HomeMy WebLinkAbout2011-11-10 - Board of Directors Meeting Agenda PacketYorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
Thursday, November 10, 2011, 8:00 AM
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE
3. ROLL CALL
Michael J. Beverage, President
Phil Hawkins, Vice President
Ric Collett
Robert R. Kiley
Gary T. Melton
4. ADDITIONS /DELETIONS TO THE AGENDA
5. PUBLIC COMMENTS
Any individual wishing to address the Board is requested to identify themselves and state the matter on which
they wish to comment. If the matter is on the agenda, the Board 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 matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to five
minutes.
6. CLOSED SESSION
The Board may hold a closed session on items related to personnel, labor relations and /or litigation. The public is
excused during these discussions.
6.1. Conference with Labor Negotiators
Pursuant to Section 54956.7 of the California Government Code
Agency Designated Representatives:
Ken Vecchiarelli
Richard Kreisler
Employee Organization:
Yorba Linda Water District Employees Association
7. CONSENT CALENDAR
All items listed on the consent calendar are considered to be routine matters, status reports, or documents
covering previous Board instructions. The items listed on the consent calendar may be enacted by one motion.
There will be no discussion on the items unless a member of the Board, staff, or public requests further
consideration.
7.1. Minutes of the Board of Directors Regular Meeting Held October 27, 2011
Recommendation: That the Board of Directors approve the minutes as presented.
7.2. Payments of Bills, Refunds, and Wire Transfers
Recommendation: That the Board of Directors ratify and authorize disbursements in
the amount of $593,077. 10.
7.3. Investment Report for the Period Ending September 2011
Recommendation: That the Board of Directors receive and file the Investment
Report for the Period Ending September 2011.
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 Reports for Fiscal Year 2010/11
Recommendation: That the Board of Directors receive and file the FY2010111
Comprehensive Annual Financial Report, the Report on Internal Control and the
Communication to Those In Governance Letter.
9. REPORTS. INFORMATION ITEMS. AND COMMENTS
9.1. President's Report
9.2. Directors' Reports
MWDOC Elected Officials' Forum -November 3, 2011 (Hawkins)
9.3. General Manager's Report
9.4. General Counsel's Report
9.5. Future Agenda Items and Staff Tasks
10. COMMITTEE REPORTS
10.1. Executive - Administrative - Organizational Committee
(Beverage /Hawkins)
Meeting scheduled November 16, 2011 at 4:00 p.m.
10.2. Finance - Accounting Committee
(Collett /Kiley)
Minutes of meeting held October 24, 2011 at 4:00 p.m.
Meeting scheduled November 28, 2011 at 4:00 p.m.
10.3. Personnel -Risk Management Committee
(Kiley /Beverage)
• Minutes of meeting held November 8, 2011 at 4:00 p.m. (To be provided at the next
Board meeting.)
• Meeting scheduled December 13, 2011 at 4:00 p.m.
10.4. Planning- Engineering- Operations Committee
(Melton /Collett)
• Minutes of meeting held November 8, 2011 at 1:00 p.m. (To be provided at the next
meeting.)
• Meeting scheduled December 1, 2011 at 4:00 p.m.
10.5. Public Affairs - Communications - Technology Committee
(Hawkins /Melton)
• Meeting scheduled November 18, 2011 at 12:00 p.m.
10.6. YLWD - MWDOC -OCWD Joint Agency Committee
(Beverage /Hawkins)
Meeting scheduled November 22, 2011 at 4:00 p.m.
10.7. Citizens Advisory Committee
(Beverage)
Meeting scheduled November 28, 2011 at 8:30 a.m.
11. INTERGOVERNMENTAL MEETINGS
11.1. YL City Council - November 1, 2011 (Hawkins)
11.2. MWDOC /MWD Workshop - November 2, 2011 (Melton /Staff)
11.3. OCWD Board - November 2, 2011 (Kiley /Staff)
11.4. WACO -November 4, 2011 (Hawkins)
11.5. YL Planning Commission - November 9, 2011 (Kiley)
12. BOARD OF DIRECTORS ACTIVITY CALENDAR
12.1. Meetings from November 11, 2011 - December 31, 2011
13. CONFERENCES, SEMINARS, AND SPECIAL EVENTS
This section of the agenda is for the Board of Directors to authorize Director attendance at the listed events.
13.1. MWDOC Colorado River Aqueduct Inspection Trip - December 2 -4, 2011
Recommendation: That the Board of Directors authorize Director attendance at this
event.
14. CLOSED SESSION CONTINUED
14.1. Conference with Legal Counsel — Pending Litigation
Pursuant to Subdivision (a) of Section 54956.9 of the California Government Code
Name of Case: Itani, et al vs. YLWD (OC Superior Court — Case No. 00124906)
Name of Case: Johnson, et al vs. YLWD, et al (OC Superior Court — Case No.
00125994)
Name of Case: State Farm General Insurance Company vs. YLWD (OC Superior Court
— Case No. 00311353)
Name of Case: Weiss vs. YLWD (OC Superior Court - Case No. 00319080)
Name of Case: Lindholm vs. YLWD, et al (OC Superior Court - Case No. 00320239)
Name of Case: Travelers Commercial Insurance Company vs. YLWD (OC Superior
Court - Case No. 00327152)
Name of Case: Manista vs. YLWD, et al (OC Superior Court - Case No. 00332968)
Name of Case: American Security Insurance Company, et al vs. YLWD (OC Superior
Court - Case No. 00348304)
Name of Case: Buc vs. YLWD (OC Superior Court — Case No. 00409755)
Name of Case: Interinsurance Exchange of the Automobile Club vs. YLWD (OC
Superior Court - Case No. 00425404)
Name of Case: ACWA/JPIA, et al vs. Insurance Company of the State of Pennsylvania,
et al (OC Superior Court - Case No. 00486884)
15. ADJOURNMENT
15.1. The next regular meeting of the Board of Directors will be held November 23, 2011 at
8:30 a.m.
Items Distributed to the Board Less Than 72 Hours Prior to the Meeting
Pursuant to Government Code section 54957.5, non - exempt public records that relate to open session agenda items
and are distributed to a majority of the Board less than seventy -two (72) hours prior to the meeting will be available for
public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870,
during regular business hours. When practical, these public records will also be made available on the District's internet
website accessible at http: / /www.ylwd.com /.
Accommodations for the Disabled
Any person may make a request for a disability - related modification or accommodation needed for that person to be
able to participate in the public meeting by telephoning the Executive Secretary at 714 - 701 -3020, or writing to Yorba
Linda Water District, P.O. Box 309, Yorba Linda, CA 92885 -0309. Requests must specify the nature of the disability and
the type of accommodation requested. A telephone number or other contact information should be included so the
District staff may discuss appropriate arrangements. Persons requesting a disability - related accommodation should
make the request with adequate time before the meeting for the District to provide the requested accommodation.
AGENDA REPORT
Meeting Date: November 10, 2011
ITEM NO. 7.1
Subject: Minutes of the Board of Directors Regular Meeting Held October 27, 2011
STAFF RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
Name: Description: Type:
102711 BOD - Minutes.doc BOD Mtg Minutes 10/27/11 Minutes
Approved by the Board of Directors of the
Yorba Linda Water District
11/10/2011
RC /RK 5 -0
1.
2.
3.
CI
5.
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
October 27, 2011
CALL TO ORDER
The October 27, 2011 Regular Meeting of the Yorba Linda Water District Board
of Directors was called to order by President Beverage at 8:30 a.m. The meeting
was held in the Board Room at the District's Administrative Building located at
1717 East Miraloma Avenue in Placentia, California 92870.
PLEDGE OF ALLEGIANCE
President Beverage led the pledge.
ROLL CALL
DIRECTORS PRESENT
Michael J. Beverage, President
Phil Hawkins Vice President
Ken VeccNarelli, veneral Manager
Steve Conklin, Engineering Manager
Stephen Parker, Finance Manager
Art Vega, Interim IT Manager
John DeCriscio, Chief Plant Operator
Ken Mendum, Water Maintenance Superintendent
Brian Vargas, Maintenance Dist Operator III
Jorge Lopez, Maintenance Dist Operator II
Eduardo Gutierrez, Maintenance Dist Operator II
Ken Graff, Maintenance Dist Operator II
Jerry Huizar, Maintenance Worker I
Nick Isbell, Maintenance Worker I
Ruben Maldanado, Water Quality Technician I
Damon Micalizzi, Public Information Officer
Annie Alexander, Executive Secretary
ALSO PRESENT
Brett Barbre, Director, Municipal Water District of Orange County
Nancy Rikel, Mayor, City of Yorba Linda
Art Kidman, General Counsel, Kidman Behrens & Tague LLP
Eddie Beltran, Senior Associate, Kidman, Behrens & Tague LLP
Greg Meyers, Member, Citizens Advisory Committee
ADDITIONS /DELETIONS TO THE AGENDA
None.
PUBLIC COMMENTS
None.
6. SPECIAL RECOGNITION
6.1. Recognition of OCWA Annual Hot Tap and Horseshoe Competition
Participants
President Beverage read aloud a proclamation recognizing Messrs.
Lopez, Gutierrez and Vargas for their participation in the hot tap
competition and Messrs. Mendum, Huizar, Isbell, and Graff for their
participation in the horseshoe competition. Mr. Freddy Ojeda also
participated in the hot tap competition but was unable to attend the
meeting to be recognized.
7. COMMITTEE REPORTS
7.1.
8. CONSENT CALENDAR Vr
Director Hawkins made a motion, seconded by Director Collett, to approve the
Consent Calendar. Motion carried 5 -0. Director Collett abstained from voting on
. Check No. 57624 on Item No. 8.2. as he has a financial interest with the vendor.
8. Minutes of the Board of Directors Regular Meeting Held October 13, 2011
Recommendation. That the Board of Directors approve the
minutes as presented.
8.2. Payments of Bills, Refunds and Wire Transfers
Recommendation. That the Board of Directors ratify and authorize
disbursements in the amount of $828,843. 0 1.
8.3. Progress Payment No. 3 for Construction of the Ohio St. and Oriente Dr.
Pipeline Replacement
Recommendation. That the Board of Directors approve Progress
Payment No. 3 in the net amount of $98,694.90 to Mamco
Construction for the Ohio Street and Oriente Drive Pipeline Project,
Job No. 201006.
2
8.4. Progress Payment No. 9 for Construction of the Highland Booster Pump
Station Project
Recommendation. That the Board of Directors approve Progress
Payment No. 9 in the net amount of $27,324.00 to Pacific
Hydrotech Corporation for construction of the Highland Booster
Pump Station Project, Job No. 200814.
9. ACTION CALENDAR
9.1. Support Services for Computerized Maintenance and Management
System (CMMS) Project
Mr. Vega provided an overview of the project and the need for additional
support services for the implementation of CMMS. Mr. Vecchiarelli
responded to questions from the Board regarding additional funding
needed to complete the project.
Director Melton made a motion, seconded by Director Collett, to execute
the revised professional services agreement with Kidman, Behrens &
Tague, LLP. Motion passed 5 -0.
3
9.4. MWDOC Board and Member Agency Elected Officials' Forum
Director Hawkins stated that he was willing to attend this event on behalf
of the District.
Director Collett made a motion, seconded by Director Melton, to designate
Director Hawkins as the District's official representative to attend the
MWDOC Board and Member Agency Elected Officials' Forum. Motion
passed 5 -0.
10. REPORTS, INFORMATION ITEMS, AND COMMENTS
10.5. Future Agenda Items and Staff Tasks
Director Kiley suggested that the Board consider scheduling an action
item to vote on the outcome of the proposed practice field project at the
Elk Mountain Reservoir. President Beverage stated that this matter would
be discussed at a future workshop meeting.
12
11. COMMITTEE REPORTS
11.1. Executive - Administrative - Organizational Committee
(Beverage /Hawkins)
Minutes of the Committee meeting held October 18, 2011 were provided
in the agenda packet. Directors Beverage and Hawkins attended.
Matters discussed during the meeting included: MWDOC Board and
Member Agency Elected Officials' Forum; Committee Meeting Minutes;
Status of Strategic Plan Initiatives; Legislative Affairs Update; Revised
Professional Services Agreement with Kidman, Behrens and Tague, LLP;
and General Counsel's Monthly Summary Report.
Meeting scheduled November 16, 2011 at 4:00 p.m
11.2. Finance - Accounting Committee
(Collett /Kiley)
Minutes of the meeting held October 24, 2011 will be provided at the next
Board meeting.
Minutes of the Committee meeting held October 21, 2011 were provided
in the agenda packet. Directors Hawkins and Melton attended. Matters
discussed during the meeting included: Computerized Maintenance and
Management System Project Status; Dynamics GP Consultant Status;
Status Report on Committee Specific Strategic Plan Initiatives; Fall
Newsletter Content; Bottled Water Label Contest; Draft Strategic
Communications Plan; Video of Board Meetings Online; and the Public
and Legislative Affairs Workshop.
Meeting scheduled November 7, 2011 at 4:00 p.m. was rescheduled to
November 18, 2011 at 12:00 p.m.
5
11.6. YLWD- MWDOC -OCWD Joint Agency Committee
(Beverage /Hawkins)
Meeting scheduled November 22, 2011 at 4:00 p.m.
12. INTERGOVERNMENTAL MEETINGS
12.4. YL Planning Commission — October 26, 2011 (Collett)
This meeting was cancelled. MWb,,-
13. BOARD OF DIRECTORS ACTIVITY CALENDA
13.1. Meetings from October 28, 2011 — November 30, 2011
The Board reviewed the listed meetings and made no additional changes.
14. CLOSED SESSION -
The meeting was adjourned to Closed Session at 9:16 a.m. All Directors were
present. Also present were Messrs. Vecchiarelli, Kidman and Beltran.
14.1. Conference with Legal Counsel — Pending Litigation
Pursuant to Subdivision (a) of Section 54956.9 of the California
Government Code
Name of Case: Itani, et al vs. YLWD (OC Superior Court — Case No.
00124906)
Name of Case: Johnson, et al vs. YLWD, et al (OC Superior Court —
Case No. 00125994)
Name of Case: State Farm General Insurance Company vs. YLWD
(OC Superior Court — Case No. 00311353)
Name of Case: Weiss vs. YLWD (OC Superior Court - Case No.
00319080)
D
Name of Case: Lindholm vs. YLWD, et al (OC Superior Court - Case
No. 00320239)
Name of Case: Travelers Commercial Insurance Company vs. YLWD
(OC Superior Court - Case No. 00327152)
Name of Case: Manista vs. YLWD, et al (OC Superior Court - Case
No. 00332968)
Name of Case: American Security Insurance Company, et al vs
Messrs. Vecchiarelli, Kidman and Beltran left the Closed Session following discussion of
this matter.
14.2. Public Employee Performance Evaluation
Pursuant to Section 54957 of the California Government Code
Title- General Manager I
15.1. The meeting was adjourned at 10:38 a.m. The next regular meeting of the
Kenneth R. Vecchiarelli
Board Secretary
7
AGENDA REPORT
Meeting Date: November 10, 2011
To: Board of Directors
From: Ken Vecchiarelli, General
Manager
Presented By: Stephen Parker, Finance
Manager
Prepared By: Maria Trujillo, Accounting
Assistant I
Budgeted:
Total Budget:
Cost Estimate:
Funding Source:
Account No:
Job No:
Dept:
ITEM NO. 7.2
Yes
N/A
$593,077.10
All Funds
N/A
N/A
Finance
Reviewed by Legal: N/A
CEQA Compliance: N/A
Subject: Payments of Bills, Refunds, and Wire Transfers
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.
STAFF RECOMMENDATION:
That the Board of Directors ratify and authorize disbursements in the amount of $593,077.10.
DISCUSSION:
The wire on this disbursement list is as follows: A wire of $188,557.20 to OCWD for August 2011
LTSS in -lieu program. The balance of $171,544.82 is routine invoices. The Accounts Payable check
register total is $360,102.02; Payroll No. 22 total is $232,975.08; and, the disbursements of this
agenda report are $593,077.10. A summary of the checks is attached.
PRIOR RELEVANT BOARD ACTION(S):
The Board of Directors approves bills, refunds and wire transfers semi - monthly.
ATTACHMENTS:
NamE Description: Type:
CkReg111011_BOD.pdf Check Register Backup Material
11 -CS 1110.doc Cap Sheet Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
11/10/2011
RC /RK 5 -0
Yorha Linda Water District
Check Register
For Checks Dated: 10/14/2011 thru 10/27/2011
Check No.
Date
Vendor Name
Amount Description ($0k or greater}
57652
11/10/2011
Abbott Staffing Group
1,020.00
57653
11/10/2011
Alternative Hose Inc.
267.79
57654
11/10/2011
Anaheim Wheel & Tire
90.00
57656
11/10/2011
Anthony Manzano
100.00
57655
11/10/2011
Anthony Varian
145.45
57657
11/10/2011
Aqua - Metric Sales Co.
14,165.44 I Perl Meters, MXU
57658
11/10/2011
Aramark
536.40
57659
11/10/2011
AT & T - Calnet2
15.22
57660
11/10/2011
AW Direct Inc.
96.57
57661
11/10/2011
8 & 5 Graphics, Inc.
1,050.56
57669
11/10/2011
C. Wells Pipeline
662.67
57662
11/10/2011
Cal Society - Municipal Finance Office
330.00
57663
11/10/2011
Calif Special Districts Assn
1,527.40
57664
11/10/2011
Carlos Murillo
66.00
57665
11/10/2011
Chemsearch
791,82
57666
11/10/2011
Coastal Ignition & Controls
572.60
57667
11/10/2011
Community Lock & Safe Service, Inc.
20.39
57686
11/10/2011
Costco Online
138.85
57668
11/10/2011
Cummins Cal Pacific, LLC
308.08
57673
11/10/2011
Dean Criske Trucking
546.98
57670
11/10/2011
Derek Nguyen
235.00
57672
11/10/2011
Don Wolf & Associates Inc.
221.22
57674
11/10/2011
E. H. Wachs Company
622.65
57675
11/10/2011
Elite Equipment Inc
77.58
57676
11/10/2011
Employment Development Departm
2,59800
57677
11/10/2011
Energy Environmental Soln, Inc
2,200.00
57685
11/10/2011
Environmental Equipment Supply
29.06
57678
11/10/2011
EyeMed
1,372.20
57679
11/10/2011
Fleet Services, Inc
646.27
57680
11/10/2011
Fry's Electronics
299 -32
57681
11/10/2011
G.M. Sager Construction Co., Inc.
24,445.00 Asphalt Repair and Paving
57682
11/10/2011
Graybar Electric Co
4,156.52
57683
11/10/2011
Haaker Equipment Co.
1,970.99
57684
11/10/2011
Home Depot Credit Services
212.74
57687
11/10/2011
Infosend Inc.
3,022.55
57690
11/10/2011
J & 5 Construction
7,215.00
57688
11/10/2011
Jackson's Auto Supply - Napa
1,201.49
57689
11/10/2011
Jon`s Flags & Poles, Inc.
1,141.07
57691
11/10/2011
KB Design
659 -32
57692
11/10/2011
Uebert Cassidy Whitmore
6,150.00
57694
11/10/2011
Mc Fadden -Dale Hardware
976.49
57695
11/10/2011
Mc Master -Carr Supply Co.
302.76
57705
11/10/2011
Measurement Specialties, Inc.
514.02
57696
11/10/2011
Muzak LLC
70 -88
57697
11/10/2011
Nextel Of California
1,681.43
57698
11/10/2011
Nickey Petroleum Co
5,896.79
57699
11/10/2011
D.C. Driveline
1,223.78
57700
11/10/2011
Office Solutions
57701
11/10/2011
Orange County - Tax Collector
W110111
11/01/2011
Orange County Water District
57707
11/10/2011
P.T.I. Sand & Gravel, Inc.
57702
11/10/2011
Parts Source Anaheim
57703
11/10/2011
Powerstride Battery
57704
11/10/2011
Praxair Distribution
57706
11/10/2011
Prudential Group Insurance
57708
11/10/2011
Quantum Automation
57709
11/10/2011
Quinn Power Systems Associates
57711
11/10/2011
R J Services, Inc
57710
11/10/2011
Rick Walkemeyer
57712
11/10/2011
Safety -Kleen Corp.
57713
11/10/2011
Schorr Metals, Inc.
57714
11/10/2011
Southern Calif Edison Co.
57715
11/10/2011
Southern Calif Gas Co.
57716
11/1012011
Staples Business Advantage
57718
11/10/2011
Stephen Parker/ Petty Cash
57717
11/10/2011
Steven Engineering
57719
11/10/2011
Terminix Processing Center
57693
11/10/2011
The Lighthouse Inc.
57720
11/10/2011
United Industries
57721
11/10/2011
USA Blue Book
57722
1111012011
Verizon Wireless
57723
11/10/2011
Village Nurseries
57724
11/10/2011
Wells Supply Co
57725
11/10/2011
West Coast Safety Supply Co
57726
11/10/2011
Westside Building Material
57571
11/10/2011
White Nelson Diehl Evans LLP
219.02
13,209.66 Property Tax 2011 -2012
188,557.20 LTSS In -lieu August 2011
1,317,66
82.88
292.16
103.70
3,045,44
2,497.32
186.71
442.00
757.15
330.44
37.71
35,545.41 All sites October
12,850.15 All sites October
998.11
184.60
796.92
185.00
102.02
128.75
175.28
591.86
148.80
6,611.00
2,000.05
926.07
275.00
Total $360,102.02
November 10, 2011
CHECK NUMBERS:
Computer Checks 57652 -57726 $ 171,544.82
NTJI N4
W- 110111 OCWD $ 188,557.20
TOTAL OF CHECKS AND WIRE
PAYROLL NO. 22:
Computer Checks 5086— 5088
Manual Checks 5089— 5099
DISBURSEMENT TOTAL:
$ 360,102.02
$ 232,975.08
$ 593,077.10
------------------------------------------------------------------
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APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD
MEETING OF NOVEMBER 10, 2011
------------------------------------------------------------------
------------------------------------------------------------------
Meeting Date:
To:
From:
Presented By:
Prepared By:
Subject:
SUMMARY:
AGENDA REPORT
November 10, 2011
Board of Directors
Ken Vecchiarelli, General Manager
Budgeted
Funding Source:
Stephen Parker, Finance Manager Dept:
Reviewed by Legal:
Delia Lugo, Senior Accountant CEQA Compliance:
Investment Report for the Period Ending September 2011
ITEM NO. 7.3
N/A
N/A
Finance
N/A
N/A
Government Code Section 53607, et, seq., requires the person delegated to invest funds to make a quarterly
report of the investments to the legislative body.
STAFF RECOMMENDATION:
That the Board of Directors receive and file the Investment Report for the Period Ending September 2011.
COMMITTEE RECOMMENDATION:
The Finance - Accounting Committee reviewed this report at its meeting on October 24, 2011.
DISCUSSION:
Staff is submitting the September 2011 Monthly Investment Report for your review and approval. This report
ends the first quarter for FY 2011 /10. The Investment Portfolio Report presents the market value and percent
yield for all the District investments by institution. The Investment Report Summary includes budget and
actual interest and average term portfolio information as well as market value broken out by reserve
categories. The total average portfolio yield for the month of September 2011 was 1.08 %.
PRIOR RELEVANT BOARD ACTION(S):
Investment reports are presented to the Board of Directors on a quarterly basis. The Investment Report for
the period ending June 30, 2011, was received and filed by the Board of Directors on August 11, 2011.
ATTACHMENTS:
Name:
Invst Rpt 9- 11.xlsx
Invst_ Agenda _Backup - Sept 2011.xlsx
Approved by the Board of Directors of the Yorba
Linda Water District
11/10/2011
RC /RK 5 -0
Description: Type:
Investment Report for the Period Ending September 2011 Backup Material
Agenda Backup Backup Material
Yorba Linda Water District
Investment Portfolio Report
September 30, 2011
Market % Percent
Value Cost of Total Institution Yield
Checking Account:
$ 1,308,603 $ 1,308,603 Wells Fargo Bank
$ 1,308,603 $ 1,308,603 4.64% Total 0.00%
Money Market Accounts:
$ 847,393 $ 847,393 Wells Fargo Money Market 0.05%
2,754,064 2,754,064 US Bank (2008 Revenue Bond) 0.10%
1,927 1,927 US Bank (2008 Bond Reserve) 0.10%
$ 3,603,384 $ 3,603,384 12.78% Total 0.09%
Federal Home Loan Bank:
$ 2,158,358 $ 2,144,397 US Bank (2008 Bond Reserve) 1.35%
$ 2,158,358 $ 2,144,397 7.66% 1.35%
Pooled Investment Accounts:
$ 1,846,000 $ 1,846,000
358 358
19,278,307 18,889,908
$ 21,124,665 $ 20,736,266 74.93%
$ 28,195,010 $ 27,792,651 100%
Local Agency Investment Fund 0.38%
CalTRUST Short Term 0.54%
Ca1TRUST Medium Term 1.31%
1.23%
Total Investments 1.08%
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.
Delia Lugo, Senior Accountant
9/30/11
Investment Summary Report
Below is a chart summarizing the yields as well as terms and maturities for the month of September 2011:
Avg. Portfolio
Avg. Portfolio
# of
Month Yield Without
Yield With
Days to
of 2010 CalTRUST
CalTRUST
Maturity
September 0.51%
1.08%
495
Below is are charts comparing operating fund interest for current and prior fiscal years.
Actual Interest
Monthly - September
Year -to -Date
9/30/2010
$ 22,196
$ 46,099
9/30/2011
$ 23,178
$ 48,083
Budget 2010/2011 2011/2012
Interest Budget, September YTD $ 39,000 $ 47,500
Interest Budget, Annual $ 156,000 $ 190,000
Interest earned on investments is recorded in the fund that owns the investment.
Investment Summary Comparison Between Current and Previous Month
The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds
is as follows:
August 2011
% Alloc
September 201'
% Alloc
Fund Description
Balance
8/31/2011
Balance
9/30/2011
Water Operating Reserve
$ 2,226,248
7.15%
$ 1,103,450
4.10%
Water Emergency Reserve
1,003,134
3.22%
1,000,991
3.72%
Water Capital Project Reserve
17,989,548
57.81%
17,656,325
65.69%
Water Reserve for Debt Service
1,339,814
4.30%
0
0.00%
COP Revenue Bond 2008 - Reserve
2,167,899
6.96%
2,160,285
8.03%
COP Revenue Bond 2008
4,452,264
14.30%
2,754,064
10.24%
Sewer Operating
118,775
0.38%
67,883
0.25%
Sewer Emergency Reserve
1,002,242
3.22%
1,000,344
3.72%
Sewer Capital Project Reserve
829,235
2.66%
1,143,065
4.25%
$ 31,129,159
100.00%
$ 26,886,407
100.00%
Wells Fargo Bank Checking
Water Operating
360,445
1,307,761
Sewer Operating
29,302
842
389,747
1,308,603
Totals
$ 31,518,906
$ 28,195,010
Meeting Date:
To:
From:
Presented By:
Prepared By:
AGENDA REPORT
November 10, 2011
Board of Directors
Ken Vecchiarelli, General Manager
Budgeted
Funding Source:
Stephen Parker, Finance Manager Dept:
Reviewed by Legal:
Stephen Parker, Finance Manager CEQA Compliance:
Subject: Audit Reports for Fiscal Year 2010/11
ITEM NO. 8.1
N/A
N/A
Finance
N/A
N/A
STAFF RECOMMENDATION:
That the Board of Directors receive and file the FY 2010/11 Comprehensive Annual Financial Report, the
Report on Internal Control and the Communication to Those In Governance Letter.
COMMITTEE RECOMMENDATION:
The Finance - Accounting Committee discussed this item on October 24, 2011 and supports the staff
recommendation.
DISCUSSION:
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, 2011. It will be submitted for the Certificate in
Achievement for Excellence in Financial Reporting award from the Government Finance Officers
Association, and it is anticipated to be awarded just as last years' CAFR received the award.
White Nelson Diehl Evans LLP (previous Diehl Evans & Company, LLP), the District's external auditors, have
completed their audit of the Yorba Linda Water District for the fiscal year ending June 30, 2011, and have
rendered an unqualified (clean) opinion in the attached Comprehensive Annual Financial Report. They
identified in the attached Report on Internal Control four internal control findings that rose to the level of a
significant deficiency, and have included management's response to those comments. Lastly, they have
reported required disclosures to the Finance - Accounting Committee in the Communication To Those In
Governance.
ATTACHMENTS:
Name:
YLWD CAFR FY 2010- 1l.pdf
6.30.11_ Report_ on Internal_Control.pdf
6.30.11 Communication to Those in Governance
Approved by the Board of Directors of the Yorba
Linda Water District
11/10/2011
RC /RK 5 -0
Description:
FY 10 /11 Comprehensive Annual Financial Report
FY 10 /11 Report on Internal Control
FY 10 /11 Communication to Those In Governance
Type:
Backup Material
Backup Material
Backup Material
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Water District
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Annual Financial
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1717 East Miraloma Avenue ■ Placentia ■ Cali4ornia■ 92870
www.ylwd.com ■ 714 - 701 -3000
Our Mission
"Yorba Linda Water District will provide reliable, high quality water and sewer
services in an environmentally responsible manner ant the most economical cost
to our customers.
Our Vision
"Yorba Linda Water District will become the premier self - sufficient source for
reliable water, sewer and related services in the communities it serves."
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, 2011
Prepared by:
Finance Department - Accounting Section
and
Cindy Botts, Management Analyst
YORBA LINDA WATER DISTRICT
TABLE OF CONTENTS
For the year ended June 30, 2011
FINANCIAL SECTION:
Independent Auditors' Report 1
Management's Discussion and Analysis
(Required Supplementary Information) 3
Basic Financial Statements: 11
Combined Statements of Net Assets 12
Combined Statements of Revenues, Expenses
and Changes in Net Assets 14
Combined Statements of Cash Flows 15
Notes to Basic Financial Statements 17
Required Supplementary Information: 41
Other Post - Employment Benefit Plan - Schedule
of Funding Progress 42
Supplementary Information: 43
Combining Schedule of Net Assets 44
Combining Schedule of Revenues, Expenses and
Changes in Net Assets 46
Combining Schedule of Cash Flows 47
Schedule of Operating Expenses by Cost Center and
Nature of Expenses for Water and Sewer 49
Schedule of Capital Assets 50
Page
Number
INTRODUCTORY SECTION:
Letter of Transmittal
i
Board of Directors and Executive Staff
xiii
Organization Chart
xiv
District Boundaries
xv
Certificate of Achievement for Excellence in Financial Reporting
xvi
FINANCIAL SECTION:
Independent Auditors' Report 1
Management's Discussion and Analysis
(Required Supplementary Information) 3
Basic Financial Statements: 11
Combined Statements of Net Assets 12
Combined Statements of Revenues, Expenses
and Changes in Net Assets 14
Combined Statements of Cash Flows 15
Notes to Basic Financial Statements 17
Required Supplementary Information: 41
Other Post - Employment Benefit Plan - Schedule
of Funding Progress 42
Supplementary Information: 43
Combining Schedule of Net Assets 44
Combining Schedule of Revenues, Expenses and
Changes in Net Assets 46
Combining Schedule of Cash Flows 47
Schedule of Operating Expenses by Cost Center and
Nature of Expenses for Water and Sewer 49
Schedule of Capital Assets 50
YORBA LINDA WATER DISTRICT
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
Page
Number
STATISTICAL SECTION: 51
Description of Statistical Section 53
Financial Trends:
Changes in Net Assets 54
Revenue Capacity:
Number of Connections 56
Ten Largest Customers 57
Debt Capacity:
Ratio of Outstanding Debt 58
Debt Coverage 59
Demographic and Economic Information:
Demographics 60
Ten Largest Employers 61
Operating Information:
Number of Employees 62
Operating and Capacity Indicators 63
INTRODUCTORY SECTION
Yorba Linda
Water District
October 27, 2011
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, 2011. 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 unqualified 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 full 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 their 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 misstatement. 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, 2010. In order to be awarded a Certificate of Achievement, a government 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.
i
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program
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 76 employees. The
District's Board of Directors meets on the second and fourth Thursday 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 75,000 and currently provides
water service through approximately 23,850 residential, commercial, and light industrial
connections.
District Services
Residential customers make up approximately 92% of the District's customer base and consume
approximately 72% of the water provided annually by the District. The District obtains about
half of its water supply from the Metropolitan Water District (MWD) through the Municipal
Water District of Orange County (MWDOC) and the other half from groundwater wells within
the area. In FY 2010/11 the District provided 19,280 acre -feet of water to its customers.
The District's service area is known for having larger than average residential lots and a network
of horse trails spanning over 100 miles in length. In 2005, CNN ranked the City of Yorba Linda
as 21" among the best places in the United States to live. Similarly, in an article by CNN Money,
the City of Yorba Linda was listed as one of the most affluent cities in the United States, as well
as the highest median income in Orange County, as reported by 2000 Census data, based on
towns between 65,000 and 250,000 in population.
ii
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 is one of very slow growth, which is projected to continue
through 2012 because of the ongoing financial crisis and the somewhat distressed housing
market.
California's water supply continues to be a concern due to projected population increases,
cyclical drought conditions, and environmental and regulatory restrictions that threaten the
State's water supply and conveyance system through the Sacramento -San Joaquin Delta. These
concerns have increased focus on the need for conservation as well as more efficient irrigation
methods and systems. Within the District's boundaries, population growth is expected to increase
only minimally in the next 5 -10 years, as more than 50% of the current households have children
under the age of 18 who are not expected to add to this growth via newborns. 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 expected to grow by
20 million people over the next 40 years.
In March 2011, the Governor declared an end to a nearly four -year statewide drought. The
State's mandate of twenty percent water use reduction by the year 2020 ( "20 by 2020 "),
instituted in 2008 as part of the previous administration's actions to address the water shortage
remains in effect.
Simultaneously with the rising cost of import water, the District was also limited in the amount
of water it was able to provide to its customers without paying significant penalties in fiscal
years 2009 -2010 and 2010 -2011. A water allocation was placed on the District by MWDOC as a
result of MWD policies that amounted to a 10% reduction of water usage on the District's
average water use for calendar years 2004 -2006. Failure to remain within this allocation would
have resulted in substantial financial penalties. While allocations were anticipated, the District
implemented a conservation ordinance effective July 1, 2009 restricting non - essential water use
and curtailing excessive water use.
Just prior to the close of the fiscal year 2010 -2011, the Board of Directors voted to move from its
conservation ordinance Stage 2: Moderate Water Shortage Condition to No Stage, based upon
the State's declaration of the conclusion of the drought and MWDOC's decision to conclude
water use allocations to its member agencies. As the District's emphasis is now on water use
efficiency, the Permanent Restrictions identified in the ordinance will remain in effect.
As of the end of the fiscal year 2010 -2011, the ordinance has proven to be successful with
District customers reducing water usage by an overwhelming 18 %. With this trend, the District is
optimistic water usage will remain within allocation, penalties will be avoided and the District
will reach the State's "20 by 2020" mandate.
iii
Year
FY 2006/07
FY 2007/08
FY 2008/09
FY 2009/10
FY 2010/11
Water Conservation Programs
Historical Water Use
Annual Water Purchased
acre -feet
25,656.5
24,635.5
23,416.8
20,162.2
19,279.9
Percent Change
N/A
-4.0%
-4.9%
-13.9%
-4.4%
The District has implemented conservation management practices since the late 1980's. District
staff participates in community events and distributes informational materials to encourage water
conservation. Through a partnership program with MWDOC, the District offers the following
conservation programs offering rebates for purchase and installation of:
Weather -based Irrigation Landscape Controllers
Rotating Irrigation Nozzles
High Efficiency Clothes Washers
In addition to these programs, the District also implemented a Water Conservation Ordinance on
July 1, 2009. The ordinance focuses on water use efficiency through the prohibition of wasteful
practices and the establishment of water conservation stages. During fiscal year 2010/11, the
District remained at a Stage 2: Moderate Water Shortage Condition, in sync with MWD's water
shortage stage.
Water Conservation Stages
Stage 1
Minimum Water S
=.
Reduce usage by
ModerateWater Shortage
II Stage 2
Reduce usage by 10 % -20%
Stage 3
Severe Water Shortage
Reduce usage by 20 -35%
Stage 4
`C'r t cal'"W", r' homage-
Reduce usage more than 35%
1V
Mission /Vision Statement and Major Initiatives
The activities of the Board and staff of the District are driven by its Mission Statement: "Yorba
Linda Water District will provide reliable, high quality water and sewer services in an
environmentally responsible manner, while maintaining an economical cost and unparalleled
customer service to our community ", and its Vision Statement: "Yorba Linda Water District will
become the leading, innovative and efficient source for high quality reliable services." The
Mission and Vision Statements dictate the following five core values of the District.
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- both our successes and our
opportunities for growth. We maintain a commitment of courtesy, assessment and
resolution with all customer concerns.
4. Transparency — We promote a culture where we actively listen to our customers and
communicate openly about our policies, processes and plans for the future.
5. Teamwork — Success centers on all departments working together and sharing
information and resources to achieve common goals. We are dedicated to ensuring that
every voice of the District, from the Board to each individual employee is treated with
dignity and respect, and that differences are valued and individual abilities and
contributions are recognized.
Major Accomplishments during FY 2010/11
Previously, the Board of Directors approved the FY 2007 -2012 five -year capital improvement
plan totaling $57.7 million. These projects were identified for funding with the 2003 and 2008
Series Certificates of Participation (Revenue Bonds), in combination with annexation funds and
other reserves held by the District. These projects are completed or underway as of the
preparation of this report.
For fiscal years 2011 through 2015, staff identified projects totaling $37.4 million. Included in
that amount, $4.3 million was spent or forecasted for spending through the end of FY 2010/11.
The remaining $33.0 million is therefore proposed for consideration by the Board for capital
improvement projects /capital replacement projects (CIP /CRP) that will extend through
FY 2014/15. $11.8 million of the $33.1 million is projected for spending in the upcoming
FY 2011/12 budget. Funding is available for the FY 2011/12 and FY 2012/13 projects with
existing and forecasted capital reserve funds. Beyond that, additional funds may be required to
complete the entire CIP list. This will depend on bid results and actual costs to complete the
approved projects.
In FY 2009/10, the Board of Directors approved a Five -Year Capital Improvement Program for
2009 to 2014 with a combined total of $44.4M. Of that amount, an estimated $18AM was spent
during FY 2010/11 for projects in planning, design and construction. Those projects included
the following:
v
Highland Reservoir
The new $10.9M Highland Reservoir, in use as of July 2010, provides six million gallons of
potable water storage and was fully completed by September 2010. The buried, reinforced
concrete reservoir serves the most southerly part of the District and is designed with provisions
for expansion to nine million gallons. The new reservoir, considered to be the hub of water
storage for the District's groundwater transmission facilities, replaced the Highland Reservoir,
originally constructed in 1911.
(Highland Reservoir During Construction)
Hidden Hills Reservoir Project
Located at the top of Hidden Hills Road, this $6.1M project now provides more efficient
operation in the District's highest pressure zones within the Hidden Hills area. The project
included construction of a two million gallon buried concrete reservoir and improvements to the
Santiago Booster Pump Station. It was fully complete in September 2010.
Vista del Verde Valve Replacement
This project is a result of needed improvements to a developer- installed system. While adequate
to provide water to the surrounding residential community, the system installed was not up to the
high standard that the District prefers, leading to difficulty with maintenance. The project
replaced twenty -two valves, over the course of two phases, and was complete in May 2011, at a
cost of $440,000.
vi
Highland Booster Pump Station Replacement
The Highland Booster Pump Station Replacement project will allow the District to reliably pump
up to 18,000 gallons per minute of water from the adjacent 6 million gallon Highland Reservoir
to customers in the largest pressure zone served by the District and up to the Lakeview
Reservoir. A feasibility study was completed in early 2009 and the project design plans were
completed in June 2010. Construction of the $7M project began in October 2010 and will be
completed in early 2012.
District Well Projects
The District's water demand averages between 22,000 and 24,000 acre -feet per year. Of that
total, approximately half is pumped from the groundwater basin and the remainder is imported
water purchased through MWDOC. The cost of groundwater, including the cost of pumping, is
about half the cost of imported water. As such, the District is working to ensure it can pump its
full allotment of groundwater. To do so, it must fully utilize its existing wells, optimize their
capacity, and construct new wells when necessary. In this regard, the CIP includes various well
projects, including the following:
Wells 1, 5 and 12 Upgrade Project
The District refurbished Wells 1, 5 and 12 located on the grounds of the District
headquarters. These wells have a combined capacity of approximately 5,000 gallons per
minute. These wells were originally drilled between 1934 and 1950 and were refurbished
to increase combined capacity and useful service life. Refurbishment results in more
reliable groundwater production, enabling the District to reduce the use of more
expensive imported water.
Well 20 Project
This project includes construction of a new groundwater production well near existing
Well 11, located at the southerly end of Richfield Road. Well 11 was drilled in 1934 and
was relined in the 1990's, but has recently become less productive due to age and wear.
Well 20, at a cost of approximately $2M, provides nearly 2,000 gallons per minute of
groundwater production. It will improve the District's capability to produce its full
allotment of groundwater in place of the more expensive imported water. Construction is
scheduled for completion by summer 2012.
South and West Well Project
Work has been initiated, investigating potential well sites south and west of the District's
existing Richfield Wellfield. If findings are positive, drilling of Well No. 21 is planned
for FY 11/12, along with design of above -grade facilities, at an estimated cost of $1
million. Planned for FY 12/13 is construction of Well No. 21 and a transmission
pipeline, at an estimated cost of $2 million. Proposed for FY 13/14 and 14/15 is
acquisition of two additional wells sites, well drilling and construction, pipelines and
appurtenances, at an estimated cost of approximately $5 million. It is anticipated that the
project will include three wells to replace and augment existing wells, and to increase the
District's groundwater pumping capacity, at a total project cost of approximately $8
million.
vii
Additional major accomplishments in FY 2010/11 include:
Sewer Master Plan
The District completed a Sewer Master Plan in February 2011, at a cost of approximately
$260,000. The plan updated the prior plan (completed in 1969) and identifies existing sewer
facilities; developed and calibrated a hydraulic computer model; provided flow monitoring;
identified existing system deficiencies; forecasted deficiencies that may develop with future
build out; and provided recommendations for future improvements, repairs and replacements.
Technological Advancements
From FY 2008/09 to the present, the District has continued to implement a series of
technological improvements including hardware and software system integrations. By ensuring
that the District remains current with technology improvements, efficiency gains have been
achieved, which include centralizing key information, reducing or eliminating inefficient,
redundant manual processes, and updating software to industry standards.
One of the largest advancements is the implementation of a new financial software package,
which will allow for a streamlined, computerized and centralized approach to the general ledger,
accounts payable, inventory, purchase orders, payroll, project accounting, bank reconciliation
and budgeting processes. A new and advanced Utility Billing software system has also been
implemented, with access to customer history and consumption information, which also offers
improved integration with online bill pay, backflow device maintenance and tracking, and
integration with the District's Geographical Information System (GIS).
Final tasks in the implementation of the District's digital information database and analytical
geographical information system (GIS) containing the water and sewer infrastructure, parcel and
street information linked to the customer service and operational database systems, began in
FY 2010/11. Phase 2 work will begin integration of applications such as CMMS, the hydraulic
model, valve - exercising program and hydrant- flushing program. Full completion of the project
is anticipated for FY 2012/13.
Future Years
Amidst the national economic turmoil and the California state budget crisis, our region continues
to face water supply issues due to extended drought seasons, as well as judicial, environmental
and regulatory restrictions. First and foremost, we continue to monitor the State's budget
shortfall and potential shift of our property tax revenues. Secondly, with water conservation and
reduced water sales, our ability to maintain a high level of services while holding costs down,
has been seriously challenged.
viii
Water Rate & Increases
In FY 2010/11, YLWD charged a uniform commodity rate of $2.52 per unit and a monthly fixed
charge of $11.73 for all sizes of meters. One unit of water equals 748 gallons, equating one
gallon of water to approximately $0.0034 (one third of a cent). At an average of 30 units of water
per month (approximately 22,500 gallons), a typical YLWD customer would pay about $87 on
the average for their monthly water bill. YLWD also provided wastewater service to
approximately two - thirds of the District's customer base in FY 2010/11, at an additional charge
of $5.50 per month. The District signed an agreement with the City of Yorba Linda in April 2011
to transfer the remaining one -third of wastewater service customers to the District, effective
July 1, 2011.
In FY 2011/12, Yorba Linda Water District faces many challenges related to water supply and
demand. The District's water supply is currently derived from both groundwater and import
water, approximately 50% from each source. Both import and groundwater prices have
dramatically increased over the past three fiscal years. In January 2009, import water prices
increased by 14.1% and another 19.7% in September 2009. Effective January 1, 2011, import
water costs increased again by 7.5% and are scheduled to increase by an additional 7.5% in
January 2012. These most recent increases alone have translated to over $2M in additional costs
in FY 2009/10. As a result, the District implemented a 41% water rate increase, beginning
September 2009, as well as a pass - through increase on the monthly service charge in
August 2010 to cover the 2011 and 2012 import water cost increases.
With the intent to develop a rate structure to support conservation and equitability among
customers, the District developed a Request for Proposals to conduct a Cost of Service Analysis
and Alternative Water Rate Feasibility Study in November 2009. This study will address the
impacts of implementing a tiered water conservation rate structure and /or a budget -based water
rate structure for customers of the District. It is the District's goal for the study to be completed
and approved by the Board of Directors in early 2012, with potential for implementation if the
Board decides to move forward with a different rate structure, beginning July 1, 2012.
Annexation Initiative
While 75% of the District's service boundary is within the territory of the Orange County Water
District (OCWD), the agency responsible for managing the groundwater basin, District Staff and
the Board will pursue annexation of the remaining 25 %. The advantage of 100% annexation is a
substantial cost savings in the water the District produces from the groundwater basin. Currently,
the OCWD groundwater basin has a pumping limitation of 65% of each agency's annual
demands, which is applicable to all Orange County water agencies that are completely annexed
within OCWD. Since only 75% the District's boundaries are within OCWD, this equates to a
48% pumping limitation. The remaining water is supplied through the more costly import water.
It is estimated that the District would reduce its water costs by over $1.0M per year if the entire
area is annexed into OCWD.
ix
Enhanced Outreach & Communications
The District continues to enhance its communications with and presence within the community.
Within the FY 2010/11 Budget, the District funded a Public Information Officer position. This
position develops additional public information and supports water conservation programs with
the overall goal of developing a more transparent image of the District to the community.
Additionally, it is the District's intent to develop a short-term and long -term public information
master plan.
The District's Citizens Advisory Committee, who serve as ambassadors to the community meet
with District staff on a monthly basis to discuss and provide recommendations on various
pending District issues. The committee has been actively involved with issues such as the water
rate increase, the water conservation ordinance, continuing conservation outreach, public
information, and various other matters as they arise. In November 2010, three Citizens Advisory
Committee members ran for, and won election to seats on the District Board of Directors.
Future Technological Advancements
Future technological advancements include the incorporation of a Computerized Maintenance &
Management System (CMMS), which will automate and track all field work orders and provide
actual costs to perform work order related functions. An Automated Purchase Requisitioning
System, which would provide better workflow and approvals for purchasing items, as well has
have direct integration with the new 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 generally accepted accounting principles.
The District's internal control structure is designed to provide reasonable assurance that these
objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control
should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits
requires estimates and judgments by management.
Budytary Control
The District Board of Directors adopts an operating and capital budget every year. 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
the financial statement basis.
x
Cash and Investment ManaMement
In order of priority, the District's objectives when investing, reinvesting, purchasing, acquiring,
selling and managing public funds are as follows:
I. 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 will remain sufficiently liquid to enable the District to
meet all operating requirements that might be reasonably anticipated.
3. Return on Investments: The investment portfolio shall be designed with the objective of
attaining a market rate of return throughout budgetary and economic cycles, taking into
account the investment risk constraints and the cash flow characteristics of the portfolio.
Audit and Financial Reporting
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
unqualified (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.
Acknowledtements
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 and especially the
Finance - Accounting Committee members for their continued support in planning and
implementation of the Yorba Linda Water District's fiscal policies.
Respectfully submitted,
Kenneth R. Vecchiarelli
General Manager
xi
e
!
t
Stephen Parker
Finance Director
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xii
Board of Directors & Executive Staff
Michael J. Beverage, President
Gary T. Melton
Director
l'
y
Lee Cory
Operations Manager
Art Vega
Interim IT Manager
Robert R. Kiley
Director
Kenneth R. Vecchiarelli
General Manager
Gina Knight
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Ric Collet
Director
Steven R. Conklin
Engineering Manager
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FINANCIAL SECTION
This page intentionally left blank
INDEPENDENT AUDITORS' REPORT
Board of Directors
Yorba Linda Water District
Placentia, California
We have audited the basic financial statements of the Yorba Linda Water District (the District) as of
and for the year ended June 30, 2011 as listed in the table of contents. These basic financial statements
are the responsibility of the District's management. Our responsibility is to express an opinion on
these basic financial statements based on our audit. The prior year partial comparative information has
been derived from the financial statements of the District for the year ended June 30, 2010 and in our
report dated September 15, 2010, we expressed an unqualified opinion on these financial statements.
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, and the State Controller's Minimum
Audit Requirements for California Special Districts. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the District's internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects,
the financial position of Yorba Linda Water District as of June 30, 2011 and the results of its changes in
financial position and cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America, as well as the accounting systems prescribed by the
State Controller's Office and State regulations governing Special Districts.
-1-
5 Corporate Park, Suite 100, Irvine, CA 92606 -5165 • Tel: 949- 399 -0600 • Fax: 949- 399 -0610
Offices located in Orange and San Diego Counties
In accordance with Government Auditing Standards, we have also issued our report dated
October 18, 2011 on our consideration of the District's internal control over financial reporting and our
tests of its compliance with certain provisions of laws, regulations, contracts, 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 and should be considered in assessing
the results of our audit.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and other post- employment benefit plan - schedule of funding
progress, as identified 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 Governmental Accounting Standards Board, who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during the audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance on them.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a
whole. The supplementary information listed in the table of contents is presented for purposes of
additional analysis and is not a required part of the basic financial statements of the District. Such
information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the financial statements. The information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements of the District
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 information is fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
Our audit was conducted for the purpose of forming an opinion on the District's basic financial
statements taken as a whole. The Introductory Section and Statistical Section are presented for
purposes of additional analysis and are not a required part of the basic financial statements. 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 do not express an opinion or provide
any assurance on them.
October 18, 2011
Irvine, California
w kA�. tVtLs m D u 4 E vm.s L, U'D
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
For the Year Ended June 30, 2011
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, 2011. 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
• The District's unrestricted net assets increased by $3.1 million, or a 40% reduction of the
negative unrestricted net assets.
• During the year the District's revenues were $27.3 million, up 3.7 %.
• During the year, expenses were $28.7 million, up 4.7 %.
Required Financial Statements
This annual report consists of a series of financial statements. The Statement of Net Assets, Statement
of Revenues, Expenses and Changes in Net Assets 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.
The Statement of Net Assets includes all of the District's investments in resources (assets) and the
obligations to creditors (liabilities). 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 Assets. 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 can also 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.
See independent auditors' report.
-3-
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
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 Assets and the Statement of
Revenues, Expenses and Changes in Net Assets report information about the District in a way that
helps answer this question. These statements include all assets and liabilities 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 assets and changes in them. You can think of the
District's net assets (the difference between assets and liabilities), as one way to measure the District's
financial health, or financial position. Over time, increases or decreases in the District's net assets are
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, population growth,
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 17
through 40.
See independent auditors' report.
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
Statement of Net Assets
Condensed Statements of Net Assets
Assets:
Current unrestricted assets
Current restricted assets
Other assets
Capital assets, net
Total Assets
Liabilities:
Liabilities payable from unrestricted current assets
Liabilities payable from restricted assets
Non - current liabilities
Total Liabilities
Net Assets:
Invested in capital assets, net of related debt
Restricted for capital projects
Unrestricted
Total Net Assets
2011 2010
$ 15,494,580
20,894,118
755,728
181,633,788
$ 13,259,954
26,908,949
785,655
180,322,149
Change
$ 2,234,626
(6,014,831)
(29,927)
1,311,639
218,778,214
221,276,707
(2,498,493)
5,586,615
6,627,839
(1,041,224)
1,373,171
1,346,440
26,731
57,582,753
58,324,858
(742,105)
64,542,539
146,235,362
12,620,256
(4,619,943)
$ 154,235,675
66,299,137
146,877,122
15,797,432
(7,696,984)
$ 154,977,570
(1,756,598)
(641,760)
(3,177,176)
3,077,041
$ (741,895)
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the District, assets of the District exceeded liabilities by $154.2 million and
$155.0 million as of June 30, 2011 and 2010, respectively.
By far the largest portion of the District's net assets (95% and 95% as of June 30, 2011 and 2010,
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, 2011, the District showed a negative balance in its unrestricted net assets
of $4.6 million, which indicates that there aren't any reserves to be utilized in future years, as was the
same with the negative balance of $7.7 million for the year ended June 30, 2010.
See independent auditors' report.
-5-
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
Statement of Revenues, Expenses and Changes in Net Assets
Condensed Statements of Revenues, Expenses and Changes in Net Assets
See independent auditors' report.
2011
2010
Change
Revenues:
Operating revenues:
Water sales
$ 22,686,251
$ 21,806,164
$ 880,087
Sewer revenue
1,274,579
1,275,980
(1,401)
Other operating revenues
1,035,545
1,102,143
(66,598)
Total operating revenues
24,996,375
24,184,287
812,088
Nonoperating revenues:
Investment income
274,152
244,857
29,295
Property taxes
1,258,769
1,269,441
(10,672)
Other nonoperating revenues
739,062
589,201
149,861
Total nonoperaring revenues
2,271,983
2,103,499
168,484
Total Revenues
27,268,358
26,287,786
980,572
Expenses:
Operating expenses:
Variable water costs
11,268,306
10,688,318
579,988
Personnel services
6,902,995
6,677,757
225,238
Supplies and services
3,686,333
3,576,147
110,186
Depreciation
5,279,860
5,153,891
125,969
Total operating expenses
27,137,494
26,096,113
1,041,381
Nonoperating expenses:
Interest expense
1,172,503
1,170,498
2,005
Other nonoperating expenses
406,575
151,300
255,275
Total nonoperaring expenses
1,579,078
1,321,798
257,280
Total Expenses
28,716,572
27,417,911
1,298,661
Net loss before capital contributions
(1,448,214)
(1,130,125)
(318,089)
Capital contributions
706,316
6,278,135
(5,571,819)
Change in net assets
(741,898)
5,148,010
(5,889,908)
Net assets, beginning of year, as restated
154,977,570
149,829,560
5,148,010
Net assets, end of year
$ 154,235,672
$ 154,977,570
$ (741,898)
See independent auditors' report.
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
Statement of Revenues, Expenses and Changes in Net Assets (Continued)
The statement of revenues, expenses and changes of net assets shows how the District's net assets
changed during the fiscal years. In the case of the District, net assets decreased by $742 thousand and
increased by $5.1 million for the fiscal years ended June 30, 2011 and 2010, respectively.
A closer examination of the sources of changes in net assets reveals that:
In 2011, the District's total revenues increased by $981 thousand, primarily due to an increase in water
sales of $880 thousand from recognizing a full year with higher rates as a result of a large rate increase
that went into effect in September 2009. In addition, total expenses increased by $1.3 million
primarily due to water rates rising which caused an increase in variable water costs ($580 thousand
increase) and other non - operating expense increasing $255 thousand as a result of closing projects that
had accumulated in CIP and determining they should be expensed.
In 2010, the District's total revenues increased by $2.1 million, primarily due to an increase operating
revenues of $2.7 million from increased water revenue from a large rate increase that went into effect
in September 2009. Also, non - operating revenues decreased by $600 thousand primarily due to lower
interest rates. In addition, total expenses increased by only $100 thousand despite a $1.0 million
increase in depreciation expense, due to an 18% reduction in water usage by conserving customers and
cuts made by District staff in the supplies and service area.
See independent auditors' report.
7-
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
Capital Assets
Changes in capital asset amounts for 2011 were as follows:
Balance Transfers/ Balance
2010 Additions Deletions 2011
Capital assets:
Capital assets, not being depreciated
$ 24,014,834
$ 6,125,312
$ (24,916,758)
$ 5,223,388
Capital assets, being depreciated
206,988,160
25,498,796
(254,120)
232,232,836
Less accumulated depreciation
(50,680,845)
(5,279,860)
138,269
(55,822,436)
Total capital assets, net
$180,322,149
$ 26,344,248
$ (25,032,609)
$181,633,788
Changes in capital asset amounts for 2010 were as follows:
Balance Transfers/ Balance
2009 Additions Deletions 2010
Capital assets:
Capital assets, not being depreciated
$ 12,298,890
$ 14,082,190
$ (2,366,246)
$ 24,014,834
Capital assets, being depreciated
198,268,513
8,854,536
(134,889)
206,988,160
Less accumulated depreciation
(45,655,616)
(5,153,891)
128,662
(50,680,845)
Total capital assets, net
$164,911,787
$ 17,782,835
$ (2,372,473)
$180,322,149
At the end of fiscal year 2011 and 2010, the District's investment in capital assets amounted to
$181.6 million and $180.3 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 additions
during the year included upgrades to the District's transmission and distribution system, most notably
the complete replacement of Highland Reservoir and bringing Hidden Hills Reservoir online.
Additional information regarding capital assets can be found in note 4 in Notes to Basic Financial
Statements.
See independent auditors' report.
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
Long -Term Liabilities
Changes in long -term debt amounts for the year ended June 30, 2011 were as follows:
2003 Revenue Certificates of Participation
2008 Revenue Certificates of Participation
Subtotal
Add (Less):
Discount
Premium
Total Certificates of Participation
Compensated absences
Other post - employment liability
Total
Balance
Balance
2010
Additions Reductions
2011
$ 9,425,000
$ - $ (225,000)
$ 9,200,000
34,035,000
- (630,000)
33,405,000
43,460,000
- (855,000)
42,605,000
(125,851)
- 5,433
(120,418)
730,955
- (26,420)
704,535
44,065,104
- (875,987)
43,189,117
1,050,888
518,006 (561,701)
1,007,193
236,483
189,147 (303,565)
122,065
$ 45,352,475 $ 707,153 $ (1,741,253) $ 44,318,375
Changes in long -term debt amounts for the year ended June 30, 2010 were as follows:
2003 Revenue Certificates of Participation
2008 Revenue Certificates of Participation
Subtotal
Add (Less):
Discount
Premium
Total Certificates of Participation
Compensated absences
Other post - employment liability
Total
Balance
Balance
2009
Additions Reductions
2010
$ 9,645,000
$ - $ (220,000)
$ 9,425,000
34,640,000
- (605,000)
34,035,000
44,285,000
- (825,000)
43,460,000
(131,283)
- 5,432
(125,851)
757,375
- (26,420)
730,955
44,911,092
- (845,988)
44,065,104
1,101,916
552,599 (603,627)
1,050,888
120,774
224,018 (108,309)
236,483
$ 46,133,782 S 776,617 $ (1,557,924) $ 45,352,475
Additional information regarding long -term liabilities can be found in note 5 in Notes to Basic
Financial Statements.
See independent auditors' report.
-9-
YORBA LINDA WATER DISTRICT
MANGEMENT'S DISCUSSION AND ANAL YSIS
(CONTINUED)
For the Year Ended June 30, 2011
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.
See independent auditors' report.
-10-
BASIC FINANCIAL STATEMENTS
-11-
YORBA LINDA WATER DISTRICT
COMBINED STATEMENTS OF NET ASSETS
June 30, 2011
(With prior year data for comparison only)
ASSETS
2011
2010
CURRENT ASSETS:
2,143,130
-
UNRESTRICTED ASSETS:
495
1,867
Cash and cash equivalents
$ 11,235,015
$ 8,686,564
Accounts receivable - water and sewer services
3,642,035
3,923,554
Accounts receivable - property taxes
114,949
120,976
Accrued interest receivable
22,049
22,248
Prepaid expenses and deposits
246,919
273,024
Inventory
233,613
233,588
TOTAL UNRESTRICTED ASSETS
15,494,580
13,259,954
RESTRICTED ASSETS:
Cash and cash equivalents
18,750,493
26,907,082
Investments
2,143,130
-
Accrued interest receivable
495
1,867
TOTAL RESTRICTED ASSETS
20,894,118
26,908,949
TOTAL CURRENT ASSETS
36,388,698
40,168,903
NONCURRENT ASSETS:
Bond issuance costs
755,728
785,655
Capital assets (Note 4):
Non - depreciable
5,223,388
24,014,834
Depreciable, net of accumulated depreciation
176,410,400
156,307,315
TOTAL NONCURRENT ASSETS
182,389,516
181,107,804
TOTAL ASSETS
218,778,214
221,276,707
See independent auditors' report and notes to basic financial statements. (Continued)
-12-
YORBA LINDA WATER DISTRICT
COMBINED STATEMENTS OF NET ASSETS
(CONTINUED)
June 30, 2011
(With prior year data for comparison only)
LIABILITIES 2011 2010
CURRENT LIABILITIES:
PAYABLE FROM UNRESTRICTED CURRENT ASSETS:
Accounts payable $ 4,506,830 $ 5,536,848
Accrued expenses 130,306 125,727
Compensated absences payable (Note 5) 251,798 262,722
Customer and construction deposits 281,156 221,940
Deferred revenue 416,525 480,602
TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS 5,586,615 6,627,839
PAYABLE FROM RESTRICTED ASSETS:
Accrued interest payable 483,171 491,440
Certificates of Participation - current portion (Note 5) 890,000 855,000
TOTAL PAYABLE FROM RESTRICTED ASSETS 1,373,171 1,346,440
TOTAL CURRENT LIABILITIES 6,959,786 7,974,279
LONG -TERM LIABILITIES (LESS CURRENT PORTION)
Deferred annexation revenue 14,406,176 14,090,105
Compensated absences (Note 5) 755,395 788,166
Other post - employment benefit (OPEB) liability (Notes 5 and 6) 122,065 236,483
Certificates of Participation (Note 5) 42,299,117 43,210,104
TOTAL LONG -TERM LIABILITIES (LESS CURRENT PORTION) 57,582,753 58,324,858
TOTAL LIABILITIES 64,542,539 66,299,137
NET ASSETS:
Invested in capital assets, net of related debt (Note 8) 1465235,362 146,877,122
Restricted for capital projects 1256205256 15,797,432
Unrestricted (456195943) (756965984)
TOTAL NET ASSETS $ 15452355675 $ 154,9775570
See independent auditors' report and notes to basic financial statements.
-13-
YORBA LINDA WATER DISTRICT
COMBINED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
For the year ended June 30, 2011
(With prior year data for comparison only)
OPERATING REVENUES:
Water sales
Sewer revenues
Other operating revenues
2011 2010
$ 22,686,251
1,274,579
1,035,545
$ 21,806,164
1,275,980
1,102,143
TOTAL OPERATING REVENUES 24,996,375 24,184,287
OPERATING EXPENSES:
Variable water costs
11,268,306
10,688,318
Personnel services
6,902,995
6,677,757
Supplies and services
3,686,333
3,576,147
Depreciation
5,279,860
5,153,891
Other nonoperating expenses
TOTAL OPERATING EXPENSES
27,137,494
26,096,113
OPERATING LOSS
(2,141,119)
(1,911,826)
NONOPERATING REVENUES (EXPENSES):
Property taxes
1,258,769
1,269,441
Investment income
274,152
244,857
Interest expense
(1,172,503)
(1,170,498)
Other nonoperating revenues
739,062
589,201
Other nonoperating expenses
(406,575)
(151,300)
TOTAL NONOPERATING REVENUES (EXPENSES)
692,905
781,701
NET LOSS BEFORE CAPITAL CONTRIBUTIONS
(1,448,214)
(1,130,125)
CAPITAL CONTRIBUTIONS
706,319
6,278,135
CHANGES IN NET ASSETS
(741,895)
5,148,010
NET ASSETS - BEGINNING OF YEAR, AS RESTATED
154,977,570
149,829,560
NET ASSETS - END OF YEAR
$ 154,235,675
$ 154,977,570
See independent auditors' report and notes to basic financial statements.
-14-
YORBA LINDA WATER DISTRICT
COMBINED STATEMENTS OF CASH FLOWS
For the year ended June 30, 2011
(With prior year data for comparison only)
See independent auditors' report and notes to basic financial statements. (Continued)
-15-
2011
2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers
$ 25,257,632
$ 22,783,879
Cash payments to employees for salaries and wages
(7,056,529)
(6,661,928)
Cash payments to suppliers of goods and services
(15,879,098)
(14,101,632)
Other revenue
245,050
156,025
Other expenses
(263,781)
(115,942)
NET CASH PROVIDED BY OPERATING ACTIVITIES
2,303,274
2,060,402
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Proceeds from property taxes and assessments
1,265,653
1,173,205
NET CASH PROVIDED BY NONCAPITAL
FINANCING ACTIVITIES
1,265,653
1,173,205
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Property taxes received for debt service
-
4,443
Proceeds from annexation fees and capital contributions
1,022,579
113,312
Acquisition and construction of capital assets
(5,599,745)
(13,505,308)
Proceeds from sales of capital assets
13,678
4,063
Principal paid on long -term liability
(855,000)
(825,000)
Interest paid on long -term liability
(1,961,047)
(1,991,711)
NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES
(7,379,535)
(16,200,201)
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale /purchase of investments, net
(2,073,253)
12,6715946
Interest and investment earnings
275,723
2585176
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES
(157975530)
12,930,122
NET DECREASE IN CASH AND CASH EQUIVALENTS
(5,6085138)
(365472)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
3555935646
3556305118
CASH AND CASH EQUIVALENTS - END OF YEAR
$ 295985,508
$ 35,593,646
See independent auditors' report and notes to basic financial statements. (Continued)
-15-
YORBA LINDA WATER DISTRICT
COMBINED STATEMENTS OF CASH FLOWS
(CONTINUED)
For the year ended June 30, 2011
(With prior year data for comparison only)
RECONCILIATION OF OPERATING LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating loss
Adjustments to reconcile operating loss to
net cash provided by operating activities:
Depreciation
Other revenues
Other expenses
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable
Inventory
Prepaid expenses and deposits
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
Accrued salaries and wages
Accrued other post - employment benefits (OPEB) liability
Accrued compensated absences
Customer and construction deposits
Total adjustments
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH AND CASH EQUIVALENTS -
FINANCIAL STATEMENT CLASSIFICATION:
Unrestricted
Restricted
TOTAL CASH AND CASH EQUIVALENTS -
FINANCIAL STATEMENT CLASSIFICATION
NONCASH INVESTING, CAPITAL AND
RELATED FINANCING ACTIVITIES:
Amortization related to long -term debt
Capital contributions
See independent auditors' report and notes to basic financial statements.
-16-
2011 2010
$ (2,141,119) $ (1,911,826)
5,279,860
244,850
(263,781)
281,520
(25)
26,105
(1,030,018)
4,579
(114,418)
(43,695)
59,216
5,153,891
156,025
(115,942)
(1,358,795)
49,111
71,637
(21,294)
(48,852)
115,709
(51,028)
21,766
4,444,193 3,972,228
$ 2,303,074 $ 2,060,402
$ 11,235,015 $ 8,686,564
18,750,493 26,907,082
$ 29,985,508 $ 35,593,646
$ 20,988 $ 20,988
$ 706,319 $ 6,278,135
NOTES TO BASIC FINANCIAL STATEMENTS
-17-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2011
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 the 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 which include Water and Sewer. Water is
provided to the entire service area. Sewer is provided to about two - thirds of the service area.
The District's service area includes Yorba Linda and portions of Placentia, Anaheim, Brea, and
areas of unincorporated Orange County. The District provides water and sewer service to
approximately 81,893 residents.
The criteria used in determining the scope of the reporting entity are based on the provisions of
GASB Statement 14. The District is the primary government unit. Component units are those
entities which are financially accountable to the primary government, either because the
District appoints a voting majority or the component unit's board, or because the component
unit will provide a financial benefit or impose a financial burden on the District.
The District's reporting entity includes the Yorba Linda Water District Public Financing
Corporation, a California nonprofit public benefit corporation, 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 with in the financing,
refinancing, acquiring, constructing and rehabilitating of facilities, land and equipment, in 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). Although the District and
the Public Facilities Corporation are legally separate entities, the District's Board of Directors
is financially responsible for the Public Financing Corporation and, therefore, the
accompanying financial statements include the accounts and records of the Public Financing
Corporation using the blending method as required by accounting principles generally accepted
in the United States of America. There are no separate financial statements for the Public
Financing Corporation.
b. Basic Financial Statements:
The basic financial statements are comprised of the Combined Statements of Net Assets, the
Combined Statements of Revenues, Expenses and Changes in Net Assets, the Statements of
Cash Flows and the notes to the basic financial statements.
See independent auditors' report.
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Basis of Presentation:
The accounts of the District are 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,
including depreciation) 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 and liabilities (whether current or
noncurrent) associated with these activities are included on the Statement of Net Assets. The
Statement of Revenues, Expenses and Changes in Net Assets present increases (revenues) and
decreases (expenses) in total net assets. 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. Net Assets:
In the Statement of Net Assets, net assets are classified in the following categories:
• Invested in capital assets, net of related debt - 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 assets - This amount is restricted by external creditors, grantors, contributors,
or laws or regulations of other governments.
• Unrestricted net assets - This amount is all net assets that do not meet the definition of
"invested in capital assets, net of related debt" or "restricted net assets ".
When both restricted and unrestricted resources are available for use, the District may use
restricted resources or unrestricted resources based on the Board's discretion.
See independent auditors' report.
-19-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
f. 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 and 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 cost of sales and services, administrative expenses and
depreciation on capital assets. All expenses not meeting this definition are reported as
nonoperating expenses.
g. 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.
h. Investments and Investment Policy:
The District has adopted an investment policy directing the District's General Manager or
Finance Director to invest, reinvest, sell or exchange securities.
Investments are stated at fair value which represents the quoted or stated market value.
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.
i. 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 $20,263 and $41,612 were made to bad debt expense for the
fiscal years ended June 30, 2011 and 2010, respectively.
See independent auditors' report.
-20-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
j. Property Taxes and Assessments:
The Orange County Assessor's Office assesses all real and personal property within the 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 I% 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:
Levy Date:
Due Dates:
Collection Dates:
k. Prepaid Expenses:
January 1
July 1
First Installment - November 1
Second Installment - March 1
First Installment - December 10
Second Installment - April 10
Certain payments to vendors reflects costs or deposits applicable to future accounting periods
and are recorded as prepaid items in the basic financial statements.
1. 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.
m. 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. Contributed assets are
recorded at estimated fair market value at the date of contribution. 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.
See independent auditors' report.
-21-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
m. Capital Assets (Continued):
Depreciation is recorded on the straight -line basis over the estimated useful lives of the assets
as follows:
Source of Supply
30 to 75 years
Pumping Plant
20 to 40 years
Water Treatment Plant
12 to 40 years
Sewer Plant
5 to 60 years
Transmission and Distribution Plant
10 to 40 years
General Plant
3 to 40 years
n. Bond Issuance Costs:
Bond issuance costs are amortized on a straight -line methodology based on the estimated term
of the related bond debt. Bond issuance costs were $755,728 and $785,655 net of accumulated
amortization of $142,056 and $112,130 at June 30, 2011 and 2010, respectively.
o. Interest Expense:
The District incurs interest charges on the Certificates of Participation. Interest expense of
$753,855 and $787,038 has been capitalized as an addition to the cost of construction for the
years ended June 30, 2011 and 2010, respectively.
p. 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 one -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 vacation leave except for those employees that have not
completed the probationary period.
Permanent employees that retire in accordance with the Public Employee's Retirement System
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 PERS account. The District has accrued 100% of the unused
sick leave as a liability as it expects most employees to meet the PERS requirements when
retiring or leaving the District.
See independent auditors' report.
-22-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
q. Deferred Credits:
Deferred credits represent customer refunds that have not been cashed and are reported as part
of deferred revenue.
r. 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.
s. 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.
t. Prepaid Connection Fees:
Connection fees are collected by the District to cover the cost of service connections within the
District. Funds in excess of connection costs are refunded to the customer. These amounts are
reported as part of deferred revenues.
u. Deferred 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 the I% property tax revenue
which the District no longer received post- Proposition 13. The fee is a present worth value
required to generate a forty year revenue stream equivalent to the lost property tax revenue. It
is calculated based on the fair market value estimate of the improved property at the time the
fee is collected and 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.
This deferred revenue source may be used for capital facilities in the future if approved by the
Board.
v. Water and Sewer Sales:
The District recognizes water and sewer service charges based on cycle billings rendered to the
customers each month.
See independent auditors' report.
-23-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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. 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.
y. Use of Estimates:
The financial statements are prepared in conformity 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.
z. 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 generally accepted accounting principles.
Accordingly, such information should be read in conjunction with the District's prior year
financial statements, from which this selected financial data was derived.
See independent auditors' report.
-24-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS:
Cash and Investments:
Cash and investments as of June 30, 2011 are reported in the accompanying combining schedule of
net assets as follows:
Unrestricted Current Assets:
Cash and cash equivalents
Restricted Assets:
Cash and cash equivalents
Investments
Water Sewer Total
$ 9,240,812 $ 1,994,203 $ 11,235,015
18,750,493
2.143.130
18,750,493
2,143,130
Total Cash and Investments 8 30,134,435 S 1.994.203 S 32.128.638
Cash and investments as of June 30, 2011 consisted of the following:
Cash on hand
Deposits with financial institutions
Escrow deposits
Investments
Total Cash and Investments
Water Sewer Total
$ 1,200 $ - $ 1,200
708,637 252,563 961,200
109,737 - 109,737
29.314.861 1.741.640 31.056.501
See independent auditors' report.
-25-
30.134,435 8 1,994,203 32.128.638
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
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.
* Excluding amounts held by bond trustee that are not subject to California Government Code
restrictions.
** At June 30, 2011, the District's investment in CalTRUST of $23,265,811 exceeded the limit of
$10 million authorized by the investment policy
N/A - Not Applicable
See independent auditors' report.
-26-
Maximum
Maximum
Maximum
Percentage
Investment
Authorized Investment Type
Maturity_
of Portfolio *
in One Issuer
Bank or Savings and Loans
5 years
None
None
Local Agency Investment Fund (LAIF)
N/A
None
$10 million
Orange County Commingled Investment Pool
N/A
None
$10 million
California Asset Management Program
N/A
None
None
United States Treasury Bills, Notes
and Bonds
5 years
None
None
United States Government Sponsored
Agency Securities
5 years
50%
None
Corporate Bonds
5 years
30%
None
Bankers Acceptances
180 days
10%
None
Commercial Paper
270 days
25%
None
CalTRUST Investment Pool **
N/A
N/A
$10 million
Money Market Funds
N/A
20%
None
* Excluding amounts held by bond trustee that are not subject to California Government Code
restrictions.
** At June 30, 2011, the District's investment in CalTRUST of $23,265,811 exceeded the limit of
$10 million authorized by the investment policy
N/A - Not Applicable
See independent auditors' report.
-26-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Investments Authorized by Debt Agreements:
Investments of debt proceeds held by bond trustees are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or the District's
investment policy. The table below identifies the investment types that are authorized for
investments held by bond trustees. The table also identifies certain provisions of these debt
agreements that address interest rate risk and concentration of risk.
Authorized Investment
Cash
United States Treasury Bills, Notes
and Bonds
United States Treasury Obligations
Resolution Funding Corp. (REFCORP)
Prefunded Municipal Bonds
United States Government Sponsored
Agency Securities
Commercial Paper
Money Market Funds
Certificates of Deposits
Guaranteed Investment Contracts
Bankers Acceptance
Repurchase Agreements
Local Agency Investment Fund
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.
See independent auditors' report.
-27-
Maximum
Maximum
Maximum
Percentage
Investment
Maturity
Allowed
in One Issuer
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
1 year
None
None
30 days
None
None
None
None
None
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.
See independent auditors' report.
-27-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Disclosures Relating to Interest Rate Risk (Continued):
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
table that shows the distribution of the District's investments by maturity as of June 30, 2011.
Investment Type
CalTRUST Investment Pool
Held by bond trustee:
United States Government Sponsored
Agency Securities
Money market funds
Disclosures Relating to Credit Risk:
Remaining
Maturity
(in Months)
12 Months
or Less
$ 23,265,811
2,143,129
5,647,561
31,056,501
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 rating
required by (where applicable) the California Government Code, the District's investment policy,
or debt agreements, and the actual Standard and Poor's credit rating as of June 30, 2011 for each
investment type.
Minimum
AAA AA+
$ - $ 2,494,665
2,143,129 -
2.143.129 2.494.665
Subsequent to June 30, 2011, Standard and Poor's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA +.
See independent auditors' report.
-28-
Legal
Investment Type
Rating
Ca1TRUST Investment Pool
N/A
Held by bond trustee:
-
United States Government
5,647,561
Sponsored Agency Securities
N/A
Money market funds
A
AAA AA+
$ - $ 2,494,665
2,143,129 -
2.143.129 2.494.665
Subsequent to June 30, 2011, Standard and Poor's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA +.
See independent auditors' report.
-28-
Not
Total
Rated
$ 23,265,811
$ 20,771,146
2,143,129
-
5,647,561
5,647,561
31,056,501
26.418.707
AAA AA+
$ - $ 2,494,665
2,143,129 -
2.143.129 2.494.665
Subsequent to June 30, 2011, Standard and Poor's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA +.
See independent auditors' report.
-28-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
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.
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 LAIF).
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. The District had
deposits with bank balances of $1,273,849 as of June 30, 2011. Of the bank balances, up to
$677,874 are federally insured and the remaining balance is collateralized in accordance with the
Code; however, the collateralized securities are not held in the District's name.
See independent auditors' report.
-29-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
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 sets overall policies for the program and selects and supervises the
activities of the investment manager and other agents. CalTRUST maintains and administers four
pooled accounts within the program: Money Market, Short -Term, Medium -Term and Long -Term.
The Money Market account permits daily transactions, with same -day liquidity (provided
redemption requests are received by 1:00 p.m. Pacific time), with no limit on the amount of funds
that may be invested. The Short-Term account permits an unlimited number of transactions per
month (with prior day notice), with no limit on the amount of funds that may be invested. The
Medium- and Long -Term accounts permit investments, withdrawals and transfers once per month,
with five days advance notice. All CalTRUST accounts comply with the limits and restrictions
placed on local agency investments by the California Government Code. CalTRUST imposes a
$250,000 minimum investment; however, there is no maximum 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.
3. RESTRICTED ASSETS:
Restricted assets were provided by, and are to be used for the following as of June 30, 2011
and 2010:
Source Use 2011 2010
Custodial receipts
Bond proceeds, taxes,
assessments and interest
See independent auditors' report.
Custodial costs
Construction of capital
assets expansion
-30-
$ 109,737 $ 1,282,379
20,784,381 25,626,570
20.894.118 S 26.908.949
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
4. CAPITAL ASSETS:
Changes in capital assets for the year ended June 30, 2011 is as follows:
Capital assets, not being depreciated:
Land, mineral and water rights
Construction in progress
Total capital assets, not
being depreciated
Capital assets, being depreciated:
Source of supply
Pumping plant
Water treatment plant
Transmission and distribution plant
General plant
Total capital assets,
being depreciated
Less accumulated depreciation for:
Source of supply
Pumping plant
Water treatment plant
Transmission and distribution plant
General plant
Total accumulated depreciation
Total capital assets,
being depreciated, net
Total capital assets, net
Balance
(137,465)
4,116
Balance
June 30, 2010
Additions
Deletions
June 30, 2011
(816,366)
(125,857)
-
$ 347,490
$ -
$ - $
347,490
23,667,344
6,125,312
(24,916,758)
4,875,898
24,014,834
6,125,312
(24,916,758)
5,223,388
5,721,883
309,114
(4,116)
6,026,881
16,867,820
801,219
(6,500)
17,662,539
2,623,881
123,924
-
2,747,805
163,291,245
22,496,269
(146,433)
185,641,081
18,483,331
1,768,270
(97,071)
20,154,530
206,988,160 25,498,796 (254,120) 232,232,836
(1,517,665)
(137,465)
4,116
(1,651,014)
(3,814,769)
(605,508)
5,193
(4,415,084)
(816,366)
(125,857)
-
(942,223)
(39,266,907)
(3,598,042)
31,889
(42,835,060)
(5,265,138) (812,988)
97,071
(5,981,055)
(50,680,845) (5,279,860) 138,269 (55,822,436)
156,307,315 20,218,936 (115,851) 176,410,400
180,322.149 $ 26,344,248 (25.032.609) 181,633,788
Depreciation expense for the depreciable capital assets was $5,279,860 in 2011.
The District has been involved in various construction projects throughout the year. The balance of
construction in progress at June 30, 2011 is $4,875,898.
See independent auditors' report.
-31-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
5. LONG -TERM LIABILITIES:
Changes in long -term liabilities for the year ended June 30, 2011 were as follows:
Certificates of Participation:
2003 Revenue Certificates
of Participation
2008 Revenue Certificates
of Participation
Subtotal
Add (Less):
Discount
Premium
Total Certificates
of Participation
Compensated absences
Other post - employment
liability
Total
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
$ 9,425,000 $
34,035,000
43,460,000
(125,851)
730,955
44,065,104
1,050,888
- $ (225,000) $ 9,200,000 $ 235,000
(630,000) 33,405,000 655,000
- (855,000) 42,605,000 890,000
- 5,433 (120,418) -
(26,420) 704,535 -
- (875,987) 43,189,117 890,000
518,006 (561,701) 1,007,193 251,798
236,483 189,147 (303,565) 122,065 -
45,352.475 707,153 (1,741.253) 44.318.375 1.141.798
2003 Revenue Certificates of Participation:
In August 2003, the Public Financing Corporation issued $10,645,000 2003 Revenue Certificates
of Participation for the purpose of financing the Highland Reservoir Renovation and
Richfield -Phase 3 Renovation Project. The Certificates bear interest ranging from 2% to 5 %,
payable semiannually on April 1 and October 1, commencing April 1, 2004. The Term Certificates
of $2,295,000 are due on October 1, 2028 and the Term Certificates of $2,930,000 are due on
October 1, 2033.
A surety bond for $679,137 was issued by Financial Guaranty Insurance Company (FGIC). FGIC
is not rated by Moody's Investors' Service, Standard & Poor's or Fitch Investors' Service. At
June 30, 2011 the 2003 Certificates outstanding balance was $9,200,000.
The 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 which 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 year 2011, the
net revenues equal to 183% of the debt service.
See independent auditors' report.
-32-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
5. LONG -TERM LIABILITIES (CONTINUED):
2003 Revenue Certificates of Participation (Continued):
The annual debt service requirements for the 2003 Revenue Certificates of Participation
outstanding at June 30, 2011 are as follows:
Year Ending
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2034
Subtotal
Less: Discount
Total
2008 Revenue Certificates of Participation:
Principal
$ 235,000
245,000
255,000
265,000
275,000
1,570,000
1,980,000
2,530,000
1,845,000
9,200,000
(120,418)
Interest
$ 437,382
428,076
418,076
407,411
395,934
1,778,900
1,350,750
789,500
141,375
6,147,404
Total
$ 672,382
673,076
673,076
672,411
670,934
3,348,900
3,330,750
3,319,500
1,986,375
15,347,404
(120,418)
9.079.582 S 6.147.404 S 15.226.986
In February 2008, the District issued $34,995,000 2008 Revenue Certificates of Participation for
the purpose of financing the 2008 Capital Improvement Projects. The Certificates bear interest
ranging from 4% to 5 %, payable semiannually on April 1 and October 1, commencing
October 1, 2008. The Term Certificates of $10,885,000 are due on October 1, 2038. The legal
reserve requirement is $2,147,096. At June 30, 2011 the reserve fund had a balance of $2,145,021.
At June 30, 2011 the 2008 Certificates outstanding balance was $33,405,000.
The 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 which 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 year 2011, the
net revenues equal to 183% of the debt service.
See independent auditors' report.
-33 -
5
0
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
LONG -TERM LIABILITIES (CONTINUED):
2008 Revenue Certificates of Participation (Continued):
The annual debt service requirements for the 2008 Revenue Certificates of Participation
outstanding at June 30, 2011 are as follows:
Year Ending
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2036
2037-2039
Subtotal
Add: Premium
Total
Compensated Absences:
Principal
$ 655,000
680,000
705,000
735,000
765,000
4,305,000
5,245,000
6,435,000
8,040,000
5,840,000
33,405,000
704,535
34.109.535
Interest
$ 1,477,796
1,451,096
1,423,396
1,394,596
1,364,596
6,329,580
5,374,122
4,136,313
2,487,363
447,250
25,886,108
Total
$ 2,1 32,796
2,131,096
2,128,396
2,129,596
2,129,596
10,634,580
10,619,122
10,571,313
10,527,363
6,287,250
59,291,108
704.535
25.886.108 59.995.643
Compensated absences are comprised of unpaid vacation leave, sick leave and compensating time
off which are accrued as earned. (See Note 1p).
OTHER POST EMPLOYMENT BENEFITS (OPEB):
a. Plan Description:
The District, through a single employer defined benefit plan, provides post- employment health
care benefits. 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 resolutions.
Medical coverage is provided for retired employees who are age 50 or over and who have a
minimum of 5 years service with the District. 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.
See independent auditors' report.
-34-
rol
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED):
b. Funding Policy:
The contribution requirements of plan members and the District are established and may be
amended by the District, District's Board of Directors, and /or the employee associations.
Currently, contributions are not required from plan members. The District is currently funding
this OPEB obligation on a pay -as- you -go basis. For the year ended June 30, 2011, the District
paid $140,747 in health care costs for its retirees and their covered dependents and made a
contribution of $162,818.
c. Annual OPEB Cost and Net OPEB Obligation:
The District's annual OPEB cost (expense) is calculated based on the annual required
contribution of the employer (ARC), an amount actuarially determined in accordance with
parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and to amortize any unfunded
liabilities of the plan over a period not to exceed thirty years.
The following table shows the components of the District's annual OPEB cost for the year, the
amount actually contributed to the plan, and changes in the District's net OPEB obligation to
the Retiree Health Plan:
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
Actual contributions made
Decrease in net OPEB obligation
Net OPEB Obligation - beginning of year
Net OPEB Obligation - end of year
$ 177,323
11,824
189,147
(303,565)
(114,418)
236,483
$ 122,065
The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation for the years ended June 30, 2011, 2010 and 2009 were as
follows:
Fiscal
Year
Ended
6/30/09
6/30/10
6/30/11
Annual
OPEB
Cost
$ 217,979
224,018
189,147
See independent auditors' report.
Percentage
of Annual
OPEB Costs
Contributed
44.64%
48.35%
160.49%
-35-
Net
OPEB
Obligation
$ 120,774
236,483
122,065
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
6. OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED):
d. Funded Status and Funding Progress:
As of March 1, 2011, the most recent actuarial valuation date, the plan was zero percent
funded. The actuarial accrued liability for benefits was $1,594,667, and the actuarial value of
assets was zero, resulting in an unfunded actuarial accrued liability (UAAL) of $1,594,667.
The covered payroll (annual payroll of active employees covered by the plan) was $5,044,860
and the ratio of the UAAL to the covered payroll was 31.61%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about rates of employee turnover, retirement, mortality, as well as economic
assumptions regarding claim costs per retiree, healthcare inflation and interest rates. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future. The schedule of funding progress, presented as
required supplementary information following the notes to the financial statements, presents
multi -year trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liabilities for benefits.
e. Actuarial Methods and Assumptions:
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and the plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions
used include techniques that are designed to reduce the effects of short -term volatility in
actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term
perspective of the calculations. In the March 1, 2011 actuarial investment valuation, the entry
age normal cost method was used. The actuarial assumptions included an inflation rate of 3.0%
per annum, an investment return of 7.6% per annum, a projected salary increase of 3.0% per
annum and a health inflation rate of 4.0% per annum. The District is using the level
percentage of payroll method to allocate amortization cost by year and a closed 30 year period
for the initial unfunded actuarial accrued liability.
See independent auditors' report.
-36-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. DEFINED BENEFIT PENSION PLAN:
a. Plan Description:
The District participates in the 2.0% at 55 Risk Pool of the California Employees Retirement
System (CalPERS), a cost sharing multiple- employer defined benefit pension plan. CalPERS
provides retirement and disability benefits, annual cost -of- living adjustments, and death
benefits to plan members and beneficiaries. CalPERS acts as a common investment and
administrative agent for participating public entities within the State of California. Benefit
provisions and all other requirements are established by State statute and District ordinance.
Copies of CalPERS' annual financial report may be obtained from their Executive Office
located at, 400 P Street, Sacramento, CA 95814.
b. Funding Policy:
The contribution rate for plan members in the CalPERS 2.0% at 55 Risk Pool Retirement Plan
is 7% of their annual covered salary. The District makes these contributions required of
District employees on their behalf and for their account. Also, the District is required to
contribute the actuarially determined remaining amounts necessary to fund the benefits for its
members. The required employer contribution rates for fiscal year 2011, 2010 and 2009 were
10.461 %, 10.062% and 9.886 %, respectively. The contribution requirements of the plan
members are established by State statute, and the employer contribution rate is established and
may be amended by CalPERS. For fiscal years 2011, 2010 and 2009 the District's annual
employer's contributions were $527,743, $492,476 and $482,987, respectively, for CalPERS
and was equal to the District's required and actual contributions for each year.
8. NET ASSETS INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT AND ESTRICTED
NET ASSETS:
The balance of net investment in capital assets consisted of the following as of June 30, 2011
and 2010:
Capital assets, net of accumulated depreciation
Certificates of participation - current
Certificates of participation - long -term
Unspent debt proceeds
Net assets invested in capital assets,
net of related debt
See independent auditors' report.
-37-
2011
$ 181,633,788
(890,000)
(42,299,117)
7,790,691
2010
$ 180,322,149
(855,000)
(43,210,104)
10.620.077
146.235.362 S 146.877.122
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
9. RISK MANAGEMENT:
The District is exposed to various risks of loss related to torts, 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 Authority).
The Authority is a risk - pooling self - insurance authority, created under provisions of California
Government Code Sections 6500 et. seq. The purpose of the Authority is to arrange and administer
programs of insurance for the pooling of self - insured losses and to purchase excess insurance
coverage.
At June 30, 2011, as a member of the Authority, the District participated in the insurance programs
as follows:
• General and auto liability, public officials and employee's error and omissions: Total risk
financing self - insurance limits of $1,000,000, combined single limit at $1,000,000 per
occurrence. The Authority purchases additional excess coverage layers: $59 million for
general, auto and public officials liability, which increases the limits on the insurance
coverage noted above.
• Employee dishonesty coverage 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 Authority is
self - insured for the first $50,000, and purchases excess coverage up to $100 million, subject
to a $1,000 deductible, except for a $500 deductible on vehicles.
• Boiler and machinery coverage for the replacement cost up to $100 million per occurrence,
subject to various deductibles depending on the type of equipment.
• Workers' compensation insurance up to California statutory limits for all work related
injuries /illnesses covered by California law.
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 2011,
2010 and 2009. 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 (IBNR). There
were no IBNR claims payable as of June 30, 2011, 2010 and 2009.
See independent auditors' report.
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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 approximately
$6,302,697 of open construction contracts as of June 30, 2011.
Construction contracts include:
Elk Mountain site improvement
Well No. 20
Well No. 20
Highland BPS upgrade
Highland BPS upgrade
YL Blvd Booster Station
Computerized maintenance and management system
South and West well project
Ohio Street/Oriente Drive pipeline replacement
Ohio Street/Oriente Drive pipeline replacement
Ohio Street/Oriente Drive pipeline replacement
2010 pipeline replacement project
2010 pipeline replacement project
Litigation:
Total
Construction
Balance
Approved
Costs
to
Contract
to Date
Complete
$ 19,000
$ 16,000
$ 3,000
96,335
67,081
29,254
179,467
18,420
161,047
800,253
655,000
145,253
4,525,800
1,097,375
3,428,425
423,000
143,000
280,000
248,626
195,526
53,100
34,180
-
34,180
174,880
146,292
28,588
1,389,089
-
1,389,089
43,798
-
43,798
238,771
99,808
138,963
568,000
-
568,000
S 8,741,199 2.438.502 6.302.697
In November 2008, a series of wildfires, known as the Freeway Complex Fires, spread across the
communities of Corona, Chino Hills, Yorba Linda, Anaheim Hills, and Brea in Orange and
Riverside Counties. The fires also spread to Diamond Bar in Los Angeles County. The fires
burned about 30,305 acres, destroyed about 200 structures, and forced the evacuations of about
7,000 homes. There are claims being asserted against the District by homeowners and others
damaged by the fires. As a member of ACWA JPIA (see Note 9), these claims are currently being
handled by the JPIA's legal counsel. The District's management believes the ultimate outcome of
these claims will not exceed the District's insurance coverage amounts.
See independent auditors' report.
-39-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
11. PROPOSITION IA BORROWINGS BY THE STATE OF CALIFORNIA:
Under the provisions of Proposition I and as part of the 2009 -2010 budget package passed by the
California state legislature on July 28, 2009, the State of California borrowed 8% of the amount of
property tax revenue, including those property taxes associated with the in -lieu motor vehicle
license fee, the triple flip in the lieu sales tax, and supplemental property tax, apportioned to cities,
counties and special districts (excluding redevelopment agencies). The state is required to repay
this borrowing plus interest by June 30, 2013. After repayment of this initial borrowing, the
California legislature may consider only one additional borrowing within a ten -year period. The
amount of this borrowing pertaining to the District was $102,192.
The borrowing by the State of California was recognized as a receivable in the accompanying
financial statements. It is reported as part of accounts receivable - property taxes.
12. PRE - ANNEXATION AGREEMENT:
In June 2008, the District entered into a pre- annexation agreement with Placentia Yorba Linda
Unified School District (PYLUSD) whereby the District intends to provide access to water and
sewer service to the PYLUSD for the benefit of a property that PYLUSD wishes to develop for
public high school use. Per the agreement, PYLUSD agreed to fund additional District reservoir
improvements equal to the cost of constructing additional 450,000 gallons of reservoir storage.
The cost for the additional water storage was estimated to be approximately $1.50 per gallon,
resulting in a total approximate cost of $675,000. PYLUSD paid the District $32,500 within
30 days of execution of the agreement. The remaining balance is payable over a nine -year period
at an annual interest rate of 4 %. Annual payments of $81,704, which include principal and interest,
started in the fiscal year ended June 30, 2010. The remaining outstanding balance at June 30, 2011
was $490,395. As of June 30, 2011 the District reservoir improvements are still in progress. The
District has not yet completed its obligation in its entirety and has not earned the rights to the entire
amount. Therefore, the outstanding balance is not recorded in the District's books.
13. RESTATEMENT OF NET ASSETS:
Net assets at July 1, 2010 were restated by $410,247 from $154,567,323 to $154,977,570 to
reclassify service fees for existing trunk lines received in prior years from a deposit liability to
revenues.
14. SUBSEQUENT EVENT:
Effective July 1, 2011, all assets, liabilities, contractual rights and obligations, and any other real or
personal property or other interest whatsoever of the City of Yorba Linda related to the Sewer
Collection Facilities was transferred to the District. In exchange, the District agreed to assume the
obligation and responsibility to provide sewer service and maintenance to the East Yorba Linda
Area.
See independent auditors' report.
.I
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POST-EMPLOYMENT BENEFIT PLAN
SCHEDULE OF FUNDING PROGRESS
-41-
Retiree Health Plan
YORBA LINDA WATER DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
For the year ended June 30, 2011
OTHER POST - EMPLOYMENT BENEFIT PLAN
SCHEDULE OF FUNDING PROGRESS
Unfunded
See independent auditors' report and notes to basic financial statements.
-42-
Actuarial
Actuarial
UAAL as a
Accrued
Actuarial Value
Accrued
Annual
Percentage
Actuarial
Liability
of Assets
Liability
Funded
Covered
of Covered
Valuation
(AAL)
(AVA)
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(a) - (b)
(b) /(a)
(c)
[(a)- (b)] /(c)
06/01/09
$ 1,740,127
$ -
$ 1,740,127
0.00%
$ 4,983,653
34.92%
03/01/11
$ 1,594,667
$ -
$ 1,594,667
0.00%
$ 5,044,860
31.61%
See independent auditors' report and notes to basic financial statements.
-42-
SUPPLEMENTARY INFORMATION
-43-
ASSETS
CURRENT ASSETS:
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF NET ASSETS
UNRESTRICTED ASSETS:
Cash and cash equivalents
Accounts receivable - water and sewer services
Accounts receivable - property taxes
Accrued interest receivable
Prepaid expenses and deposits
Inventory
TOTAL UNRESTRICTED ASSETS
RESTRICTED ASSETS:
Cash and cash equivalents
Investment
Accrued interest receivable
TOTAL RESTRICTED ASSETS
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Bond issuance costs
Capital assets:
Non - depreciable
Depreciable, net of accumulated depreciation
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
See independent auditors' report.
June 30, 2011
-44-
Water Sewer Totals
$ 9,240,812 $
1,994,203
$ 11,235,015
3,458,899
183,136
3,642,035
114,091
858
114,949
20,269
1,780
22,049
246,919
-
246,919
233,613
-
233,613
13,314,603
2,179,977
15,494,580
18,750,493
-
18,750,493
2,143,130
-
2,143,130
495
-
495
20,894,118
-
20,894,118
34,208,721
2,179,977
36,388,698
755,728 - 755,728
4,993,359
230,029
5,223,388
152,656,383
23,754,017
176,410,400
158,405,470
23,984,046
182,389,516
192,614,191
26,164,023
218,778,214
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF NET ASSETS
(CONTINUED)
June 30, 2011
LIABILITIES
CURRENT LIABILITIES:
PAYABLE FROM UNRESTRICTED CURRENT ASSETS:
Accounts payable
Accrued expenses
Compensated absences
Customer and construction deposits
Deferred revenue
TOTAL PAYABLE FROM
UNRESTRICTED CURRENT ASSETS
PAYABLE FROM RESTRICTED ASSETS:
Accrued interest payable
Certificates of Participation - current portion
TOTAL PAYABLE FROM RESTRICTED ASSETS
TOTAL CURRENT LIABILITIES
LONG -TERM LIABILITIES (LESS CURRENT PORTION):
Deferred annexation revenue
Compensated absences
Other post - employment benefit (OPEB) liability
Certificates of Participation
TOTAL LONG -TERM
LIABILITIES (LESS CURRENT PORTION)
TOTAL LIABILITIES
NET ASSETS:
Invested in capital assets, net of related debt
Restricted for capital projects
Unrestricted
TOTAL NET ASSETS
See independent auditors' report.
-45-
Water
Sewer
Totals
$ 4,382,882
$ 123,948
$ 4,506,830
115,056
15,250
130,306
234,543
17,255
251,798
226,534
54,622
281,156
416,525
-
416,525
5,375,540
211,075
5,586,615
483,171
-
483,171
890,000
-
890,000
1,373,171
-
1,373,171
6,748,711
211,075
6,959,786
14,406,176
-
14,406,176
703,630
51,765
755,395
111,255
10,810
122,065
42,299,117
-
42,299,117
57,520,178
62,575
57,582,753
64,268,889
273,650
64,542,539
122,251,316
23,984,046
146,235,362
12,620,256
-
12,620,256
(6,526,270)
1,906,327
(4,619,943)
$ 128,345,302
$ 25,890,373
$ 154,235,675
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
For the year ended June 30, 2011
OPERATING REVENUES:
Water sales
Sewer revenues
Other operating revenues
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Variable water costs
Personnel services
Supplies and services
Depreciation and amortization
TOTAL OPERATING EXPENSES
OPERATING LOSS
NONOPERATING REVENUES (EXPENSES):
Property taxes
Investment income
Interest expense
Other nonoperating revenues
Other nonoperating expenses
TOTAL NONOPERATING
REVENUES (EXPENSES)
NET LOSS BEFORE
CAPITAL CONTRIBUTIONS
CAPITAL CONTRIBUTIONS
CHANGES IN NET ASSETS
NET ASSETS - BEGINNING OF YEAR,
AS RESTATED
NET ASSETS - END OF YEAR
See independent auditors' report.
-46-
Water Sewer Totals
$ 22,686,251 $ - $ 22,686,251
- 1,274,579 1,274,579
981,471 54,074 1,035,545
23,667,722 1,328,653 24,996,375
11,267,615 691 11,268,306
6,114,939 788,056 6,902,995
3,160,419 525,914 3,686,333
4,669,579 610,281 5,279,860
25,212,552 1,924,942 27,137,494
(1,544,830) (596,289) (2,141,119)
1,258,769 - 1,258,769
252,522 21,630 274,152
(1,171,439) (1,064) (1,172,503)
732,638 6,424 739,062
(291,195) (115,380) (406,575)
781,295 (88,390) 692,905
(763,535) (684,679) (1,448,214)
364,564 341,755 706,319
(398,971) (342,924) (741,895)
128,744,273 26,233,297 154,977,570
$ 128,345,302 $ 25,890,373 $ 154,235,675
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF CASH FLOWS
For the year ended June 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers
Cash payments to employees for salaries and wages
Cash payments to suppliers of goods and services
Other revenue
Other expenses
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Proceeds from property taxes and assessments
NET CASH PROVIDED (USED) BY
NONCAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Proceeds from annexation fees and capital contributions
Acquisition and construction of capital assets
Proceeds from sales of capital assets
Principal paid on long -term liability
Interest paid on long -term liability
NET CASH PROVIDED (USED) BY CAPITAL
AND RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale /purchase of investments, net
Interest and investment earnings
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR
See independent auditors' report.
-47-
Water Sewer Totals
$ 23,932,171 $ 1,325,461 $ 25,257,632
(6,346,307) (710,222) (7,056,529)
(15,487,283) (391,815) (15,879,098)
244,850 200 245,050
(148,850) (114,931) (263,781)
2,194,581 108,693 2,303,274
1,265,653 - 1,265,653
1,265,653 - 1,265,653
751,715
270,864
1,022,579
(5,351,531)
(248,214)
(5,599,745)
13,678
-
13,678
(855,000)
-
(855,000)
(1,959,983)
(1,064)
(1,961,047)
(7,401,121)
21,586
(7,379,535)
(2,079,477)
6,224
(2,073,253)
253,876
21,847
275,723
(1,825,601)
28,071
(1,797,530)
(5,766,488)
158,350
(5,608,138)
33,757,793
1,835,853
35,593,646
$ 27,991,305 $ 1,994,203 $ 29,985,508
(Continued)
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF CASH FLOWS
(CONTINUED)
For the year ended June 30, 2011
RECONCILIATION OF OPERATING LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating loss
Adjustments to reconcile operating loss to
net cash provided by operating activities:
Depreciation
Other revenues
Other expenses
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable
Inventory
Prepaid expenses and other deposits
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
Accrued salaries and wages
Accrued other post - employment benefits (OPEB) liability
Accrued compensated absences
Customer and other deposits
Total adjustments
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH AND CASH EQUIVALENTS -
FINANCIAL STATEMENT CLASSIFICATION:
Unrestricted
Restricted
TOTAL CASH AND CASH EQUIVALENTS -
FINANCIAL STATEMENT CLASSIFICATION
NONCASH INVESTING, CAPITAL AND
RELATED FINANCING ACTIVITIES:
Amortization related to long -term debt
Capital contributions
See independent auditors' report.
-48-
Water Sewer Totals
$ (1,544,830) $ (596,289) $ (2,141,119)
4,669,579
610,281
5,279,860
244,850
200
245,050
(148,850)
(114,931)
(263,781)
283,368
(1,848)
281,520
(25)
-
(25)
28,169
(2,064)
26,105
(1,164,977)
134,959
(1,030,018)
(10,671)
15,250
4,579
(103,945)
(10,473)
(114,418)
(112,715)
69,020
(43,695)
54,628
4,588
59,216
3,739,411
704,982
4,444,393
$ 2,194,581 $ 108,693 $ 2,303,274
$ 9,240,812 $ 1,994,203 $ 11,235,015
18,750,493 - 18,750,493
$ 27,991,305 $ 1,994,203 $ 29,985,508
$ 20,988 $ - $ 20,988
$ 364,564 $ 341,755 $ 706,319
YORBA LINDA WATER DISTRICT
SCHEDULE OF OPERATING EXPENSES BY COST CENTER
AND NATURE OF EXPENSES FOR WATER AND SEWER
OPERATING EXPENSES:
Variable Water Costs:
Imported water
OCWD replenishment assessment
Fuel and power /pumping
MWD connection charge
Total Variable Water Costs
Personnel Services:
Unit salaries
Fringe benefits
Director's fees
Total Personnel Services
Supplies and Services:
Board elections
Communications
Contractual services
Data processing
District activities
Dues and memberships
Fees and permits
Insurance
Maintenance
Materials
Noncapital equipment
Office expense
Professional services
Training
Travel and conferences
Uncollectible accounts
Utilities
Vehicle expense
Total Supplies and Services
TOTAL OPERATING EXPENSES
See independent auditors' report.
For the year ended June 30, 2011
-49-
Water
Sewer
Totals
$ 7,734,559
$ -
$ 7,734,559
2,212,161
-
2,212,161
787,444
691
788,135
533,451
-
533,451
11,267,615
691
11,268,306
4,422,739
541,270
4,964,009
1,635,800
242,425
1,878,225
56,400
4,361
60,761
6,114,939
788,056
6,902,995
32,485
3,213
35,698
246,115
24,672
270,787
718,383
63,169
781,552
118,175
11,688
129,863
13,478
1,333
14,811
26,899
2,933
29,832
57,982
5,911
63,893
201,974
19,975
221,949
237,689
42,419
280,108
432,441
20,890
453,331
87,296
22,534
109,830
25,485
2,525
28,010
557,721
224,786
782,507
20,976
3,293
24,269
19,417
1,949
21,366
18,919
1,344
20,263
83,603
8,250
91,853
261,381
65,030
326,411
3,160,419
525,914
3,686,333
$ 20,542,973 $ 1,314,661 $ 21,857,634
YORBA LINDA WATER DISTRICT
SCHEDULE OF CAPITAL ASSETS
For the year ended June 30, 2011
Water
Land, Mineral and Water Rights:
Land $ 138,629
Water rights 86,300
Mineral rights 63,650
Land rights and easements 385
Total Land, Mineral and Water Rights 288,964
Source of Supply:
Wells
MWD connection
Total Source of Supply
Pumping Plant:
Structures and improvements
Equipment
Total Pumping Plant
Water Treatment Plant:
Structures and improvements
Equipment
Total Water Treatment Plant
Transmission and Distribution Plant:
Mains
Reservoirs and tanks
Service and meter installation
Fire hydrants
Meters
Fire mains
Structures and improvements
Control system
Total Transmission and Distribution Plant
General Plant:
Structures and improvements
Transportation equipment
Power operated equipment
Communication equipment
Computer equipment
Office furniture
Tools, shops and garage equipment
Other
Store equipment
Total General Plant
Construction in Progress
Total Capital Assets
See independent auditors' report.
-50-
Sewer Totals
$ - $ 138,629
86,300
63,650
58,526 58,911
58,526 347,490
5,460,513 - 5,460,513
564,368 2,000 566,368
6,024,881 2,000 6,026,881
9,529,805 - 9,529,805
7,857,374 275,360 8,132,734
17,387,179 275,360 17,662,539
1,473,626
1,274,179
2,747,805
1,473,626
1,274,179
2,747,805
68,811,395
28,250,714
97,062,109
61,484,568
-
61,484,568
5,447,665
2,389,115
7,836,780
6,252,285
-
6,252,285
8,738,693
-
8,738,693
717,746
-
717,746
2,195,750
-
2,195,750
1,353,150
-
1,353,150
155,001,252
30,639,829
185,641,081
13,403,182
-
13,403,182
1,532,041
979,744
2,511,785
549,710
-
549,710
565,557
-
565,557
1,608,857
205,242
1,814,099
1,188,942
-
1,188,942
67,716
-
67,716
4,650
-
4,650
48,889
-
48,889
18,969,544
1,184,986
20,154,530
4,704,395
171,503
4,875,898
$ 205,124,020 $ 32,332,204 $ 237,456,224
STATISTICAL SECTION
-51-
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-52-
YORBA LINDA WATER DISTRICT
DESCRIPTION OF STATISTICAL SECTION CONTENTS
June 30, 2011
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. 54
Revenue Capacity these schedules contain information to help the reader
assess the District's most significant local revenue source, the water sales. 56
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. 58
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. 60
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. 62
-53 -
Yorba Linda Water District
Changes in Net Assets
Last Ten Fiscal Years
Nonoperating Revenues (Expenses)
Property Taxes
1,258,769
Fiscal Year
1,283,521
1,263,656
Changes in Net Assets:
2011
2010
2009
2008
Operating Revenues
(1,172,503)
(1,170,498)
(1,469,925)
(824,387)
Water Sales
$ 22,686,251
$ 21,806,164 $
19,626,738
$ 19,470,109
Sewer Revenues
1,274,579
1,275,980
1,259,723
1,247,907
Other Operating Revenues
1,035,545
1,102,143
439,302
380,175
Operating Expenses
692,905
781,701
805,062
2,084,287
Variable Water Costs
11,268,306
10,688,318
10,859,328
10,516,507
Personnel Services
6,902,995
6,677,757
6,498,959
5,751,384
Supplies and Services
3,686,333
3,576,147
4,151,058
4,361,512
Depreciation
5,279,860
5,153,891
4,167,958
3,572,726
Operating Loss
(2,141,119)
(1,911,826)
(4,351,540)
(3,103,938)
Nonoperating Revenues (Expenses)
Property Taxes
1,258,769
1,269,441
1,283,521
1,263,656
Investment Income
274,152
244,857
689,108
1,508,193
Interest Expense
(1,172,503)
(1,170,498)
(1,469,925)
(824,387)
Other Nonoperating Revenues
739,062
589,201
479,911
270,429
Other Nonoperating Expenses
(406,575)
(151,300)
(177,553)
(133,604)
Total Nonoperating
Revenues (Expenses)
692,905
781,701
805,062
2,084,287
Net Income (Loss) Before
Capital Contributions
(1,448,214)
(1,130,125)
(3,546,478)
(1,019,651)
Capital Contributions
706,319
6,278,135
4,363,527
4,100,051
Changes in Net Assets
$ (741,895)
$ 5,148,010
$ 817,049
$ 3,080,400
Net Assets by Component:
Invested in Capital Assets,
Net of Related Debt
$ 146,235,362
$ 146,877,122
$ 141,514,024
$ 139,677,663
Restricted
12,620,256
15,797,432
14,063,802
14,523,549
Unrestricted
(4,619,943)
(7,696,984)
(6,158,513)
(4,898,647)
Total Net Assets
$ 154,235,675
$ 154,977,570
$ 149,419,313
$ 149,302,565
Source: YLWD Audited Financial Statements
-54-
(Continued)
Fiscal Year
2007 2006 2005 2004 2003 2002
$ 18,944,233
$ 17,017,275
$ 14,533,021
$ 14,138,952
$ 12,128,715 $
12,080,445
806,897
778,275
750,771
763,528
545,119
525,188
393,285
382,917
427,430
385,241
177,966
174,572
10,703,037
8,930,535
7,920,218
8,405,858
7,510,409
7,018,095
5,276,878
4,635,464
4,294,020
3,903,396
3,304,878
2,874,817
3,395,303
2,877,288
2,699,842
2,345,991
2,111,993
1,762,580
3,445,868
2,923,288
2,578,420
2,498,265
2,305,286
2,073,348
(2,676,671)
(1,188,108)
(1,781,278)
(1,865,789)
(2,380,766)
(948,635)
1,186,441
335,075
252,663
1,005,859
3,304,314
3,247,591
2,180,067
1,425,663
638,235
342,554
549,093
914,100
(468,087)
(472,163)
(565,581)
(484,895)
(214,842)
(291,352)
455,067
534,385
416,778
642,358
155,814
277,198
(138,501)
(336,649)
(179,526)
(296,528)
(282,039)
(311,231)
3,214,987
1,486,311
562,569
1,209,348
3,512,340
3,836,306
538,316
298,203
(1,218,709)
(656,441)
1,131,574
2,887,671
6,913,095
26,026,524
6,701,629
2,184,681
11,419,097
1,884,633
$ 7,451,411
$ 26,324,727
$ 5,482,920
$ 1,528,240
$ 12,550,671 $
4,772,304
$ 121,317,296
$ 106,376,683
$ 84,000,773
$ 74,338,841
$ 80,268,884 $
67,026,121
23,089,201
22,274,814
23,196,485
25,140,038
16,774,957
16,593,197
1,815,668
10,119,257
5,248,769
7,484,228
8,391,026
9,264,878
$ 146,222,165
$ 138,770,754
$ 112,446,027
$ 106,963,107
$ 105,434,867 $
92,884,196
-55-
Yorba Linda Water District
Number of Connections
Last Ten Fiscal Years
NOTE: * $1.48 was approved January 1, 2005
25,000
20,000
15,000
10,000
5,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: YLWD Billing System
-56-
a Irrigation
Industrial
Residential
■ Residential
Single Family
Multi - Family
Commercial/
Direct Rate
Fiscal Year
Residential
Residential
Industrial
Irrigation
(Billing Unit)
2002
19,915
234
1,056
809
$ 1.13
2003
20,383
225
1,050
840
1.33
2004
20,914
225
849
829
1.33
2005
20,773
217
842
803
1.48
2006
21,300
217
847
838
1.57
2007
21,451
228
792
868
1.57
2008
21,580
228
840
857
1.79
2009
21,672
228
831
855
2.52
2010
21,846
228
837
877
2.52
2011
21,701
231
833
879
2.52
NOTE: * $1.48 was approved January 1, 2005
25,000
20,000
15,000
10,000
5,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: YLWD Billing System
-56-
a Irrigation
Industrial
Residential
■ Residential
Yorba Linda Water District
Ten Largest Customers
Current and Nine Years Ago
FY 2011
FY 2002
Customer Name
Business Type
1
City of Yorba Linda
Government
2
Placentia Yorba Linda USD
Government
3
Yorba Linda Villages
Homeowner's Assoc.
4
Rancho Dominquez Assoc.
Homeowner's Assoc.
5
Archstone Apts
Apartment Complex
6
Cal Water
Manufacturer
7
Tac West
Manufacturer
8
Placentia Linda Hospital
Hospital
9
Advanced Management
Apartment Complex
10
St Francis of Assisi
Private School
FY 2002
Sources: City of Yorba Linda CAFR
YLWD Billing Department
-57-
Annual Revenues
$ 1,614,372.24
289,091.80
106,003.75
99,386.63
91,111.13
88,672.44
81,067.98
72,837.61
68,314.20
66,344.50
$ 2,577,202.28
Annual Revenues
$ 1,915,251.67
175,921.20
98,367.66
97,005.47
78,760.00
31,609.61
30,968.79
30,308.28
27,839.87
25,743.78
$ 2,511,776.33
% of Total
6.46%
1.16%
0.42%
0.40%
0.36%
0.35%
0.32%
0.29%
0.27%
0.27%
10.31%
% of Total
14.99%
1.38%
0.77%
0.76%
0.62%
0.25%
0.24%
0.24%
0.22%
0.20%
19.65%
Customer Name
Business Type
1
City of Yorba Linda
Government
2
Saba Petroleum
Manufacturer
3
Tac West Inc
Manufacturer
4
St Francis of Assissi
Private School
5
Shigemi Muranaka
Nursery Retail
7
Placentia Unified School
Government
6
Sunset Tropicals
Nursery Retail
8
Costco
Warehouse Retail
9
Excell Circuits
Manufacturer
10
YL Country Club
Private Club
Sources: City of Yorba Linda CAFR
YLWD Billing Department
-57-
Annual Revenues
$ 1,614,372.24
289,091.80
106,003.75
99,386.63
91,111.13
88,672.44
81,067.98
72,837.61
68,314.20
66,344.50
$ 2,577,202.28
Annual Revenues
$ 1,915,251.67
175,921.20
98,367.66
97,005.47
78,760.00
31,609.61
30,968.79
30,308.28
27,839.87
25,743.78
$ 2,511,776.33
% of Total
6.46%
1.16%
0.42%
0.40%
0.36%
0.35%
0.32%
0.29%
0.27%
0.27%
10.31%
% of Total
14.99%
1.38%
0.77%
0.76%
0.62%
0.25%
0.24%
0.24%
0.22%
0.20%
19.65%
Yorba Linda Water District
Ratio of Outstanding Debt
Last Ten Fiscal Years
r Composition of Debt
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
I
$2,500
$2,000
$1,500
$1,000
$500
Debt per Connection
Participation
OCWD Loan
Bonds
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: YLWD Audited Financial Statements
As a Share of
Personal
Income
0.10%
0.05%
0.16%
0.13%
0.12%
0.12%
0.50%
0.44%
0.44%
0.46%
Total
General
Certificates
Fiscal
Obligation
of
Per
Per
Year
Bonds
OCWD Loan Participation
Debt
Connection
Capita
2002
$ 5,742,169
$ 171,048 $ -
$ 5,913,217
$ 267
$ 72
2003
3,671,446
149,061 -
3,820,507
170
46
2004
1,590,000
- 10,384,239
11,974,239
525
142
2005
-
- 10,000,078
10,000,078
441
119
2006
-
- 9,873,717
9,873,717
426
115
2007
-
- 10,540,139
10,540,139
451
122
2008
-
- 45,502,080
45,502,080
1,932
522
2009
-
- 44,911,092
44,911,092
1,900
513
2010
-
- 44,065,104
44,065,104
1,848
499
2011
-
- 43,189,117
43,189,117
1,827
494
r Composition of Debt
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
I
$2,500
$2,000
$1,500
$1,000
$500
Debt per Connection
Participation
OCWD Loan
Bonds
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: YLWD Audited Financial Statements
As a Share of
Personal
Income
0.10%
0.05%
0.16%
0.13%
0.12%
0.12%
0.50%
0.44%
0.44%
0.46%
Fiscal
Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Revenues
$ 16,568 g
16,215
16,471
16,178
19,563
23,036
22,822
22,514
24,417
25,912
Yorba Linda Water District
Debt Coverage
Last Ten Fiscal Years
Debt Service
Operating & Net
Maint. Costs Revenues Principal Interest
11,759 $
12,873
14,428
14,230
16,009
18,703
19,829
20,604
19,928
20,845
Total
4,809 $
2,086 $
305 $
2,391
3,342
2,172
229
2,401
2,043
2,263
148
2,411
1,948
1,760
299
2,059
3,554
200
473
673
4,333
205
469
674
2,993
210
919
1,129
1,910
570
2,051
2,621
4,489
825
1,951
2,776
5,067
855
1,915
2,770
NOTE: Excludes depreciation and debt service payments
Source: YLWD Audited Financial Statements
-59-
Coverage
Ratio
2.01
1.39
0.85
0.95
5.28
6.43
2.65
0.73
1.62
1.83
Yorba Linda Water District
Demographics
Last Ten Fiscal Years
YLWD
Year Population * City of YL Population
Personal Income
Personal Income
per Capita
2002
70,566
61,362 $
5,081,187,350 $
72,006
2003
72,080
62,678
6,025,361,496
83,593
2004
73,663
64,055
6,435,285,575
87,361
2005
75,189
65,382
6,699,301,248
89,099
2006
76,817
66,797
7,150,485,256
93,085
2007
78,090
67,904
7,623,582,080
97,626
2008
78,559
68,312
8,179,815,504
104,123
2009
80,209
69,747
9,465,109,914
118,006
2010
81,893
71,211
9,224,696,122
112,643
2011
83,613
72,707
8,990,388,841
107,524
County of Orange
Personal Income
Year Population Unemployment Rate Personal Income per Capita
2002
2,940,743
5.0% $
111,750,294 $
38,001
2003
2,983,731
5.0%
117,722,484
39,455
2004
3,019,889
4.8%
125,670,056
41,614
2005
3,047,054
4.3%
133,031,819
43,659
2006
3,072,336
3.2%
143,949,044
46,853
2007
3,098,121
3.9%
151,039,900
48,752
2008
3,121,251
5.2%
155,459,600
49,807
2009
3,139,017
9.0%
155,459,600
49,525
2010
3,158,479
9.8%
151,510,926
47,970
2011
3,178,061
9.0% **
147,662,549
46,463
NOTE:
* Based on City of Yorba
Linda population, plus an additional 15%
of estimated population
for customers outside of the City
* * As of August 2011
Sources: City of Yorba Linda CAFR
County of Orange CAFR
State of California, Employment Development Department
State of California, Department of Finance
YLWD Billing System
-60-
Employer ^
Viasys Respiratory Care, Inc.
Nobel Biocare USA, Inc.
Costco Wholesale Corp.
City of Yorba Linda
Vons
Kohl's Inc.
Best Buy
Sunrise Retirement Homes
Office Solutions
Cobra Engineering
Total
NOTES: * Most current available data
Yorba Linda Water District
Ten Largest Employers
Current and Five Years Ago
2008*
% of Total
Labor Force
389
1.19 %
328
0.93 %
276
0.78 %
194
0.55 %
165
0.47 %
158
0.45 %
129
0.37 %
126
0.36 %
92
0.26%
80
0.23 %
1,937
5.6 %
2006+
% of Total
Employees I Labor Force
359
1.02 %
323
0.92 %
204
0.58 %
180
0.51 %
167
0.48 %
145
0.41 %
135
0.38 %
120
0.34%
98
0.28 %
0
0.00%
1,731
4.9 %
+ 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
-61-
Yorba Linda Water District
Number of Employees
Last Ten Fiscal Years
Full Time Equivalent Employees by Department *
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NOTE: *Number of employees in each department are authorized and funded positions.
Source: YLWD Human Resources Department
-62-
F. Operations
■ IT
• Resources
• Finance
• Engineering
Department
Fiscal
Human
Year
Administration
Engineering
Finance Resources
IT
Operations
Total
2002
2.0
10.0
10.0 1.0
1.0
29.0
53.0
2003
2.0
11.0
10.0 1.0
2.0
29.0
55.0
2004
3.0
12.0
10.0 1.0
2.0
32.0
60.0
2005
3.0
13.0
11.0 1.0
3.0
31.0
62.0
2006
4.0
14.0
13.0 3.0
3.0
28.0
65.0
2007
4.0
13.0
15.0 3.0
3.0
32.0
70.0
2008
4.0
13.0
16.0 3.0
6.0
32.0
74.0
2009
4.0
13.0
16.0 3.0
6.0
33.0
75.0
2010
4.5
12.0
15.0 3.0
6.5
35.0
76.0
2011
4.5
12.0
15.0 3.0
7.0
35.0
76.5
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NOTE: *Number of employees in each department are authorized and funded positions.
Source: YLWD Human Resources Department
-62-
F. Operations
■ IT
• Resources
• Finance
• Engineering
Yorba Linda Water District
Operating and Capacity Indicators
Last Ten Fiscal Years
Fiscal
Miles of Water
Yearly Water
Average
Year
Mains Installed*
Production (MG)
Production (MGD)
2002
4.81
7,548
20.7
2003
0.78
7,927
21.7
2004
3.64
7,863
21.5
2005
3.64
7,042
19.3
2006
2.52
7,505
20.6
2007
9.72
8,360
22.9
2008
9.72
8,027
22.0
2009
9.72
7,590
20.8
2010
9.72
6,569
18.0
2011
2.00
6,282
17.2
Fiscal
Number of
Number of
Number of
Year
Booster Pumps
Reserviors
Field Service Calls
2002
9
9
1,535
2003
11
10
1,727
2004
11
10
1,833
2005
11
10
1,460
2006
11
10
1,484
2007
12
11
1,565
2008
12
11
1,943
2009
12
11
1,674
2010
12
13
1,640
2011
12
13
1,924
MG - Millions of Gallons
MGD - Millions of Gallons per Day
NOTE: * Miles of Water Main estimated
Sources: YLWD Asset Management Plan 2010
YLWD Operations Department
-63-
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M
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
The Board of Directors
Yorba Linda Water District
Placentia, California
We have audited the basic financial statements of the Yorba Linda Water District (the District) as of
and for the year ended June 30, 2011, and have issued our report thereon dated October 18, 2011. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the District's internal control over financial
reporting as a basis for designing our auditing procedures 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 over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the District's internal control over financial reporting.
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 District's financial statements will not be prevented, or detected and corrected on a
timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above. However, we identified certain deficiencies in internal control
over financial reporting, described below, that we consider to be significant deficiencies in internal
control over financial reporting. 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.
-I-
5 Corporate Park, Suite 100, Irvine, CA 92606 -5165 • Tel: 949- 399 -0600 • Fax: 949- 399 -0610
Offices located in Orange and San Diego Counties
Compliance with Investment Policy
Auditors' Comment and Recommendation:
The District's investment policy sets limits on how much can be invested in certain types of
investments. During our review of investment policy, we noted that investments in CaITRUST
exceeded the limit set forth in the District's investment policy. The District is not in compliance with
its policy. We recommend that the District establish procedures that would ensure adherence to the
District's investment policy.
Management's Response
The District agrees with the comment and will revise the investment policy accordingly.
Posting of Rejected Customer Pam
Auditors' Comment and Recommendation:
During our testing of cash receipts, we noted three customer payments that were rejected by the bank
due to insufficient funds in October 2010. The general ledger was not corrected for these rejected
items until July 2011. These items remained reconciling items in the bank reconciliations during this
period. An important element of internal controls over cash is the reconciliation process to identify
differences between the bank and the general ledger and resolve differences timely. When differences
are not properly identified, the bank reconciliation is not complete and can result in misappropriation
of assets. We recommend that variances be investigated and District takes necessary actions in a timely
manner.
Management's Response
The District agrees with the comment and has changed its policy to address reconciling items in the
bank reconciliation process on a more timely basis.
Accounts Receivable
Auditors' Comment and Recommendation:
During our testing of accounts receivable, we noted that the schedule for unbilled water receivable did
not agree to the general ledger balance due to a journal entry for last year's accrual that was not
properly reversed. We recommend that District establish procedures that will ensure general account
balances are reconciled to subsidiary schedules.
Management's Response
The District agrees with the comment and will begin reconciling account balances to subsidiary
schedules on a quarterly basis to ensure this does not happen during the annual accrual process.
-2-
Communication between Departments
Auditors' Comment and Recommendation:
During our review of trust accounts for contractors' retentions, we noted that the general ledger
balance of one the trust accounts did not agree with the bank statement. Per further review, we noted
that the retention amount was released during the year. Also, we noted that current year additions
included assets contributed by developers to the District in prior years. This information was not
communicated to the finance department in a timely manner which caused the general ledger balance
to be inaccurate. We recommend that the District establish proper communication procedures between
the finance department and other departments to ensure that accurate information is timely forwarded
to the finance department for financial reporting purposes.
Management's Response
The District agrees with the comment and the importance of sharing information between departments
has been emphasized.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free of
material misstatements, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the Yorba Linda Water District 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 specific parties.
October 18, 2011
Irvine, California
Board of Directors
Yorba Linda Water District
Placentia, California
We have audited the financial statements of the Yorba Linda Water District for the year ended
June 30, 2011, and have issued our report thereon dated October 18, 2011. Professional standards
require that we provide you with information about our responsibilities under generally accepted
auditing standards, as well as certain information related to the planned scope and timing of our audit.
We have communicated such information in our engagement letter dated June 13, 2011 and during our
planning meeting on August 8, 2011. 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 Yorba Linda Water District are described in Note 1 to the
financial statements. No new accounting policies were adopted and the application of existing
accounting policies was not changed during the year ended June 30, 2011. We noted no transactions
entered into by the Yorba Linda Water 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.
-1-
5 Corporate Park, Suite 100, Irvine, CA 92606 -5165 • Tel: 949- 399 -0600 • Fax: 949- 399 -0610
Offices located in Orange and San Diego Counties
Significant Audit Findings (Continued):
Qualitative Aspects of Accounting Practices (Continued):
The most sensitive estimates affecting the financial statements were:
a. Management's estimate that an allowance for doubtful accounts was not necessary.
b. Management's estimate of the fair market value of investments which is based on market
values provided by outside sources.
c. The estimated useful lives of capital assets for depreciation purposes which are based on
industry standards.
d. The annual required contribution for the District's Other Post - Employment Benefits was
prepared by an outside consultant.
We evaluated the 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 disclosure affecting the financial statements was reported
in Note 6 to the financial statements regarding the annual required contribution and the actuarial
liability for the District's Other Post - Employment Benefits.
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. Management has corrected all such misstatements. The following material misstatements
detected as a result of audit procedures were corrected by management:
a. An adjusting journal entry was required to remove the liability and cash associated with a
retention that was paid out during the fiscal year.
b. An increase of capitalized interest was required for costs allocated to capital projects
completed during the fiscal year.
c. A deposit liability balance was decreased to recognize capital contributed in prior years and
net assets were restated as of July 1, 2010.
d. The accounts receivable was decreased to correct errors on calculation for unbilled water
and sewer receivables.
-2-
Disagreements with Mana eg ment
For purposes of this letter, professional standards define a disagreement with management as 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 October 18, 2011.
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 Yorba Linda Water 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 Yorba Linda Water 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 Information in Documents Containing Audited Financial Statements
With respect to the supplementary information accompanying the financial statements, 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.
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.
October 18, 2011
Irvine, California
ITEM NO. 10.2
AGENDA REPORT
Meeting Date: November 10, 2011
Subject: Finance - Accounting Committee
(Collett /Kiley)
Minutes of meeting held October 24, 2011 at 4:00 p.m.
Meeting scheduled November 28, 2011 at 4:00 p.m.
ATTACHMENTS:
Name: Description: Type:
102411 FA - Minutes.doc FA Mtg Minutes 10/24/11 Minutes
MINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCE - ACCOUNTING COMMITTEE MEETING
October 24, 2011
A meeting of the Finance - Accounting Committee was called to order by Director Collett
at 4:00 p.m. The meeting was held at the District's Administrative Office at 1717 E
Miraloma Ave, Placentia CA 92870.
COMMITTEE
Director Ric Collett, Chair
Director Robert R. Kiley
STAFF
Ken Vecchiarelli, General Manager
Stephen Parker, Finance Director
OTHER ATTENDEES
Nitin Patel, CPA, Audit Engagement Partner, White Nelson Diehl Evans LLP
Daphnie Munoz, CPA, Audit Engagement Manager, White Nelson Diehl Evans LLP
1. PUBLIC COMMENTS
None.
2. ACTION CALENDAR
2.1. Submission of 2011 Audit Reports
Mr. Nitin Patel and Ms. Daphnie Munoz from White Nelson Diehl Evans
LLP (formerly Diehl Evans & Co., LLP) were on hand to present three
reports from the conculsion of their audit of the District for the year ending
June 30, 2011. Mr. Patel went through the CAFR and commented
extensively on the Independent Auditors' Report, including identifying that
their opinion was unqualified or "clean ". He mentioned that this year's
CAFR includes the Certificate of Acheivement for Excellence in Financial
Reporting from the GFOA for the first time. He pointed out in the financial
statements that the current year and prior years' revenues and expenses
are very comparable, but a large difference between the two years is the
decrease in capital contributions, which are developer contributed capital
assets. Mr Patel also went over the Report on Internal Control, where four
recommendations for improvements in internal control were identified by
the auditors. The Committee asked questions of staff regarding the
comments and what was going to be done to ensure the comments were
corrected. Mr. Patel then went over the final letter, which doesn't have a
title, but is referred to as SAS 114 Communications. He explained that
there was nothing out of the ordinary in this letter, but that these were
required disclosures. The Committee commended staff on a job well
done, and Mr. Parker thanked the auditors for working well with staff
through the audit. At this time Mr. Vecchiarelli walked Mr. Patel and Ms.
Munoz out.
1
2.2. Investment Report through September 2011
Mr. Parker presented the investment report through September 2011. Mr.
Parker explained that this item would go on to the Board to receive and file
at the first meeting in November. Mr. Parker commented on an improved
yield to over 1% as being mostly due to spending down 2008 COP
proceeds, which are only yielding 0.10 %. He also mentioned that the
District would easily spend down the remaining spendable bond proceeds
before the fiscal year ended. Large changes in specific reserves were
identified by Mr. Parker as including a significant decrease in the Reserve
for Debt Service, as our semi - annual interest and annual principal
payment on the 2003 and 2008 COP Bonds was made in September. In
addition, Mr. Parker noted that the Sewer Capital Fund had increased
mostly due to $264,000 received from the City of Yorba Linda relating to
the completed transfer of the City sewer system to YLWD. The
Committee recommended submitting the report to the Board of Directors
to receive and file.
3. DISCUSSION ITEMS
3.1. Summary of January Workshop Discussion
Mr. Parker described at a high level, items that would be discussed at the
January Board Workshop on the Cost of Service and Water Rate Study.
Mr. Vecchiarelli came back early in this discussion. It was stressed by the
Committee that information relating to any future rate increases make their
way to the Citizen's Advisory Committee and the District's PIO to ensure
that the message makes it's way out prior to an increase taking effect.
3.2. September 2011 Budget to Actual Results
Mr. Parker presented the September 2011 budget to actual results. He
commented that at the following Committee meeting he would be
presenting the full - accrual quarterly budget to actual results that would go
on to the full Board, but these were just the standard monthly statements.
Mr. Parker commented that while water consumption was lower than
budgeted, it had made an improvement over the comparison to budget
from August's consumption. The Committee requested that in the future
staff report the conservation percentage monthly and provide this
information to the full Board as well. Mr. Parker commented on variable
water cost being higher than budgeted based on the District's strategy of
purchasing more import water prior to the January 1 MWD rate increase.
Mr. Parker also reviewed specific supplies and services expenses that
were trending higher than budgeted and explained why those looked out
of place.
3.3. Status of Strategic Plan Initiatives
Mr. Parker highlighted the current strategic plan initiatives, including
progress made with evaluating procurement credit card options, rewriting
water and sewer rules and regulations and customer service and
2
developer fees, and a change being evaluated in the processing of
customers' credit cards that will result in reduced merchant fees.
3.4 Future Agenda Items and Staff Tasks
Staff will submit a revised investment policy to the FAC at the November
meeting to ensure the District is in compliance with its investment policy.
The FAC recommended they receive in future meetings current
information regarding the rate of consumption YLWD customers have
been using in the current fiscal year.
4. ADJOURNMENT
4.1. The Committee adjourned at 5:10 p.m. The next regular meeting of the
Finance - Accounting Committee will be held November 28, 2011 at 4:00
p.m.
3
AGENDA REPORT
Meeting Date: November 10, 2011
ITEM NO. 12.1
Subject: Meetings from November 11, 2011 - December 31, 2011
ATTACHMENTS:
Name: Description: Type:
BOD - Activities Calendar.pdf BOD Activity Calendar Backup Material
Board of Directors Activity Calendar
Event Date Time Attendance by:
November 2011
Holiday
Fri, Nov 11
7:30AM
District Offices Closed
Board of Directors Workshop Meeting
Mon, Nov 14
5:00PM
Melton /Collett
Yorba Linda City Council
Tue, Nov 15
6:30PM
Melton
MWDOC Board
Wed, Nov 16
8:30AM
Melton /Staff
Exec - Admin- Organizational Committee Meeting
Wed, Nov 16
4:00PM
Beverage /Hawkins
OCWD Board
Wed, Nov 16
5:30PM
Kiley /Staff
Pub Affairs - Communications -Tech Committee Meeting
Fri, Nov 18
12:00PM
Hawkins /Melton
Joint Committee Meeting with MWDOC and OCWD
Tue, Nov 22
4:00PM
Beverage /Hawkins
Board of Directors Regular Meeting
Wed, Nov 23
8:30AM
Holiday
Thu, Nov 24
7:30AM
District Offices Closed
Holiday
Fri, Nov 25
7:30AM
District Offices Closed
Citizens Advisory Committee Meeting
Mon, Nov 28
8:30AM
Beverage
ACWA /JPIA Fall Conference
Mon, Nov 28
8:30AM
Hawkins
Finance - Accounting Committee Meeting
Mon, Nov 28
4:00PM
Collett /Kiley
ACWA /JPIA Fall Conference
Tue, Nov 29
8:30AM
Hawkins /Melton
ACWA Fall Conference
Wed, Nov 30
8:00AM
Hawkins /Kiley /Melton
December 2011
ACWA Fall Conference
Thu, Dec 1
8:00AM
Hawkins /Kiley /Melton
Planning- Engineering- Operations Committee Meeting
Thu, Dec 1
4:00PM
Melton /Collett
ACWA Fall Conference
Fri, Dec 2
8:00AM
Hawkins /Kiley /Melton
Pub Affairs - Communications -Tech Committee Meeting
Mon, Dec 5
4:00PM
Hawkins /Melton
AB1825 Training
Tue, Dec 6
9:30AM
Beverage
Yorba Linda City Council
Tue, Dec 6
6:30PM
Hawkins
MWDOC /MWD Workshop
Wed, Dec 7
8:30AM
Melton /Staff
OCWD Board
Wed, Dec 7
5:30PM
Kiley /Staff
Board of Directors Regular Meeting
Thu, Dec 8
8:30AM
WACO
Fri, Dec 9
7:30AM
Hawkins
Board of Directors Workshop Meeting
Mon, Dec 12
8:30AM
Personnel -Risk Management Committee Meeting
Tue, Dec 13
4:00PM
Kiley /Beverage
CRWUA Annual Conference
Wed, Dec 14
8:00AM
Beverage /Kiley /Melton
Yorba Linda Planning Commission
Wed, Dec 14
7:00PM
Kiley
CRWUA Annual Conference
Thu, Dec 15
8:00AM
Beverage /Kiley /Melton
CRWUA Annual Conference
Fri, Dec 16
8:00AM
Beverage /Kiley /Melton
Exec - Admin- Organizational Committee Meeting
Tue, Dec 20
4:00PM
Beverage /Hawkins
Yorba Linda City Council
Tue, Dec 20
6:30PM
Melton
MWDOC Board
Wed, Dec 21
8:30AM
Melton /Staff
OCWD Board
Wed, Dec 21
5:30PM
Kiley /Staff
Board of Directors Regular Meeting
Thu, Dec 22
8:30AM
Holiday
Fri, Dec 23
7:30AM
District Offices Closed
Holiday
Mon, Dec 26
7:30AM
District Offices Closed
Finance - Accounting Committee Meeting
Tue, Dec 27
4:00PM
Collett /Kiley
Yorba Linda Planning Commission
Wed, Dec 28
7:00PM
Collett
11/7/2011 8:27:13 AM
AGENDA REPORT
Meeting Date: November 10, 2011
ITEM NO. 13.1
Subject: MWDOC Colorado River Aqueduct Inspection Trip - December 2 -4, 2011
STAFF RECOMMENDATION:
That the Board of Directors authorize Director attendance at this event.
ATTACHMENTS:
Name:
Description:
MWDOC Colorado River Aqueduct Inspection Trip_pdf Event Flyer
Type:
Backup Material
SAVE THE DATE
The Metropolitan Water District of Southern California (MWD)
and the Municpal Water District of Orange County (MWDOC) are
hosting an exciting and educational 3 -day inspection trip of the
Colorado River Aqueduct
Friday through Sunday, December 2-4,2011
Please join Director Brett R. Barbre for a unique, inside look
at the 242 mile aqueduct system, MWD's water treatment
process, and what measures are taken to ensure the
highest quality level of water for Southern California.
Space is extremely ]united. Please contact Tiffany Baca at
(714) 593 - 5013 /tbaca @mwdoc.com, or Director Brett R. Barbre
at (714) 39£- 1350/brbarbre@mwdoc.com if you have any z�
questions or if you would like to reserve your seat in advance] t
i
Participation on this inspection trip by certain California governmental
officials will constitute a reportablegift under California and local ethics laws.
The estimated reportable expense for this trip is $300.00.
Watch a video of the history
of the CRA here:
MUNICIPAL
WATER
OFTRI'CT
OF
ORANGE
COUNTY
SAVE THE DATE
The Metropolitan Water District of Southern California (MWD)
and the Municpal Water District of Orange County (MWDOC) are
hosting an exciting and educational 3 -day inspection trip of the
Colorado River Aqueduct
Friday through Sunday, December 2-4,2011
Please join Director Brett R. Barbre for a unique, inside look
at the 242 mile aqueduct system, MWD's water treatment
process, and what measures are taken to ensure the
highest quality level of water for Southern California.
Space is extremely ]united. Please contact Tiffany Baca at
(714) 593 - 5013 /tbaca @mwdoc.com, or Director Brett R. Barbre
at (714) 39£- 1350/brbarbre@mwdoc.com if you have any z�
questions or if you would like to reserve your seat in advance] t
i
Participation on this inspection trip by certain California governmental
officials will constitute a reportablegift under California and local ethics laws.
The estimated reportable expense for this trip is $300.00.
Watch a video of the history
of the CRA here: