value of the old and new debt service payments) of approximately $4.22 million. At June 30, 2019 and 2018, the 2017A Bonds’ outstanding balance was $27,560,000 and $28,390,000, respectively. Page 144 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 40 NOTE 5 - LONG-TERM LIABILITIES (CONTINUED) 2017A Revenue Bonds (Continued) The 2017A Bonds bear interest at rates ranging from 3% to 5%, payable semiannually on April 1 and October 1. There is no reserve requirement for the 2017A Bonds. The 2017A Bonds are obligations of the Authority payable solely from payments received from the District pursuant to the Installment Purchase Agreement by and between the District and the Authority. The Installment Purchase Agreement requires the District to fix, prescribe, and collect rates and charges for the water service that will be at least sufficient to yield during each fiscal year net revenues equal to 125% of the debt service for such fiscal year. For fiscal years 2019 and 2018, the net revenues are equal to 302% and 263% of the debt service, respectively. The 2017A Bonds are subject to federal arbitrage regulations. The annual debt service requirements for the 2017A Bonds outstanding at June 30, 2019, are as follows: Year Ending June 30, Principal Interest Total 2020 860,000$ 1,283,244$ 2,143,244$ 2021 895,000 1,243,669 2,138,669 2022 945,000 1,197,669 2,142,669 2023 990,000 1,149,294 2,139,294 2024 1,045,000 1,098,419 2,143,419 2025 - 2029 6,035,000 4,636,095 10,671,095 2030 - 2034 7,435,000 3,184,835 10,619,835 2035 - 2039 9,355,000 1,208,475 10,563,475 27,560,000$ 15,001,700$ 42,561,700$ Compensated Absences Compensated absences are composed of unpaid vacation leave, sick leave, and compensating time off, which are accrued as earned (see Note 1m). Page 145 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 41 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN a.General Information about the OPEB Plan Plan Description The District, through an agent multiple-employer defined benefit plan, provides post-employment health-care benefits to retirees managed through California Employers’ Retiree Benefit Trust (CEBRT). Specifically, the District provides health (medical, dental, and vision) insurance for its retired employees and directors, their dependent spouses (if married and covered on the District’s plan at time of retirement), or survivors in accordance with Board of Director resolutions. Medical coverage is provided for retired employees who are age 50 or over and who have a minimum of five years of service with the District. Only employees hired prior to December 8, 2011, qualify for these benefits. The District pays 100% of the premium for the retiree and two-thirds of the premium amount for eligible dependents accrued at a rate of one year for every three years of service. Two-thirds of the premium amount of medical coverage is provided for the surviving spouse of retired employees for the remaining vested period. The plan does not provide a publicly available financial report. Employees Covered As of the June 30, 2017 actuarial valuation, the following current and former employees were covered by the benefit terms under the plan: Inactive employees or beneficiaries currently receiving benefits15 Active employees 48 Total 63 Contributions Contribution requirements are established by District policy and may be amended by the Board of Directors. The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2019, the District made a contribution of $264,793 to the OPEB trust, made payments totaling $154,103 for retiree health-care insurance benefits and the implied subsidy was $43,784, resulting in payments of $462,680. b.Net OPEB Liability The District’s net OPEB liability was measured as of June 30, 2018, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2017, rolled forward to June 30, 2018, using standard update procedures. A summary of the principal assumptions and methods used to determine the total OPEB liability is shown below. Page 146 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 42 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) b.Net OPEB Liability (Continued) Actuarial Assumptions The total OPEB liability in the June 30, 2017 actuarial valuation was determined using the following actuarial assumptions and applied to all periods included in the measurement, unless otherwise specified: Valuation Date June 30, 2017 Measurement Date June 30, 2018 Actuarial Cost Method Entry-age normal cost method, level percent of pay Actuarial Assumptions: Discount Rate 6.50% Inflation 2.75% Projected Salary Increase 2.75% per year Expected Long-Term Investment Rate of Return 6.50% Health-care Cost Trend Rates 4.00% per year Preretirement Turnover Derived from 2014 CalPERS OPEB assumptions model for "public agency miscellaneous" Mortality Derived from 2014 CalPERS OPEB assumptions model for "public agency miscellaneous" The actuarial assumptions used in the June 30, 2017, valuation were based on a standard set of assumptions the actuary has used for similar valuations, modified as appropriate for the District. The long-term expected rate of return was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation as of June 30, 2018 are summarized in the following table: New Strategic Long-Term Expected Allocation Real Rate of Return Global equity 57.00% 5.50% Global debt securities 27.00% 2.35% Inflation assets 5.00% 1.50% Commodities 3.00% 1.75% REITs 8.00% 3.65% Total 100.00% Asset Class Page 147 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 43 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) b.Net OPEB Liability (Continued) Discount Rate The discount rate used to measure the total OPEB liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that the District’s contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on the plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. c.Changes in the Net OPEB Liability The changes in the net OPEB liability are as follows: Total Plan Net OPEB Fiduciary OPEB Liability Net Position Liability Balance at June 30, 2017 (Measurement Date)3,595,567$ 1,322,152$ 2,273,415$ Changes in the Year: Service cost 73,292 - 73,292 I nterest on the total OPEB liability 228,072 - 228,072 Contribution - employer - 431,245 (431,245) N et investment income - 98,256 (98,256) Administrative expenses - (762) 762 Benefit payments (173,539) (173,539) - Net Changes 127,825 355,200 (227,375) Balance at June 30, 2018 (Measurement Date)3,723,392$ 1,677,352$ 2,046,040$ Increase (Decrease) Change of Assumptions There was no change of assumptions. Change of Benefit Terms There was no change of benefit terms. Page 148 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 44 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) c.Changes in the Net OPEB Liability (Continued) Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the District, as well as what the District’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (5.50%) or one percentage point higher (7.50%) than the current discount rate: 1% Decrease Discount Rate 1% Increase (5.50%) (6.50%) (7.50%) Net OPEB Liability 2,400,597$ 2,046,040$ 1,735,978$ Sensitivity of the Net OPEB Liability to Changes in Health-care Cost Trend Rates The following presents the net OPEB liability of the District, as well as what the District’s net OPEB liability would be if it were calculated using health-care cost trend rates that are one percentage point lower (3.00%) or one percentage point higher (5.00%) than the current health-care cost trend rates: Current Health-care 1% Decrease Cost Trend Rates 1% Increase (3.00%) (4.00%) (5.00%) Net OPEB Liability 1,685,948$ 2,046,040$ 2,462,965$ d.OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2019, the District recognized OPEB expense of $202,501. At June 30, 2019, the District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources OPEB contributions subsequent to measurement date 462,680$ -$ Differences between actual and expected experience - - Change in assumptions - - Differences between projected and actual earnings -(43,597) Tota l 462,680$ (43,597)$ The net difference between projected and actual earnings on plan investments is amortized over a five-year period. Page 149 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 45 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) d.OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued) Amount of $462,680 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows: Year Ending June 30, Amount 2020 (13,710)$ 2021 (13,710) 2022 (13,710) 2023 (2,467) 2024 - Thereafter - e.Payable to the OPEB Plan At June 30, 2019, the District had no outstanding amount of contributions to the OPEB plan as required for the year ended June 30, 2019. NOTE 7 - PENSION PLANS a.General Information about the Pension Plans Plan Description All qualified permanent and probationary employees are eligible to participate in the District’s separate Miscellaneous Employee Pension Plans (Plans), which are cost-sharing multiple-employer defined benefit pension plans administered by CalPERS. Benefit provisions under these plans are established by state statute and District resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. All members are eligible for non- industrial disability benefits after five (5) years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. Page 150 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 46 NOTE 7 - PENSION PLANS (CONTINUED) a.General Information about the Pension Plans (Continued) The Plans’ provisions and benefits in effect at June 30, 2018 measurement date, are summarized as follows: Tier I Tier II Tier III - PEPRA Prior to On or After On or After Hire date December 22, 2011 December 22, 2011 January 1, 2013 Benefit formula 2%@55 2%@60 2%@62 Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 63 50 - 63 52 - 67 Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.092% to 2.418% 1.0% to 2.5% Required employee contribution rates 7%7%6.25% Required employer contribution rates Normal cost rate 8.921%7.653%6.533% Payment of unfunded liability 318,966$ 215$ 632$ Miscellaneous Contributions Section 20814(c) of CalPERS law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’s annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. District contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by pension plan terms as plan member contribution requirements are classified as plan member contributions. Page 151 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 47 NOTE 7 - PENSION PLANS (CONTINUED) b.Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2019, the District reported net pension liabilities for its proportionate share of the net pension liability of the Plans as follows: Proportionate Share of Net Pension Liability Miscellaneous 8,449,114$ The District’s net pension liability for the Plans is measured as the proportionate share of the net pension liability. The net pension liability of the Plans is measured as of June 30, 2018, and the total pension liability for the Plans used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017, rolled forward to June 30, 2018, using standard update procedures. The District’s proportionate share of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The District’s proportionate share of the net pension liability for the Plans as of the measurement dates June 30, 2017 and 2018, was as follows: Miscellaneous Proportion - June 30, 2017 0.21753% Proportion - June 30, 2018 0.22419% Change - Increase (Decrease) 0.00666% Page 152 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 48 NOTE 7 - PENSION PLANS (CONTINUED) b.Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) For the year ended June 30, 2019, the District recognized pension expense of $1,061,432. At June 30, 2019, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Pension contributions subsequent to measurement date 981,952$ -$ Differences between actual and expected experience 324,177 (110,316) Change in assumptions 963,224 (236,067) Change in employer's proportion and differences between the employer's contributions and the employer's proportionate share of contributions 24,205 (84,124) Net differences between projected and actual earnings on plan investments 41,770 - Tota l 2,335,328$ (430,507)$ An amount of $981,952 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ending June 30, Amount 2020 789,661$ 2021 454,299 2022 (245,096) 2023 (75,995) 2024 - Thereafter - Page 153 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 49 NOTE 7 - PENSION PLANS (CONTINUED) b.Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) Actuarial Assumptions The total pension liability for the June 30, 2018 measurement period the total pension liability was determined by an actuarial valuation as of June 30, 2017, with update procedures used to roll forward the total pension liability to June 30, 2018. The total pension liability was based on the following assumptions: Miscellaneous Valuation Date June 30, 2017 Measurement Date June 30, 2018 Actuarial Cost Method Entry-age Normal Cost Method Actuarial Assumptions: Discount Rate 7.15% Inflation 2.50% Salary Increases (1) Mortality Rate Table (2) Postretirement Benefit Increase (3) (1) Varies by entry age and service. (2) (3) The mortality table used was developed based on CalPERS-specific data. The table includes 15 years ofmortality improvements using Societyof Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 Experience Study report (based on CalPERS demographic data from 1997 to 2015) available on the CalPERS website. Contract cost of living adjustment up to 2.00% until purchasing power protection allowance floor on purchasing power applies, 2.50% thereafter. Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations, as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. Page 154 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 50 NOTE 7 - PENSION PLANS (CONTINUED) b.Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) Long-term Expected Rate of Return (Continued) The expected real rates of return by asset class are as follows: Assumed Real Return Real Return Asset Years Years Allocation 1 - 10 (a) 11+ (b) Global Equity 50.00% 4.80% 5.98% Fixed Income 28.00% 1.00% 2.62% Inflation Assets 0.00% 0.77% 1.81% Private Equity 8.00% 6.30% 7.23% Real Assets 13.00% 3.75% 4.93% Liquidity 1.00% 0.00% -0.92% Tota l 100.00% (a) In CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities (b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period. Asset Class Discount Rate The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Page 155 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 51 NOTE 7 - PENSION PLANS (CONTINUED) b.Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportionate share of the net pension liability for the Plans, calculated using the discount rate for each plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one-percentage point lower or one-percentage point higher than the current rate: Miscellaneous 1% Decrease 6.15% Net Pension Liability 13,597,876$ Current Discount Rate 7.15% Net Pension Liability 8,449,114$ 1% Increase 8.15% Net Pension Liability 4,198,895$ Pension Plans Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. c.Payable to the Pension Plans At June 30, 2019, the District had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2019. NOTE 8 - NET INVESTMENT IN CAPITAL ASSETS The balance of net investment in capital assets consisted of the following as of June 30, 2019 and 2018: 2019 2018 Capital assets, net of accumulated depreciation 190,910,575$ 194,261,125$ Certificates of participation - current (1,175,000) (1,140,000) Certificates of participation - long term (37,691,080) (39,122,056) Unspent debt proceeds 252 172 Deferred amount on refunding 252,651 272,386 Net investment in capital assets 152,297,398$ 154,271,627$ Page 156 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 52 NOTE 9 - RISK MANAGEMENT The District is exposed to various risks of loss related to torts, and theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. In an effort to manage its risk exposure, the District is a member of the Association of California Water Agencies Joint Powers Insurance Authority (the Insurance Authority). The Insurance Authority is a risk-pooling self-insurance authority created under provisions of California Government Code Sections 6500 et seq. The purpose of the Insurance Authority is to arrange and administer programs of insurance for the pooling of self-insured losses and to purchase excess insurance coverage. At June 30, 2019, as a member of the Insurance Authority, the District participated in the insurance programs as follows: General, auto liability, and public officials’ and employee’s error and omissions: Total risk financing self-insurance limits of $5,000,000, combined single limit at $5,000,000 per occurrence. The Insurance Authority purchases additional excess coverage layers of $55 million for general, auto and public officials liability, which increases the limits on the insurance coverage noted above. Employee dishonesty coverage of up to $100,000 per loss, includes public employee dishonesty, forgery or alteration, and theft, disappearance, and destruction coverages, subject to a $1,000 deductible per occurrence. Property loss is paid at the replacement cost for property on file if replaced within two years after the loss, otherwise paid on an actual cash value basis. The District’s Retrospective Allocation Point (deductible) is $25,000 per occurrence. The Insurance Authority is self-insured for the first $100,000 and purchases excess coverage of up to $500 million limited to insurable value ($33,191,411), subject to a $1,000 deductible, except for a $500 deductible on vehicles. Boiler and machinery coverage for the replacement cost of up to $150 million per occurrence limited to insurable value, subject to various deductibles depending on the type of equipment. Workers’ compensation insurance of up to California statutory limits for all work related injuries/illnesses covered by California law. The Insurance Authority is self-insured to $2,000,000 and has purchased excess insurance to the statutory limit. Cyber security coverage is $3 million per occurrence and $5,000,000 in aggregate with a $50,000 deductible per occurrence limited to the insurable value. Settled claims have not exceeded any of the coverage amounts in any of the last three fiscal years, and there were no reductions in the District’s insurance coverage during the years ended 2019, 2018, and 2017. Liabilities are recorded when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated net of the respective insurance coverage. Liabilities include an amount for claims that have been incurred but not reported. There were no claims payable as of June 30, 2019, 2018, and 2017. Page 157 of 244 YORBA LINDA WATER DISTRICT Notes to Basic Financial Statements June 30, 2019 53 NOTE 10 - COMMITMENTS AND CONTINGENCIES Construction Contracts The District has a variety of agreements with private parties relating to the installation, improvement, or modification of water facilities and distribution systems within its service area. The financing of such construction contracts is being provided primarily from the District’s replacement reserves and advances for construction. The District has committed to $781,566 and $2,061,122 of open construction contracts as of June 30, 2019 and 2018, respectively. Construction contracts include the following: June 30, 2019 Tota l Construction Balance Approved Costs to Contract to Date Complete Well No. 22 1 ,029,565$ 824,178$ 205,387$ Camino Verde/Mickel Lane Waterline 576,179 - 576,179 1,605,744$ 824,178$ 781,566$ June 30, 2018 Total Construction Balance Approved Costs to Contract to Date Complete Well No. 22 1,029,565$ 765,961$ 263,604$ Lakeview Grade Separation 250,000 187,695 62,305 YLWD - Fairmont/Zone 5 BPS Project 8,225,509 7,673,247 552,262 PRS Rehabilitation Phase II 630,585 268,355 362,230 Tract 15199 Waterline Replacement 654,610 - 654,610 2018 Sewer Main CIPP Rehabilitation 166,111 - 166,111 10,956,380$ 8,895,258$ 2,061,122$ Litigation The District is a defendant in certain legal actions arising in the normal course of operations. In the opinion of management and legal counsel, any liability resulting from these actions will not result in a material adverse effect on the District’s financial statements. NOTE 11 - SPECIAL ITEM During the fiscal year 2017-2018, the Board of Directors approved a refund to customers of $2,205,847. These refunds are related to the restricted net position that consists of penalty revenues assessed and collected in prior years due to the anticipated fines from the state of $1,105,809 and a one-time refund associated with rate charges of $1,100,038. NOTE 12 - SUBSEQUENT EVENTS Events occurring after June 30, 2019, have been evaluated for possible adjustments to the financial statements or disclosure as of September 13, 2019, which is the date these financial statements were available to be issued. Page 158 of 244 54 This page intentionally left blank Page 159 of 244 55 REQUIRED SUPPLEMENTARY INFORMATION Page 160 of 244 Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Measurement date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Plans' proportion of the net pension liability 0.08768% 0.08647% 0.08368% 0.07706% 0.08184% Plans' proportionate share of the net pension liability 8,449,114$ 8,575,054$ 7,240,999$ 5,289,322$ 5,092,626$ Plans' covered payroll 6,561,629$ 6,116,587$ 5,899,338$ 5,564,327$ 5,054,265$ Plans' proportionate share of the net pension liability as a percentage of its covered payroll 128.77% 140.19% 122.74% 95.06% 100.76% Plans' proportionate share of the fiduciary net position as a percentage of the Plan's total pension liability 75.26% 73.31% 74.06% 83.35% 83.03% Plans' proportionate share of aggregate employer contributions 1,128,006$ 1,071,006$ 967,937$ 916,213$ 673,737$ Notes to Schedule: Benefit Changes: Changes in Assumptions: From fiscal year June 30, 2015 to June 30, 2016: From fiscal year June 30, 2016 to June 30, 2017: There were no changes in assumptions. From fiscal year June 30, 2017 to June 30, 2018: The discount rate was reduced from 7.65% to 7.15%. From fiscal year June 30, 2018 to June 30, 2019: There were no changes in assumptions. * - Fiscal year 2015 was the 1st year of implementation, therefore only five years are shown. YORBA LINDA WATER DISTRICT SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Last Ten Fiscal Years* There were no changes in benefits. GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014, measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015, measurement date is without reduction of pension plan administrative expense. 56 Page 161 of 244 Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Contractually required contribution (actuarially determined) 981,952$ 850,393$ 755,544$ 674,827$ 587,176$ Contributions in relation to the actuarially determined contributions (981,952) (850,393) (755,544) (674,827) (587,176) Contribution deficiency (excess) -$ -$ -$ -$ -$ Covered payroll 6,673,227$ 6,561,629$ 6,116,587$ 5,899,338$ 5,564,327$ Contributions as a percentage of covered payroll 14.71% 12.96% 12.35% 11.44% 10.55% Notes to Schedule: Valuation Date 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1) Asset valuation method Market Value Market Value Market Value Market Value 15 Year Smoothed Market Method Inflation 2.75% 2.75% 2.75% 2.75% 2.75% Salary increases (2) (2) (2) (2) (2) Investment rate of return 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4) Mortality (5) (5) (5) (5) (5) (1) Level percentage of payroll, closed (2) Depending on age, service, and type of employment (3) Net of pension plan investment expense, including inflation (4) 50 for all plans with exception of 52 for Miscellaneous 2% @62 (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study YORBA LINDA WATER DISTRICT SCHEDULE OF CONTRIBUTIONS - DEFINED BENEFIT PENSION PLANS Last Ten Fiscal Years* 57 Page 162 of 244 Measurement date 6/30/2018 6/30/2017 Total OPEB Liability: Service cost 73,292$ 71,330$ Interest on total OPEB liability 228,072 219,305 Benefit payments, including refunds of (173,539) (137,979) Net Change in Total OPEB Liability 127,825 152,656 Total OPEB Liability - Beginning of Year 3,595,567 3,442,911 Total OPEB Liability - End of Year (a) 3,723,392 3,595,567 Plan Fiduciary Net Position: Contributions - employer 431,245 355,672 Net investment income 98,256 121,311 Administrative expenses (762) (606) Benefit payments (173,539) (137,979) Net Change in Plan Fiduciary Net Position 355,200 338,398 Plan Fiduciary Net Position - Beginning of Year 1,322,152 983,754 Plan Fiduciary Net Position - End of Year (b) 1,677,352 1,322,152 Net OPEB Liability - Ending (a)-(b) 2,046,040$ 2,273,415$ Plan fiduciary net position as a percentage of the total OPEB liability 45.05% 36.77% Covered - employee payroll 4,690,421$ 4,490,485$ Net OPEB liability as percentage of covered - employee payroll 43.62% 50.63% Notes to Schedule: Benefit Changes: Changes in Assumptions: * Fiscal year 2018 was the first year of implementation; therefore, only two years are shown. YORBA LINDA WATER DISTRICT SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Last Ten Fiscal Years* There were no changes in benefits. There were no changes in assumptions. 58 Page 163 of 244 6/30/2019 6/30/2018 Actuarially determined contribution 257,706$ 257,706$ Contributions in relation to the actuarially determined contributions (462,680) (431,245) Contribution deficiency (excess) (204,974)$ (173,539)$ Covered - employee payroll 4,419,954$ 4,690,421$ Contributions as a percentage of covered - employee payroll 10.47% 9.19% Notes to Schedule: Valuation Date 6/30/2017 6/30/2017 Methods and Assumptions Used to Determine Contribution Rates: Single and agent employers Entry age Amortization method Level percentage of payroll, closed Asset valuation method Market Value Inflation 2.75% Salary increases 2.75% Investment rate of return 6.50% Mortality *Fiscal year 2018 was the first year of implementation; therefore, only two years are shown. 2014 CalPERS OPEB Assumptions Model YORBA LINDA WATER DISTRICT SCHEDULE OF CONTRIBUTIONS - OPEB Last Ten Fiscal Years* 59 Page 164 of 244 60 SUPPLEMENTARY INFORMATION Page 165 of 244 Water Sewer Total CURRENT ASSETS UNRESTRICTED ASSETS Cash and cash equivalents 25,576,816$ 3,401,571$ 28,978,387$ Investments 5,288,511 1,822,259 7,110,770 Accounts receivable - water and sewer services 3,553,539 283,669 3,837,208 Accounts receivable - property taxes 18,176 1,179 19,355 Accrued interest receivable 81,900 23,186 105,086 Prepaid expenses and deposits 288,064 - 288,064 Inventory 283,523 - 283,523 TOTAL UNRESTRICTED ASSETS 35,090,529 5,531,864 40,622,393 RESTRICTED ASSETS Cash and cash equivalents 1,762,759 198,038 1,960,797 TOTAL RESTRICTED ASSETS 1,762,759 198,038 1,960,797 TOTAL CURRENT ASSETS 36,853,288 5,729,902 42,583,190 NONCURRENT ASSETS Capital assets: Not depreciable 2,577,455 153,294 2,730,749 Depreciable, net of accumulated depreciation 149,544,604 38,635,222 188,179,826 TOTAL NONCURRENT ASSETS 152,122,059 38,788,516 190,910,575 TOTAL ASSETS 188,975,347 44,518,418 233,493,765 DEFERRED OUTFLOWS OF RESOURCES Deferred amounts from pension plans 2,067,304 268,024 2,335,328 Deferred amounts from OPEB 409,578 53,102 462,680 Deferred loss on refunding 350,727 - 350,727 TOTAL DEFERRED OUTFLOWS OF RESOURCES 2,827,609 321,126 3,148,735 (Continued) ASSETS AND DEFERRED OUTFLOWS YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF NET POSITION June 30, 2019 OF RESOURCES 61 Page 166 of 244 Water Sewer Total CURRENT LIABILITIES PAYABLE FROM UNRESTRICTED CURRENT ASSETS Accounts payable 5,040,552$ 152,644$ 5,193,196$ Accrued expenses 202,687 - 202,687 Compensated absences payable - current portion 390,465 - 390,465 Customer and construction deposits 477,649 105,965 583,614 Unearned revenue 224,267 - 224,267 Accrued interest payable 393,864 - 393,864 Certificates of Participation - current portion 1,175,000 - 1,175,000 TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS 7,904,484 258,609 8,163,093 TOTAL CURRENT LIABILITIES 7,904,484 258,609 8,163,093 LONG-TERM LIABILITIES (LESS CURRENT PORTION) Unearned annexation revenue 13,112,931 - 13,112,931 Compensated absences 1,171,396 - 1,171,396 Certificates of Participation 37,691,080 - 37,691,080 Net pension liability 7,479,406 969,708 8,449,114 Net OPEB liability 1,811,215 234,825 2,046,040 TOTAL LONG-TERM LIABILITIES (LESS CURRENT PORTION) 61,266,028 1,204,533 62,470,561 TOTAL LIABILITIES 69,170,512 1,463,142 70,633,654 DEFERRED INFLOWS OF RESOURCES Deferred amounts from pension plans 381,096 49,411 430,507 Deferred amounts from OPEB 38,593 5,004 43,597 Deferred gain on refunding 98,076 - 98,076 TOTAL DEFERRED INFLOWS OF RESOURCES 517,765 54,415 572,180 NET POSITION Net investment in capital assets 113,508,882 38,788,516 152,297,398 Restricted: Water conservation 103,420 - 103,420 Other post-employment benefits 1,762,507 198,038 1,960,545 Unrestricted 6,739,870 4,335,433 11,075,303 TOTAL NET POSITION 122,114,679$ 43,321,987$ 165,436,666$ INFLOWS OF RESOURCES June 30, 2019 LIABILITIES AND DEFERRED YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF NET POSITION (CONTINUED) 62 Page 167 of 244 Water Sewer Total OPERATING REVENUES Water sales 29,819,532$ -$ 29,819,532$ Sewer revenues - 2,528,020 2,528,020 Other operating revenues 981,069 33,622 1,014,691 TOTAL OPERATING REVENUES 30,800,601 2,561,642 33,362,243 OPERATING EXPENSES Variable water costs 13,327,860 - 13,327,860 Personnel services 8,602,890 935,277 9,538,167 Supplies and services 4,068,320 524,201 4,592,521 Depreciation 5,947,042 1,375,711 7,322,753 TOTAL OPERATING EXPENSES 31,946,112 2,835,189 34,781,301 OPERATING LOSS (1,145,511) (273,547) (1,419,058) NONOPERATING REVENUES (EXPENSES) Property taxes 1,874,688 - 1,874,688 Investment income 687,320 132,202 819,522 Interest expense (1,350,616) - (1,350,616) Other nonoperating revenues 927,224 87,271 1,014,495 Other nonoperating expenses (1,454,302) (96,076) (1,550,378) TOTAL NONOPERATING REVENUES (EXPENSES) 684,314 123,397 807,711 NET LOSS BEFORE CAPITAL CONTRIBUTIONS (461,197) (150,150) (611,347) CAPITAL CONTRIBUTIONS 75,845 95,299 171,144 CHANGES IN NET POSITION (385,352) (54,851) (440,203) NET POSITION - BEGINNING OF YEAR 122,500,031 43,376,838 165,876,869 NET POSITION - END OF YEAR 122,114,679$ 43,321,987$ 165,436,666$ YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the year ended June 30, 2019 63 Page 168 of 244 Water Sewer Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers 31,129,214$ 2,524,819$ 33,654,033$ Cash payments to employees for salaries and wages (8,964,452) (959,647) (9,924,099) Cash payments to suppliers of goods and services (17,710,972) (450,041) (18,161,013) Other revenues 95,549 66,691 162,240 Other expenses (29,752) (8,360) (38,112) NET CASH PROVIDED BY OPERATING ACTIVITIES 4,519,587 1,173,462 5,693,049 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Proceeds from property taxes and assessments 1,873,286 - 1,873,286 NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 1,873,286 - 1,873,286 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from (payments for) annexation fees and capital contributions (44,325) 4,056 (40,269) Acquisition and construction of capital assets (3,448,079) (1,873,756) (5,321,835) Proceeds from sales of capital assets 4,454 - 4,454 Principal paid on long-term liabilities (1,140,000) - (1,140,000) Interest paid on long-term liabilities (1,598,256) - (1,598,256) NET CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES (6,226,206) (1,869,700) (8,095,906) CASH FLOWS FROM INVESTING ACTIVITIES Sale of investments 17,009,712 - 17,009,712 Purchases of investments (20,101,588) (1,594,444) (21,696,032) Interest and investment earnings 644,113 121,362 765,475 NET CASH USED IN INVESTING ACTIVITIES (2,447,763) (1,473,082) (3,920,845) NET DECREASE IN CASH AND CASH EQUIVALENTS (2,281,096) (2,169,320) (4,450,416) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 29,620,671 5,768,929 35,389,600 CASH AND CASH EQUIVALENTS - END OF YEAR 27,339,575$ 3,599,609$ 30,939,184$ (Continued) YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF CASH FLOWS For the year ended June 30, 2019 64 Page 169 of 244 Water Sewer Total RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating loss (1,145,511)$ (273,547)$ (1,419,058)$ Adjustments to reconcile loss to net cash provided by operating activities: Depreciation 5,947,042 1,375,711 7,322,753 Other revenues 95,549 66,691 162,240 Other expenses (29,752) (8,360) (38,112) Changes in operating assets, deferred outflows of resources, operating liabilities and deferred inflows of resources: (Increase) decrease in assets and deferred outflows: of resources: Accounts receivable 331,340 (36,690) 294,650 Inventory (35,034) - (35,034) Prepaid expenses and deposits (117,507) - (117,507) Deferred outflows of resources from pension plans 366,925 47,573 414,498 Deferred outflows of resources from OPEB (55,841) (7,240) (63,081) Increase (decrease) in liabilities and deferred inflows of resources: Accounts payable and accrued expenses (187,050) 64,851 (122,199) Accrued salaries and wages 20,577 - 20,577 Accrued compensated absences (193,401) - (193,401) Customer and construction deposits 21,310 9,176 30,486 Net pension liability (111,486) (14,454) (125,940) Net OPEB liability (201,279) (26,096) (227,375) Deferred inflows of resources from pension plans (185,083) (23,996) (209,079) Deferred inflows of resources from OPEB (1,212) (157) (1,369) Total adjustments 5,665,098 1,447,009 7,112,107 NET CASH PROVIDED BY OPERATING ACTIVITIES 4,519,587$ 1,173,462$ 5,693,049$ CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION Unrestricted 25,576,816$ 3,401,571$ 28,978,387$ Restricted 1,762,759 198,038 1,960,797 TOTAL CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION 27,339,575$ 3,599,609$ 30,939,184$ NONCASH INVESTING, CAPITAL, AND RELATED FINANCING ACTIVITIES Amortization related to long-term debt 236,240$ -$ 236,240$ Capital contributions 75,845$ 95,299$ 171,144$ (CONTINUED) For the year ended June 30, 2019 YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF CASH FLOWS 65 Page 170 of 244 Water Sewer Total OPERATING EXPENSES: Variable Water Costs: Imported water 3,076,462$ -$ 3,076,462$ OCWD replenishment assessment 6,553,998 - 6,553,998 In lieu 1,194,353 - 1,194,353 MWD connection charge 736,295 - 736,295 Fuel and power/pumping 1,766,752 - 1,766,752 Total Variable Water Costs 13,327,860 - 13,327,860 Personnel Services: Unit salaries 6,219,353 664,366 6,883,719 Fringe benefits 2,332,681 267,467 2,600,148 Director's fees 50,856 3,444 54,300 Total Personnel Services 8,602,890 935,277 9,538,167 Supplies and Services: Board election 52,742 3,970 56,712 Communications 151,127 8,582 159,709 Contractual services 390,442 23,794 414,236 Data processing 264,280 17,438 281,718 District activities 36,079 2,572 38,651 Dues and memberships 73,970 7,590 81,560 Fees and permits 269,225 10,477 279,702 Insurance 263,807 19,786 283,593 Maintenance 435,489 191,846 627,335 Materials 907,620 52,569 960,189 Noncapital equipment 133,959 27,462 161,421 Office expense 38,495 2,488 40,983 Professional services 466,033 76,433 542,466 Training 39,887 17,602 57,489 Travel and conferences 88,298 7,040 95,338 Uncollectible accounts 2,727 133 2,860 Utilities 172,299 13,247 185,546 Vehicle expense 281,841 41,172 323,013 Total Supplies and Services 4,068,320 524,201 4,592,521 Depreciation 5,947,042 1,375,711 7,322,753 TOTAL OPERATING EXPENSES 31,946,112$ 2,835,189$ 34,781,301$ YORBA LINDA WATER DISTRICT SCHEDULE OF OPERATING EXPENSES BY COST CENTER AND NATURE OF EXPENSES FOR WATER AND SEWER For the year ended June 30, 2019 66 Page 171 of 244 Water Sewer Total Land, Mineral, and Water Rights: Land 78,558$ -$ 78,558$ Water rights 86,300 - 86,300 Mineral rights 63,650 - 63,650 Land rights and easements 385 58,526 58,911 Total Land, Mineral, and Water Rights 228,893 58,526 287,419 Source of Supply: Wells 5,784,629 - 5,784,629 MWD connection 564,368 - 564,368 Total Source of Supply 6,348,997 - 6,348,997 Pumping Plant: Structures and improvements 15,723,458 - 15,723,458 Equipment 12,383,029 321,478 12,704,507 Total Pumping Plant 28,106,487 321,478 28,427,965 Water Treatment Plant: Structures and improvements 1,302,812 - 1,302,812 Equipment 2,204,857 - 2,204,857 Total Water Treatment Plant 3,507,669 - 3,507,669 Transmission and Distribution Plant: Mains 83,781,303 51,728,451 135,509,754 Reservoirs and tanks 61,742,318 - 61,742,318 Service and meter installation 7,217,806 3,456,011 10,673,817 Fire hydrants 7,690,162 - 7,690,162 Meters 9,892,383 - 9,892,383 Fire mains 745,360 - 745,360 Structures and improvements 4,640,751 - 4,640,751 Control system 5,547,563 33,485 5,581,048 Total Transmission and Distribution Plant 181,257,646 55,217,947 236,475,593 General Plant: Structures and improvements 13,278,291 - 13,278,291 Transportation equipment 2,363,745 1,401,250 3,764,995 Power operated equipment 601,673 - 601,673 Communication equipment 721,032 - 721,032 Computer equipment 2,387,854 238,071 2,625,925 Office furniture 1,098,711 - 1,098,711 Tools, shop, and garage equipment 101,782 - 101,782 Store equipment 60,241 - 60,241 Total General Plant 20,613,329 1,639,321 22,252,650 Construction in Progress 2,348,562 94,768 2,443,330 Accumulated Depreciation (90,289,524) (18,543,524) (108,833,048) Total Capital Assets 152,122,059$ 38,788,516$ 190,910,575$ YORBA LINDA WATER DISTRICT SCHEDULE OF CAPITAL ASSETS For the year ended June 30, 2019 67 Page 172 of 244 Water Sewer Total CURRENT ASSETS: UNRESTRICTED ASSETS: Cash and cash equivalents 29,026,904$ 5,768,929$ 34,795,833$ Investments 1,860,005 203,670 2,063,675 Accounts receivable - water and sewer services 3,884,879 246,979 4,131,858 Accounts receivable - property taxes 16,774 4,744 21,518 Accrued interest receivable 38,693 12,346 51,039 Prepaid expenses and deposits 170,557 - 170,557 Inventory 248,489 - 248,489 TOTAL UNRESTRICTED ASSETS 35,246,301 6,236,668 41,482,969 RESTRICTED ASSETS: Cash and cash equivalents 593,767 - 593,767 TOTAL RESTRICTED ASSETS 593,767 - 593,767 TOTAL CURRENT ASSETS 35,840,068 6,236,668 42,076,736 NONCURRENT ASSETS: Capital assets: Not depreciable 10,642,238 145,882 10,788,120 Depreciable, net of accumulated depreciation 145,331,943 38,141,062 183,473,005 TOTAL NONCURRENT ASSETS 155,974,181 38,286,944 194,261,125 TOTAL ASSETS 191,814,249 44,523,612 236,337,861 DEFERRED OUTFLOWS OF RESOURCES: Deferred amounts from pension plans 2,434,229 315,597 2,749,826 Deferred amounts from OPEB 353,737 45,862 399,599 Deferred loss on refunding 375,558 - 375,558 TOTAL DEFERRED OUTFLOWS OF RESOURCES 3,163,524 361,459 3,524,983 (Continued) ASSETS AND DEFERRED OUTFLOWS YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF NET POSITION June 30, 2018 OF RESOURCES 68 Page 173 of 244 Water Sewer Total CURRENT LIABILITIES: PAYABLE FROM UNRESTRICTED CURRENT ASSETS: Accounts payable 4,881,397$ 87,793$ 4,969,190$ Accrued expenses 182,110 - 182,110 Compensated absences payable - current portion 438,816 - 438,816 Customer and construction deposits 456,339 96,789 553,128 Unearned revenue 268,592 - 268,592 Accrued interest payable 405,264 - 405,264 Certificates of Participation - current portion 1,140,000 - 1,140,000 TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS 7,772,518 184,582 7,957,100 PAYABLE FROM RESTRICTED ASSETS: Retention payable 346,205 - 346,205 TOTAL PAYABLE FROM RESTRICTED ASSETS 346,205 - 346,205 TOTAL CURRENT LIABILITIES 8,118,723 184,582 8,303,305 LONG-TERM LIABILITIES (LESS CURRENT PORTION): Unearned annexation revenue 13,607,976 - 13,607,976 Compensated absences 1,316,446 - 1,316,446 Certificates of Participation 39,122,056 - 39,122,056 Net pension liability 7,590,892 984,162 8,575,054 Net OPEB liability 2,012,494 260,921 2,273,415 TOTAL LONG-TERM LIABILITIES (LESS CURRENT PORTION) 63,649,864 1,245,083 64,894,947 TOTAL LIABILITIES 71,768,587 1,429,665 73,198,252 DEFERRED INFLOWS OF RESOURCES: Deferred amounts from pension plans 566,179 73,407 639,586 Deferred amounts from OPEB 39,805 5,161 44,966 Deferred gain on refunding 103,171 - 103,171 TOTAL DEFERRED INFLOWS OF RESOURCES 709,155 78,568 787,723 NET POSITION: Net investment in capital assets 115,984,683 38,286,944 154,271,627 Restricted: Water conservation 104,673 - 104,673 Other post-employment benefits 247,390 - 247,390 Unrestricted 6,163,285 5,089,894 11,253,179 TOTAL NET POSITION 122,500,031$ 43,376,838$ 165,876,869$ INFLOWS OF RESOURCES June 30, 2018 LIABILITIES AND DEFERRED YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF NET POSITION (CONTINUED) 69 Page 174 of 244 Water Sewer Total OPERATING REVENUES: Water sales 32,082,152$ -$ 32,082,152$ Sewer revenues - 2,330,809 2,330,809 Other operating revenues 763,069 68,664 831,733 TOTAL OPERATING REVENUES 32,845,221 2,399,473 35,244,694 OPERATING EXPENSES: Variable water costs 15,028,131 - 15,028,131 Personnel services 8,828,638 1,045,574 9,874,212 Supplies and services 3,865,733 433,130 4,298,863 Depreciation 6,098,375 1,367,602 7,465,977 TOTAL OPERATING EXPENSES 33,820,877 2,846,306 36,667,183 OPERATING LOSS (975,656) (446,833) (1,422,489) NONOPERATING REVENUES (EXPENSES): Property taxes 1,749,957 - 1,749,957 Investment income 444,371 74,229 518,600 Interest expense (1,106,515) - (1,106,515) Other nonoperating revenues 403,721 9,744 413,465 Other nonoperating expenses (47,465) (41,556) (89,021) TOTAL NONOPERATING REVENUES (EXPENSES) 1,444,069 42,417 1,486,486 NET INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS 468,413 (404,416) 63,997 CAPITAL CONTRIBUTIONS 1,907,644 1,646,479 3,554,123 CHANGES IN NET POSITION, BEFORE SPECIAL ITEM 2,376,057 1,242,063 3,618,120 SPECIAL ITEM (2,205,847) - (2,205,847) CHANGES IN NET POSITION 170,210 1,242,063 1,412,273 NET POSITION - BEGINNING OF YEAR 124,574,437 42,404,986 166,979,423 PRIOR-PERIOD ADJUSTMENT (2,244,616) (270,211) (2,514,827) NET POSITION - BEGINNING OF YEAR, AS RESTATED 122,329,821 42,134,775 164,464,596 NET POSITION - END OF YEAR 122,500,031$ 43,376,838$ 165,876,869$ YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the year ended June 30, 2018 70 Page 175 of 244 Water Sewer Total CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers 33,044,210$ 2,374,249$ 35,418,459$ Cash payments to employees for salaries and wages (8,431,746) (1,016,615) (9,448,361) Cash payments to suppliers of goods and services (18,128,973) (447,037) (18,576,010) Other revenues 201,180 33,694 234,874 Other expenses (47,465) (41,556) (89,021) Refund to customers (2,205,847) - (2,205,847) NET CASH PROVIDED BY OPERATING ACTIVITIES 4,431,359 902,735 5,334,094 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Proceeds from property taxes and assessments 1,751,697 - 1,751,697 NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 1,751,697 - 1,751,697 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from annexation fees and capital contributions 46,895 30,311 77,206 Acquisition and construction of capital assets (7,311,989) (39,365) (7,351,354) Proceeds from sales of capital assets 11,556 - 11,556 Principal paid on long-term liabilities (1,240,000) - (1,240,000) Interest paid on long-term liabilities (1,509,535) - (1,509,535) NET CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES (10,003,073) (9,054) (10,012,127) CASH FLOWS FROM INVESTING ACTIVITIES: Sale of investments 15,984,982 - 15,984,982 Purchases of investments (11,357,398) (28,079) (11,385,477) Interest and investment earnings 466,636 68,503 535,139 NET CASH PROVIDED BY INVESTING ACTIVITIES 5,094,220 40,424 5,134,644 NET INCREASE IN CASH AND CASH EQUIVALENTS 1,274,203 934,105 2,208,308 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 28,346,468 4,834,824 33,181,292 CASH AND CASH EQUIVALENTS - END OF YEAR 29,620,671$ 5,768,929$ 35,389,600$ (Continued) YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF CASH FLOWS For the year ended June 30, 2018 71 Page 176 of 244 Water Sewer Total RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating loss (975,656)$ (446,833)$ (1,422,489)$ Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation 6,098,375 1,367,602 7,465,977 Other revenues 201,180 33,694 234,874 Other expenses (47,465) (41,556) (89,021) Refund to customers (2,205,847) - (2,205,847) Changes in operating assets, deferred outflows of resources, operating liabilities, and deferred inflows of resources: (Increase) decrease in assets and deferred outflows: of resources: Accounts receivable 203,144 (24,768) 178,376 Inventory 17,344 - 17,344 Prepaid expenses and deposits 119,430 - 119,430 Other post-employment benefits (OPEB) asset (693,616) (89,926) (783,542) Deferred outflows of resources from pension plans (38,885) (5,041) (43,926) Increase (decrease) in liabilities and deferred inflows of resources: Accounts payable and accrued expenses 734,148 (26,829) 707,319 Accrued salaries and wages 37,946 - 37,946 Accrued compensated absences 135,609 - 135,609 Customer and construction deposits (110,186) 12,466 (97,720) Net pension liability 1,180,945 153,110 1,334,055 Net OPEB liability (164,425) (21,317) (185,742) Deferred inflows of resources from pension plans (100,487) (13,028) (113,515) Deferred inflows of resources from OPEB 39,805 5,161 44,966 Total adjustments 5,407,015 1,349,568 6,756,583 NET CASH PROVIDED BY OPERATING ACTIVITIES 4,431,359$ 902,735$ 5,334,094$ CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION: Unrestricted 29,026,904$ 5,768,929$ 34,795,833$ Restricted 593,767 - 593,767 TOTAL CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION 29,620,671$ 5,768,929$ 35,389,600$ NONCASH INVESTING, CAPITAL, AND RELATED FINANCING ACTIVITIES: Amortization related to long-term debt 236,240$ -$ 236,240$ Capital contributions 1,907,643$ 1,616,168$ 3,523,811$ (CONTINUED) For the year ended June 30, 2018 YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF CASH FLOWS 72 Page 177 of 244 Water Sewer Total OPERATING EXPENSES: Variable Water Costs: Imported water 5,973,705$ -$ 5,973,705$ OCWD replenishment assessment 5,469,856 - 5,469,856 Continuous use program 1,497,366 - 1,497,366 MWD connection charge 833,002 - 833,002 Fuel and power/pumping 1,254,202 - 1,254,202 Total Variable Water Costs 15,028,131 - 15,028,131 Personnel Services: Unit salaries 5,929,459 738,340 6,667,799 Fringe benefits 2,846,131 303,431 3,149,562 Director's fees 53,048 3,803 56,851 Total Personnel Services 8,828,638 1,045,574 9,874,212 Supplies and Services: Communications 138,958 8,676 147,634 Contractual services 400,827 29,493 430,320 Data processing 228,103 16,965 245,068 District activities 27,010 2,023 29,033 Dues and memberships 78,219 6,044 84,263 Fees and permits 244,196 10,636 254,832 Insurance 250,493 18,743 269,236 Maintenance 398,511 140,363 538,874 Materials 720,410 38,460 758,870 Noncapital equipment 123,995 26,187 150,182 Office expense 40,087 2,993 43,080 Professional services 674,815 35,565 710,380 Training 32,350 5,399 37,749 Travel and conferences 78,429 5,753 84,182 Uncollectible accounts 4,155 456 4,611 Utilities 169,758 13,299 183,057 Vehicle expense 255,417 72,075 327,492 Total Supplies and Services 3,865,733 433,130 4,298,863 Depreciation 6,098,375 1,367,602 7,465,977 TOTAL OPERATING EXPENSES 33,820,877$ 2,846,306$ 36,667,183$ YORBA LINDA WATER DISTRICT SCHEDULE OF OPERATING EXPENSES BY COST CENTER AND NATURE OF EXPENSES FOR WATER AND SEWER For the year ended June 30, 2018 73 Page 178 of 244 Water Sewer Total Land, Mineral, and Water Rights: Land 78,558$ -$ 78,558$ Water rights 86,300 - 86,300 Mineral rights 63,650 - 63,650 Land rights and easements 385 58,526 58,911 Total Land, Mineral, and Water Rights 228,893 58,526 287,419 Source of Supply: Wells 5,784,629 - 5,784,629 MWD connection 564,368 - 564,368 Total Source of Supply 6,348,997 - 6,348,997 Pumping Plant: Structures and improvements 13,532,628 - 13,532,628 Equipment 12,384,874 431,576 12,816,450 Total Pumping Plant 25,917,502 431,576 26,349,078 Water Treatment Plant: Structures and improvements 1,302,812 - 1,302,812 Equipment 2,204,857 - 2,204,857 Total Water Treatment Plant 3,507,669 - 3,507,669 Transmission and Distribution Plant: Mains 83,029,078 49,790,247 132,819,325 Reservoirs and tanks 61,565,606 - 61,565,606 Service and meter installation 7,047,491 3,439,358 10,486,849 Fire hydrants 7,579,804 - 7,579,804 Meters 9,887,847 - 9,887,847 Fire mains 745,360 - 745,360 Structures and improvements 2,875,096 - 2,875,096 Control system 3,379,060 33,485 3,412,545 Total Transmission and Distribution Plant 176,109,342 53,263,090 229,372,432 General Plant: Structures and improvements 13,389,583 - 13,389,583 Transportation equipment 2,223,112 1,401,250 3,624,362 Power operated equipment 601,673 - 601,673 Communication equipment 532,132 - 532,132 Computer equipment 2,287,135 238,071 2,525,206 Office furniture 1,098,711 - 1,098,711 Tools, shops, and garage equipment 101,782 - 101,782 Other - - - Store equipment 60,241 - 60,241 Total General Plant 20,294,369 1,639,321 21,933,690 Construction in Progress 10,413,345 87,356 10,500,701 Accumulated Depreciation (86,845,936) (17,192,925) (104,038,861) Total Capital Assets 155,974,181$ 38,286,944$ 194,261,125$ YORBA LINDA WATER DISTRICT SCHEDULE OF CAPITAL ASSETS For the year ended June 30, 2018 74 Page 179 of 244 75 STATISTICAL SECTION Page 180 of 244 76 This page intentionally left blank Page 181 of 244 YORBA LINDA WATER DISTRICT Description of Statistical Section Contents June 30, 2019 77 This part of the District’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements and the note disclosures say about the government’s overall financial health. Contents: Pages Financial Trends these schedules contain trend information to help the reader understand how the District’s financial performance and well-being have changed over time. 78 Revenue Capacity these schedules contain information to help the reader assess the District’s most significant local revenue source, water sales. 80 Debt Capacity these schedules present information to help the reader assess the affordability of the District’s current levels of outstanding debt and the District’s ability to issue additional debt in the future. 82 Demographic and Economic Information these schedules offer demographic and economic indicators to help the reader understand the environment within which the District’s financial activities take place. 84 Operating Information these schedules contain service and infrastructure data to help the reader understand how the information in the District’s financial report relates to the services the District provides and the activities it performs. 86 Page 182 of 244 Changes in Net Position: 2019 2018 2017 2016 Operating Revenues Water Sales 29,819,532$ 32,082,152$ 29,326,565$ 27,820,638$ Sewer Revenues 2,528,020 2,330,809 2,099,947 1,849,114 Other Operating Revenues 1,014,691 831,733 1,033,608 2,665,835 Operating Expenses Variable Water Costs 13,327,860 15,028,131 12,710,857 10,470,181 Personnel Services 9,538,167 9,874,212 8,913,639 8,096,853 Supplies and Services 4,592,521 4,298,863 4,504,054 4,355,033 Depreciation 7,322,753 7,465,977 7,147,369 7,546,407 Operating Income/(Loss) (1,419,058) (1,422,489) (815,799) 1,867,113 Nonoperating Revenues (Expenses) Property Taxes 1,874,688 1,749,957 1,687,384 1,615,454 Investment Income 819,522 518,600 377,205 288,817 Interest Expense (1,350,616) (1,106,515) (1,552,896) (1,671,539) Bond Issuance Costs - - - - Other Nonoperating Revenues 1,014,495 413,465 645,562 872,420 Other Nonoperating Expenses (1,550,378) (89,021) (403,597) (7,273) Total Nonoperating Revenues (Expenses) 807,711 1,486,486 753,658 1,097,879 Net Income (Loss) Before (611,347) 63,997 (62,141) 2,964,992 Capital Contributions Extraordinary Items Capital Contributions 171,144 3,554,123 2,665,462 788,445 Special Items - (2,205,847) - - Extraordinary Items - - - - Changes in Net Position (440,203)$ 1,412,273$ 2,603,321$ 3,753,437$ Net Position by Component: Net investment in Capital Assets 152,297,398 154,271,627 154,273,025$ 153,776,247$ Restricted 2,063,965 352,063 1,222,452 1,572,527 Unrestricted 11,075,303 11,253,179 8,969,119 9,027,328 Total Net Assets 165,436,666$ 165,876,869$ 164,464,596$ 164,376,102$ Source: YLWD Audited Financial Statements (Continued) 78 Yorba Linda Water District Changes in Net Position Last Ten Fiscal Years Fiscal Year Page 183 of 244 2015 2014 2013 2012 2011 2010 26,446,618$ 28,376,082$ 26,369,940$ 24,998,673$ 22,686,251$ 21,806,164$ 1,775,676 1,762,816 1,762,039 1,785,804 1,274,579 1,275,980 1,461,106 1,047,625 723,577 848,238 1,035,545 1,102,143 12,733,762 14,673,144 13,509,336 12,275,853 11,268,306 10,688,318 7,778,763 7,529,481 7,225,729 6,979,088 6,902,995 6,677,757 3,806,900 3,849,183 4,222,398 3,811,125 3,686,333 3,576,147 7,432,586 7,315,084 6,884,213 6,595,720 5,279,860 5,153,891 (2,068,611) (2,180,369) (2,986,120) (2,029,071) (2,141,119) (1,911,826) 1,496,489 1,394,722 1,340,916 1,273,855 1,258,769 1,269,441 187,316 145,048 137,569 277,137 274,152 244,857 (1,683,039) (1,715,429) (1,781,416) (1,626,190) (1,172,503) (1,170,498) - - (192,410) - - - 744,572 1,325,685 588,854 805,654 739,062 589,201 (116,528) (47,948) (35,954) (108,984) (406,575) (151,300) 628,810 1,102,078 57,559 621,472 692,905 781,701 (1,439,801) (1,078,291) (2,928,561) (1,407,599) (1,448,214) (1,130,125) 705,848 2,128,579 1,174,673 17,214,138 706,319 6,278,135 - - - - - - - 5,000,000 - (5,000,000) - - (733,953)$ 6,050,288$ (1,753,888)$ 10,806,539$ (741,895)$ 5,148,010$ 157,092,210$ 161,159,541$ 161,494,158$ 161,672,565$ 146,235,362$ 146,877,122$ 189,314 - - 9,598,420 12,620,256 15,797,432 3,341,141 6,617,328 232,423 (6,228,771) (4,619,943) (7,696,984) 160,622,665$ 167,776,869$ 161,726,581$ 165,042,214$ 154,235,675$ 154,977,570$ 79 Fiscal Year Page 184 of 244 Fiscal Year Single Family Residential Multi-Family Residential Commercial/ Industrial Irrigation Direct Rate (Billing Unit) 2010 21,846 228 837 877 2.52 2011 21,701 231 833 879 2.52 2012 22,064 240 829 846 2.52 2013 22,480 158 908 933 2.52 2014 22,586 230 892 876 2.64 2015 22,649 230 898 876 2.70 2016 22,845 229 842 884 2.70 2017 22,991 232 845 902 2.70 2018 23,055 256 821 908 2.70 Total 2019 23,207 256 829 914 2.80 25,206 SFR % 92.07% Source: YLWD Billing System 80 Last Ten Fiscal Years Yorba Linda Water District Number of Connections Page 185 of 244 FY 2019 Customer Name Business Type Annual Revenues % of Total Revenues * 1 City of Yorba Linda Government 2,084,287$ 6.50% 2 Placentia Yorba Linda USD Government 334,319 1.04% 3 The Hills at Yorba Linda Homeowners' Assoc. 158,387 0.49% 4 Yorba Linda Villages Homeowner's Assoc. 140,154 0.44% 5 RRE Yorba Linda Holdings Manufacturer 125,752 0.39% 6 Aseptic Technology Manufacturing 121,520 0.38% 7 Fairmont Hill Coummunity Assoc Homeowners' Assoc. 114,915 0.36% 8 Lake Park Mobile Home Community Homeowner's Assoc. 103,295 0.32% 9 Amalfi Hills Community Assoc. Homeowner's Assoc. 79,724 0.25% 10 Woodgate Condominiums Homeowners' Assoc. 69,319 0.22% 3,331,673$ 10.40% FY 2015 Customer Name Business Type Annual Revenues % of Total Revenue 1 City of Yorba Linda Government 2,331,179 7.85% 2 Placentia-Yorba Linda USD Government 305,915 1.03% 3 Toll Brothers Manufacturer 131,157 0.44% 4 RRE Yorba Linda Holdings Manufacturer 130,572 0.44% 5 The Hills at Yorba Linda Homeowners' Assoc. 127,406 0.43% 7 Yorba Linda Villages Homeowners' Assoc. 120,873 0.41% 6 Fairmont Hill Coummunity Assoc Homeowners' Assoc. 109,828 0.37% 8 Lake Park Mobile Home Community Homeowners' Assoc. 77,327 0.26% 9 Aspetic Tech Manufacturer 65,020 0.22% 10 Woodgate Condominiums Homeowners' Assoc. 63,688 0.21% 3,462,966$ 11.67% NOTES: * Total "actual revenues" represents revenue generated from customer billings (water and sewer related) Source: YLWD Billing Department Yorba Linda Water District Ten Largest Customers Current and Five Years Ago 81 # Annual Revenues represents the listed customer's annual total billing for water and sewer services (including Base Service Charges) Page 186 of 244 Wells Certificates As a Share of Fiscal Fargo Bank of Per Per Personal Year Line of Credit Participation Debt Connection Capita Income 2010 -$ 44,065,104$ 44,065,104$ 1,848$ 616$ 1.47% 2011 - 43,189,117 43,189,117 1,827 588 1.35% 2012 - 42,278,129 42,278,129 1,764 565 1.25% 2013 1,171,131 42,009,722 43,180,853 1,802 584 1.25% 2014 4,642,656 40,970,599 45,613,255 1,858 610 1.32% 2015 5,994,099 39,886,475 45,880,574 1,861 584 1.27% 2016 6,883,720 38,767,354 45,651,074 1,841 577 1.25% 2017 - 41,758,033 41,758,033 1,672 525 1.14% 2018 - 40,262,056 40,262,056 1,612 499 1.11% 2019 - 38,866,080 38,866,080 1,542 482 1.04% Source: YLWD Audited Financial Statements Last Ten Fiscal Years Total 82 Yorba Linda Water District Ratio of Outstanding Debt Page 187 of 244 Debt Service Fiscal Operating &Net Coverage Year Revenues Maint. Costs Revenues Principal Interest Total Ratio 2010 24,417$ 19,928$ 4,489$ 825$ 1,951$ 2,776$ 1.62 2011 25,912 20,845 5,067 855 1,949 2,804 1.81 2012 27,818 21,950 5,868 890 1,915 2,805 2.09 2013 27,055 23,790 3,265 925 1,985 2,910 1.12 2014 29,309 24,853 4,456 965 1,813 2,778 1.60 2015 27,759 23,102 4,657 1,010 1,714 2,724 1.71 2016 30,417 21,611 8,806 1,045 1,777 2,822 3.12 2017 30,217 24,715 5,502 1,080 1,768 2,848 1.93 2018 32,845 27,723 5,122 1,240 1,509 2,749 1.86 2019 30,801 26,010 4,791 1,140 1,598 2,738 1.75 NOTE: O & M Costs exclude depreciation and debt service expenses. Source: YLWD Audited Financial Statements Yorba Linda Water District Debt Coverage Last Ten Fiscal Years 83 Page 188 of 244 Personal Income Year Population * City of YL Population Personal Income per Capita 2010 72,083 69,816 2,943,660,024$ 40,837$ 2011 71,520 70,681 2,993,957,236 41,862 2012 73,498 72,706 3,192,753,120 43,440 2013 74,861 65,777 3,374,570,547 45,078 2014 73,990 67,069 3,461,036,956 46,777 2015 74,787 67,826 3,451,134,500 46,146 2016 78,539 67,637 3,624,303,533 46,147 2017 79,170 67,890 3,654,487,200 46,160 2018 79,565 68,229 3,672,735,413 46,160 2019 80,606 69,121 3,633,462,895 45,077 Personal Income Year Population Unemployment Rate Personal Income per Capita 2010#^ 3,170,721 9.8% 150,467,328$ 47,455$ 2011#^ 3,192,916 8.7% 155,323,766 48,646 2012^ 3,182,171 7.9% 160,637,055 50,480 2013^ 3,055,792 8.5% 160,072,905 52,383 2014 3,081,804 6.2% 168,966,068 54,827 2015 3,113,991 5.4% 177,412,900 56,973 2016 3,132,681 4.6% 169,792,810 54,200 2017 3,194,024 3.7% 172,509,495 54,010 2018 3,221,103 3.3% 174,062,080 54,038 2019 3,222,498 2.2% 175,628,639 54,501 NOTES: ^ No personal income data available for County of Orange, used State of California data. # No population data available for County of Orange, used State of California data. Sources: City of Yorba Linda CAFR County of Orange CAFR State of California, Employment Development Department State of California, Department of Finance 84 County of Orange YLWD Yorba Linda Water District Demographics Last Ten Fiscal Years Page 189 of 244 2019* 2010+ Employer ^ Employees Employees Placentia Linda Hospital 475 0.027 % 441 0.023 % Costco Wholesale Corp. 315 0.018 % 276 0.014 % Vyaire Medical, Inc. (CareFusion) 305 0.017 % 389 0.020 % Nobel Biocare USA, Inc. 298 0.017 % 328 0.017 % City of Yorba Linda 204 0.012 % 194 0.010 % Office Solution 164 0.009 % 92 0.005 % Sprouts 163 0.009 % 110 0.006 % Emeritus at Yorba Linda 158 0.009 % 126 0.006 % Kohl's Inc. 110 0.006 % 158 0.008 % Sunrise Retirement Home 80 0.005 % 120 0.006 % Total 2,272 0.130 % 2,234 0.115 % NOTES: * Most current available data + Oldest available data ^ The Placentia- Yorba Linda Unified School District has 2,500 employees and serves the entire communities of Yorba Linda and Placentia, and also serves parts of the Cities of Brea, Anaheim and Fullerton. YLWD cannot provide the number of employees working within the boundaries of Yorba Linda. Source: City of Yorba Linda CAFR Yorba Linda Water District Ten Largest Employers Current and Nine Years Ago 85 % of Total % of Total Labor Force Labor Force Page 190 of 244 Fiscal Human Year Administration Communications Engineering Finance Resources IT Operations Total 2010 4.5 12.0 15.0 3.0 6.0 35.5 76.0 2011 5.5 11.0 14.0 3.0 7.0 37.0 77.5 2012 5.0 11.0 14.0 3.0 7.5 37.0 77.5 2013 5.0 11.0 14.0 4.5 7.5 37.0 79.0 2014 5.5 10.0 13.0 4.0 7.0 38.0 77.5 2015 7.0 10.0 13.0 4.0 5.0 38.0 77.0 2016 #8.0 10.0 13.0 6.0 5.0 40.0 82.0 2017 ##3.0 5.5 10.0 13.0 6.0 5.0 40.0 82.5 2018 4.0 1.0 10.0 14.0 6.0 5.0 40.0 80.0 2019 5.0 2.0 8.5 11.0 5.0 2.0 43.0 76.5 NOTE: * Number of employees in each department are authorized and funded positions. #Includes 3FTE temporary positions in relation to the SWRCB Emergency Mandate ##Includes 2 Limited-term FT and 1 Limited-term PT positions in relation to the SWRCB Emergency Mandate Source: YLWD Human Resources Department 86 Yorba Linda Water District Number of Employees Last Ten Fiscal Years Full Time Equivalent Employees by Department * Department Page 191 of 244 Fiscal Miles of Water Yearly Water Average Number of Year Mains Installed*Production (MG) Production (MGD) Field Service Calls 2010 9.72 6,569 18.0 1,640 2011 2.00 6,282 17.2 1,924 2012 2.02 6,780 18.6 1,693 2013 1.10 7,099 19.4 1,561 2014 0.77 7,329 20.1 1,579 2015 1.53 6,447 17.7 1,247 2016 2.86 4,408 12.1 1,873 2017 1.15 5,827 16.0 1,782 2018 1.50 6,643 18.2 1,681 2019 0.97 6,433 16.4 1,651 Fiscal Number of Capacity by Booster Number of Capacity by Year Booster Pumps Pump (GPM)Reservoirs Reservoir (MG) 2010 11 43,025 12 49 2011 12 46,525 14 57 2012 12 46,525 14 57 2013 12 46,525 14 57 2014 12 46,525 14 57 2015 12 52,025 14 57 2016 12 52,025 14 57 2017 12 52,025 14 57 2018 12 52,025 14 57 2019 12 56,125 14 57 MG - Millions of Gallons MGD - Millions of Gallons per Day GPM - Gallon per Minute NOTE: * Miles of Water Main estimated Sources: YLWD Asset Management Plan 2010 YLWD Operations Department 87 Yorba Linda Water District Operating and Capacity Indicators Last Ten Fiscal Years Page 192 of 244 2875 Michelle Drive, Suite 300 | Irvine, California 92606 | WNDECPA.com | 714.978.1300 1 Board of Directors Yorba Linda Water District Placentia, California We have audited the financial statements of the Yorba Linda Water District (the District) as of and for the year ended June 30, 2019, and have issued our report thereon dated September 13, 2019. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our planning communication letter to you dated May 17, 2019. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the District are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended June 30, 2019. We noted no transactions entered into by the District during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were as follows: a.Management’s estimate of the fair value of investments is based on quoted prices in active markets. When quoted prices in active markets are not available, fair values are based on evaluated prices received by the District’s asset manager from a third-party service provider. b.Management’s estimate of useful lives of depreciable capital assets is based on the length of time it is believed that those assets will provide some economic benefit in the future. c. The value of the capital assets received as a contribution from developers was based on the developer’s acquisition cost. Page 193 of 244 2 Significant Audit Findings (Continued) Qualitative Aspects of Accounting Practices (Continued) Sensitive Estimates (Continued) d. The annual required contributions, pension expense, net pension liability, and corresponding deferred outflows of resources and deferred inflows of resources for the District’s public defined benefit plans with CalPERS are based on an actuarial valuation provided by CalPERS. e.The actuarially determined contribution, OPEB expense, net OPEB liability, and corresponding deferred outflows of resources and deferred inflows of resources for the District’s OPEB plan are based on actuarial valuation provided by a third party. We evaluated key factors and assumptions used to develop these estimates in determining that they were reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were reported in Note 6 to the financial statements regarding the District’s Other Post-Employment Benefits Plan, and Note 7 regarding the pension plans. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. As a result of our audit-related test work, we proposed no corrections to the financial statements. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated September 13, 2019. Page 194 of 244 3 Significant Audit Findings (Continued) Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a second opinion on certain situations. If a consultation involves application of an accounting principle to the District’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the District’s auditors. However, these discussions occurred in the normal course of our professional relationship, and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, the schedule of changes in the net OPEB liability and related ratios, and the schedule of contributions - OPEB, which are Required Supplementary Information (RSI) that supplement the financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining schedules, the schedule of operating expenses by cost center and nature of expenses for water and sewer, and the schedule of capital assets, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Page 195 of 244 4 Restriction on Use This information is intended solely for the use of the Board of Directors and management of the Yorba Linda Water District and is not intended to be, and should not be, used by anyone other than these specified parties. Irvine, California September 13, 2019 Page 196 of 244 2875 Michelle Drive, Suite 300 | Irvine, California 92606 | WNDECPA.com | 714.978.1300 1 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Yorba Linda Water District Placentia, California We have audited, in accordance with the auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Yorba Linda Water District (the District) as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated September 13, 2019. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Page 197 of 244 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matter that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California September 13, 2019 Page 198 of 244 ITEM NO. 8.3. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Brett Barbre, Assistant General Manager Delia Lugo, Finance Manager Rosanne Weston, Engineering Manager SUBJECT:Debt Financing of Treatment Facilities RECOMMENDATION: That the Board of Directors: (1) defer adoption of the Debt Financing/Reimbursement Agreement for up to 6 months; (2) shift the proposed bond financing from FY21 to FY22 and adjusting the CIP projects accordingly; and (3) defer commencement of the new Water and Sewer Rate Study to FY21 for implementation of new rates effective January 2022. SUMMARY: Staff has been tasked with developing plans for the new Water and Sewer Rate Study, establishing an expanded 5-year Capital Improvement Plan (CIP), and evaluating various short-term funding options for the PFAS Treatment Facility and bond financing for CIP projects. BACKGROUND: With the expected requirement to build a PFAS Treatment Plant and Booster Pump Station, all but the most critical projects at the Yorba Linda Water District (YLWD) will be set aside or deferred until the completion and full integration of the new facilities into the YLWD water delivery system. With so many inter-related decisions yet to be made by entities outside of the Yorba Linda Water District, staff recommends the following prudent actions until such time as the items may be fully executed: 1. Defer the adoption of the Debt Financing/Reimbursement Agreement for up to 6 months; 2. Shift the proposed bond financing from FY21 to FY22 and adjust the CIP project schedule Page 199 of 244 accordingly; and 3. Defer the commencement of the new Water and Sewer Rate Study to FY21 for implementation of new rates effective January 2022. 1.Defer decision on adopting Debt Financing/Reimbursement Agreement In order to approve a short-term Debt Financing/Reimbursement Agreement, we will need to determine the type and costs associated with the PFAS treatment facility and booster pump station that we may be required to construct. In addition, we are still evaluating appropriate short-term financing instruments that will allow for reimbursement from an outside source and will allow early debt retirement without penalty. All of these decisions are contingent upon the decision from the Governor on PFAS Response Levels and from the Orange County Water District (OCWD) regarding their proposed reimbursement terms and schedule for our treatment plant. Once the Governor and OCWD make their decisions, we will bring to the Board a budget proposal for the treatment plant and booster pumping station, the reimbursement agreement with OCWD, a recommended financing proposal for the treatment plant, and the Debt Financing/Reimbursement Agreement. BOARD DECISIONS needed before moving forward: 1) Approve Treatment Plant type (GAC, IOX, R/O) and budget for Booster Pump Station at the Richfield Headquarters; 2) Approve short-term financing plan to allow maximum flexibility for the District during the construction of the PFAS treatment plant; 3) Approve Reimbursement Agreement with the Orange County Water District. 4) Approve the Debt Financing/Reimbursement Agreement for the short term financing plan. 2.Shift the Bond Financing for the CIP Project List Out One Fiscal Year The YLWD staff has prepared a 5-year CIP for FY20 to FY24. Staff separated the CIP into 5 categories of projects: Public Health & Safety, Regulatory, Emergency Preparedness, Repair and Replacement, and System Upgrades. With the expected requirement to construct a PFAS treatment facility in FY21, it seems prudent to shift the Bond Financed portion of the CIP Project List out to FY22 from FY21. The construction and implementation of the PFAS Plant and Booster Pump Station will be an “all hands” effort from our Operations and Engineering departments. It would not Page 200 of 244 be prudent to begin the Bond Financing for the increased CIP project list until after construction has been completed on the treatment facility since we are required to expend 85% of the bond proceeds on capital projects within a three-year time period. We plan to bring to the Board on-call professional services contracts for project management, planning, design and construction management to ensure we meet all timetables and deadlines necessary to fulfill the critical CIP and PFAS Treatment Plant & Booster Pump Station projects. This is in lieu of adding staff to complete these ambitious projects. There are still a number of Pay-Go Financed projects that we deem to be critical and that must be accomplished in FY20 and FY21, even as we plan for and execute the construction and implementation of a PFAS Treatment Plant and Booster Pump Station. BOARD DECISIONS needed before moving forward: 1. Approve on-call professional services contracts for project management, planning, design and construction management; 2. Approve Debt Financing/Reimbursement Agreement for Bond Financing plan; 3. Approve updated 5-year CIP plan to include PAY-GO and Capital Financing; 4. Approve bond financing plan to go to market to fund CIP projects in FY22 to FY24; 3.Defer the commencement of the Water and Sewer Rate Study to FY21 In order to move forward with an accurate and useful Water and Sewer Rate Study, we must first ascertain our financial needs in the five years covered by the study. There are numerous decisions that will have an impact on YLWD moving forward and once again, all of the decisions are from outside entities that will have an enormous impact on our decision making process. Rushing the rate study will exacerbate and magnify potential mistakes and we are not interested wide variations of budgets which create systemic deficits or surpluses. Currently we are hampered by the ability to add “pass through” costs to our commodity rate. However, counsel to the District has opined that we do have the ability to “unbundle” the fixed rate should we need to call out specific treatment or capital charges on our bills. The metrics of the District are currently strong but moving forward, we are uncertain of the impacts a revolving or other short term financing will have on our Days-in-Cash and Bond Coverage ratios. We do not know what the ultimate costs may be for the PFAS Treatment Facility and Booster Pump Station. We also do not know how the state intends to implement water use budgets. Finally, if we are required to shift to 100% imported water due to changing Response Levels; we will have short term financing Page 201 of 244 options available until such time as the new treatment facility is fully integrated and online. BOARD DECISIONS needed before moving forward: 1. Approve financing options and construction costs for PFAS Treatment Facility and Booster Pump Station; 2. Approve updated 5-year CIP plan to include PAY-GO and Capital Financing; 3. Approve budget and potential rate/revenue requirements to maintain AA Fitch rating. ATTACHMENTS: 1.Draft 5-Year CIP Funding Source Chart Page 202 of 244 YLWD SHIFTING PRIORITIES FY20-FY24 (DRAFT 10/1/19) FY20 FY21 FY22 FY23 FY24 TOTAL Pay-Go Water Projects $ 2,592,998 $ 3,471,575 $ 165,000 $ 165,000 $ 165,000 $ 6,559,573 Debt-Funded Water Projects $ - $ - $ 8,470,000 $ 8,140,000 $ 3,300,000 $ 19,910,000 Pay-Go Sewer Projects $ 935,000 $ 825,000 $ 935,000 $ 935,000 $ 935,000 $ 4,565,000 Water Pay-Go Vehicle & Capital Equipment $ 820,640 $ 765,296 $ 484,235 $ 557,235 $ 600,000 $ 3,227,406 Sewer Pay-Go Vehicle & Capital Equipment $ 314,045 $ - $ 475,000 $ - $ - $ 789,045 PFAS Treatment (OCWD Funded) $ - $ 20,000,000 $ - $ - $ - $ 20,000,000 Backup Emergency Generators (Alternative Funding) $ - $ - $ 1,500,000 $ - $ - $ 1,500,000 Stonehaven Pipeline (Developer Funded) $ 428,080 $ - $ - $ - $ - $ 428,080 Hidden Hills BPS Upgrade (Developer Funded) $ 429,659 $ 429,659 $ - $ - $ - $ 859,318 TOTAL 5,520,422$ 25,491,530$ 12,029,235$ 9,797,235$ 5,000,000$ 57,838,422$ Conclusion: Due to the anticipated construction of the PFAS Treatment Plant during FY21, YLWD is deferring some CIP projects to the following fiscal year. As shown above, YLWD will continue to have approximately $5.5M worth of CIP in FY21 and $12M CIP in FY22. In order to accomplish the CIP projects in addition to the PFAS Treatment Plant, YLWD will need to secure an on-call professional services contract for project, design, and construction management. This contract will be in lieu of hiring additional staff. Note: Budget amounts are 2019 dollars and do not include escalation. These are planning level budgets. Cost estimates for all projects will be updated following preparation of design documents, and/or receipt of construction bids. $2,592,998 $3,471,575 $165,000 $165,000 $165,000 $8,470,000 $8,140,000 $3,300,000 $935,000 $825,000 $935,000 $935,000 $935,000 $820,640 $765,296 $484,235 $557,235 $600,000 $314,045 $475,000 $20,000,000 $1,500,000 $428,080 $429,659 $429,659 $5,520,422 $25,491,530 $12,029,235 $9,797,235 $5,000,000 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 FY20 FY21 FY22 FY23 FY24 YLWD SHIFTING PRIORITIES (FY20 - FY24) DRAFT 10/1/19 Pay-Go Water Projects Debt-Funded Water Projects Pay-Go Sewer Projects Water Pay-Go Vehicle & Capital Equipment Sewer Pay-Go Vehicle & Capital Equipment PFAS Treatment (OCWD Funded) Backup Emergency Generators (Alternative Funding)Stonehaven Pipeline (Developer Funded)Hidden Hills BPS Upgrade (Developer Funded) Page 203 of 244 ITEM NO. 9.1. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Rosanne Weston, Engineering Manager SUBJECT:Status of Engineering Activities SUMMARY: Staff will present a report on the status of Engineering departmental activities. ATTACHMENTS: 1.Engineering Activity Report Page 204 of 244 PONO i Yorba Linda Water District Status of Engineering Activities 10/08/2019 Presented by: Rosanne Weston, PE*, PMP Engineering Manager *PE Florida and Georgia 10/08/19 `'F �� '�orbanek�dV < -= — � Page 244 Fairmont Booster i • f� 10/08/19 —'S;ba�rid&Z Page244 Highland Pressure Regulating Station r F Existing Highland a Reservoir •Station r `' • Booster Pump • • • • do-Vv � - Highland Pressure Regulating Station Existing Reservoir Existing Cell Tower Existing Booster ' Pump Station ' t Proposed Pressure Regulating Station _ Ar 10/19 �� `�orba Cnd�-1N Page 2A 244 �. C AttributesAWWA Free Water Audit Software: WAS v5.0 Water Works Association. Svswm -r • .. n , Water Audit Report for: Yorba Linda Water District Reporting Year: FY18-19 11 712018-612019 ***YOUR WATER AUDIT DATA VALIDITY SCORE IS: 71 out of 100*** Svstem Attributes: Apparent Losses: 227.018 acre-ft/yr + Real Losses: 1,073.17 acre-ft/yr - Water Losses: 1,300.193 acre-ft/yr Unavoidable Annual Real Losses(UARL): 517.96acre-ft/yr Annual cost of Apparent Losses: ` Annual cost of Real Losses: $808 949 Valued at Variable Production Cost Return to Reporting Worksheet to change this assumpiton Performance Indicators: Non-revenue water as percent by volume of Water Supplied: 7.4%] Financial: Non-revenue water as percent by cost of operating system: 4.2%1 Real Losses valued at Variable Production Cost Apparent Losses per service connection per day: 8.041gallons/connection/day Real Losses per service connection per day: 38.01 gallons/connection/day Operational Efficiency: Real Losses per length of main per day*. N/A Real Losses per service connection per day per psi pressure: 0.47 gallons/connection/day/psi From Above, Real Losses= Current Annual Real Losses(CARL): 1,073.18jacre-feeYyear IM Infrastructure Leakage Index(ILI) [CARL/UARL]: I 2.071 Page 209 of 244 *This performance indicator applies for systems with a low service connection density of less than 32 service connections/mile of pipeline Ire Miscellaneous Engineering Activities • 2019 Sewer Main A CIPP Rehabilitation J6 • On -Call Professional = Services Contracts RFP Hidden Hills Booster Pump Station Design 10/08/19 y�_� —'n;ba uric / ti Pae 42 4� — g 1 -fit nil !ti a� e — Aw i Well 23 Lease Negotiations R - 6 .40 A-Vring. Ip . - s `• 1 M. Well 21 1 f o - 2 ^fir: �e�d:`k,E:�?s�:.-';�':^:,;r':`<:;•-. �+ Huckleberry Basin _ f £`.•�L ,� '� F.••."fix .¢ si.. � �� _i Wo � l _ � � .. . . y a.',"�.,.w '?`•:r.'�:t�-::'�.�s, ;'� "COfrOd[B8SY1- — La Palma AveIle - z T PR6F1[� F5A51 lYIFlT=>*S ,��+-qa�33 : Well 11 d� PRC]P(7SEL} ,Weil�Q WELL x fy - .� Pip 4*1f Yorba Linda Arts Center and Library �.'"'� ui�-■yin � � I � i. �� .�,Fr"",I I,"a1�6l eYY��I•a� � � �� _` _��g.. ._. � +— � iI,I}`Jy! I +I VII �III{III — #G 7 �� • 2A244 i�a�.,� �•a,� i1 ' } l I 1* i 1 } 1 4 1 PFASIssues • 2nd Quarter PFAS Sampling Results • PFAS Inquiries from .� Customers yy 10/08/19 a L Pa 9~4'df 42 4� ' --� 9 PFAS Treatment Facility • OCWD Proposed Funding Recommendations — 100% Capital Cost — Up to 50% 0&M Cost • OCWD PFAS Treatment Systems Planning Study 10/08/19 ''ecu baintdl/ y `�' Page 42 4� _- . OCWD PFAS Bench and Pilot-Scale Testing U? "1 ,". 1 Media • • • / I i • . • • FILTRASORB 400 (F400) Bituminous GAC (Virgin) . • • FILTRASORB 400 (F400) Bituminous GAC (Reactivated) . • • F600 Bituminous GAC . • • Norit GAC400 Bituminous GAC . • • Norit Darco Lignite-Based • • AquaCarb° 1240 Bituminous GAC • • AquaCarb° 1230CX Enhanced Coconut Shell GAC • –a&— U".0 Purofine PFA694E Single Use IMM CalRes 2301 Single Use ff • •R PSR2+ Single Use FNM Sorbix LC4 Single Use NOVEL • • Fluoro-Sorb° Modified Zeolite ^�16t � .n 10/08/19 u 'a�orba�rid•a- VZ ti `�'• Page 241244 � ' --, ITEM NO. 9.2. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Delia Lugo, Finance Manager Kelly McCann, Senior Accountant SUBJECT:Budget to Actual Reports for Month Ending August 31, 2019 BACKGROUND: For the month-ending August 31, 2019, staff is presenting Budget to Actual Reports for the District as a whole, as well as the individual water and sewer funds. Cumulative Volumetric Water Revenue, as reported through the month ending August 31, 2019, reflects an average decrease of 9.94% as compared to the prior year for the same reporting period. Commercial customer connections have the lowest decrease in consumption sales of 13.20% as compared to reported results from the prior year. Total Variable Costs results, as reported through the month ending August 31, 2019, reflect a 7.29% decrease when compared to prior year for the same reporting period. The decrease in costs is predominantly reflective of the decrease in total water demand, which as reported, is 8.07% below the reported results from the prior year ATTACHMENTS: 1.August 2019 Financial Reports & Graphs Page 217 of 244 FY20 Annual Budget YTD Actuals thru August 2019 YTD % of Budget Water Revenue (Residential)16,548,758$ 3,241,601$ 19.59% Water Revenue (Commercial & Fire Det.)1,872,073 329,259 17.59% Water Revenue (Landscape/Irrigation)3,917,982 858,054 21.90% Service Charges 10,988,263 1,759,999 16.02% Other Operating Revenue 902,996 168,355 18.64% Total Operating Revenue 34,230,072 6,357,268 18.57% Revenue (Non-Operating): Interest 698,777 63,439 9.08% Property Taxes 1,820,471 2,294 0.13% Other Non-Operating Revenue 608,430 160,631 26.40% Total Non-Operating Revenue 3,127,678 226,364 7.24% Total Revenue 37,357,750$ 6,583,632$ 17.62% Expenses (Operating): Variable Water Costs (G.W., Import & Power) Water-Related Costs 12,485,582$ 2,761,684$ 22.12% Fixed Costs 1,179,009 109,168 9.26% Power-Related Costs 1,446,219 282,638 19.54% Variable Water Costs Related Expenses Total 15,110,810 3,153,490 20.87% Salary Related Expenses 10,753,255 1,232,002 11.46% Reduction for Capital Project Labor (225,000) (29,437) 13.08% Salary Related Expenses Total 10,528,255 1,202,565 11.42% Supplies & Services Communications 228,183 24,915 10.92% Contractual Services 496,717 68,721 13.84% Data Processing 324,069 34,000 10.49% Dues & Memberships 78,862 19,000 24.09% Fees & Permits 290,271 25,834 8.90% Board Election - - 0.00% Insurance 304,468 42,453 13.94% Materials 948,195 134,889 14.23% District Activities, Emp Recognition 43,371 2,537 5.85% Maintenance 565,165 101,598 17.98% Non-Capital Equipment 170,778 26,976 15.80% Office Expense 33,950 8,494 25.02% Professional Services 585,971 81,553 13.92% Training 78,301 2,937 3.75% Travel & Conferences 126,278 7,973 6.31% Uncollectible Accounts 4,185 (141) -3.37% Utilities 179,258 32,347 18.04% Vehicle Expenses 335,600 52,127 15.53% Supplies & Services Sub-Total 4,793,620 666,213 13.90% Total Operating Expenses 30,432,685 5,022,268 16.50% Expenses (Non-Operating) Other Expense 13,520 (1,303) -9.64% Total Non-Operating Expenses 13,520 (1,303) -9.64% Total Expenses 30,446,205$ 5,020,965$ 16.49% Net Revenues 6,911,545 1,562,667 22.61% Less: Debt Service (Principal & Interest)2,726,956 - 0.00% Less: Committed Capital Expenditures (PayGo)3,204,425 160,808 5.02% Transfer to/(from) Reserves 980,164 1,401,859 143.02% Net Total -$ 0$ Yorba Linda Water District Water Enterprise FY20 ProForma - Use of Funds August 2019 Page 218 of 244 Yorba Linda Water District Summary Financial Report Water & Sewer Funds For Period Ending August 31, 2019 Annual YTD Aug YTD YTD Actual Prior Year Prior Year YTD Actual YTD Actual Budget Budget Actual Actual (Under) Over Aug Actual Actual (thru vs vs FY20 FY20 FY20 FY20 YTD Budget FY19 Aug 2019)PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$16,548,758 $3,748,294 $1,887,261 3,241,601$ (506,693)$ $1,969,424 $3,398,118 (156,517)-4.61% Water Revenue (Commercial & Fire Det.)1,872,073 424,025 188,059 329,259 (94,766)213,186 379,312 (50,053)-13.20% Water Revenue (Landscape/Irrigation)3,917,982 887,423 508,099 858,054 (29,369)578,786 975,170 (117,116)-12.01% Water Revenue (Service Charge)10,988,263 1,831,377 919,104 1,759,999 (71,378)835,840 1,670,575 89,424 5.35% Sewer Charge Revenue 2,421,665 403,611 207,105 393,636 (9,975)192,731 365,702 27,934 7.64% Locke Ranch Assessments 324,173 73,425 - - (73,425) 42 42 (42) 0.00% Other Operating Revenue 964,708 160,785 107,834 202,683 41,898 109,140 206,289 (3,606)-1.75% Total Operating Revenue:37,037,622 7,528,939 3,817,462 6,785,232 (743,707)3,899,149 6,995,208 (209,976) -3.00% Revenue (Non-Operating): Interest 812,306 135,384 35,830 73,566 (61,818)41,531 85,108 (11,542)-13.56% Property Tax 1,820,471 - 2,294 2,294 2,294 1,921 1,921 373 0.00% Other Non-Operating Revenue 632,909 105,485 145,789 175,936 70,451 86,555 134,122 41,814 31.18% Total Non-Operating Revenue:3,265,685 240,869 183,913 251,796 10,927 130,007 221,151 30,645 13.86% Total Revenue 40,303,307 7,769,808 4,001,375 7,037,028 (732,780)4,029,156 7,216,359 (179,331) -2.49% Expenses (Operating): Variable Water Costs (G.W., Import & Power)15,110,810 3,422,598 1,492,928 3,153,490 (269,109)1,729,514 3,401,315 (247,825)-7.29% Salary Related Expenses 11,664,922 1,385,516 766,697 1,361,112 (24,404)722,510 1,300,619 60,493 4.65% Supplies & Services 5,419,301 770,717 409,737 717,780 (52,937)331,035 647,230 70,550 10.90% Total Operating Expenses 32,195,033 5,578,831 2,669,362 5,232,382 (346,450)2,783,059 5,349,164 (116,782)-2.18% Expenses (Non-Operating): Interest on Long Term Debt 1,303,967 217,328 111,601 223,203 5,876 115,401 230,803 (7,600) -3.29% Other Expense 13,520 2,253 15,975 9,643 7,390 4,371 4,600 5,043 109.63% Total Non-Operating Expenses:1,317,488 219,581 127,577 232,847 13,265 119,772 235,403 (2,557) -1.09% Total Expenses 33,512,521 5,798,413 2,796,939 5,465,229 (333,184)2,902,831 5,584,567 (119,339)-2.14% Net Position Before Capital Contributions 6,790,787 1,971,395 1,204,436 1,571,799 (399,596)1,126,325 1,631,792 (59,993) -3.68% Special Item - - - - - - Capital Contributions (Non-Cash - - 762 762 762 930 2,320 (1,558) 0.00% Transaction GASB 34 Compliant)- - 0 Net Position Before Depreciation 6,790,787 1,971,395 1,205,198 1,572,561 (398,834)1,127,255 1,634,112 (61,551)-3.77% Depreciation & Amortization 7,720,659 1,286,777 612,042 1,224,084 (62,693) 625,262 1,250,524 (26,440) -2.11% Total Net Position ($929,872)$684,619 593,156 348,477 ($336,141)$501,993 $383,588 ($35,111)-9.15% (295,000) (49,167) (22,099)(31,136) (31,136) (30,802) (50,236) 19,100 -38.02% (With August 31, 2018 for comparison purposes) Page 219 of 244 Annual YTD Aug YTD YTD Actual Prior Year Prior YTD YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over Aug Actual Actual (thru vs vs FY20 FY20 FY20 FY20 YTD Budget FY19 Aug 2019) PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)16,548,758$ $3,748,294 1,887,261$ 3,241,601$ (506,693)$ 1,969,424$ 3,398,118$ (156,517)$ -4.61% Water Revenue (Commercial & Fire Det.)1,872,073 424,025 188,059 329,259 (94,766) 213,186 379,312 (50,053) -13.20% Water Revenue (Landscape/Irrigation)3,917,982 887,423 508,099 858,054 (29,369) 578,786 975,170 (117,116) -12.01% Water Revenue (Service Charge)10,988,263 1,831,377 919,104 1,759,999 (71,378) 835,840 1,670,575 89,424 5.35% Other Operating Revenue 902,996 150,499 86,372 168,355 17,856 91,302 176,844 (8,489) -4.80% Total Operating Revenue:34,230,072 7,041,618 3,588,895 6,357,268 (684,350) 3,688,538 6,600,019 (242,751) -3.68% Revenue (Non-Operating): Interest 698,777 116,463 30,621 63,439 (53,024) 37,312 76,298 (12,859) -16.85% Property Tax 1,820,471 0 2,294 2,294 2,294 1,921 1,921 373 0.00% Other Non-Operating Revenue 608,430 101,405 133,934 160,631 59,226 82,168 117,561 43,070 36.64% Total Non-Operating Revenue:3,127,678 217,868 166,849 226,364 8,496 121,401 195,780 30,584 15.62% Total Revenue 37,357,750 7,259,485 3,755,744 6,583,632 (675,853) 3,809,939 6,795,799 (212,167) -3.12% Expenses (Operating): Variable Water Costs (G.W., Import & Power)15,110,810 3,422,598 1,492,928 3,153,490 (269,109) 1,729,514 3,401,315 (247,825) -7.29% Salary Related Expenses 10,528,255 1,219,750 667,074 1,202,565 (17,185) 656,842 1,183,672 18,893 1.60% Supplies & Services: Communications 228,183 28,031 5,553 24,915 (3,116) 35,472 57,264 (32,349) -56.49% Contractual Services 496,717 72,786 34,175 68,721 (4,065) 25,858 50,833 17,889 35.19% Data Processing 324,069 39,012 14,396 34,000 (5,012) 21,103 40,981 (6,981) -17.03% Dues & Memberships 78,862 13,144 15,648 19,000 5,856 148 26,662 (7,662) -28.74% Fees & Permits 290,271 30,879 16,388 25,834 (5,045) 12,359 23,784 2,050 8.62% Board Election - - - - - - - - 0.00% Insurance 304,468 50,745 19,268 42,453 (8,292) 21,721 44,232 (1,779) -4.02% Materials 948,195 138,033 70,681 134,889 (3,144) 81,341 146,736 (11,847) -8.07% District Activities, Emp Recognition 43,371 7,229 1,983 2,537 (4,692) 1,246 3,325 (788) -23.70% Maintenance 565,165 99,194 72,147 101,598 2,404 5,662 33,655 67,943 201.88% Non-Capital Equipment 170,778 28,463 21,928 26,976 (1,487) 35,650 42,542 (15,566) -36.59% Office Expense 33,950 5,658 2,419 8,494 2,836 1,621 5,249 3,245 61.81% Professional Services 585,971 87,662 50,319 81,553 (6,109) 27,392 36,437 45,116 123.82% Training 78,301 3,050 2,425 2,937 (113) 457 4,623 (1,686) -36.47% Travel & Conferences 126,278 11,046 5,219 7,973 (3,073) 3,187 10,089 (2,116) -20.97% Uncollectible Accounts 4,185 697 (28) (141) (838) (197) (567) 426 -75.12% Utilities 179,258 29,876 17,040 32,347 2,471 17,848 37,080 (4,733) -12.76% Vehicle Equipment 335,600 55,933 25,121 52,127 (3,806) 23,022 47,440 4,687 9.88% Supplies & Services Sub-Total 4,793,620 701,437 374,682 666,213 (35,224) 313,890 610,365 55,848 9.15% Total Operating Expenses 30,432,685 5,343,786 2,534,684 5,022,268 (321,518) 2,700,246 5,195,352 (173,084) -3.33% Expenses (Non-Operating): Interest on Long Term Debt 1,303,967 217,328 111,601 223,203 5,875 115,401 230,803 (7,600) -3.29% Other Expense 13,520 2,253 5,030 (1,303) (3,556) 1,846 2,075 (3,378) -162.80% Total Non-Operating Expenses:1,317,487 219,581 116,631 221,900 2,319 117,247 232,878 (10,978) -4.71% Total Expenses 31,750,172 5,563,367 2,651,315 5,244,168 (319,199) 2,817,493 5,428,230 (184,062) -3.39% Net Position Before Capital Contributions 5,607,578 1,696,119 1,104,429 1,339,464 (356,654) 992,446 1,367,569 (28,105) -2.06% Special Item - - - - - - - - - Capital Contributions (Non-Cash Transaction -- - - - - - - - - GASB 34 Compliant) Net Position Before Depreciation 5,607,578 1,696,119 1,104,429 1,339,464 (356,654) 992,446 1,367,569 (28,105) -2.06% Depreciation & Amortization 6,289,903 1,048,317 497,190 994,380 (53,937) 510,767 1,021,534 (27,154) -2.66% Total Net Position (682,325)$ 647,802$ 607,239$ 345,084 (302,717)$ 481,679$ 346,035$ (951)$ -0.27% Capital - Direct Labor (225,000) (37,500)(21,694) (29,437) 8,063 (23,400) (39,800) 10,363 -26.04% Yorba Linda Water District Water Fund For Period Ending August 31, 2019 (With August 31, 2018 for comparison purposes) Page 220 of 244 $5,033,261 $5,719,033 $6,588,703 $6,795,799 $6,583,632 -3.12% $4,348,152 $5,308,823 $4,861,431 $5,428,230 $5,244,168 -3.39% $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 Aug. 2015 Aug. 2016 Aug. 2017 Aug. 2018 Aug. 2019 Water Revenues & Expenses -August (excludes Depreciation, Special Items, and Contributed Capital ) Total Revenue Total Expenses Page 221 of 244 Annual YTD Aug YTD YTD Actual Prior Year Prior Year YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over Aug Actual Actual (thru vs vs FY20 FY20 FY20 FY20 YTD Budget FY19 Aug 2019)PY Actual $PY Actual % Revenue (Operating): Sewer Charge Revenue $2,421,665 $403,611 $207,105 393,636$ ($9,975)$192,731 $365,702 $27,934 7.64% Locke Ranch Assessments 324,173 73,425 - -$ (73,425) 42 42 (42) 0.00% Other Operating Revenue 61,712 10,285 21,462 34,327$ 24,042 17,838 29,445 4,882 16.58% Total Operating Revenue:2,807,550 487,321 228,567 427,963$ (59,358)210,611 395,189 32,774 8.29% Revenue (Non-Operating): Interest 113,528 18,921 5,209 10,127$ (8,794)4,219 8,811 1,316 14.94% Other Non-Operating Revenue 24,480 4,080 11,855 15,305$ 11,225 4,387 16,561 (1,256)-7.58% Total Non-Operating Revenue:138,008 23,001 17,064 25,432$ 2,431 8,606 25,372 60 0.24% Total Revenue 2,945,558 510,323 245,631 453,395$ (56,928)219,217 420,561 32,834 7.81% Expenses (Operating): Salary Related Expenses 1,136,668 165,766 99,623 158,546 (7,220)65,668 116,948 41,598 35.57% Supplies & Services: Communications 13,412 2,235 410 1,867 (368)557 2,197 (330)-15.03% Contractual Services 30,764 5,127 2,500 4,567 (560)1,298 2,677 1,890 70.58% Data Processing 21,382 3,564 860 1,824 (1,740)1,147 2,355 (531)-22.55% Dues & Memberships 5,928 988 1,178 1,430 442 11 2,007 (577)-28.75% Fees & Permits 15,509 2,585 1,110 1,363 (1,222)804 991 372 37.57% Board Election - - - - - - 0 0.00% Insurance 22,917 3,820 1,450 3,195 (625)1,635 3,329 (134)-4.03% Materials 65,206 5,868 3,649 3,819 (2,049)1,916 8,485 (4,666)-54.99% District Activities, Emp Recognition 3,264 544 149 191 (353)94 250 (59)-23.60% Maintenance 171,135 18,523 13,883 13,904 (4,619)- 13,904 0.00% Non-Capital Equipment 39,542 6,590 1,259 1,454 (5,136)3,931 4,336 (2,882)-66.47% Office Expense 2,555 426 182 613 187 122 395 218 55.19% Professional Services 156,229 6,038 2,503 3,844 (2,194)1,865 2,556 1,288 50.41% Training 8,569 1,428 736 845 (583)13 283 562 199.01% Travel & Conferences 14,362 2,394 963 1,093 (1,301)240 731 362 49.52% Uncollectible Accounts 315 52 (13) (37) (89)(21) (116) 79 -68.10% Utilities 13,493 2,249 1,283 2,435 186 1,429 2,944 (509)-17.30% Vehicle Equipment 41,100 6,850 2,955 9,159 2,309 2,103 3,447 5,712 165.72% Supplies & Services Sub-Total 625,681 69,280 35,057 51,566 (17,714) 17,145 36,867 14,699 39.87% Total Operating Expenses 1,762,349 235,046 134,680 210,112 (24,934) 82,813 153,815 56,297 36.60% Expenses (Non-Operating): Interest Expense - - - - - - - - - Other Expense - - 10,946 10,946 10,946 2,525 2,525 8,421 - Total Non-Operating Expenses:- - 10,946 10,946 10,946 2,525 2,525 8,421 0.00% Total Expenses 1,762,349 235,046 145,626 221,058 (13,988) 85,338 156,340 64,718 41.40% Net Position Before Capital Contributions 1,183,209 275,277 100,005 232,337 (42,940)133,879 264,221 (31,884) -12.07% Capital Contributions (Non-Cash Transaction -- - 762 762 762 930 2,320 (1,558) -67.16% GASB 34 Compliant) Net Position Before Depreciation 1,183,209 275,277 100,767 233,099 (42,178) 134,809 266,541 (33,442) -12.55% Depreciation & Amortization 1,430,756 238,459 114,852 229,704 (8,755)114,495 228,990 714 0.31% Total Net Position (247,547) 36,817 (14,085) 3,395 (33,422) 20,314 37,551 (34,156) -90.96% Capital - Direct Labor (70,000)(11,667) (404) (1,699)9,968 (7,402) (10,436)8,737 -83.72% Yorba Linda Water District Sewer Fund For Period Ending August 31, 2019 (With August 31, 2018 for comparison purposes) Page 222 of 244 $290,353 $313,946 $359,186 $420,561 $453,395 7.81% $197,783 $223,319 $220,720 $156,340 $221,058 41.40% $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 Aug. 2015 Aug. 2016 Aug. 2017 Aug. 2018 Aug. 2019 Sewer Revenues & Expenses -August (excludes Depreciation, Special Items, and Contributed Capital) Total Revenue Total Expenses Page 223 of 244 $849,371 $1,824,613 $1,666,730 $1,670,575 1,759,999 $316,823 $323,322 $392,268 $379,312 329,260 $578,612 $734,546 $907,022 $975,170 858,054 $2,455,507 $2,602,968 $3,297,266 $3,398,118 $3,241,601 $4,200,313 $5,485,449 $6,263,286 $6,423,175 -3.65% decrease compared to FY19 $6,188,914 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 FY16 FY17 FY18 FY19 FY20 Water Revenue Comparison by Fiscal Year Water Revenue (Service Charge) Water Revenue (Commercial & Fire Det.) Water Revenue (Landscape/Irrigation) Water Revenue (Residential)Total Page 224 of 244 1,310,853 1,388,016 1,284,700 1,135,165 981,755 1,069,354 1,460,113 1,505,340 1,358,893 1,340,186 1,143,948 1,518,953 1,671,801 1,729,514 1,512,043 1,307,477 981,384 1,019,234 1,660,561 1,492,928 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 Jul Aug Sept Oct Nov Dec Variable Costs Analysis FY17 Var Costs FY18 Var Costs FY19 Var Costs FY20 Var Costs Page 225 of 244 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 JULY AUGUST 55,561 58,238 56,992 61,680 49,466 51,254 63,184 80,884 74,233 63,745 119,268 136,162 131,653 154,349 136,153 80,846 154,590 207,053 220,117 183,783 CONSUMPTION BY UNITS CCF Residential Commercial Landscape Page 226 of 244 ITEM NO. 9.3. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Delia Lugo, Finance Manager Kelly McCann, Senior Accountant SUBJECT:Cash and Investment Report for Period Ending August 31, 2019 SUMMARY: Government Code Section 530607, et. seq., requires the person delegated to invest funds to make monthly report of investments to the legislative body. BACKGROUND: The Cash & Investment Portfolio Report presents the market value and percent yield for all District investments by institution. The Cash & Investment Summary Report includes budget and actual interest and average term portfolio information as well as market value broken out by reserve categories. The Fair Value Measurement Report categorizes investments with the fair value hierarchy established by generally accepted accounting principles. The Unrestricted Reserves and Days in Cash Graph presents Water Unrestricted Reserve Balances and Days in Cash at a particular point in time for the last four years. The average portfolio yield for the month ending August 31, 2019 is 2.07%. The District's Total Cash and Investment balance at August 31, 2019 resulted in an overall increase in the investment balance from the previous month is approximately $918,547. A larger balance includes an increase in the Water Operating Fund of $960,415 due to the positive net effect between operating revenues and expenses through the reporting month of the fiscal year. ATTACHMENTS: 1.Cash and Investment Report August 2019 Page 227 of 244 Market %Date of Percent Value Par of Total Institution Maturity Yield Checking Account: 461,587$ 461,587$ Wells Fargo Bank 461,587$ 461,587$ 1.25%Total 0.00% Money Market Accounts: 253$ 253$ US Bank (Revenue Bonds)1.92% 3,101,339 3,101,508 US Bank (Money Market)1.87% 1,970,247 1,970,247 Public Agency Retirement Svcs. (PARS) 5,071,839$ 5,072,008$ 13.78%Total 1.87% Certificates of Deposits: 248,176 249,000 Comenity Cap Bk Salt Lake City 06/30/21 1.66% 246,939 248,000 EnerBank USA Salt Lake City 08/26/20 1.31% 179,068 180,000 HSBC BK USA, NA MC Clean CTF 08/31/21 1.26% 247,058 248,000 Wells Fargo Bank NA Sioux Falls D 08/31/21 1.61% 249,339 247,000 PrivateBank & Tr Chicago Ill CTF 03/30/22 2.18% 249,120 249,000 JP Morgan Chase Bk NA Columbus 03/31/22 2.45% 246,833 245,000 Goldman Sachs Bank 06/28/21 2.18% 246,833 245,000 Morgan Stanley Private Bank 06/28/21 2.18% 247,448 245,000 Capital One Bank USA 06/27/22 2.18% 247,448 245,000 Capital One Bank NA 06/27/22 2.18% 247,783 245,000 Ally Bank 06/27/22 2.22% 247,783 245,000 Sallie Mae Bank 06/27/22 2.22% 249,008 245,000 Synchrony 05/17/22 2.41% 249,751 245,000 Morgan Stanley Bank NA 06/13/22 2.50% 245,473 245,000 Silvergate Bank 06/28/24 2.45% 245,294 245,000 First Choice Bank 06/28/24 2.00% 3,893,350$ 3,871,000$ 10.58%Total 2.07% Federal Agency Bonds: 1,000,100 1,000,000 FHLMC 12/24/20 2.20% 1,000,120 1,000,000 FHLMC 06/24/21 2.25% 2,000,220$ 2,000,000$ 5.43%Total 2.23% Corporate Notes: 502,975 500,000 Wells Fargo Co.03/04/21 2.49% 503,955 500,000 JP Morgan Chase Co.03/01/21 2.53% 1,006,930$ 1,000,000$ 2.74%Total 2.51% Pooled Investment Accounts: 14,389,424$ 14,389,424$ Local Agency Investment Fund 2.34% 1,375,080 1,369,920 CalTRUST Short Term 2.12% 8,605,860 8,533,011 CalTRUST Medium Term 1.70% 24,370,363$ 24,292,355$ 66.22%2.10% 36,804,290$ 36,696,950$ 100%Total Investments 2.07% Per Government Code requirements, the Investment Report is in compliance with the Yorba Linda Water District's Investment Policy, and there are adequate funds available to meet budgeted and actual expenditures for the next six months. 8/31/19 Yorba Linda Water District Cash & Investment Portfolio Report August 31, 2019 ________________________________ Kelly McCann, Senior Accountant Page 228 of 244 Below is a chart summarizing the yields as well as terms and maturities for the month of August 2019: Average # of Month Portfolio Days to of 2019 Yield Maturity August 2.07%157 Below are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 8/31/2018 8/31/2019 Monthly - August 41,531$ 35,830$ Year-to-Date 85,108$ 73,566$ Budget 2018/2019 2019/2020 Interest Budget, August YTD 59,667$ 135,384$ Interest Budget, Annual 358,000$ 812,306$ Interest earned on investments is recorded in the fund that owns the investment. The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: The table below displays the District's Cash and Investment balance of $36.8 million which is allocated between the established reserve funds, Wells Fargo Checking Account, and the restricted funds held at U.S. Bank for the construction of the Fairmont Booster Pump Station. The number of Days in Cash are 345 for the Un-Restricted Water Reserve balance and 1,071 for the Un-Restricted Sewer Reserve balances, as of August 31, 2019. FY20 Reserve Cash and Requirements Investments July 2020 % Alloc August 2020 % Alloc "Target Available for Fund Description Balance 7/31/2019 Balance 8/31/2019 Levels"CY Obligations Water Operating Reserve 9,410,020$ 28.17%10,375,697$ 30.19%12,427,055$ (2,051,358)$ Water Emergency Reserve 7,134,864 21.36%7,173,371 20.87%7,115,108 58,263 Water Capital Project Reserve 7,281,785 21.80%7,126,757 20.73%7,314,221 (187,464) Rate Stabilization Reserve 4,113,454 12.31%4,120,137 11.99%4,093,400 26,737 Un-Restricted Water Reserve Balance 27,940,124 28,795,962 30,949,784 (2,153,822) Conservation Reserve 103,420 0.31%103,420 0.30%- 103,420 Employee Liability Reserve 302,179 0.90%302,179 0.88%400,000 (97,822) Restricted Reserve Balance 405,599 405,599 400,000 5,599 Sewer Operating Reserve 1,215,523 3.64%1,328,385 3.86%1,335,465 (7,080) Sewer Emergency Reserve 1,922,119 5.75%1,929,197 5.61%1,914,347 14,850 Sewer Capital Project Reserve 1,921,067 5.75%1,913,060 5.57%1,909,045 4,015 Un-Restricted Sewer Reserve Balance 5,058,708 5,170,642 5,158,857 11,785 Total Reserve Balances 33,404,431$ 100.00%34,372,203$ 100.00%36,508,641$ (2,136,438)$ Water Operating 452,088 446,827 Sewer Operating 68,426 14,760 520,514 461,587 Rev. Bond 2012A & 2017A-Principal & Interest 252 253 Public Agency Retirement Svc. -PARS (Restricted)1,960,545 1,970,247 Total Cash and Investments 35,885,742$ 36,804,290$ Cash & Investment Summary Report Cash & Investment Summary Comparison Between Current and Previous Month Wells Fargo Bank Checking US Bank Held (Restricted) Page 229 of 244 Checking Account:461,587$ 1.25% Money Market Accounts:5,071,839$ 13.78% Federal Agency Securities:2,000,220$ 5.43% Certificates of Deposit:3,893,350$ 10.58% Corporate Notes:1,006,930$ 2.74% Pooled Investment Accounts:24,370,363$ 66.22% Total 36,804,290$ 100.00% Checking Account: 1.25% Money Market Accounts: 13.78% Federal Agency Securities: 5.43% Certificates of Deposit: 10.58% Corporate Notes: 2.74% Pooled Investment Accounts: 66.22% INVESTMENT BALANCES (AS OF 8 -31-2019) Checking Account:Money Market Accounts:Federal Agency Securities:Certificates of Deposit:Corporate Notes:Pooled Investment Accounts: Page 230 of 244 Yorba Linda Water District Fair Value Measurement Report August 31, 2019 Quoted Observable Unobservable Prices Inputs Inputs Investments Level 1 Level 2 Level 3 Total CalTRUST Investment Pool -$ 9,980,939$ -$ 9,980,939$ Local Agency Investment Fund - 14,389,424 - 14,389,424 U.S. Government Sponsored Agency Securities - 2,000,220 - 2,000,220 Corporate Notes 1,006,930 1,006,930 Negotiable Certificates of Deposit - 3,893,350 - 3,893,350 Total Investments -$ 31,270,864$ -$ 31,270,864$ Page 231 of 244 Transaction Date Transaction Description Water Operating Pension Water Operating OPEB Sewer Operating Pension Sewer Operating OPEB Account Total Beginning Balance as of 7/1/19 1,235,837.20 526,669.64 135,806.94 62,230.97 1,960,544.75 7/31/2019 Investment Gain/(Loss)6,734.69 2,716.09 339.13 320.93 1,970,655.59 7/31/2019 Management Fees (272.06)(109.72)(13.70)(12.97) 1,970,247.14 Account Balance by Account Type 1,242,299.83 529,276.01 136,132.37 62,538.93 1,970,247.14$ Pension OPEB Total Initial Contribution as of 12/28/2017 247,599.00$ - 247,599.00 Additional Contribution 6/26/19 1,105,248.00$ 587,339.00 1,692,587.00 Total Contributions =1,940,186.00 Total Gain (or Loss) from Inception 26,804.74$ 4,598.63 31,403.37 Total Management Fees from Inception (1,219.54)$ (122.69) (1,342.23) Balance as of 7-31-19 =1,378,432.20$ 591,814.94$ 1,970,247.14$ PARS (Public Agency Retirement Services) Funding Reconciliation Page 232 of 244 $26,676,691 $33,357,741 $28,510,316 $29,108,618 $28,795,962 363 472 389 366 345 60 110 160 210 260 310 360 410 460 510 $20,000 $5,020,000 $10,020,000 $15,020,000 $20,020,000 $25,020,000 $30,020,000 $35,020,000 $40,020,000 Aug. 2015 Aug. 2016 Aug. 2017 Aug. 2018 Aug. 2019 Unrestricted Reserves & Days in Cash (Water) Unrestricted Reserves (Water)Days in Cash (Water) Page 233 of 244 ITEM NO. 10.1. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary SUBJECT:Directors' Reports The Directors will report on their attendance at the following events: 1.YL Planning Commission - September 11, 2019 (Hawkins - As Needed) 2.YL Mayor's Prayer Breakfast - September 12, 2019 (Jones/Miller/Nederhood) 3.WACO Planning Committee - September 17, 2019 (Jones/Nederhood) 4.SAWPA Commission - September 17, 2019 (Jones - As Needed) 5.YL City Council - September 17, 2019 (Hall) 6.MWDOC Board - September 18, 2019 (Nederhood) 7.OCWD Board - September 18, 2019 (Jones) 8.Placentia State of the City - September 25, 2019 (Jones/Nederhood) 9.OCSD Board - September 25, 2019 (Jones) 10.CSDA Annual Conference - September 26-27, 2019 (Nederhood) 11.ISDOC Executive Committee - October 1, 2019 (Nederhood) 12.SAWPA Commission - October 1, 2019 (Jones - As Needed) 13.YL City Council - October 1, 2019 (Miller) 14.OCWD Board - October 2, 2019 (Jones) Page 234 of 244 15.WACO - October 4, 2019 (Hawkins/Nederhood) Page 235 of 244 ITEM NO. 11.1. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Rosanne Weston, Engineering Manager SUBJECT:Interagency Committee with MWDOC and OCWD (Jones/Hawkins) Minutes of the meeting held Thursday, September 26, 2019 at 4:00 p.m. Next meeting is scheduled Monday, November 25, 2019 at 4:00 p.m. SUMMARY: The minutes for the September 26, 2019 meeting are attached for reference. ATTACHMENTS: 1.Meeting Minutes Page 236 of 244 Minutes of the YLWD/MWDOC/OCWD Interagency Committee Meeting Held September 26, 2019 at 4:00 p.m.1 MINUTES OF THE YORBA LINDA WATER DISTRICT INTERAGENCY COMMITTEE MEETING WITH MWDOC AND OCWD Thursday, September 26, 2019, 4:00 P.M. 1717 E Miraloma Ave, Placentia CA 92870 1.CALL TO ORDER The meeting was called to order at 4:00 p.m. 2.ROLL CALL YLWD COMMITTEE MEMBERS YLWD STAFF Brooke Jones, President Marc Marcantonio, General Manager John DeCriscio, Operations Manager Rosanne Weston, Engineering Manager MWDOC COMMITTEE MEMBER MWDOC STAFF Brett R. Barbre, President None OCWD COMMITTEE MEMBER OCWD STAFF Roger Yoh, Director Mike Markus, General Manager OTHER ATTENDEES J. Wayne Miller, Director 3. PUBLIC AND COMMENTS None. 4.DISCUSSION ITEMS 4.1.MWD Water Supply Conditions and Outlook Brett Barbre stated that storage of water is at an historic high. 4.2.Condition of OCWD Groundwater Basin, Water Purchased for Recharge, and In-Lieu Recharge Mike Markus reported that the groundwater basin is full and OCWD will have purchased a total of 30,000 AF this year. IRWD, Mesa and Huntington Beach are using in-lieu water. MWD has a new in-lieu program, whereby, the cost is similar to untreated MWD water. Page 237 of 244 Minutes of the YLWD/MWDOC/OCWD Interagency Committee Meeting Held September 26, 2019 at 4:00 p.m.2 4.3.Funding and Time Frame for PFAS Treatment Studies, Design, Construction, and Operations and Maintenance Mike Markus stated that the Producers seem to be in agreement that OCWD will pay for the capital costs for PFAS treatment, assuming that this would be the lowest cost for reasonable treatment. For example, if Granulated Activated Carbon (GAC) treatment is less expensive than Ion Exchange (IX) treatment, but there are site constraints that won’t allow for GAC, then IX could be selected. Mike said that the Producers also seem to be in agreement that OCWD pays for up to 50% of the O&M costs. OCWD plans to take these recommendations to the Water Issues Committee in October for informational purposes and later to the Board of Directors. Mike said that OCWD has been in discussions with DDW regarding the proposed PFAS Response Levels. There is some discussion about setting the PFAS Response Levels based on a non-cancerous risk. This would translate to the Response Level for PFOA being set at 20 ppt, rather than at 10 ppt. At this level, YLWD would only have to provide partial treatment for PFAS and then blend all flows to meet the 20 ppt. YLWD is below the currently proposed PFOS Response Level of 40 ppt. It was suggested that OCWD may want to look at injecting GWRS water into areas of the OC Basin where there are higher concentrations of PFAS, such as near Yorba Linda. 4.4.YLWD Well Projects Rosanne Weston said that Well 22 is shovel-ready; however, YLWD is waiting to equip the well until PFAS treatment can be put in place. YLWD will proceed to negotiate the lease with OCWD on proposed Well 23. 5.ADJOURNMENT 5.1.The meeting was adjourned at 4:45 p.m. RPW Page 238 of 244 ITEM NO. 11.2. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary SUBJECT:Joint Agency Committee with City of Yorba Linda (Jones/Hawkins) Minutes of the meeting held Monday, September 16, 2019 at 4:00 p.m. Next meeting is scheduled Monday, December 16, 2019 at 3:00 p.m. at YL City Hall. SUMMARY: The draft minutes for the September 16, 2019 meeting are attached for reference. ATTACHMENTS: 1.Draft Meeting Minutes Page 239 of 244 YLWD/CC Joint Advisory Committee Minutes September 16, 2019 Page 1 of 3 CITY OF YORBA LINDA Land of Gracious Living YORBA LINDA WATER DISTRICT/ CITY COUNCIL JOINT ADVISORY COMMITTEE MEETING MINUTES September 16, 2019 4:00 p.m. 1.CALL TO ORDER The Yorba Linda Water District/City Council Joint Advisory Committee meeting convened at 4:05 p.m. in the Council Chambers at 4845 Casa Loma Avenue, Yorba Linda. 2.PLEDGE OF ALLEGIANCE Council Member Carlos Rodriguez 3.ROLL CALL Committee Members City Council: Gene Hernandez (arrived at 4:25 p.m.), Council Member Carlos Rodriguez, Council Member Water District: Brooke Jones, President Phil Hawkins, Vice President Staff Members: Marc Marcantonio, General Manager YL Water District Mark Pulone, City Manager City of Yorba Linda 4.PUBLIC COMMENTS None Page 240 of 244 YLWD/CC Joint Advisory Committee Minutes September 16, 2019 Page 2 of 3 5.ACTION CALENDAR 5.1 Minutes of the YLWD/City Council Joint Advisory Committee meeting held on June 17, 2019. The YLWD/City Council Joint Advisory Committee approve the minutes of the June 17, 2019 meeting. 6.DISCUSSION ITEMS 6.1 Pending and Recently Chaptered Water Related Legislation General Manager Marc Marcantonio updated the Committee about recent legislation including SB 1, SB 134, AB 756 and the South Coast Air Quality Management District’s (SCAQMD) proposed Amended Rule 1403 regarding asbestos emissions from Demolition/Renovation Activities. Councilman Carlos Rodriguez thanked Mr. Marcantonio for actively working with SCAQMD on the asbestos issue and asked how the City could lend a hand. General Manager Marcantonio responded that this issue should concern every city and organizations such as ACC-OC, and that he would keep the Committee informed of their progress. 6.2 Strategies for Addressing Per- and Polyfluoroalkyl Substances (PFAS) General Manager Marcantonio discussed PFAS and reviewed the three primary treatment methods for removing them from drinking water. He said the District is continuing to research each treatment method and how to integrate the methods into their groundwater delivery to protect public health at the least risk and cost. 6.3 Formation of Sewer Assessment/Community Facilities Districts General Manager Marcantonio stated that the District has approximately 625 parcels that are not on sewer service, and some of these property owners have inquired about forming Community Facility Districts to help finance a conversion from a septic system to the sanitary sewer system. Brett Barbre, Assistant General Manager, clarified that over 600 parcels are in the City of Yorba Linda, primarily in the Kellogg West area. Councilman Rodriguez inquired about the number of interested property owners. He also asked if there was a minimum number of neighbors required to participate in converting their septic to sewer. Rosanne Weston, Engineering Manager, responded that the District has been advised by their consultant to begin with two pilot projects for Sandra Page 241 of 244 YLWD/CC Joint Advisory Committee Minutes September 16, 2019 Page 3 of 3 Drive and Danita Lane, since these property owners have expressed interest. Ms. Weston said they do not require 100% participation from the whole street, but this would be preferable. It is also preferable to include a greater number of participants in a Community Facilities District to reduce the administrative costs for each property owner. John Koeller, resident on Sandra Drive, stated his interest as well as his neighbors’, in the District’s Community Facilities District Program. 6.4 Future Meeting Date and Agenda Items The Committee agreed to meet again on Monday, December 16th at 3:00 p.m. No additional items for the next Agenda were discussed. 7.ADJOURNMENT 7.1 City Manager Mark Pulone adjourned the meeting at 4:56 p.m. to the next Yorba Linda Water District/City Council Joint Advisory Committee meeting on Monday, December 16, 2019 at 3:00 p.m. Page 242 of 244 ITEM NO. 12.1. AGENDA REPORT MEETING DATE:October 8, 2019 TO:Board of Directors FROM:Marc Marcantonio, General Manager STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary SUBJECT:Meetings from October 9 - November 30, 2019 ATTACHMENTS: 1.Board of Directors' Activities Calendar Page 243 of 244 Board of Directors Activity Calendar Event Date Time Attendance_by_ October OC LAFCO Wed, Oct 9 8:15 AM Nederhood (As Needed) YL Planning Commission Wed, Oct 9 6:30 PM Hawkins (As Needed) WACO Planning Committee Tue, Oct 15 7:30 AM Jones/Nederhood SAWPA Commission Tue, Oct 15 9:30 AM Jones (As Needed) YL City Council Tue, Oct 15 6:30 PM Nederhood MWDOC Board Wed, Oct 16 8:30 AM Nederhood OCWA Luncheon Wed, Oct 16 11:30 AM Nederhood OCWD Board Wed, Oct 16 5:30 PM Jones ACWA Regulatory Summit Thu, Oct 17 8:00 AM Jones Board of Directors Regular Meeting Tue, Oct 22 6:30 PM MWDOC/OCWD Joint Planning Committee Wed, Oct 23 8:30 AM OCSD Board Wed, Oct 23 6:00 PM Hawkins YL Planning Commission Wed, Oct 23 6:30 PM Hawkins (As Needed) ISDOC Thu, Oct 24 11:30 AM Hawkins/Jones/Nederhood Joint Committee Meeting with City of Placentia Tue, Oct 29 3:30 PM Jones/Hawkins November WACO Fri, Nov 1 7:30 AM ISDOC Executive Committee Tue, Nov 5 7:30 AM Nederhood SAWPA Commission Tue, Nov 5 9:30 AM Jones (As Needed) YL City Council Tue, Nov 5 6:30 PM Jones MWDOC Board Wed, Nov 6 8:30 AM Nederhood OCWD Board Wed, Nov 6 5:30 PM Jones YL State of the City Wed, Nov 6 5:30 PM Nederhood Board of Directors Regular Meeting Tue, Nov 12 6:30 PM OC LAFCO Wed, Nov 13 8:15 AM Nederhood (As Needed) YL Planning Commission Wed, Nov 13 6:30 PM Hawkins (As Needed) WACO Planning Committee Tue, Nov 19 7:30 AM Jones/Nederhood SAWPA Commission Tue, Nov 19 9:30 AM Jones (As Needed) YL City Council Tue, Nov 19 6:30 PM Hawkins MWDOC Board Wed, Nov 20 8:30 AM Nederhood OCWA Luncheon Wed, Nov 20 11:30 AM OCWD Board Wed, Nov 20 5:30 PM Jones Interagency Committee Meeting with MWDOC and OCWD Mon, Nov 25 4:00 PM Jones/Hawkins Board of Directors Regular Meeting Tue, Nov 26 6:30 PM OCSD Board Wed, Nov 27 6:00 PM Hawkins YL Planning Commission Wed, Nov 27 6:30 PM Hawkins (As Needed) District Offices Closed Thu, Nov 28 7:00 AM As of October 1, 2019 Page 244 of 244 BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING YLWD SHIFTING PRIORITIES FY20-FY24 (DRAFT 10/1/19) FY20 FY21 FY22 FY23 FY24 TOTAL Pay-Go Water Projects $ 2,592,998 $ 3,346,514 $ 165,000 $ 165,000 $ 165,000 $ 6,434,512 Debt-Funded Water Projects $ - $ - $ 8,470,000 $ 8,140,000 $ 3,300,000 $ 19,910,000 Pay-Go Sewer Projects $ 891,000 $ 825,000 $ 935,000 $ 935,000 $ 935,000 $ 4,521,000 Water Pay-Go Vehicle & Capital Equipment $ 820,640 $ 765,296 $ 484,235 $ 557,235 $ 600,000 $ 3,227,406 Sewer Pay-Go Vehicle & Capital Equipment $ 314,045 $ - $ 475,000 $ - $ - $ 789,045 PFAS Treatment (OCWD Funded) $ - $ 20,000,000 $ - $ - $ - $ 20,000,000 Advanced Metering Infrastructure (AMI) $ - $ 300,000 $ - $ - $ - $ 300,000 Backup Emergency Generators (Alternative Funding) $ - $ - $ 1,500,000 $ - $ - $ 1,500,000 Stonehaven Pipeline (Developer Funded) $ 428,080 $ - $ - $ - $ - $ 428,080 Hidden Hills BPS Upgrade (Developer Funded) $ 429,659 $ 429,659 $ - $ - $ - $ 859,318 TOTAL 5,476,422$ 25,666,468$ 12,029,235$ 9,797,235$ 5,000,000$ 57,969,361$ Conclusion: Due to the anticipated construction of the PFAS Treatment Plant during FY21, YLWD is deferring some CIP projects to FY22. As shown above, YLWD will continue to have approximately $5.5M worth of CIP in FY21 and $12M CIP in FY22. In order to accomplish the CIP projects in addition to the PFAS Treatment Plant, YLWD will need to secure an on-call professional services contract for project, design, and construction management. This contract will be in lieu of hiring additional staff. Note: Budget amounts are 2019 dollars and do not include escalation. These are planning level budgets. Cost estimates for all projects will be updated following preparation of design documents, and/or receipt of construction bids. $2,592,998 $3,346,514 $165,000 $165,000 $165,000 $8,470,000 $8,140,000 $3,300,000 $891,000 $825,000 $935,000 $935,000 $935,000 $820,640 $765,296 $484,235 $557,235 $600,000 $314,045 $475,000 $20,000,000 $300,000 $1,500,000 $428,080 $429,659 $429,659 $5,476,422 $25,666,468 $12,029,235 $9,797,235 $5,000,000 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 FY20 FY21 FY22 FY23 FY24 YLWD SHIFTING PRIORITIES (FY20 - FY24) DRAFT 10/8/19 Pay-Go Water Projects Debt-Funded Water Projects Pay-Go Sewer Projects Water Pay-Go Vehicle & Capital Equipment Sewer Pay-Go Vehicle & Capital Equipment PFAS Treatment (OCWD Funded) Advanced Metering Infrastructure (AMI)Backup Emergency Generators (Alternative Funding)Stonehaven Pipeline (Developer Funded) Hidden Hills BPS Upgrade (Developer Funded) REVISED ITEM NO. 8.3. MATERIALS SUBMITTED BY: Rosanne Weston MEETING DATE: October 8, 2019