HomeMy WebLinkAbout2014-02-24 - Finance-Accounting Committee Meeting Agenda PacketYorba Linda
'"Water District
AGENDA
YORBA LINDA WATER DISTRICT
FINANCE - ACCOUNTING COMMITTEE MEETING
Monday, February 24, 2014, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
2. ROLL CALL
COMMITTEE
Director Michael J. Beverage, Chair
Director Phil Hawkins
STAFF
Steve Conklin, Acting General Manager
Delia Lugo, Finance Manager
3. PUBLIC COMMENTS
Any individual wishing to address the committee is requested to identify themselves and state the matter on
which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for
their comment when the item is considered. No action will be taken on matters not listed on this agenda.
Comments are limited to matters of public interest and matters within the jurisdiction of the Water District.
Comments are limited to five minutes.
4. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and committee discussions are needed prior to
formal committee action.
4.1. Submission of 2013 Audit Reports
Recommendation: That the Committee recommend the Board of Directors receive
and file the FY 2012113 Comprehensive Annual Financial Report, the Report on
Internal Control and the Communication to Those In Governance Letter.
5. DISCUSSION ITEMS
This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar
items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda
may also include items for information only.
5.1. Draft Reserve Policy for FY 2014/15
5.2. Draft Finance Department Budget for FY 2014/15
5.3. Projected Operating Revenues for FY 2014/15 (To be provided at the meeting.)
5.4. Investment Report for Period Ending January 31, 2014
5.5. Budget to Actual Results for January 2014
5.6. Future Agenda Items and Staff Tasks
6. ADJOURNMENT
6.1. The next Finance - Accounting Committee meeting is scheduled to be held Monday,
March 24, 2014 at 4:00 p.m.
Items Distributed to the Committee 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 Committee 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: February 24, 2014
ITEM NO. 4.1
To:
Finance - Accounting Committee
From:
Steve Conklin, Acting General
Manager
Presented By:
Delia Lugo, Finance Manager Dept: Finance
Prepared By:
Delia Lugo, Finance Manager
Subject:
Submission of 2013 Audit Reports
STAFF RECOMMENDATION:
That the Committee recommend the Board of Directors receive and file the FY 2012/13
Comprehensive Annual Financial Report, the Report on Internal Control and the Communication to
Those In Governance Letter.
DISCUSSION:
Staff is pleased to present the Finance - Accounting Committee with Yorba Linda Water District's
Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2013.
White Nelson Diehl Evans LLP, the District's external auditors, have completed their audit of the
Yorba Linda Water District for the fiscal year ending June 30, 2013, and have rendered an
unqualified (clean) opinion in the attached Comprehensive Annual Financial Report. They identified
in the attached Report on Internal Control, internal 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.
STRATEGIC PLAN:
FR 1 -G: Continue to Improve Communications of the Districts Financial Information to the Board of
Directors, Member Agencies, Management, and the Financial Community
ATTACHMENTS:
Name: Description: Type:
YLWD FY 12 -13 CAFR.pdf 2013 CAFR Backup Material
YLWD FY 12 -13 ACL.pdf Backup Material - ACL Backup Material
YLWD FY 12 -13 GAS.pdf Backup Materila - GAS Backup Material
YORBA LINDA WATER DISTRICT
of Yorba Linda, California
Comprehensive Annual Financial Report
WITH REPORT ON AUDIT BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Prepared by:
The Yorba Linda Water District Finance Department
Delia Lugo - Finance Manager
Maria Trujillo, Accounting Assistant II
Richard Cabadas, Accounting Assistant I
and
Cindy Botts, Management Analyst
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YORBA LINDA WATER DISTRICT
TABLE OF CONTENTS
For the year ended June 30, 2013
INTRODUCTORY SECTION:
Page
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)
5
Basic Financial Statements:
13
Statements of Net Position
14
Statements of Revenues, Expenses
and Changes in Net Position
16
Statements of Cash Flows
17
Notes to Basic Financial Statements
19
Required Supplementary Information:
47
Other Post - Employment Benefit Plan - Schedule
of Funding Progress
48
Supplementary Information:
49
Combining Schedule of Net Position
50
Combining Schedule of Revenues, Expenses and
Changes in Net Position
52
Combining Schedule of Cash Flows
53
Schedule of Operating Expenses by Cost Center and
Nature of Expenses for Water and Sewer
55
Schedule of Capital Assets
56
YORBA LINDA WATER DISTRICT
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2013
Page
Nnmhar
STATISTICAL SECTION: 57
Description of Statistical Section 59
Financial Trends:
Changes in Net Position 60
Revenue Capacity:
Number of Connections 62
Ten Largest Customers 63
Debt Capacity:
Ratio of Outstanding Debt 64
Debt Coverage 65
Demographic and Economic Information:
Demographics 66
Ten Largest Employers 67
Operating Information:
Number of Employees 68
Operating and Capacity Indicators 69
INTRODUCTORY SECTION
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Yorba Linda
Water District
January 29, 2013
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, 2013. This report was
prepared pursuant to the guidelines set forth by the Governmental Accounting
Standards Board (GASB).
District staff prepared this financial report in conjunction with an unmodified opinion
issued by the independent audit firm White, Nelson, Diehl, Evans LLP. The independent
auditor's report is located at the front of the financial section of this document.
Management's discussion and analysis (MD &A) immediately follows the independent
auditor's report and provides a narrative introduction, overview and analysis of the basic
financial statements. MD &A complements this letter of transmittal and should be read in
conjunction with it.
This report consists of management's representations concerning the finances of Yorba
Linda Water District. Consequently, management assumes 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
its benefits, the District's comprehensive framework of internal controls has been
designed to provide reasonable, rather than absolute, assurance that the financial
statements will be free from material 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, 2012. In order to be awarded a Certificate of Achievement, a
governmental entity must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one 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 79 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 65,000
and currently provides water service through approximately 24,479 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 2012/13 the District provided 21,789 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 21St 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.
M
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 2014 because of the ongoing financial crisis and the
somewhat distressed housing market.
District expenses have increased approximately $500,000 per year over the past four
fiscal years, with the fiscal year 2013/14 budget expected to increase an additional
$800,000. A primary factor of the increase in these expenses is the cost of water YLWD
pays to the Municipal Water District of Orange County (MWDOC) for import water and
assessments. MWDOC's cost is primarily based on the cost of water they must pay to
the Metropolitan Water District of Southern California (MWD). Impacting the fiscal year
2012/13 budget was an average 5% rate increase (6.7% actual for YLWD) increase
from MWD, effective January 1, 2013. An additional 4.8% increase was also adopted
and will take effect January 1, 2014. These rate increases are part of an overall 35%
rate increase since January 1, 2009. As the cost of import water has continued to
increase, the cost of groundwater, purchased from the Orange County Water District
(OCWD) has kept pace. Over the FY 2009/10, FY 2010/11 and FY 2011/12 years, the
District averaged annual sales of 19,100 acre -feet. However, during the 2012/13 fiscal
year, the District the District sold approximately 2,700 acre -feet more water than
anticipated for FY 2012/13. This amounts to an increase in water sales revenue of $1.5
million. This increase was the result of calendar year 2013 being the driest year on
record for most of California. In response to this and to the California Department of
Water Resources first snowmelt runoff forecast for 2014, which suggests that if
conditions do not substantially improve, 2014 will be a Critical Dry water year for both
the Sacramento and San Joaquin River systems, District water sales for FY 2013/14 are
estimated to be even greater than the 20,000 acre -feet budgeted.
The District is also pursuing annexation of the remaining 26% of its service area into
OCWD. This will allow the District to pump the maximum allowable volume each year,
at a lower cost than purchasing the same amount of import (MWD) water. Had the
District been able to access the entirety of OCWD's Basin Production Percentage (BPP)
for the fiscal year 2012/13, the District would have been able to lower its variable water
costs by approximately $1.0 million. As variable water costs comprise approximately
53% of the District's operating expenses, ensuring these costs are held as low as
possible is a top priority each and every fiscal year.
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 —all of which lead to increasing supply costs. Within the District's
boundaries, population growth is expected to increase only minimally in the next 5 -10
years, 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.
it>il
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 2012/13
Previously, the Board of Directors approved the FY 2007 -2012 five -year capital
improvement plan totaling $57.7 million. The projects in this plan 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 time of 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 through the end of fiscal year 2010/11.
The remaining $33.1 million is therefore proposed for consideration by the Board for
capital improvement projects /capital replacement projects (CIP /CRP) that will extend
through fiscal year 2014/15. Approximately $8.5 million of the $33.1 million was spent in
fiscal year 2011/12 and an additional $5.8 million in fiscal year 2012/13 for projects in
planning, design and construction. Fiscal year 2012/13 projects included the following:
2012 Waterline Replacement Project
Total Project Budget: $1,645,000 Proposed FY 13/14 Budget: $500,000
The project consists of replacing old waterlines and appurtenances in seven locations,
ranging from 200 to 3,000 feet, with a total replacement length of approximately 6,700
feet. These locations were identified in the Asset Management Plan and the Capital
Improvement Plan as requiring near -term replacement due to age and condition of the
pipelines. The project was divided into two phases for construction. Phase 1, a
replacement pipeline in Plumosa Drive, has been completed. Phase 2 work is under
construction and planned for completion in FY 13/14.
Yorba Linda Blvd Booster Pump Station Project
Total Project Budget: $3,115,000 Proposed FY 13/14 Budget: $2,075,000
The project consists of replacing the existing Palm Avenue Booster Pump Station with a
three -pump 5,000 -gpm capacity new pump station at Gun Club Road and Yorba Linda
Blvd. The project will make it possible to deliver more groundwater to the easterly
portion of the District's service area. Construction of the new pump station began in
FY12/13 and will be complete in FY 13/14. Projected costs in FY 12/13 and FY 13/14
are estimated to be $927,000 and $2,075,000, respectively.
Well #21 Project
Total Project Budget: $1,680,000 Proposed FY 13/14 Budget: $1,000,000
Work began in FY 12/13 on plans for the drilling of the new well. In FY13/14, a test well
will be drilled to confirm the quantity and quality of water expected from a well at that
site. If the findings are positive, the test well will be drilled out and completed with a
steel casing, for production testing. Budgeted for FY13/14 is the drilling of the well and
the preparation of plans for well equipping at an estimated cost of $800,000. Budgeted
for FY 14/15 is construction of wellhead facilities and a discharge pipeline at an
estimated cost of $680,000.
Fairmont Pump Station Upgrade Project
Total Project Budget: $6,300,000 Proposed FY 13/14 Budget: $500,000
The project is the refurbishment and upgrading of the Fairmont site. The existing 37-
year old booster station will be demolished and its two booster pumps will be replaced
by six, with two each pumping to three different pressure zones. A new building will be
constructed to house the pumps, as well as facilities for operations and maintenance,
and for equipment and material storage. The project will also include refurbishment of
elements of the Fairmont Reservoir. Completed in FY11/12 was the replacement of
valves inside the reservoir. Planned for FY12/13 is completion of design plans at an
estimated cost of $500,000. Construction is planned to follow, at an estimated cost of $3
million in FY 13/14 and $2.5 million in FY 14/15. Part of the cost of the improvements
will be offset by developer - provided funding.
®r
Lakeview Grade Separation Project
Total Project Budget: $600,000 Proposed FY 13/14 Budget: $300,000
The Orange County Transportation Authority (OCTA) is the lead agency for a planned
Lakeview Avenue bridge over Orangethorpe Avenue and the adjacent BNSF Railroad
tracks. As part of the project, it will be necessary to replace and relocate the District's
water lines currently in Lakeview Avenue through the project area. The District has been
in discussions with OCTA as to how much of the total cost of the relocation and
replacement of its waterlines and appurtenances the District must pay for, estimated at
a cost in the range of $1 million. During this process, the District has been pursuing
means to minimize the project cost it will bear. It is anticipated that OCTA and the
District will reach a decision on the project cost share to be borne by each by early in
FY 12/13, and that construction of the pipeline relocation work will begin late in FY
12/13, with completion by FY 14/15.
Yorba Linda High School Park Pipeline Relocation Project
Total Project Budget: $370,000 Proposed FY 13/14 Budget: $20,000
The proposed Yorba Linda High School Park, within Placentia Yorba Linda Unified
School District's (PYLUSD) property located south of Yorba Linda High School, includes
proposed grading with nearly 18 -feet of fill over our existing 39 -inch diameter Bryant
Cross Feeder (BCF) pipeline. The BCF pipeline will be unable to support the additional
fill, and must be relocated. Per the Pre - Annexation Agreement with PYLUSD, the
District is responsible for the design and construction costs for relocating approximately
530 lineal feet of the 39" BCF pipeline, at an estimated cost of $370,000.
Meter Replacement Program (R &R)
Total Program Budget: $2,500,000 Proposed FY 13/14 Budget: $50,000
This consists of replacing old meters on the eastern side of the District and converting
the manually -read meters with radio - read /drive -by technology. The amount budgeted for
FY 13/14 includes the cost of replacing still functioning, but aged meters in strategic
locations on the eastern side of the District. The meters removed from service will be
tested in house to determine the accuracy of the meters and amount of water loss
occurring. This information will inform the District of areas where more water loss is
occurring, and guide staff to replace those areas in a more timely manner.
Future Pipeline Replacement Project (R &R)
Total Project Budget: $2,690,000 Proposed FY 13/14 Budget: $50,000
The District has pipeline installed in the early 1900s, identified in the Asset Management
Plan with leak history that needs to be replaced. To reduce costs, staff will design, in-
house, approximately 2,000 feet of the more critical pipeline replacement reaches
during FY 13/14, with pipeline construction in FY 14/15. The remainder of waterline
replacement will be designed and installed during subsequent fiscal years.
a
Elk Mountain Booster Station Surge Tank (R &R)
Total Project Budget: $100,000 Proposed FY 13/14 Budget: $100,000
Replace the 23 -year old surge tank with a new tank. The existing tank and air
compressor can't be repaired or maintained and was never certified. Because it's older
and uncertified, our insurance carrier will not provide coverage if damage is created
because this facility did not properly work. The tank is located near the Elk Mountain
Booster Pump Station northeast of Camino De Bryant and Elk Mountain Way.
Timber Ridge Booster Station Rehabilitation (R &R)
Total Project Budget: $250,000 Proposed FY 13/14 Budget: $50,000
Timber Ridge Booster Station is undersized and needs additional emergency pumping
capacity. Staff will evaluate the least cost method to install a new gas engine enclosed
with a new building, or install a new electric generator and possibly upsizing one or
more of the existing pumps.
Other major accomplishments in fiscal year 2012/13 include the following:
• Completed CEQA Process for OCWD Annexation
• Completed Construction of Yorba Linda Pipeline Project
• Completed Hydraulic Model Calibration and Area Master Plan Update
• Completed Construction of Highland Booster Pump Station
• Completed Construction of Green Crest Sewer Lift Station Upgrade
• Commenced Design of Fairmont Booster Pump Station Replacement
• Received Positive Auditors Letter for FY 2011/12
• Received State and National Recognition for CAFR
• Executed Multi -Year Memorandum of Understanding (MOU)
• Received State and National Recognition for FY 2012/13 Budget document
• Launched New District Website
• Implemented Enhanced Public Affairs and Outreach Program
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.
vii
Water Rate & Increases
In FY 2012/13, YLWD charged a uniform commodity rate of $2.57 per unit and a
monthly fixed charge based on the size of the meter. Meters sized 5/8 and 3/4 inch
were charged $7.56, 1 inch meters were charged $12.60, 1 '/2 inch meters were
charged $25.20, 2 inch meters were charged $40.32, 3 inch meters were charged
$88.20, 4 inch meters were charged $158.76 and 6 inch meters were charged $352.80.
One unit of water equals 748 gallons, equating one gallon of water to a cost of
approximately $0.0034 (one third of a cent). At an average of 30 units of water per
month (approximately 22,500 gallons), a typical 1 inch metered YLWD customer would
pay about $ 89.70 on the average for their monthly water bill. YLWD also provided
wastewater service to all 24,479 of the District's water customer base in fiscal year
2012/13, at a charge of $5.50 per month. The District also provided sewer service to
approximately 1,400 customers that it does not provide water to. These customers, in
the "Locke Ranch" area of Yorba Linda, are served by a private water company —
Golden State Water Company.
These rates are the result of a Cost of Service Analysis and Alternative Water Rate
Feasibility Study in fiscal year 2011/12, which addressed the impacts of implementing a
tiered water conservation rate structure and /or a budget -based water rate structure for
customers of the District. The result of this study was a three -year rate increase to
customers on the Monthly Service Charge, approved by the Yorba Linda Water District
Board of Directors. The approved rate increase is a percentage on the District's overall
revenue and consists of a 1.5% revenue increase beginning on July 1, 2012, a 2.5%
increase beginning on July 1, 2013, and a 2.5% increase beginning on July 1, 2014.
These increases will assist in covering the costs associated with operating, maintaining
and replacing the District's water facilities. The District will also be passing through to
customers any future increases on the commodity charge from its water suppliers as
these charges are based on the amount of water sold.
In conjunction with this rate increase, the Board of Directors recommended that staff
pursue a line of credit with Wells Fargo for $7 million with a 3 -year renewable term and
an interest rate based on 1 month LIBOR, currently calculated at 1.14 %. The line of
credit will allow the District to pursue future capital improvement projects with a minimal
borrowing cost and a lowered financial burden to our customers.
The District also issued Refunding Revenue Bonds, Series 2012A, which advance
refunded the 2003 Certificates of Participation (COP) Bonds. This is estimated to save
approximately $80,000 annually.
In FY 2012/13, 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 four fiscal years, and it is
anticipated that costs will continue to increase as supplies become more strained from
projected population increases, cyclical drought conditions, and environmental and
regulatory restrictions.
viii
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 are pursuing 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 approximately $1 M per year if
the entire area is annexed into OCWD.
Enhanced Outreach & Communications
The District continues to enhance its communications with and presence within the
community. Within the FY 2012/13 Budget, the District funded a Public Information
Officer position and two part -time Public Affairs Intern positions. The Public Affairs
division of the Administration department develops and disseminates information to the
public and supports water conservation programs with the overall goal of developing a
more transparent image of the District to the community.
The District's Citizens Advisory Committee, made up of local residents, 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. Those three seats will be up for re- election in November 2014.
Technological Advancements in Progress
Technological advancements include the incorporation of a Computerized Maintenance
& Management System (CMMS), which automates and tracks field work orders and
provide actual costs to perform work -order related functions. In planning is an
Automated Purchase Requisitioning System, which will provide better workflow and
approvals for purchasing items, as well as 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.
1X
Budgetary 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.
Cash and Investment Management
In order of priority, the District's objectives when investing, reinvesting, purchasing,
acquiring, selling and managing public funds are as follows:
1. Safety: Safety of principal is the foremost objective of the investment program.
Investments made by the District are undertaken in a manner that seeks to
ensure the preservation of capital in the overall portfolio. To attain this objective,
diversification is required to prevent any potential loss on any individual security
or depository from exceeding the income generated from the remainder of the
portfolio.
2. Liquidity: The investment portfolio 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 unmodified (clean) Independent Auditor's Report appears in the
Financial Section.
Other References
More information is contained in the Management's Discussion and Analysis and the
Notes to the Basic Financial Statements found in the Financial Section of the report.
X
Acknowledgements
Preparation of this report was accomplished by the combined efforts of District staff.
We appreciate the dedicated efforts and professionalism that these staff members
contribute to the District. We would also like to thank the members of the Board of
Directors 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,
El I/ I,. �
Steve Conklin
Acting General Manager
X1
d �
Delia Lugo
Finance Manager
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xli
Yorba Linda Water District
Board of Directors and Executive Staff
Gary T. Melton, President
Michael J. Beverage
Director
�r
Robert R. Kiley, Vice President
Phil Hawkins
Director
Steven R. Conklin
Acting General Manager/
Engineering Manager
Art Vega
Interim IT Manager
John DeCriscio
Operations Manager
Gina Knight
HR & Risk Manager
X111
Ric Collet
Director
Delia Lugo
Finance Manager
Yorba Linda
Water District
Engineering
Manager
Executive
Secretary
Public Information
Officer
I.T. Manager
Sr. Protect
Engineering
Water Quality
Protect
Manager
Secretary
Engineer
Engineer
Management
S.C.A.D.A.
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G.I.S.
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Inspector
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Intern Technician
Technician
2 FTE
2 FTE
Construction
Inspector
Operations
finance
Manager
Manager
NR & Risk
Manager
Sr. Fleet
Operations Water Maint.
Chief Plant
Customer Svc.
Mechanic
Asst. /Storekeeper Superintendent
Operator
Sr.A000Untant
Supervisor
HR Analyst
Personnel
Technician Mechanic
Sr. Maintanance
11 /111
Dist. Operator
Facilities
Sr. Plant
Accounfing
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Maintenance
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Yorba Linda Water District
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2012
Executive Director /CEO
FINANCIAL SECTION
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INDEPENDENT AUDITORS' REPORT
Board of Directors
Yorba Linda Water District
Placentia, California
Report on the Financial Statements
We have audited the accompanying financial statements of Yorba Linda Water District (the District),
as of and for the year ended June 30, 2013, and the related notes to the financial statements, which
collectively comprise the District's basic financial statements as listed in the table of contents.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America, 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 from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditors consider internal control relevant to the District's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the District's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of Yorba Linda Water District, as of June 30, 2013, and the respective
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.
Emphasis of Matters
As discussed in Note 1 e to the basic financial statements, the District incorporated deferred outflows of
resources and deferred inflows of resources into the definitions of the required components of the
residual measure of net position due to the adoption of Governmental Accounting Standards Board's
Statement No. 63, "Financial Reporting of Deferred Ou flows of Resources, Deferred Inflows of
Resources, and Net Position ". The adoption of this standard also provides a new statement of net
position format to report all assets, deferred outflows of resources, liabilities, deferred inflows of
resources, and net position. Our opinion is not modified with respect to this matter.
As discussed in Note le to the basic financial statements, the District has changed its method for
accounting and reporting certain items previously reported as assets or liabilities during fiscal
year 2012 -2013 due to the early adoption of Governmental Accounting Standards Board's Statement
No. 65, `Items Previously Reported as Assets and Liabilities ". The adoption of this standard required
retrospective application resulting in a $725,802 reduction of previously reported net position of the
District. Our opinion is not modified with respect to this matter.
Other Matters
Partial Summarized Comparative Information
The financial statements include partial year comparative information. Such information does not
include all of the information required to constitute a presentation in accordance with accounting
principles generally accepted in the United States of America. Accordingly, such information should
be read in conjunction with the District's financial statements for the year ended June 30, 2012 from
which such partial information was derived.
Report on Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and other post - employment benefit plan - schedule of funding
progress, listed in the table of contents as required supplementary information, 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
management's discussion and other post - employment benefit plan - schedule of funding progress 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 management's discussion and analysis and
other post - employment benefit plan - schedule of funding progress because the limited procedures do
not provide us with sufficient evidence to express an opinion or provide any assurance on them.
-2-
Other Matters (Continued)
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the District's basic financial statements. The introductory section,
supplementary information consisting of combining schedules, schedule of operating expenses by cost
center and nature of expenses for water and sewer, schedule of capital assets and statistical section, as
listed in the table of contents, are presented for purposes of additional analysis and are not a required
part of the basic financial statements.
The combining schedules, schedule of operating expenses by cost center and nature of expenses for
water and sewer and schedule of capital assets, as listed in the table of contents, are the responsibility
of management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the combining schedules, schedule of
operating expenses by cost center and nature of expenses for water and sewer and schedule of capital
assets are fairly stated in all material respects in relation to the basic financial statements taken as a
whole.
The introductory section and statistical section have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion or
provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 29, 2014 on our consideration of the District's internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
the internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the District's
internal control over financial reporting and compliance.
z,)� edydJ LLB°
Irvine, California
January 29, 2014
-3-
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YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2013
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, 2013. 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 net position decreased by $1.8 million, or a 1.07% decrease in net position.
• During the year the District's revenues were $30.9 million, up 3.1 %.
• During the year, the District's expenses were $33.9 million, up 7.8 %.
Required Financial Statements
This annual report consists of a series of financial statements. The Statement of Net Position,
Statement of Revenues, Expenses and Changes in Net Position and Statement of Cash Flows provide
information about the activities and performance of the District using accounting methods similar to
those used by private sector companies.
The District's statements consist of two funds; the Water Fund and the Sewer Fund. The District's
records are maintained on an enterprise basis, as it is the intent of the Board of Directors that the costs
of providing water and sewer to the customer of the District are financed primarily through user
charges.
The Statement of Net Position includes all of the District's investments in resources (assets), deferred
outflows of resources, obligations to creditors (liabilities) and deferred inflow of resources. It also
provides the basis for computing a rate of return, evaluating the capital structure of the District and
assessing the liquidity and financial flexibility of the District. All of the current year's revenue and
expenses are accounted for in the Statement of Revenues, Expenses and Changes in Net Position. This
statement measures the success of the District's operations over the past year and can be used to
determine if the District has successfully recovered all of its costs through its rates and other charges.
This statement 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.
-5-
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
For the Year Ended June 30, 2013
Financial Analysis of the District
One of the most important questions asked about the District's finances is, "Is the District better off or
worse off as a result of this year's activities ?" The Statement of Net Position and the Statement of
Revenues, Expenses and Changes in Net Position report information about the District in a way that
helps answer this question. These statements include all assets, deferred outflows of resources,
liabilities, and deferred inflows of resources using the accrual basis of accounting, which is similar to
the accounting used by most private sector companies. All of the current year's revenues and expenses
are taken into account regardless of when the cash is received or paid.
These two statements report the District's net position and changes in them. You can think of the
District's net position (the difference between assets, deferred outflows of resources, liabilities, and
deferred inflows of resources), as one way to measure the District's financial health, or financial
position. Over time, increases or decreases in the District's net position is one indicator of whether its
financial health is improving or deteriorating. However, one will need to consider other non - financial
factors such as changes in economic conditions, 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 19
through 46.
See independent auditors' report.
9 Me
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
Statement of Net Position
Assets:
Current assets
Restricted assets
Non - current assets
Capital assets, net
Total assets
Deferred Outflows of Resources:
For the Year Ended June 30, 2013
2013
$ 21,994,679 $
2,171,030
2012 (Restated) Change
24,102,093 $ (2,107,414)
2,739,111 (568,081)
200,985,168 201,082,486 (97,318)
225,150,877 227,923,690 (2,772,813)
Deferred amount on refunding
498,686
114,986
383,700
Liabilities:
Liabilities payable from unrestricted current assets
6,168,421
6,466,920
(298,499)
Liabilities payable from restricted assets
965,000
925,000
40,000
Non - current liabilities
56,789,561
57,166,287
(376,726)
Total liabilities
63,922,982
64,558,207
(635,225)
Net position:
Net investment in capital assets
161,494,158
160,946,763
547,395
Restricted
10,640
564,075
(553,435)
Unrestricted
221,783
1,969,631
(1,747,848)
Total net position $
161,726,581 $
163,480,469
$ (1,753,888)
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the District, assets and deferred outflows of resources of the District exceeded
liabilities by $161.7 million and $163.48 million as of June 30, 2013 and 2012, respectively.
By far the largest portion of the District's net position (100% and 99% as of June 30, 2013 and 2012,
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, 2013, the District showed a positive balance in its unrestricted net position
of $221.8 thousand, which indicates that there are very minimal reserves to be utilized in future years,
as was the same with the balance of $1.97 million for the year ended June 30, 2012.
See independent auditors' report.
-7-
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
For the Year Ended June 30, 2013
Statement of Revenues, Expenses and Changes in Net Position
Revenues:
Operating revenues:
Water sales
Sewer revenue
Other operating revenue
Total operating revenues
Non - operating revenues:
Investment income
Property taxes
Other non - operating income
Total non - operating revenue
Total revenues
Expenses:
Operating expenses:
Variable costs
Pesonnel services
Supplies and services
Depreciation
Total operating expenses
Non - operating expenses:
Interest expense
Bond issuance cost
Other non - operating expense
Total non - operating expenses
Total expenses
2013
$ 26,369,940
1,762,039
723,577
28,855,556
Net income(loss) before capital contributions
and extraordinary item
Capital contributions
Extraordinary item
137,569
1,340,916
588,854
2,067,339
30,922,895
13,509,336
7,225,729
4,222,398
6,884,213
31,841,676
1,781,416
192,410
35,954
2,009,780
33,851,456
(2,928,561)
1,174,673
2012 (As Restated) Change
$ 24,998,673
1,785,804
848,238
27,632,715
277,137
1,273,855
805,654
2,356,646
29,989,361
12,275,853
6,979,088
3,811,125
6,595,720
29,661,786
1,596,264
108,984
1,705,248
31,367,034
(1,377,673)
$ 1,371,267
(23,765)
(124,661)
1,222,841
(139,568)
67,061
(216,800)
(289,307)
933,534
1,233,483
246,641
411,273
288,493
2,179,890
185,152
192,410
(73,030)
304,532
2,484,422
(1,550,888)
17,214,138 (16,039,465)
(5,000,000) (5,000,000)
Change in net position
(1,753,888)
10,836,465
(12,590,353)
Net position, beginning of year, as restated
163,480,469
152,644,004
10,836,465
Net position, end of year $
161,726,581 $
163,480,469
$ (1,753,888)
See independent auditors' report.
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
For the Year Ended June 30, 2013
Statement of Revenues, Expenses and Changes in Net Position (Continued)
The statement of revenues, expenses and changes of net position shows how the District's net position
changed during the fiscal years. In the case of the District, net position decreased by $1.8 million and
increased by $10.8 million for the fiscal years ended June 30, 2013 and 2012, respectively.
A closer examination of the sources of changes in net position reveals that:
In 2013, the District's total revenues increased by $933 thousand, primarily due to an increase in water
sales of $1.3 million as a result of a warmer summer than the two previous years and an improving
economy. In addition, total expenses increased by $2.6 million primarily due to increased variable
water costs of $1.2 million due to increased water purchases and an overall increase of $950 thousand
in the remaining operating expense categories.
In 2012, the District's total revenues increased by $2.7 million, primarily due to an increase in water
sales of $2.3 million as a result of a warmer summer than the two previous years and an improving
economy. In addition, total expenses increased by $2.7 million primarily due to increased variable
water costs of $1.1 million due to increased water purchases and increased depreciation expenses of
$1.3 million as a result of a number of large capital assets closed in the previous year.
See independent auditors' report.
M
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
For the Year Ended June 30, 2013
Capital Assets
Changes in capital asset amounts for 2013 were as follows:
Balance Transfers/ Balance
2012 Additions Deletions 2013
Capital assets
Capital assets, not being depreciated $
10,886,493 $
6,191,597 $
(11,242,786) $
5,835,304
Capital assets, being depreciated
252,375,491
11,736,626
(107,283)
264,004,834
Less accumulated depreciation
(62,212,128)
(6,884,213)
101,007
(68,995,334)
Total capital assets, net $
201,049,856 $
11,044,010 $
(11,249,062) $
200,844,804
Changes in capital asset amounts for 2012 were as follows:
Balance
Transfers /
Balance
2011
Additions
Deletions
2012
Capital assets
Capital assets, not being depreciated $
5,223,388 $
8,785,670
$ (3,122,565) $
10,886,493
Capital assets, being depreciated
232,232,836
20,438,265
(295,610)
252,375,491
Less accumulated depreciation
(55,822,436)
(6,595,720)
206,028
(62,212,128)
Total capital assets, net $
181,633,788 $
22,628,215
$ (3,212,147) $
201,049,856
At the end of fiscal year 2013 and 2012, the District's investment in capital assets amounted to $200.8
million and $201.0 million, respectively (net of accumulated depreciation). This investment in capital
assets includes land, transmission and distribution systems, reservoirs, tanks, pumps, buildings and
structures, equipment, vehicles and construction -in- process, etc. Major capital assets projects in fiscal
year 2012 -13 include Well 20, implementation of the CMMS project, Fairmont Reservoir valves, and
the purchase of a Kenworth Vactor truck.
Additional information regarding capital assets can be found in note 4 in Notes to Basic Financial
Statements.
See independent auditors' report.
-10-
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
For the Year Ended June 30, 2013
Long -Term Liabilities
Changes in long -term debt amounts for the year ended June 30, 2013 were as follows:
Beginning Ending
Balance Additions Reductions Balance
2003 Revenue Certificates
of Participation
2008 Revenue Certificates
of Participation
2012A Refuding Certificate
of Participation
Subtotal
Add (Less):
$ 8,965,000 $
32,750,000
- 8,330,000
41,715,000 8,330,000
(8,965,000) $
(680,000)
(9,645,000)
32,070,000
8,330,000
40,400,000
2003 Discount
(114,986)
-
114,986
-
2008 Pemium
678,115
-
(26,420)
651,695
2012A Premium
-
1,001,754
(43,727)
958,027
Total Certificates
42,278,129
9,331,754
(9,600,161)
42,009,722
Line of Credit
122,065
1,171,131
(32,630)
1,171,131
Compensated Balances
1,063,572
624,669
(687,858)
1,000,383
Total
$ 43,341,701 $
11,127,554
$ (10,288,019) $
44,181,236
Changes in long -term liabilities amounts for the year ended June 30, 2013 were as follows:
Beginning
Ending
Balance
Additions
Reductions
Balance
2003 Revenue Certificates
of Participation
$ 9,200,000 $
-
$ (235,000) $
8,965,000
2008 Revenue Certificates
of Participation
33,405,000
-
(655,000)
32,750,000
Subtotal
42,605,000
-
(890,000)
41,715,000
Add (Less)
Discount
(120,418)
- 5,432
(114,986)
Pemium
704535
- (26,420)
678,115
Total Certificates
43,189,117
- (910,988)
42,278,129
Compensated Balances
1,007,193
524,867 (468,488)
1,063,572
Other post - employment
liability (asset)
122,065
164,390 (319,085)
(32,630)
Total
$ 44,318,375 $
689,257 $ (1,698,561) $
43,309,071
Additional information regarding long -term liabilities can be found in note 5 in Notes to Basic
Financial Statements.
See independent auditors' report.
-11-
YORBA LINDA WATER DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
(CONTINUED)
For the Year Ended June 30, 2013
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.
-12-
BASIC FINANCIAL STATEMENTS
-13-
YORBA LINDA WATER DISTRICT
STATEMENTS OF NET POSITION
June 30, 2013
(With prior year data for comparison only)
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
14181a3=411 MI MyX11II
UNRESTRICTED ASSETS:
Cash and cash equivalents (Note 2)
Investments (Note 2)
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 (Note 2)
Investments (Note 2)
TOTAL RESTRICTED ASSETS
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Capital assets (Note 4):
Non - depreciable
Depreciable, net of accumulated depreciation
Other post - employment benefit (OPEB) asset (Notes 5 and 6)
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES:
Deferred amount on refunding
TOTAL DEFERRED OUTFLOWS OF RESOURCES
See independent auditors' report and notes to basic financial statements.
-14-
2013 2012
$ 10,354,438
$ 19,571,257
7,051,042
-
4,063,578
3,855,326
16,885
128,477
8,205
18,981
259,329
243,771
241,202
284,281
21,994,679 24,102,093
33,886 581,325
2,137,144 2,157,786
2,171,030 2,739,111
24,165,709 26,841,204
5,835,304 10,886,493
195,009,500 190,163,363
140,364 32,630
200,985,168 201,082,486
225,150,877 227,923,690
498,686 114,986
498,686 114,986
(Continued)
YORBA LINDA WATER DISTRICT
STATEMENTS OF NET POSITION
(CONTINUED)
June 30, 2013
(With prior year data for comparison only)
LIABILITIES
CURRENT LIABILITIES:
PAYABLE FROM UNRESTRICTED CURRENT ASSETS:
Accounts payable
Accrued expenses
Compensated absences payable - current portion (Note 5)
Customer and construction deposits
Unearned revenue
Accrued interest payable
TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS
PAYABLE FROM RESTRICTED ASSETS:
Certificates of Participation - current portion (Note 5)
TOTAL PAYABLE FROM RESTRICTED ASSETS
TOTAL CURRENT LIABILITIES
LONG -TERM LIABILITIES (LESS CURRENT PORTION):
Unearned annexation revenue
Compensated absences (Note 5)
Pension related debt
Payable on line of credit (Note 5)
Certificates of Participation (Note 5)
TOTAL LONG -TERM LIABILITIES (LESS CURRENT PORTION)
TOTAL LIABILITIES
NET POSITION (AS RESTATED - NOTE 12):
Net investment in capital assets (Note 8)
Restricted for capital projects
Unrestricted
TOTAL NET POSITION
See independent auditors' report and notes to basic financial statements.
-15-
2013 2012
$ 4,604,893
$ 4,892,274
197,033
152,907
250,096
265,893
277,799
267,896
397,522
413,532
441,078
474,418
168,421 6,466,920
965,000 925,000
965,000 925,000
7,133,421 7,391,920
13, 823,421
14,064,550
750,287
797,679
-
835,943
1,171,131
-
41,044,722
41,468,115
56,789,561 57,166,287
63,922,982 64,558,207
161,494,158 160,946,763
10,640 564,075
221,783 1,969,631
$ 161,726,581 $ 163,480,469
YORBA LINDA WATER DISTRICT
STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
For the year ended June 30, 2013
(With prior year data for comparison only)
OPERATING REVENUES:
Water sales
Sewer revenues
Other operating revenues
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Variable water costs
Personnel services
Supplies and services
Depreciation
TOTAL OPERATING EXPENSES
OPERATING LOSS
NONOPERATING REVENUES (EXPENSES):
Property taxes
Investment income
Interest expense
Bond issuance costs
Other nonoperating revenues
Other nonoperating expenses
TOTAL NONOPERATING REVENUES (EXPENSES)
NET LOSS BEFORE CAPITAL CONTRIBUTIONS AND
EXTRAORDINARY ITEMS
CAPITAL CONTRIBUTIONS
EXTRAORDINARY ITEMS (NOTE 11)
CHANGES IN NET POSITION
NET POSITION - BEGINNING OF YEAR (AS RESTATED) (NOTE 12)
NET POSITION - END OF YEAR
See independent auditors' report and notes to basic financial statements.
-16-
2013 2012
$ 26,369,940 $ 24,998,673
1,762,039 1,785,804
723,577 848,238
28,855,556 27,632,715
13,509,336
12,275,853
7,225,729
6,979,088
4,222,398
3,811,125
6,884,213
6,595,720
163 ,480,469
31,841,676
29,661,786
(2,986,120)
(2,029,071)
1,340,916
1,273,855
137,569
277,137
(1,781,416)
(1,596,264)
(192,410)
-
588,854
805,654
(35,954)
(108,984)
57,559
651,398
(2,928,561)
(1,377,673)
1,174,673
17,214,138
-
(5,000,000)
(1,753,888)
10,836,465
163 ,480,469
152,644,004
$ 161,726,581 $ 163,480,469
YORBA LINDA WATER DISTRICT
STATEMENTS OF CASH FLOWS
For the year ended June 30, 2013
(With prior year data for comparison only)
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 28,610,921 $ 27,396,429
Cash payments to employees for salaries and wages (8,188,469) (7,054,803)
Cash payments to suppliers of goods and services (17,945,308) (15,739,319)
Other revenue 359,936 478,300
Other expenses (1,219) (74,806)
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,835,861 5,005,801
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Cash payments for extraordinary item - (5,000,000)
Proceeds from line of credit 1,171,131 -
Proceeds from property taxes and assessments 1,452,375 1,261,507
NET CASH PROVIDED (USED) BY
NONCAPITAL FINANCING ACTIVITIES
2,623,506
(3,738,493)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Proceeds from annexation fees and capital contributions
180,772
89,949
Acquisition and construction of capital assets
(5,510,763)
(8,633,470)
Proceeds from sales of capital assets
10,502
11,249
Proceeds from long -term debt issuance
9,331,754
-
Repayment of certificates of participation
(9,127,367)
-
Bond issuance costs
(204,383)
-
Principal paid on long -term liability
(925,000)
(890,000)
Interest paid on long -term liability
(1,884,903)
(1,919,822)
NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES
(8,129,388)
(11,342,094)
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale /purchase of investments, net
(7,242,582)
(38,840)
Interest and investment earnings
148,345
280,700
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES
(7,094,237)
241,860
NET DECREASE IN CASH AND CASH EQUIVALENTS
(9,764,258)
(9,832,926)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
20,152,582
29,985,508
CASH AND CASH EQUIVALENTS - END OF YEAR
$ 10,388,324
$ 20,152,582
See independent auditors' report and notes to basic financial statements.
(Continued)
-17-
YORBA LINDA WATER DISTRICT
STATEMENTS OF CASH FLOWS
(CONTINUED)
For the year ended June 30, 2013
(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
Otherrevenues
Other expenses
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable
Inventory
Prepaid expenses and deposits
Other post - employment benefits (OPEB) asset
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
Accrued salaries and wages
Accrued other post - employment benefits (OPEB) liability
Pension related debt
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
Write -off bond discount for defeased bonds
See independent auditors' report and notes to basic financial statements.
-18-
2013 2012
$ (2,986,120) $ (2,029,071)
6,884,213 6,595,720
359,936 478,300
(1,219) (74,806)
(208,252) (213,291)
43,079 (50,668)
(15,558) 3,148
(107,734) -
(287,381)
385,444
44,126
22,601
-
(154,695)
(835,943)
-
(63,189)
56,379
9,903
(13,260)
5,821,981 7,034,872
$ 2,835,861 $ 5,005,801
$ 10,354,438 $ 19,571,257
33,886 581,325
$ 10,388,324 $ 20,152,582
$ 70,147 $ 50,914
$ 1,174,673 $ 17,480,462
$ 114,986 $ -
NOTES TO BASIC FINANCIAL STATEMENTS
-19-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2013
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 service to approximately
72,498 residents and sewer service to approximately 75,498 residents.
The financial statements present the District and its component units. 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 Statements of Net Position, the Statements
of Revenues, Expenses and Changes in Net Position, the Statements of Cash Flows and the
notes to the basic financial statements.
See independent auditors' report.
-20-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
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 Position. The
Statement of Revenues, Expenses and Changes in Net Position present increases (revenues)
and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues
are recorded when earned and expenses are recorded when a liability is incurred, regardless of
the timing of related cash flows.
e. GASB Pronouncements Implemented:
In fiscal year 2012 -2013, the District implemented Governmental Accounting Standards Board
(GASB) Statement No. 63, "Financial Reporting of Deferred Ou flows of Resources, Deferred
Inflows of Resources, and Net Position". This statement incorporates deferred outflows of
resources and deferred inflows of resources, as defined by GASB Concepts Statement No. 4,
"Elements of Financial Statements " into the definitions of the required components of the
residual measure of net position, formerly net assets. This statement also provides a new
Statement of Net Position format to report all assets, deferred outflows of resources, liabilities,
deferred inflows of resources, and net position.
See independent auditors' report.
-21-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
e. GASB Pronouncements Implemented (Continued):
In fiscal year 2012 -2013, the District early implemented GASB Statement No. 65, "Items
Previously Reported as Assets and Liabilities ". This statement established accounting and
financial reporting standards that reclassify, as deferred outflows of resources or deferred
inflows of resources, certain items that were previously reported as assets and liabilities. Due
to the early implementation of this statement, bond issuance costs, which should be recognized
as an expense in the period incurred, were eliminated. Accounting changes adopted to
conform to the provisions of this statements should be applied retroactively. The result of the
implementation of this standard was to decrease the net position at July 1, 2012 by $725,802,
which is the amount of bond issue costs at July 1, 2012. Implementation of this statement also
resulted in the reclassification of deferred amount on refunding from liabilities to deferred
outflows of resources.
f. GASB Pending Accounting Standards:
GASB has issued the following statements which may impact the District's financial reporting
requirements in the future:
• GASB 66 - "Technical Corrections, an amendment of GASB Statement No. 10 and
Statement No. 62 ", effective for periods beginning after December 15, 2012.
• GASB 67 - "Financial Reporting for Pension Plans, an amendment of GASB Statement
No. 25 ", effective for the fiscal years beginning after June 15, 2013.
• GASB 68 - "Accounting and Financial Reporting for Pensions, an amendment of GASB
Statement No. 27 ", effective for the fiscal years beginning after June 15, 2014.
• GASB 69 - "Government Combinations and Disposals of Government Operations
effective for periods beginning after December 15, 2013.
• GASB 70 - "Accounting and Financial Reporting for Nonexchange Financial Guarantees
effective for the periods beginning after June 15, 2013.
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 Manager to invest, reinvest, sell or exchange securities.
See independent auditors' report.
-22-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
h. Investments and Investment Policy (Continued):
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 $36,383 was made to bad debt expense for the fiscal year ended
June 30, 2013.
j. Prepaid Expenses:
Certain payments to vendors reflects costs or deposits applicable to future accounting periods
and are recorded as prepaid items in the basic financial statements.
k. 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.
1. 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.
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
See independent auditors' report.
-23-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
m. Deferred Outflows /Inflows of Resources:
In addition to assets, the statement of net position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will
not be recognized as an outflow of resources (expense /expenditure) until then. The District has
one item that qualifies for reporting in this category. It is the deferred loss on refunding
reported in the Statement of Net Position. A deferred loss on refunding results from the
difference in the carrying value of refunded debt and its reacquisition price. This amount is
deferred and amortized over the shorter of the life of the refunded or refunding debt.
In addition to liabilities, the statement of net position will sometimes report a separate section
for deferred inflows of resources. This separate financial statement element, deferred inflows
of resources, represents an acquisition of net position that applies to a future period(s) and will
not be recognized as an inflow of resources (revenue) until that time. The District does not
have any applicable deferred inflows of resources.
n. 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.
o. 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.
See independent auditors' report.
-24-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
p. 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.
q. Unearned Revenue:
Unearned revenue consists of customer refunds that have not been cashed and 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.
r. Unearned Annexation Revenue:
The District collects a fee from newly annexed developments for all residential and
commercial properties. This fee is in -lieu of the District's share of 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 unearned revenue source may be used for capital facilities in the future if approved by the
Board.
s. Net Position:
In the Statement of Net Position, net position is classified in the following categories:
• Net investment in capital assets - This amount consists of capital assets net of accumulated
depreciation and reduced by outstanding debt that is attributed to the acquisition,
construction, or improvement of the assets.
• Restricted net position - This amount is restricted by external creditors, grantors,
contributors, or laws or regulations of other governments.
• Unrestricted net position - This amount is all net position that does not meet the definition
of "net investment in capital assets" or "restricted net position ".
See independent auditors' report.
-25-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
t. Net Position Flow Assumptions:
Sometimes the District will fund outlays for a particular purpose from both restricted
(e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted - net position and unrestricted - net position in the Statement of
Net Position, a flow assumption must be made about the order in which the resources are
considered to be applied.
It is the District's practice to consider restricted - net position to have been depleted before
unrestricted - net position is applied.
u. 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.
v. 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 1% of
countywide assessed valuations. This levy is allocated pursuant to state law to the appropriate
units of local governments.
See independent auditors' report.
-26-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
v. Property Taxes and Assessments (Continued):
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:
w. Water and Sewer Sales:
January 1
July 1
First Installment - November 1
Second Installment - March I
First Installment - December 10
Second Installment -April 10
The District recognizes water and sewer service charges based on cycle billings rendered to the
customers each month.
x. 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.
y. 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
z. 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.
See independent auditors' report.
-27-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
2. CASH AND INVESTMENTS:
Cash and Investments:
Cash and investments as of June 30, 2013 are reported in the accompanying statement of net
position as follows:
Unrestricted Current Assets:
Cash and cash equivalents $ 10,354,438
Investments 7,051,042
Restricted Assets:
Cash and cash equivalents 33,886
Investments 2,137,144
Total Cash and Investments 19,576,510
Cash and investments as of June 30, 2013 consisted of the following:
Cash on hand $ 1,200
Deposits with financial institutions 6,672,352
Escrow deposits 10,640
Investments 12,892,318
Total Cash and Investments 19,576,510
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.
See independent auditors' report.
-28-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
2. CASH AND INVESTMENTS (CONTINUED):
Investments Authorized by the California Government Code and the District's Investment
Policy (Continued):
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.
Authorized Investment Type
Bank or Savings and Loans
Negotiable Certificates of Deposit
Local Agency Investment Fund (LAIF)
Orange County Commingled
Investment Pool
California Asset Management Program
United States Treasury Bills, Notes
and Bonds
United States Government Sponsored
Agency Securities
Corporate Bonds
Bankers Acceptances
Commercial Paper
Ca1TRUST Investment Pool
Money Market Funds
Maximum Maximum
* Excluding amounts held by bond trustee that are not subject to California Government Code
restrictions.
(1) Limited to bond proceeds held by the District.
N/A - Not Applicable
The District's investment in money market funds as of June 30, 2013 exceeded the 20% portfolio
limit and 10% maximum investment in one issuer limit.
See independent auditors' report.
-29-
Percentage
Investment
Minimum
Maximum
of
in One
Credit
Maturity
Portfolio *
Issuer
Rating_
5 years
None
None
FDIC or
FSLIC
5 years
30%
None
A and FDIC/
collateralized
N/A
None
None
N/A
N/A
None
None
N/A
N/A
(1)
None
N/A
5 years
None
None
N/A
5 years
None
None
N/A
5 years
30%
None
A
180 days
10%
5%
A -1
270 days
25%
None
A -1
N/A
None
None
N/A
N/A
20%
10%
N/A
* Excluding amounts held by bond trustee that are not subject to California Government Code
restrictions.
(1) Limited to bond proceeds held by the District.
N/A - Not Applicable
The District's investment in money market funds as of June 30, 2013 exceeded the 20% portfolio
limit and 10% maximum investment in one issuer limit.
See independent auditors' report.
-29-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
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.
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.
-30-
Maximum
Maximum
Maximum
Percentage
Investment
Authorized Investment Type
Maturity_
Allowed
in One Issuer
Cash
None
None
None
United States Treasury Bills, Notes
and Bonds
None
None
None
United States Treasury Obligations
None
None
None
Resolution Funding Corp. (REFCORP)
None
None
None
Prefunded Municipal Bonds
None
None
None
United States Government Sponsored
Agency Securities
None
None
None
Commercial Paper
None
None
None
Money Market Funds
None
None
None
Certificates of Deposits
None
None
None
Guaranteed Investment Contracts
None
None
None
Bankers Acceptance
1 year
None
None
Repurchase Agreements
30 days
None
None
Local Agency Investment Fund
None
None
None
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.
-30-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
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, 2013.
Disclosures Relating to Credit Risk:
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented in the following table are the minimum 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, 2013 for each
investment type.
Minimum
Legal
Remaining
Maturity (in Months)
Investment Type
Rating
Total
12 Months
13 to 24
25 to 36
37 to 48
48 to 60
LAIF
Investment Type
or Less
Months
Months
Months
Months
Totals
Ca1TRUST Investment Pool
$ 3,063,753
$ -
$ -
$ -
$ -
$ 3,063,753
LAIF
640,379
-
-
-
-
640,379
United States Government
Sponsored Agency Securities
N/A
2,137,144
- 2,137,144
Sponsored Agency Securities
-
2,438,135
-
-
-
2,438,135
Negotiable Certificates of Deposit
-
-
246,368
490,181
3,876,358
4,612,907
Held by bond trustee:
United States Government
Sponsored Agency Securities
2.137.144
-
-
-
-
2,137.144
$ 5,841,276
&2_438 ,135
$ 246,368
$ 490,181
3,876,358
$12,892,318
Disclosures Relating to Credit Risk:
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented in the following table are the minimum 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, 2013 for each
investment type.
Minimum
See independent auditors' report.
-31-
12.892.318 8.317.027 4.575.291
Legal
Not
Investment Type
Rating
Total
Rated AA+
Ca1TRUST Investment Pool
N/A
$ 3,063,753
$ 3,063,741 $ 12
LAIF
N/A
640,379
640,379 -
United States Government
Sponsored Agency Securities
N/A
2,438,135
- 2,438,135
Negotiable Certificates of Deposit
N/A
4,612,907
4,612,907 -
Held by bond trustee:
United States Government
Sponsored Agency Securities
N/A
2,137,144
- 2,137,144
See independent auditors' report.
-31-
12.892.318 8.317.027 4.575.291
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
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 with the exception of
banker's acceptances, commercial paper and money market funds which are limited to an
investment in any one issuer of 5 %, 5% and 10 %, respectively.
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 and Ca1TRUST Investment Pool).
The California Government Code and the District's investment policy do not contain legal or
policy requirements that would limit the exposure to custodial credit risk for deposits or
investments, other than the following provision for deposits: The California Government Code
requires that a financial institution secure deposits made by state or local governmental units by
pledging securities in an undivided collateral pool held by a depository regulated under state law
(unless so waived by the governmental unit). The market value of the pledged securities in the
collateral pool must equal at least I10% of the total amount deposited by the public agencies.
California law also allows financial institutions to secure District deposits by pledging first trust
deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2013, all of the District's deposits with financial institutions were covered by
federal depository insurance limits or were held in collateralized accounts.
Investment in State Investment Pool
The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by California Government Code Section 16429 under the oversight of the Treasurer of
the State of California. The fair value of the District's investment in this pool is reported in the
accompanying financial statements at amounts based upon the District's prorate share of the fair
value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that
portfolio). The balance available for withdrawal is based on the accounting records maintained by
LAIF, which are recorded on an amortized cost basis.
See independent auditors' report.
-32-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
2. CASH AND INVESTMENTS (CONTINUED):
Investment in Ca1TRUST Investment Pool:
Ca1TRUST 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.
Ca1TRUST 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. Ca1TRUST 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 Ca1TRUST 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 Ca1TRUST for the
Ca1TRUST accounts (in relation to the amortized cost of that portfolio). The balance available for
withdrawal is based on the accounting records maintained by Ca1TRUST.
3. RESTRICTED ASSETS:
Restricted assets were provided by, and are to be used for the following as of June 30, 2013:
Source Use 2013
Bond proceeds Repayment of debt 2,171,030
See independent auditors' report.
-33 -
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
4. CAPITALASSETS:
Changes in capital assets for the year ended June 30, 2013 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
(164,452)
- (1,978,263)
Balance
June 30, 2012
Additions
Deletions
June 30, 2013
- (1,159,062)
(47,389,638)
(4,730,260)
$ 347,490
$ -
$ - $
347,490
10,539,003
6,191,597
(11,242,786)
5,487,814
10,886,493
6,191,597
(11,242,786)
5,835,304
6,024,882
71,273
-
6,096,155
17,667,276
6,635,982
-
24,303,259
2,576,991
553,581
-
3,130,572
205,815,675
3,425,402
(14,931)
209,226,145
20,290,667
1,050,388
(92,352)
21,248,703
252,375,491 11,736,626 (107,283) 264,004,834
(1,813,811)
(164,452)
- (1,978,263)
(5,052,204)
(680,955)
- (5,733,159)
(1,001,261)
(157,801)
- (1,159,062)
(47,389,638)
(4,730,260)
8,655 (52,111,243)
(61955,214) (1,150,745)
92,352 (8,013,607)
(62,212,128) (6,884,213) 101,007 (68,995,334)
190,163,363 4,852,413 (6,276) 195,009,500
201.049.856 11.044.010 $(11.249.062) 200.844.804
Depreciation expense for the depreciable capital assets was $6,884,213 in 2013.
The District has been involved in various construction projects throughout the year. The balance of
construction in progress at June 30, 2013 is $5,487,814.
See independent auditors' report.
-34-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
5. LONG -TERM LIABILITIES:
Changes in long -term liabilities for the year ended June 30, 2013 were as follows:
Certificates of Participation:
2003 Revenue Certificates
of Participation
2008 Revenue Certificates
of Participation
2012A Refunding Certificates
of Participation
Subtotal
Add (Less):
2003 Discount
2008 Premium
2012A Premium
Total Certificates
of Participation
Line of Credit
Compensated absences
Total
Balance Balance Due Within
June 30, 2012 Additions Reductions June 30, 2013 One Year
$ 8,965,000 $ - $ (8,965,000) $ - $ -
32,750,000 - (680,000) 32,070,000 705,000
- 8,330,000 - 8,330,000 260,000
41,715,000 8,330,000 (9,645,000) 40,400,000 965,000
(114,986) - 114,986 - -
678,115 - (26,420) 651,695 -
1,001,754 (43,727) 958,027 -
42,278,129 9,331,754 (9,600,161) 42,009,722 965,000
- 1,171,131 - 1,171,131 -
1,063,572 624,669 (687,858) 1,000,383 250,096
43.341.701 11.127.554 (10,288.019) 44.181.236 1.215.096
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.
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.
In September 2012, the 2003 Certificates were refunded by the 2012 Refunding Certificates of
Participation. The proceeds of the refunding were placed in an escrow account to provide for the
debt service of the 2003 Certificates. As a result, the 2003 Certificates are considered to be
defeased and the liability for these bonds has been removed.
See independent auditors' report.
-35-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
5. LONG -TERM LIABILITIES (CONTINUED):
2008 Revenue Certificates of Participation:
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. The Term Certificates of
$10,885,000 are due on October 1, 2038. The legal reserve requirement is $2,147,096. At
June 30, 2013 the reserve fund had a balance of $2,160,390. At June 30, 2013 the
2008 Certificates outstanding balance was $32,070,000.
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 2013, the
net revenues equal to 181 % of the debt service.
The annual debt service requirements for the 2008 Revenue Certificates of Participation
outstanding at June 30, 2013 are as follows:
Year Ending
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
2034-2038
2039
Subtotal
Principal
$ 705,000
735,000
765,000
795,000
825,000
4,660,000
5,680,000
7,020,000
8,845,000
2,040,000
32,070,000
See independent auditors' report.
-36-
Interest
$ 1,423,396
1,394,596
1,364,596
1,333,396
1,300,996
5,971,080
4,921,406
3,537,875
1,658,875
51,000
22,957,216
Total
$ 2,128,396
2,129,596
2,129,596
2,128,396
2,125,996
10,631,080
10,601,406
10,557,875
10,503,875
2,091,000
55,027,216
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
5. LONG -TERM LIABILITIES (CONTINUED):
2012 Refunding Certificates of Participation:
In September 2012, the District issued $8,330,000 of Revenue Refunding Certificates of
Participation, Series 2012A. The 2012A Certificates were issued to provide funds (1) to advance
refund all of the currently outstanding District Certificates of Participation Series 2003 and (2) to
pay costs of issuance of the 2012A Bonds. The District completed the refunding to reduce its total
debt service payments over the next 21 years by over $1.72 million, resulting in an economic gain
(difference between the present value of the old and new debt service payments) of over $1.32
million. The 2003 Certificates were paid off in October 2012.
The Certificates bear interest ranging from 2% to 5 %, payable semiannually on April 1 and
October 1.
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 2013, the
net revenues equal to 181% of the debt service.
The annual debt service requirements for the 2012A Revenue Certificates of Participation
outstanding at June 30, 2013 are as follows:
Year Ending
2014
2015
2016
2017
2018
2019-2023
2024-2028
2029-2033
Subtotal
Principal
—
$ 260,000
275,000
280,000
285,000
295,000
1,665,000
2,085,000
3,185,000
8,330,000
See independent auditors' report.
-37-
Interest Total
$ 324,262
318,912
311,962
303,487
293,312
1,272,274
836,855
323,059
3,984.123
$ 584,262
593,912
591,962
588,487
588,312
2,937,274
2,921,855
3,508,059
12,314.123
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
5. LONG -TERM LIABILITIES (CONTINUED):
Line of Credit
On September 24, 2012, the District established a $7,000,000 Line of Credit ( "Line ") pursuant to a
line of credit agreement ( "Credit Agreement ") with Wells Fargo Bank, NA. The Line is
subordinate to the 2008 Revenue Certificates of Participation and the Revenue Refunding Bonds,
Series 2012A and borrowings from it are due and payable by September 30, 2015, though the
maturity date can be extended by request of the District and agreement by the bank. The Line has
an interest rate equal to One -Month LIBOR + 0.90 %, with an annual unused commitment fee of
0.35 %. As of June 30, 2013, the District has drawn down $1,171,131 of the available line and has
incurred $20,227 of interest expense and fees.
The Credit 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 2013, the net revenues equal to 181 %
of the debt service.
Compensated Absences:
Compensated absences are comprised of unpaid vacation leave, sick leave and compensating time
off which are accrued as earned. (See Note In).
6. 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.
6
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
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 has established a
trust to fund future OBEP benefits. For the year ended June 30, 2013, the District made a
medical contribution of $278,235 which paid $134,492 in health care costs for its retirees and
their covered dependents and a contribution of $143,743 to the OPEB trust.
c. Annual OPEB Cost and Net OPEB Obligation (Asset):
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
$ 170,191
Interest on net OPEB asset
(2,483)
Adjustment to annual required contribution
2,793
Annual OPEB cost (expense)
170,501
Actual contributions made
(278,235)
Increase in net OPEB asset
(107,734)
Net OPEB asset - beginning of year
X32,630)
Net OPEB asset - end of year
(140.364)
The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation (asset) for the years ended June 30, 2013, 2012 and 2011 were as
follows:
Fiscal
Year
Ended
6/30/11
6/30/12
6/30/13
Annual
OPEB
Cost
$ 189,147
164,390
170,501
See independent auditors' report.
Percentage
of Annual
OPEB Costs
Contributed
-39-
160.49%
194.10%
163.87%
Net
OPEB
Obligation
(Asset)
$ 122,065
(32,630)
(140,364)
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
6. OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED):
d. Funded Status and Funding Progress:
As of June 30, 2011, the most recent actuarial valuation date, the plan was 10.28 percent
funded. The actuarial accrued liability for benefits was $1,597,488, and the actuarial value of
assets was $164,291, resulting in an unfunded actuarial accrued liability (UAAL) of
$1,433,197. The covered payroll (annual payroll of active employees covered by the plan) was
$4,773,686 and the ratio of the UAAL to the covered payroll was 30.02 %.
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 June 30, 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 7.61% 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 and an open 30 year amortization for any
residual unfunded actuarial accrued liabilities.
See independent auditors' report.
.1
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
7. DEFINED BENEFIT PENSION PLAN:
a. Plan Description:
The District participates in the 2.0% at 55, 2.0% at 60 (effective for new hires after
December 22, 2011) and 2.0% at 62 Risk Pools of the California Employees Retirement System
(Ca1PERS), a cost sharing multiple - employer defined benefit pension plan. Ca1PERS provides
retirement and disability benefits, annual cost -of- living adjustments, and death benefits to plan
members and beneficiaries. CaIPERS 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 Ca1PERS'
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 Ca1PERS 2.0% at 55, and 2.0% at 60 Risk Pool
Retirement Plans is 7% of their annual covered salary. The District makes these contributions
required of District employees hired before January 26, 2012 on their behalf and for their
account. Employees hired after January 26, 2012 are responsible for making the 7% required
contribution. 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 are equal to the annual pension cost (APC) percentage of payroll for fiscal year 2013,
2012 and 2011.
Upon the implementation of the California Employees' Pension Reform Act (PEPRA) on
January 1, 2013, the 2.0% at 62 Risk Pool Retirement Plan was created and is open to all new
employees who do not qualify for the 2.0% at 60 Risk Pool Retirement Plan. Active plan
members are required to contribute 6.25% of their annual covered salary, which is paid by the
employees and is equal to the required employer contribution rates. The required employer
contribution rates are equal to the annual pension cost (APC) percentage of payroll for fiscal
year 2013.
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.
See independent auditors' report.
-41-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
7. DEFINED BENEFIT PENSION PLAN (CONTINUED):
b. Funding Policy (Continued):
For fiscal years 2013, 2012 and 2011 the District's annual employer's contributions for
Ca1PERS were equal to the District's required and actual contributions for each year as follows:
2% at 55 Risk Pool
Fiscal
Annual
Percentage
APC
Year
Pension
of APC
Percentage
Ended
Cost (APC)
Contributed
of Payroll
6/30/11
$ 527,743
100.00 %
10.461 %
6/30/12
548,528
100.00 %
11.507 %
6/30/13
491,326
100.00 %
10.238 %
Fiscal
Year
Ended
6/30/12
6/30/13
Fiscal
Year
Ended
6/30/13
2% at 60 Risk Pool
Annual Percentage
Pension of APC
Cost APQ Contributed
$ 780 100.00 %
12,996 100.00 %
2% at
Annual
Pension
Cost (APC
$ 921
Risk Pool
8. NET INVESTMENT IN CAPITAL ASSETS:
Percentage
of APC
Contributed
100.00 %
APC
Percentage
of Pgffoll
8.197 %
9.450 %
APC
Percentage
of Payroll
6.250 %
The balance of net investment in capital assets consisted of the following as of June 30, 2013:
2013
Capital assets, net of accumulated depreciation $ 200,844,804
Certificates of participation - current (965,000)
Certificates of participation - long -term (41,044,722)
Unspent debt proceeds 2,160,390
Deferred amount on refunding 498,686
Net investment in capital assets 161,494,158
See independent auditors' report.
-42-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
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, 2013, 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 $2,000,000, combined single limit at $2,000,000 per
occurrence. The Authority purchases additional excess coverage layers: $58 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 $100,000, 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. The Authority is self - insured to $2,000,000
and has purchased excess insurance to the statutory limit.
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 2013,
2012 and 2011, except for effects of the claim in Note 11. 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, 2013, 2012 and 2011.
See independent auditors' report.
-43-
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
10. 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, 2013
was $363,736. As of June 30, 2013 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.
11. 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
$1,855,286 of open construction contracts as of June 30, 2013. Construction contracts include:
Project Name
YL Blvd BPS
YL Blvd BPS
2010 Waterline Project
2010 Waterline Project - Phase II
See independent auditors' report.
Total C
Construction B
Balance
Approved C
Costs t
to
Contract t
to Date C
Complete
$ 1,581,179 $
$ 361,944 $
$ 1,219,235
263,813 1
162,802 1
101,011
246,269 1
184,881 6
61,388
1.441.567 9
967.915 4
473.652
$===77 542 1.855.286
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
11. COMMITMENTS AND CONTINGENCIES (CONTINUED):
Litigation:
In 2008, a firestorm known as the Freeway Complex Fire, the largest wildfire in the County in half
a century, resulted in the destruction of several homes served by the District. Certain homeowners
sued the District, alleging that the water system failed to provide sufficient water for fire protection
purposes. The District's excess liability insurers denied coverage for the Freeway Complex Fire
lawsuit.
In June 2012, with no admission of liability, the District and ACWA JPIA paid $10,000,000 (the
"Settlement Amount ") as part of a settlement with the plaintiff - homeowners. The District's
portion of the settlement amount was $5,000,000, which was paid from District reserves. As part
of the settlement, the lawsuit was referred to a third -party neutral who awarded damages in favor of
some plaintiff - homeowners. Under the settlement, the successful plaintiff - homeowners will
attempt to recover their awards in a separate lawsuit against the District's excess liability insurers,
but will not pursue further recovery from the District.
The District believes that its excess liability insurers wrongfully denied coverage in connection
with the Freeway Complex Fire lawsuit and is currently in litigation against such insurers to
recover both the Settlement Amount and certain legal fees. There can be no assurance that the
District's efforts to recover the Settlement Amount will be successful. However, the District is
protected from any further financial liability over and above the Settlement Amount.
12. RESTATEMENT OF NET POSITION:
Net position for the District as of July 1, 2012 was restated as follows:
Net position as previously reported
as of June 30, 2012
Reduction in net position to record expense
related to the pension related debt for
Ca1PERS side fund
Reduction in net position to remove unamortized
bond issuance costs for the implementation of
GASB Statement 65
Net position as restated July 1, 2013
See independent auditors' report.
-45-
$ 165,042,214
(835,943)
(725,802)
163,480.469
YORBA LINDA WATER DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2013
13. SUBSEQUENT EVENTS:
On October 1, 2013, the District amended the $7,000,000 Line of Credit ( "Line ") agreement
( "Credit Agreement ") with Wells Fargo Bank, NA, to extend the maturity date from
September 30, 2015 to September 30, 2016.
See independent auditors' report.
.e
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POST-EMPLOYMENT BENEFIT PLAN
SCHEDULE OF FUNDING PROGRESS
-47-
Retiree Health Plan
YORBA LINDA WATER DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
For the year ended June 30, 2013
OTHER POST - EMPLOYMENT BENEFIT PLAN
SCHEDULE OF FUNDING PROGRESS
Unfunded
See independent auditors' report and notes to basic financial statements.
-48-
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%
6/30/2011
$ 1,597,488
$ 164,291
$ 1,433,197
10.28%
$ 4,773,686
30.02%
See independent auditors' report and notes to basic financial statements.
-48-
SUPPLEMENTARY INFORMATION
BELIE
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF NET POSITION
June 30, 2013
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
14181013=411 M11%811 11
UNRESTRICTED ASSETS:
Cash and cash equivalents
Investments
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
TOTAL RESTRICTED ASSETS
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Capital assets:
Non - depreciable
Depreciable, net of accumulated depreciation
Other post - employment benefit (OPEB) asset
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES:
Deferred amount on refunding
TOTAL DEFERRED OUTFLOWS OF RESOURCES
See independent auditors' report.
-50-
Water Sewer Totals
$ 8,039,327
$ 2,315,111
$ 10,354,438
6,859,956
191,086
7,051,042
3,827,889
235,689
4,063,578
14,980
1,905
16,885
7,554
651
8,205
259,329
-
259,329
241,202
-
241,202
19,250,237
2,744,442
21,994,679
33,886
-
33,886
2,137,144
-
2,137,144
2,171,030
-
2,171,030
21,421,267
2,744,442
24,165,709
5,603,378
231,926
5,835,304
155,307,575
39,701,925
195,009,500
130,539
9,825
140,364
161,041,492
39,943,676
200,985,168
182,462,759
42,688,118
225,150,877
498,686
498,686
498,686
498,686
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF NET POSITION
(CONTINUED)
June 30, 2013
LIABILITIES Water Sewer Totals
CURRENT LIABILITIES:
PAYABLE FROM UNRESTRICTED CURRENT ASSETS:
Accounts payable
Accrued expenses
Compensated absences payable - current portion
Customer and construction deposits
Unearned revenue
Accrued interest payable
TOTAL PAYABLE FROM
UNRESTRICTED CURRENT ASSETS
PAYABLE FROM RESTRICTED ASSETS:
Certificates of Participation - current portion
TOTAL PAYABLE FROM RESTRICTED ASSETS
TOTAL CURRENT LIABILITIES
LONG -TERM LIABILITIES (LESS CURRENT PORTION):
Unearned annexation revenue
Compensated absences
Line of credit
Certificates of Participation
TOTAL LONG -TERM
LIABILITIES (LESS CURRENT PORTION)
TOTAL LIABILITIES
NET POSITION:
Net investment in capital assets
Restricted for capital projects
Unrestricted
TOTAL NET POSITION
See independent auditors' report.
-51-
$ 4,590,233
$ 14,660
$ 4,604,893
197,033
-
197,033
250,096
-
250,096
232,338
45,461
277,799
396,522
1,000
397,522
441,078
-
441,078
6,107,300
61,121
6,168,421
965,000
-
965,000
965,000
-
965,000
7,072,300
61,121
7,133,421
13,823,421
-
13,823,421
750,287
-
750,287
1,171,131
-
1,171,131
41,044,722
-
41,044,722
56,789,561
-
56,789,561
63,861,861
61,121
63,922,982
121,560,307
39,933,851
161,494,158
10,640
-
10,640
(2,471,363)
2,693,146
221,783
$ 119,099,584
$ 42,626,997
$ 161,726,581
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
For the year ended June 30, 2013
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
Bond issuance costs
Other nonoperating revenues
Other nonoperating expenses
TOTAL NONOPERATING
REVENUES (EXPENSES)
NET LOSS BEFORE CAPITAL CONTRIBUTIONS
CAPITAL CONTRIBUTIONS
CHANGES IN NET POSITION
NET POSITION - BEGINNING OF YEAR (AS RESTATED)
NET POSITION - END OF YEAR
See independent auditors' report.
-52-
Water
Sewer
Totals
$ 26,369,940
$ -
$ 26,369,940
-
1,762,039
1,762,039
684,916
38,661
723,577
27,054,856
1,800,700
28,855,556
13,509,336
-
13,509,336
6,390,207
835,522
7,225,729
3,890,552
331,846
4,222,398
5,580,026
1,304,187
6,884,213
29,370,121
2,471,555
31,841,676
(2,315,265)
(670,855)
(2,986,120)
1,340,916
-
1,340,916
121,210
16,359
137,569
(1,781,416)
-
(1,781,416)
(192,410)
-
(192,410)
574,424
14,430
588,854
(35,954)
-
(35,954)
26,770
30,789
57,559
(2,288,495)
(640,066)
(2,928,561)
711,319
463,354
1,174,673
(1,577,176)
(176,712)
(1,753,888)
120,676,760
42,803,709
163,480,469
$ 119,099,584
$ 42,626,997
$ 161,726,581
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF CASH FLOWS
For the year ended June 30, 2013
NET CASH PROVIDED 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
Proceeds from long -term debt issuance
Repayment of certificates of participation
Bond issuance costs
Principal paid on long -term liability
Interest paid on long -term liability
NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale /purchase of investments, net
Interest and investment earnings
NET CASH USED BY
INVESTING ACTIVITIES
NET DECREASE IN
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR
See independent auditors' report.
-53-
2,623,506 - 2,623,506
180,772
Water
Sewer
Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
(5,510,763)
10,502
-
Cash received from customers
$ 26,804,531
$ 1,806,390
$ 28,610,921
Cash payments to employees for salaries and wages
(7,345,406)
(843,063)
(8,188,469)
Cash payments to suppliers of goods and services
(17,557,857)
(387,451)
(17,945,308)
Other revenue
335,985
23,951
359,936
Other expenses
(1,219)
-
(1,219)
NET CASH PROVIDED BY OPERATING ACTIVITIES
2,236,034
599,827
2,835,861
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
17,729
148,345
Proceeds from line of credit
1,171,131
-
1,171,131
Proceeds from property taxes and assessments
1,452,375
-
1,452,375
NET CASH PROVIDED 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
Proceeds from long -term debt issuance
Repayment of certificates of participation
Bond issuance costs
Principal paid on long -term liability
Interest paid on long -term liability
NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale /purchase of investments, net
Interest and investment earnings
NET CASH USED BY
INVESTING ACTIVITIES
NET DECREASE IN
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR
See independent auditors' report.
-53-
2,623,506 - 2,623,506
180,772
-
180,772
(4,938,761)
(572,002)
(5,510,763)
10,502
-
10,502
9,331,754
-
9,331,754
(9,127,367)
-
(9,127,367)
(204,383)
-
(204,383)
(925,000)
-
(925,000)
(1,884,903)
-
(1,884,903)
(7,557,386)
(572,002)
(8,129,388)
(7,042,108)
(200,474)
(7,242,582)
130,616
17,729
148,345
(6,911,492)
(182,745)
(7,094,237)
(9,609,338)
(154,920)
(9,764,258)
17,682,551
2,470,031
20,152,582
$ 8,073,213 $ 2,315,111 $ 10,388,324
(Continued)
YORBA LINDA WATER DISTRICT
COMBINING SCHEDULE OF CASH FLOWS
(CONTINUED)
For the year ended June 30, 2013
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
Otherrevenues
Other expenses
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable
Inventory
Prepaid expenses and other deposits
Other post - employment benefits (OPEB) asset
Increase (decrease) in liabilities:
Accounts payable and accrued expenses
Accrued salaries and wages
Pension related debt
Accrued compensated absences
Customer and other deposits
Total adjustments
Water Sewer Totals
$ (2,315,265) $ (670,855) $ (2,986,120)
5,580,026
1,304,187
6,884,213
335,985
23,951
359,936
(1,219)
-
(1,219)
(218,236)
9,984
(208,252)
43,079
-
43,079
(15,558)
-
(15,558)
(100,193)
(7,541)
(107,734)
(231,949)
(55,432)
(287,381)
44,126
-
44,126
(835,943)
-
(835,943)
(63,189)
-
(63,189)
14,370
(4,467)
9,903
4,551,299
1,270,682
5,821,981
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,236,034 $ 599,827 $ 2,835,861
CASH AND CASH EQUIVALENTS -
FINANCIAL STATEMENT CLASSIFICATION:
Unrestricted $ 8,039,327 $ 2,315,111 $ 10,354,438
Restricted 33,886 - 33,886
TOTAL CASH AND CASH EQUIVALENTS -
FINANCIAL STATEMENT CLASSIFICATION $ 8,073,213 $ 2,315,111 $ 10,388,324
NONCASH INVESTING, CAPITAL AND
RELATED FINANCING ACTIVITIES:
Amortization related to long -term debt
Capital contributions
Write -off bond discount for defeased bonds
See independent auditors' report.
-54-
$ 70,147 $ - $ 70,147
$ 711,319 $ 463,354 $ 1,174,673
$ 114,986 $ - $ 114,986
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
MWD connection charge
Fuel and power /pumping
Total Variable Water Costs
Personnel Services:
Unit salaries
Fringe benefits
Director's fees
Total Personnel Services
Supplies and Services:
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, 2013
-55-
Water
Sewer
Totals
$ 8,690,878
$ -
$ 8,690,878
2,971,802
-
2,971,802
880,475
-
880,475
966,181
-
966,181
13,509,336
-
13,509,336
4,685,240
596,779
5,282,019
1,632,735
234,392
1,867,127
72,232
4,351
76,583
6,390,207
835,522
7,225,729
186,573
12,577
199,150
442,969
33,400
476,369
124,249
9,177
133,426
20,053
1,370
21,423
53,262
4,140
57,402
173,052
15,302
188,354
242,338
14,936
257,274
353,309
104,354
457,663
734,474
18,064
752,538
164,430
18,415
182,845
39,441
2,902
42,343
876,546
30,272
906,818
19,741
5,365
25,106
23,883
1,578
25,461
32,089
4,294
36,383
85,903
6,430
92,333
318,240
49,270
367,510
3,890,552
331,846
4,222,398
$ 23,790,095 $ 1,167,368 $ 24,957,463
YORBA LINDA WATER DISTRICT
SCHEDULE OF CAPITAL ASSETS
For the year ended June 30, 2013
Water Sewer Totals
Land, Mineral and Water Rights:
Land $ 138,629 $ - $ 138,629
Water rights 86,300 - 86,300
Mineral rights 63,650 - 63,650
Land rights and easements 385 58,526 58,911
Total Land, Mineral and Water Rights 288,964 58,526 347,490
Source of Supply:
Wells
5,531,787
-
5,531,787
MWD connection
564,368
-
564,368
Total Source of Supply
6,096,155
-
6,096,155
Pumping Plant:
Structures and improvements
12,865,109
-
12,865,109
Equipment
11,016,013
422,137
11,438,150
Total Pumping Plant
23,881,122
422,137
24,303,259
Water Treatment Plant:
Structures and improvements
1,302,811
-
1,302,811
Equipment
1,827,761
-
1,827,761
Total Water Treatment Plant
3,130,572
-
3,130,572
Transmission and Distribution Plant:
Mains
72,593,486
45,975,705
118,569,191
Reservoirs and tanks
61,484,568
-
61,484,568
Service and meter installation
5,692,671
2,544,651
8,237,322
Fire hydrants
6,564,925
-
6,564,925
Meters
9,038,884
-
9,038,884
Fire mains
717,746
-
717,746
Structures and improvements
2,599,123
-
2,599,123
Control system
1,980,901
33,485
2,014,386
Total Transmission and Distribution Plant
160,672,304
48,553,841
209,226,145
General Plant:
Structures and improvements
13,403,182
-
13,403,182
Transportation equipment
1,645,548
1,374,856
3,020,404
Power operated equipment
549,710
-
549,710
Communication equipment
572,654
-
572,654
Computer equipment
2,128,134
238,071
2,366,205
Office furniture
1,188,942
-
1,188,942
Tools, shops and garage equipment
82,715
-
82,715
Other
4,650
-
4,650
Store equipment
60,241
-
60,241
Total General Plant
19,635,776
1,612,927
21,248,703
Construction in Progress
5,314,414
173,400
5,487,814
Total Capital Assets
$ 219,019,307
$ 50,820,831
$ 269,840,138
See independent auditors' report.
-56-
STATISTICAL SECTION
-57-
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-58-
YORBA LINDA WATER DISTRICT
DESCRIPTION OF STATISTICAL SECTION CONTENTS
June 30, 2013
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. 60
Revenue Capacity these schedules contain information to help the reader
assess the District's most significant local revenue source, water sales. 62
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. 64
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. 66
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. 68
-59-
Yorba Linda Water District
Changes in Net Position
Last Ten Fiscal Years
Operating Expenses
Variable Water Costs
13,509,336
Fiscal Year
11,268,306
10,688,318
Changes in Net Position:
2013
2012
2011
2010
Operating Revenues
4,222,398
3,811,125
3,686,333
3,576,147
Water Sales
$ 26,369,940
$ 24,998,673 $
22,686,251
$ 21,806,164
Sewer Revenues
1,762,039
1,785,804
1,274,579
1,275,980
Other Operating Revenues
723,577
848,238
1,035,545
1,102,143
Operating Expenses
Variable Water Costs
13,509,336
12,275,853
11,268,306
10,688,318
Personnel Services
7,225,729
6,979,088
6,902,995
6,677,757
Supplies and Services
4,222,398
3,811,125
3,686,333
3,576,147
Depreciation
6,884,213
6,595,720
5,279,860
5,153,891
Operating Loss
(2,986,120)
(2,029,071)
(2,141,119)
(1,911,826)
Nonoperating Revenues (Expenses)
Property Taxes
1,340,916
1,273,855
1,258,769
1,269,441
Investment Income
137,569
277,137
274,152
244,857
Interest Expense
(1,781,416)
(1,626,190)
(1,172,503)
(1,170,498)
Bond Issuance Costs
(194,010)
-
-
-
Other Nonoperating Revenues
588,854
805,654
739,062
589,201
Other Nonoperating Expenses
(35,954)
(108,984)
(406,575)
(151,300)
Total Nonoperating
Revenues (Expenses)
55,959
621,472
692,905
781,701
Net Income (Loss) Before
Capital Contributions and
Extraordinary Items
(2,930,161)
(1,407,599)
(1,448,214)
(1,130,125)
Capital Contributions
1,174,673
17,214,138
706,319
6,278,135
Extraordinary Items
-
(5,000,000)
-
-
Changes in Net Position
$ (1,755,488)
$ 10,806,539
$ (741,895)
$ 5,148,010
Net Position by Component:
Net investment in Capital Assets
$ 161,494,158
$ 161,672,565
$ 146,235,362
$ 146,877,122
Restricted
10,640
9,598,420
12,620,256
15,797,432
Unrestricted
221,783
(6,228,771)
(4,619,943)
(7,696,984)
Total Net Assets
$ 161,726,581
$ 165,042,214
$ 154,235,675
$ 154,977,570
Source: YLWD Audited Financial Statements
-60-
(Continued)
Fiscal Year
2009 2008 2007 2006 2005 2004
$ 19,626,738
$ 19,470,109
$ 18,944,233
$ 17,017,275
$ 14,533,021
$ 14,138,952
1,259,723
1,247,907
806,897
778,275
750,771
763,528
439,302
380,175
393,285
382,917
427,430
385,241
10,859,328
10,516,507
10,703,037
8,930,535
7,920,218
8,405,858
6,498,959
5,751,384
5,276,878
4,635,464
4,294,020
3,903,396
4,151,058
4,361,512
3,395,303
2,877,288
2,699,842
2,345,991
4,167,958
3,572,726
3,445,868
2,923,288
2,578,420
2,498,265
(4,351,540)
(3,103,938)
(2,676,671)
(1,188,108)
(1,781,278)
(1,865,789)
1,283,521
1,263,656
1,186,441
335,075
252,663
1,005,859
689,108
1,508,193
2,180,067
1,425,663
638,235
342,554
(1,469,925)
(824,387)
(468,087)
(472,163)
(565,581)
(484,895)
479,911
270,429
455,067
534,385
416,778
642,358
(177,553)
(133,604)
(138,501)
(336,649)
(179,526)
(296,528)
805,062
2,084,287
3,214,987
1,486,311
562,569
1,209,348
(3,546,478)
(1,019,651)
538,316
298,203
(1,218,709)
(656,441)
4,363,527
4,100,051
6,913,095
26,026,524
6,701,629
2,184,681
$ 817,049
$ 3,080,400
$ 7,451,411
$ 26,324,727
$ 5,482,920
$ 1,528,240
$ 141,514,024
$ 139,677,663
$ 121,317,296
$ 106,376,683
$ 84,000,773
$ 74,338,841
14,063,802
14,523,549
23,089,201
22,274,814
23,196,485
25,140,038
(6,158,513)
(4,898,647)
1,815,668
10,119,257
5,248,769
7,484,228
$ 149,419,313
$ 149,302,565
$ 146,222,165
$ 138,770,754
$ 112,446,027
$ 106,963,107
-61-
Single Family
Yorba Linda Water District
Number of Connections
Last Ten Fiscal Years
Multi- Family Commercial/
2005
20,773
217
842
2006
21,300
217
847
2007
21,451
228
792
2008
21,580
228
840
2009
21,672
228
831
2010
21,846
228
837
2011
21,701
231
833
2012
22,064
240
829
2013
22,480
158
908
NOTE: * $1.48 was approved January 1, 2005
25,000
Direct Rate
Irrigation
(Billing Unit)
829
$ 1.33
803
1.48
838
1.57
868
1.57
857
1.79
855
2.52
877
2.52
879
2.52
846
2.52
933
2.64
25,000
20,000
15,000
■ Irrigation
■ Industrial
10,000
■ Residential
■ Residential
5,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: YLWD Billing System
-62-
FY 2013
1
2
3
4
5
6
7
8
9
10
FY 2004
1
2
3
4
5
7
6
8
9
10
Yorba Linda Water District
Ten Largest Customers
Current and Nine Years Ago
Customer Name
City of Yorba Linda
Placentia -Yorba Linda USD
Fairmont Hill Community Assoc.
Archstone Apartments
Yorba Linda Villages
The Hills at Yorba Linda
Lake Park Mobil Home Community
Woodgate Condominiums
Kerrigan Ranch Il Community Assoc.
Aspetic Tech
Customer Name
City of Yorba Linda
Saba Petroleum
Tac West Inc
St Francis of Assissi
Shigemi Muranaka
Sunset Tropicals
Placentia -Yorba Linda USD
Costco
Excell Circuits
Yorba Linda Country Club
Source: YLWD Billing Department
Business Type
Government
Government
Homeowners' Assoc.
Apartment Complex
Homeowners' Assoc.
Homeowners' Assoc.
Homeowners' Assoc.
Homeowners' Assoc.
Homeowners' Assoc.
Manufacturing
Business Type
Government
Manufacturer
Manufacturer
Private School
Nursery Retail
Government
Nursery Retail
Warehouse Retail
Manufacturer
Private Club
-63-
/O Ul 1 Utal
Annual Revenues
$ 2,197,006.85
313,850.01
143,793.07
112,072.00
113,751.90
111,491.41
78,445.84
67,327.18
65,362.57
60,913.94
$ 3,264,014.77
Annual Revenues
$ 1,162,249.51
27,162.94
18,409.96
13,001.84
12,303.44
9,493.13
9,381.26
8,933.78
8,893.10
8,453.53
$ 1,278,282.49
7.61%
1.09 %
0.50%
0.39%
0.39%
0.39%
0.27%
0.23%
0.23%
0.21%
11.31%
/O Ul XUtal
7.60%
0.18%
0.12%
0.09 %
0.08%
0.06%
0.06%
0.06 %
0.06%
0.06%
8.36%
Fiscal
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
General
Obligation
Bonds
$ 1,590,000
Yorba Linda Water District
Ratio of Outstanding Debt
Last Ten Fiscal Years
Certificates
of
OCWD Loan Participation
Debt
$ - $ 10,384,239
$ 11,974,239
- 10,000,078
10,000,078
- 9,873,717
9,873,717
- 10,540,139
10,540,139
- 45,502,080
45,502,080
- 44,911,092
44,911,092
- 44,065,104
44,065,104
- 43,189,117
43,189,117
- 42,278,129
42,278,129
- 42,009,722
42,009,722
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$2,500
$2,000
$1,500
$1,000
$500
Total
As a Share of
Per Per Personal
Connection Capita Income
Composition of Debt
Debt per Connection
525 $ 172
441 142
426 139
451 148
1,932 637
1,900 628
1,848 611
1,827 604
1,764 583
1,753 648
Participation
OCWD Loan
Bonds
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: YLWD Audited Financial Statements
-64-
0.15%
0.14%
0.14%
0.56%
0.55%
0.54%
0.52%
0.49%
0.52%
Yorba Linda Water District
Debt Coverage
Last Ten Fiscal Years
NOTE: Excludes depreciation and debt service payments
Source: YLWD Audited Financial Statements
-65-
Debt Service
Fiscal
Operating &
Net
Coverage
Year
Revenues
Maint. Costs
Revenues
Principal
Interest
Total
Ratio
2004
$ 16,471
$ 14,428
$ 2,043
$ 2,263
$ 148
$ 2,411
0.85
2005
16,178
14,230
1,948
1,760
299
2,059
0.95
2006
19,563
16,009
3,554
200
473
673
5.28
2007
23,036
18,703
4,333
205
469
674
6.43
2008
22,822
19,829
2,993
210
919
1,129
2.65
2009
22,514
20,604
1,910
570
2,051
2,621
0.73
2010
24,417
19,928
4,489
825
1,951
2,776
1.62
2011
25,912
20,845
5,067
855
1,949
2,804
1.81
2012
27,818
21,950
5,868
890
1,915
2,805
2.09
2013
27,055
23,790
3,265
925
1,985
2,910
1.12
NOTE: Excludes depreciation and debt service payments
Source: YLWD Audited Financial Statements
-65-
Yorba Linda Water District
Demographics
Last Ten Fiscal Years
YLWD
Year Population * City of YL Population
Personal Income
Personal Income
per Capita
2004
69,610
64,055 $
6,435,285,575 $
92,448
2005
70,364
65,382
6,699,301,248
95,209
2006
70,935
66,797
7,150,485,256
100,803
2007
71,258
67,904
7,623,582,080
106,986
2008
71,428
68,312
8,179,815,504
114,518
2009
71,507
68,852
8,239,633,400
115,228
2010
72,083
69,816
8,095,032,402
112,302
2011
71,520
70,681
8,233,404,978
115,120
2012
72,498
72,706
8,660,636,569
119,460
2013
64,861
65,777
8,040,383,024
123,963
County of Orange
Personal Income
Year Population Unemployment Rate Personal Income per Capita
2004
3,019,889
4.8%
$ 125,798,433 $
41,657
2005
3,047,054
4.3%
135,070,503
44,328
2006
3,072,336
3.2%
145,435,581
47,337
2007
3,098,121
3.9%
150,214,330
48,486
2008^
3,121,251
5.2%
157,828,108
50,566
2009^
3,139,017
9.0%
159,710,562
50,879
2010 #^
3,170,721
9.8%
150,467,328
47,455
2011 #^
3,192,916
8.7%
155,323,766
48,646
2012^
3,182,171
7.9%
160,637,055
50,480
2013^
3,055,792
8.5%
160,072,905
52,383
NOTE: ^ No personal income data available for County of Orange, used State of California data.
# No population data available for County of Orange, used State of California data.
Sources: City of Yorba Linda CAFR
County of Orange CAFR
State of California, Employment Development Department
State of California, Department of Finance
-66-
^
Yorba Linda Water District
Ten Largest Employers
Current and Seven Years Ago
2013* 2006+
% of Total % of Total
Labor Force Employees I Labor Force
Viasys Respiratory Care, Inc.
389
1.19%
359
1.02 %
Nobel Biocare USA, Inc.
328
0.93 %
323
0.92 %
Costco Wholesale Corp.
276
0.78 %
204
0.58 %
City of Yorba Linda
194
0.55 %
180
0.51 %
Vons
165
0.47 %
167
0.48 %
Kohl's Inc.
158
0.45 %
145
0.41 %
Best Buy
129
0.37 %
135
0.38 %
Sunrise Retirement Homes
126
0.36%
120
0.34 %
Office Solutions
92
0.26%
98
0.28 %
Cobra Engineering
80
0.23 %
0
0.00 %
Total
1,937
5.6 %
1,731
4.9%
NOTES: * Most current available data
+ Oldest available data
^ The Placentia- Yorba Linda Unified School District has 2,500 employees and
serves the entire communities of Yorba Linda and Placentia, and also serves
parts of the Cities of Brea, Anaheim and Fullerton. YLWD cannot provide the
number of employees working within the boundaries of Yorba Linda.
Source: City of Yorba Linda CAFR
-67-
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
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NOTE: *Number of employees in each department are authorized and funded positions.
Source: YLWD Human Resources Department
-68-
Operations
IT
Resources
Finance
r Engineering
Department
Fiscal
Human
Year
Administration
Engineering
Finance Resources
IT
Operations
Total
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
6.0
35.5
76.0
2011
5.5
11.0
14.0 3.0
7.0
37.0
77.5
2012
5.0
11.0
14.0 3.0
7.5
37.0
77.5
2013
5.0
11.0
14.0 4.5
7.5
37.0
79.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NOTE: *Number of employees in each department are authorized and funded positions.
Source: YLWD Human Resources Department
-68-
Operations
IT
Resources
Finance
r 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)
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
2012
2.02
6,780
18.6
2013
1.10
7,099
18.6
Fiscal
Number of
Number of
Number of
Year
Booster Pumps
Reservoirs
Field Service Calls
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
2012
12
13
1,693
2013
12
13
1,561
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
-69-
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-70-
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, 2013, and have issued our report thereon dated January 29, 2014. Professional standards
require that we provide you with information about our responsibilities under generally accepted
auditing standards and Government Auditing Standards, as well as certain information related to the
planned scope and timing of our audit. We have communicated such information in our engagement
letter dated May 3, 2013 and our meeting on planning matters on July 22, 2013. 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. As discussed in Note le to the financial statements, the District incorporated
deferred outflows of resources and deferred inflows of resources into the definitions of the required
components of the residual measure of net position due to the adoption of Governmental Accounting
Standards Board's Statement No. 63, "Financial Reporting of Deferred Ou flows of Resources,
Deferred Inflows of Resources, and Net Position ". The adoption of this standard also provides a new
statement of net position format to report all assets, deferred outflows of resources, liabilities, deferred
inflows of resources, and net position. Also discussed in Note le to the financial statements, the
District has changed its method for accounting and reporting certain items previously reported as assets
or liabilities during fiscal year 2012 -2013 due to the early adoption of Governmental Accounting
Standards Board's Statement No. 65, "Items Previously Reported as Assets and Liabilities ". The
adoption of this standard required retrospective application resulting in a $725,802 reduction of
previously reported net position as of the beginning of the year. No other accounting procedures were
adopted and the application of other accounting policies was not changed during the year ended June
30, 2013. 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-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
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 of the fair market value of investments which is based on market
values provided by outside sources.
b. The estimated useful lives of capital assets for depreciation purposes which are based on
industry standards.
c. The value of the capital assets received as a contribution from developers was based on the
developer's acquisition cost.
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 disclosures affecting the financial statements were
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, Note 11 regarding the settlement
of the Freeway Complex Fire case and in Note 12 regarding the restatement of net position.
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. The accounts payable balance was adjusted to reflect the balance in the detail schedule.
b. The beginning net position restated to record the side fund liability with PERS that
represents pension related debt.
Disagreements with Management
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.
-2-
Significant Audit Findings (Continued)
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated January 29, 2014.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the District's financial statements or a determination
of the type of auditor's opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the District's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our retention.
nth Pr Mattarc
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.
Irvine, California
January 29, 2014
-3-
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 GO VERNMENTA UDITING STANDARDS
The Board of Directors
Yorba Linda Water District
Placentia, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the Yorba Linda
Water District (the District) as of and for the year ended June 30, 2013, and the related notes to the
financial statements, which collectively comprise the District's basic financial statements and have
issued our report thereon dated January 29, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinion on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the District's internal control.
Accordingly, we do not express an opinion on the effectiveness of the District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the District's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal
control that is less severe than a material weakness, yet important enough to merit attention by those
charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies
may exist that were not identified. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified. We did identify certain deficiencies in internal
control, described below, that we consider to be significant deficiencies in internal control over
financial reporting.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
Year - Ending Closing Procedures
Auditors' Comment and Recommendation
While conducting our audit, we noted that obtaining a complete and accurate final general ledger was
problematic, as was also the case for the inconsistencies of supporting schedules for balances in the
general ledger. These factors resulted in a postponement of the completion of fieldwork so
management could correct the issues. After management corrected the issues, a new trial balance was
provided. Audit procedures performed on the new trial balance resulted in adjustments to accounts
payable and expenses. Complete and accurate supporting schedules are necessary for complete and
accurate financial statements. We suggest the District review its procedures and identify whether a
more formal review process is required for year -end closing procedures or if additional education and
training is required in this area. An improvement in the year -end closing procedures will result in a
more complete and accurate final general ledger for financial reporting.
Management's Response
The District believes that a vast majority of the difficulties that resulted in the year -end closing
procedures was in large part due to a vacancy of professional staff in the Accounting Section shortly
before the preparation of reconciliations and schedules were to begin. However, it is agreed that
improvements can be made to the year -end closing processes to ensure that accurate schedules and
supporting schedules will be available to the auditors when fieldwork is scheduled to begin.
Debt Covenants
Auditors' Comment and Recommendation
During our review of the line of credit agreement, we noted that the District is required to provide
unaudited quarterly financial statements no later than 60 days after the end of each fiscal quarter. In
addition, the District is required to submit a copy of the adopted budget no later than 45 days to the
financial institution. Timely submission of the required reports did not occur during the fiscal year end
June 30, 2013. We recommend the District submit all required reports to the financial institution in a
timely manner.
Management's Response
The District believes that the transformation of information upon the departure of key professional
accounting staff was not properly noted to ensure Debt Covenant requirements were met in regards to
providing a copy of the adopted 2013 -14 Operating Budget to the financial institution within 45 days.
District staff will remedy this issue by including the requirement to submit a copy of the Operating
Budget to the financial institution within 45 day of adoption in the Budget Calendar for the budgeting
fiscal year.
-2-
Investment Policy Compliance
Auditors' Comment and Recommendation
During our review of the District's investments, we noted the investment policy limits the money
market portfolio percentage to 20 %. As of June 30, 2013, the District's investment in the Bank of West
money market fund exceeded this limit. We recommend the District either follow the limits set forth in
the investment policy or update the policy to reflect the current practice.
Management's Response
District staff will regularly review month end balances of funds held within each active financial
institution to ensure compliance with the current Investment Policy of the District. As with every year,
District staff will review the current Investment Policy and recommend any changes to update the
policy to accommodate future financial goals.
Invoice Approval
Auditors' Comment and Recommendation
The District's purchasing policy specifies which employee positions must sign and approve cash
disbursements. During our review of the District's cash disbursements, we noted that two out of forty
invoices did not contain the approval signature by the designated District employee. We recommend
the District follow the guidelines in the purchasing policy over invoice approval.
Management's Response
District staff recognizes the oversight of the required signature approval on invoices for all cash
disbursements. Over the past fiscal year there were three different permanent or temporary staff
members processing the District's cash disbursements. Management will review the Purchasing Policy
and train staff to ensure that all guidelines are adhered to.
Utility Billing
Auditors' Comment and Recommendation
The Board of Directors approved resolution 12 -06, which changed the annual backflow fee from $29
to $28 as of April 1, 2012. During our testing of bills subsequent to April 1, 2012, we noted that the
old rate of $29 was charged to customers instead of the new rate of $28. Approximately 1,000
customers were charged an annual backflow fee that was $1 higher than the approved rate. We
recommend the District develop procedures to ensure any rate changes are implemented appropriately.
Management's Response
District staff recognizes the oversight of the misstated approved back flow fee that was listed on
Resolution 12 -06, which ultimately resulted in an overcharge of $1.00 for approximately 1,000
customers in FY 2012 -13. The District has remedied this issue by correcting the charge code in the
system to match that as approved and listed in Resolution 12 -06 for FY 2013 -14.
-3-
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
District's Responses to Findings
The District's responses to the findings identified in our audit are described above. The District's
responses were not subjected to the auditing procedures applied in the audit of the financial statements
and, accordingly, we express no opinion on them.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
January 29, 2014
ZZI
AGENDA REPORT
Meeting Date: February 24, 2014
ITEM NO. 5.1
To: Finance - Accounting Committee
From: Steve Conklin, Acting General
Manager
Presented By: Delia Lugo, Finance Manager Dept: Finance
Prepared By: Delia Lugo, Finance Manager
Subject: Draft Reserve Policy for FY 2014/15
DISCUSSION:
Attached is a draft of the financial reserves policy for FY 2014/15 for the Finance - Accounting
Committee to review.
Staff is not proposing any major changes in this years' policy. The only changes are minor,
consisting primarily of updating account balances, which is required annually.
STRATEGIC PLAN:
FR 2 -A: Review the Reserve Policy and Funding Levels Annually
ATTACHMENTS:
Description: Type:
Financial Reserves Policy - FY 14.15 2.19.14.docx Draft Reserve Policy for FY 2014/15 Backup Material
RESERVE POLICY
A. GENERAL POLICY:
Maintaining adequate reserves is an essential part of sound financial management. The Yorba
Linda Water District Board of Directors realizes the importance of reserves in providing reliable
service to its customers, financing of long -term capital projects and funding availability for
emergencies should the need arise. Interest derived from reserve balances shall be credited to the
reserve account from which it was earned.
B. CATEGORIES:
YLWD shall accumulate, maintain and segregate its reserve funds into the following categories:
Restricted and Designated Reserves
1. Board Designated Reserves; and
2. Contractually Restricted Reserves.
C. SCOPE:
This policy will assist the Board of Directors in establishing:
1. Target levels for reserve funds;
2. Requirements for the use of reserve funds; and
3. Periodic review requirements for each reserve.
D. PERIODIC REVIEW:
Staff and the YLWD Board shall review the reserve balances and targets annually as a part of the
annual budget process. The Finance - Accounting Committee will continue to review all reserve
and investment balances monthly, with a quarterly report going to the full Board.
E. RESTRICTED AND DESIGNATED RESERVES:
1. Board Designated Reserves:
These are reserve funds earmarked for the purpose of funding such items as new capital
facilities, repair or replacement of existing facilities and general operating reserves designated
for a specific purpose and use by the Board of Directors.
1.0 Operating Reserve
A. Definition and Purpose — Established to cover temporary cash flow deficiencies that
occur as a result of timing differences between the receipt of operating revenue and
expenditure requirements and unexpected expenditures occurring as a result of doing
business.
February 19, 2014 Page 1 of 4
B. Target Level — The Government Finance Officers Association (GFOA) recommends
that funding should be no less than one to two months (or 8% - 17 %) of the District's
annual operating budget. The District's current target will be a minimum of 8% and a
maximum of 17% of the annual operating budget for both the water and sewer funds.
C. Events or Conditions Prompting the Use of the Operating Reserve — This reserve may
be utilized as needed to pay outstanding operating expenditures prior to the receipt of
anticipated operating revenues.
1.1 Emergency Reserve
A. Definition and Purpose — Established to provide protection recovery to the District
and its customers for losses arising from an unplanned event or circumstance. The
reserve level combined with YLWD's existing insurance policies should adequately
protect YLWD and its customers in the event of a loss.
B. Target Level — Established at a minimum level equal to $1,000,000 for the water fund
and shall accumulate interest and annual contributions as determined by the District's
annual operation to a maximum level of $4,000,000. The target for sewer will be a
minimum of $250,000 and a maximum of $1,000,000.
C. Events or Conditions Prompting the Use of the Emergency Reserve — This reserve
shall be utilized to cover unexpected losses experienced by the District as a result of a
disaster or other unexpected loss. Any reimbursement received by the District from
insurance companies as a result of a submitted claim shall be deposited back into the
reserve as replenishment for the loss.
1.2 Capital Replacement Reserve
A. Definition and Purpose — Established to provide capital repair and replacement
funding as the District's infrastructure deteriorates over its expected useful life.
B. Target Level —The Board - approved 2010 Asset Management Plan recommended that
the annual contribution to this reserve be at a minimum level of $1,820,000 for the
water fund and $345,000 for the sewer fund, less money set aside for the Maintenance
Reserve. Funding with available funds based on the District's operations shall be
allocated quarterly.
C. Events or Conditions Prompting the Use of the Capital Replacement Reserve —
Through the annual budget process, staff shall recommend anticipated asset
replacement projects. The Board of Directors shall take action to approve
recommended project appropriations from the capital replacement reserve. Should
unplanned replacement be necessary during any fiscal year, the Board of Directors
may take action to amend the budget and appropriate needed funds as required.
1.3 Maintenance Reserve
A. Definition and Purpose — Established to provide funding for non - scheduled capital
asset repair and replacement.
February 19, 2014 Page 2 of 4
B. Target Level — $200,000 subject to an annual review.
C. Events or Conditions Prompting the Use of the Maintenance Replacement Reserve —
Unplanned failure of assets including but not limited to pumps, motors and major
facility repairs.
1.4 Debt Service Reserve
A. Definition and Purpose — Established to provide funding for semi - annually scheduled
debt service payments.
B. Target Level — The District's highest annual debt service payment — currently
$2,723,509.
C. Events or Conditions Prompting the Use of the Debt Service Reserve — Semi - annual
debt service payments will be made out of this fund, with funding on the water rate
replenishing the fund annually.
1.5 Employee Liabilities Reserve
A. Definition and Purpose — The purpose is to cover employees' accrued vacation and
other compensatory time and to ensure the complete funding associated with the
liability incurred for employees whom have met the requirements necessary for
district paid health benefits at retirement.
B. Target Level — The annual contribution will be $100,000 ($93,000 for water and
$7,000 for sewer) to be evaluated and/or adjusted annually thereafter based on an
analysis of current employees' vacation and sick time accrued and actuarial
determinations of future retiree costs. As of November 2, 2011, an actuary
determined that the District's Other Post Employment Benefit (OPEB) liability was
$1,431,892. When combined with a liability on the District's books for vacation,
compensatory and sick time of $1,000,383 at June 30, 2013, the target is projected to
be approximately $2,432,000 for the combined water and sewer enterprises.
C. Events or Conditions Prompting the Use of the Employee Liabilities Reserve — This
reserve may be used in the event that operating funds are not adequate to meet
vacation, compensatory and sick time paid out or retiree medical cost obligations
within the current year.
2. Contractually Restricted Reserves:
These are funds held to satisfy limitations set by external requirements established by creditors,
grant agencies or law. Examples include stipulated bond covenants and reserves held with a
fiscal agent.
2.0 US Bank 2008 COP Reserve
A. Definition and Purpose — Established to cover reserve requirements held with a
designated fiscal agent (US Bank) for the 2008 Certificates of Participation.
February 19, 2014 Page 3 of 4
B. Target Level — Funding shall be held in an amount equal to $2,147,096.
C. Events or Conditions Prompting the Use of the Contractually Restricted Reserve —
This reserve may be utilized as needed by the fiscal agent to pay any outstanding debt
service payments not covered by the District within the specified billing and due
dates.
End of Policy Document
February 19, 2014 Page 4 of 4
AGENDA REPORT
Meeting Date: February 24, 2014
ITEM NO. 5.2
To: Finance - Accounting Committee
From: Steve Conklin, Acting General
Manager
Presented By: Delia Lugo, Finance Manager Dept: Finance
Prepared By: Delia Lugo, Finance Manager
Subject: Draft Finance Department Budget for FY 2014/15
DISCUSSION:
For the upcoming fiscal year, the Finance Department is proposing to increase its Supplies and
Services budget by 8% to $439,675.
The most significant increases in the proposed budget projections for FY 2014 -15 are in the areas
of fees and permits and uncollectible accounts. The fees and permits increase is related to
increases in banking services pertaining to lock box and credit card or auto debit processing fees.
The increase in uncollectible accounts pertains to the potential write -off of unpaid customer billing
balances that were due over 24 months ago.
75% of the Finance Department's budget relates to Customer Service, with postage and printing of
customer bills, credit card and lock box fees, phone answering service and the writing off of
uncollectible accounts amounting to 94% of that section's budget. In the Administration Section, the
expense of external auditors and professional services for items like our auditing fees and updating
our financial plan model account for 76% of the budget. In the Accounting Section, our bank service
fees and office supplies for the administrative building amount to 82% of the budget. Lastly, in the
Meter Services Section, meter registers amount to 82% of the budget.
ATTACHMENTS:
Name:
2015 Finance Dept Budget.xlsx
3010 Fin Admin 2015 Budget.xls
3020 Fin Acctq 2015 Budget.xls
3030 Fin. Cust Svc 2015 Budget.xls
3040 Fin. Meter Reading 2015 Budget.xls
Description:
Proposed Finance Dept Budget FY 14/15
Section 3010 Budget FY 14/15
Section 3020 Budget FY 14/15
Section 3040 Budget FY 14/15
Section 3040 Budget FY 14/15
Type:
Backup Material
Backup Material
Backup Material
Backup Material
Backup Material
FY 2014/15
FY 2013/14
Budget
Proposed
Budget
Expenses (Operating)
Supplies & Services
Communications
$
98,200
$
101,400
Contractual Services
$
98,640
$
101,010
Dues & Memberships
$
785
$
785
Fees & Permits
$
101,365
$
121,090
Insurance
$
-
$
600
Materials
$
25,000
$
23,000
District Activities & Events
$
1,050
$
1,050
Maintenance
$
300
$
300
Non - Capital Equipment
$
950
$
800
Office Expense
$
14,050
$
14,050
Professional Services
$
33,360
$
27,660
Professional Development
$
3,160
$
3,170
Travel & Conferences
$
5,300
$
4,760
Uncollectible Accounts
$
25,000
$
40,000
Supplies & Services Sub -Total
$
407,160
$
439,675
Section Detail Expense Budget
Dept /Section: Fin (Admin) (3010) FY 2015
Primary GL Category
1-3010-0600-00
Contractual Services
Category Total
$400
Sub Acct No./Sub Category
I
1- 3010- 0600 -00
Contractual Services
Sub Acct
I Total
400
Detail Item Description
Check signature plate
Detail Amt
400
1- 3010 - 0640 -00
Dues, Memberships &
Subscriptions
$425
1- 3010 - 0640 -00
Dues, Memberships & Subscriptions
425
CSMFO
110
CMTA
155
GFOA
160
1- 3010 - 0690 -00
Insurance
$600
1- 3010- 0690 -00
Insurance
600
Honesty Bond
600
1- 3010 - 0715 -00
District Activities & Events
$400
1- 3010- 0715 -50
Meeting Supplies
400
Meeting Supplies
400
1- 3010 - 0780 -00
Professional Services
$27,160
1- 3010 - 0780 -00
Professional Services
27,160
CDAR Preparation
1,200
Auditors
18,960
Financial Plan Model Consulting
5,000
CAR Online
2,000
1- 3010 - 0810 -00
Training
$925
1- 3010- 0810 -00
Training
925
CMTA Seminars
300
2014 Government Tax Update
325
CSMFO Workshops
300
1- 3010 - 0830 -00
Travel & Conferences
$1,500
1- 3010 - 0830 -00
Travel & Conferences
1,500
CalPERS Annual Conference
500
CSMFO Conference
1,000
Section Total
$31,410
Section Detail Expense Budget
Dept /Section: Fin (Accounting) (3020) FY 2015
Primary GL Category7ategory
1-3020-0580-00
Communications
Total
$400
I Sub Acct No./Sub Category
1- 3020 - 0580 -00
Communications
Sub Acct
Total
400
Detail Item Description
Publish Unclaimed List
Detail Amt
400
1- 3020- 0600 -00
Contractual Services
$860
1- 3020 - 0600 -00
Contractual Services
860
Green Shades
500
Doculivery
360
1- 3020 - 0640 -00
Dues, Memberships &
Subscriptions
$110
1- 3020- 0640 -00
Dues, Memberships & Subscriptions
110
CSMFO
110
1- 3020- 0645 -00
Fees & Permits
$34,090
1- 3020 - 0645 -00
Fees & Permits
915
CSMFO Budget Reviewer Fee
150
GFOA CAFR Reviewer Fee
435
GFOA Budget Award Reviewer Fee
330
1- 3020- 0645 -50
Bank Service /Fees
33,175
Analysis Fees (Avg $2550 /mo)
33,000
Safe Deposit Box Fee
150
Annual Bankcard Fee
25
1- 3020- 0715 -00
District Activities and Events
$400
1- 3020- 0715 -50
Meeting Supplies
400
Meeting Supplies
400
1- 3020- 0730 -00
Maintenance
$300
1- 3020- 0730 -00
Maintenance
300
Small Office Equipment Maintenance
300
1- 3020- 0760 -00
Office Expense
$12,500
1- 3020- 0760 -00
Office Expense
9,000
Office supplies
9,000
1- 3020- 0760 -10
Paper
3,500
Paper
3,500
1- 3020- 0810 -00
Training
$1,000
1- 3020 - 0810 -00
Training
1,000
Staff Training
1,000
1- 3020- 0830 -00
Travel & Conferences
$1,500
1- 3020 - 0830 -00
Travel & Conferences
1,500
CalPERS Annual Conference
500
CSMFO Conference
1,000
Section Total
$51,160
Section Detail Expense Budget
Dept /Section: Fin (CS & Billing) (3030) FY 2015
Primary GL Category
Communications
CategoryTotal
$101,000
Sub Acct No./Sub Category
1- 3030 - 0580 -00
Communications
Sub Acct
500
Detail Item Description
UPS/ Fed Ex /Other
Detail Amt
500
1- 3030 - 0580 -10
Postage
5,500
Postage Metered
5,500
1- 3030 - 0580 -22
Postage - Infosend
95,000
Postage - Infosend
95,000
1- 3030 - 0600 -00
Contractual Services
$97,450
1 -3030- 0600 -00
Contractual Services
1,730
Post Office Box
250
Post Master- Lockbox
1,480
1- 3030 - 0600 -21
Customer Credit Check
5,600
Online - Credit Checks
5,000
Online - Utility Exchange
600
1- 3030 - 0600 -22
Printing of Bills - Infosend
78,620
Mailing Service
58,000
Info Send E -Bill Fees
19,000
DOXO
1,620
1- 3030 - 0600 -30
Warranties & Service Contracts
1,500
Meter & Scale Lease Agreement
1,500
1- 3030 - 0600 -55
Answering Service
10,000
Phone Answering Service
10,000
1- 3030 - 0645 -00
Fees & Permits
$87,000
1- 3030 - 0645 -50
Bank Services /Fees
87,000
Lock Box Services
32,000
Credit Card & Auto Dr Processing
55,000
1- 3030 - 0715 -00
District Activities and Events
$250
1- 3030 - 0715 -50
Meeting Supplies
250
Meeting Supplies
250
1- 3030 - 0760 -00
Office Expense
$1,550
1- 3030 - 0760 -00
Office Expense
1,550
Forms /Pads/Tags /Deposit Slips
1,300
Postage Machine Supplies
250
1- 3030 - 0780 -00
Professional Services
$500
1- 3030 - 0780 -09
Collection Services
500
Collection Agency Fee
500
1- 3030 - 0810 -00
Training
$1,245
1- 3030 - 0810 -00
Training
1,245
Customer Service Training (min of 2 Classes PP)
1,245
1- 3030 - 0830 -00
Travel & Conferences
$200
1- 3030 - 0830 -00
Travel & Conferences
200
Mileage /Parking fees
200
1- 3030 - 0850 -00
Uncollectible Accounts
$40,000
1- 3030 - 0850 -00
Uncollectible Accounts
40,000
Uncollectible Accounts (Based on the listed unpaid balances
between June 2011 & June 2013)
40,000
Section Total
1 $329,195
Section Detail Expense Budget
Dept /Section: Fin (Meter Reading) FY 2015
(30401
Primary GL Category
Category Total
Sub Acct No./Sub Category
I
Sub Acct
I
Detail Description
Detail Amt
1-3040-0600-00
$2,300
1- 3040 - 0600 -00
Total
2,300
Neptune Maintenance Agreement
2,300
Contractual Services
Contractual Services
1- 3040 - 0640 -00
$250
1- 3040 - 0640 -00
250
AWWA
250
Dues, Memberships, &
Dues, Memberships & Subscriptions
Subscriptions
1- 3040 - 0710 -00
$23,000
1- 3040 - 0710 -58
23,000
Registers
23,000
Materials
Registers
1- 3040 - 0750 -00
$800
1- 3040 - 0750 -00
800
Meter Shop Equipment
500
Non - Capital Equipment
Non - Capital Equiptment
Construction Meter Locks
300
1- 3040 - 0810 -00
$860
1- 3040 - 0810 -00
700
Training classes
700
Training
Training
1- 3040 - 0810 -40
160
Certificate Reimbursement (Hill & Dalton)
160
Certificate Reimbursement
1- 3040 - 0830 -00
$700
1- 3040 - 0830 -00
700
AWWA Conference
700
Travel & Conferences
Travel & Conferences
Section Total
1 $27,910
Meeting Date
Subject:
ATTACHMENTS:
N�;,ne,.
AGENDA REPORT
February 24, 2014
ITEM NO. 5.3
Projected Operating Revenues for FY 2014/15 (To be provided at the meeting.)
Projected Operating Revenues for FY 14- 15.pdf
Description: Type:
Backup Material Distributed Less Than 72 Hours Prior to
Backup Material
the Meeting
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Yorba Linda Water District
Water & Sewer Enterprise
5% Voluntary Conservation
FY 2011/12
FY 2012/13
FY 2013/14
FY 2013/14
FY 2014/15
Actual
Actual
Budget
Forecast
Budaet
Revenue (Operating):
Water Revenue (Residential)
$16,120,680
$16,596,680
$16,217,590
$17,772,330
$18,301,639
Water Revenue (Commercial & Fire Det.)
$ 1,820,913
$ 1,890,269
$ 2,020,223
$ 2,004,926
$ 2,095,350
Water Revenue (Landscape /Irrigation)
$ 3,687,643
$ 4,161,528
$ 4,794,156
$ 4,648,541
$ 4,953,790
Service Charges
$ 3,369,437
$ 3,721,462
$ 4,468,716
$ 4,331,664
$ 4,478,000
Sewer Charge Revenue
$ 1,580,369
$ 1,561,850
$ 1,550,530
$ 1,597,080
$ 1,605,292
Sewer Parcel Assessments
$ 205,435
$ 200,189
$ 200,797
$ 195,928
$ 201,000
Other Operating Revenue
$ 848,238
$ 723,577
$ 717,749
$ 873,048
$ 751,777
Total Operating Revenue
$27,632,716
$28,855,555
$29,969,760
$31,423,516
$32,386,849 8%
Revenue (Non- Operating):
Interest
$ 277,137
$ 141,210
$ 87,000
$ 119,734
$ 112,000
Property Tax
$ 1,273,855
$ 1,340,916
$ 1,264,672
$ 1,233,070
$ 1,283,642
Other Non - Operating Revenue
$ 805,654
$ 578,599
$ 509,150
$ 631,669
$ 529,525
Total Non - Operating Revenue
$ 2,356,646
$ 2,060,725
$ 1,860,822
$ 1,984,473
$ 1,925,167
Total Revenue
$29,989,362
$30,916,280
$31,830,583
$33,407,989
$34,312,016 7.80%
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Revenue (Operating):
Water Revenue (Residential)
Water Revenue (Commercial & Fire Det.)
Water Revenue (Landscape /Irrigation)
Service Charges
Other Operating Revenue
Total Operating Revenue
Revenue (Non- Operating):
Interest
Property Taxes
Other Non - Operating Revenue
Total Non - Operating Revenue
Total Revenue
Yorba Linda Water District
Water Enterprise
5% Volumtarty Conservation
FY 2011/12 FY 2012/13 FY 2013/14 FY 2013/14 FY 2014/15
Actual Actual Budget Forecast Budget
$ 16,120,680 $ 16,596,680 $ 16,217,590 $ 17,772,330 $ 18,301,639
$ 1,820,913 $ 1,890,269 $ 2,020,223 $ 2,004,926 $ 2,095,350
$ 3,687,643 $ 4,161,528 $ 4,794,156 $ 4,648,541 $ 4,953,790 10.1%
$ 3,369,437 $ 3,721,462 $ 4,468,716 $ 4,331,664 $ 4,478,000 0.2%
$ 753,830 $ 684,916 $ 681,074 $ 798,822 $ 702,003
$ 25,752,503 $ 27,054,855 $ 28,181,759 $ 29,556,282 $ 30,530,782 8.3%
$ 253,478 $ 121,210 $ 75,000 $ 111,958 $ 100,000
$ 1,273,855 $ 1,340,916 $ 1,264,672 $ 1,233,070 $ 1,283,642
$ 538,468 $ 574,424 $ 501,200 $ 601,975 $ 517,600
$ 2,065,801 $ 2,036,550 $ 1,840,872 $ 1,947,004 $ 1,901,242
$ 27,818,304 $ 29,091,405 $ 30,022,631 $ 31,503,286 $ 32,432,024 8.0%
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Yorba Linda Water District
Sewer Enterprise
FY 2011/12 FY 2012/13 FY 2013/14 FY 2013/14 FY 2014/15
Actual Actual Budaet Forecast Budaet
Revenue (Operating):
$1,550,530
$1,597,080
Sewer Charge Revenue
$
1,580,369
Sewer Parcel Assessments
$
205,435
Other Operating Revenue
$
94,408
Total Operating Revenue
$
1,880,213
Revenue (Non- Operating):
Interest
$
23,659
Other Non - Operating Revenue
$
267,186
Total Non - Operating Revenue
$
290,845
Total Revenue
$
2,171,058
$ 1,561,850
$1,550,530
$1,597,080
$1,605,292
$ 200,189
$ 200,797
$ 195,928
$ 201,000
$ 38,661
$ 36,675
$ 74,226
$ 49,774
$ 1,800,700
$1,788,002
$1,867,234
$1,856,066
$ 20,000
$ 12,000
$ 7,776
$ 12,000
$ 4,175
$ 7,950
$ 29,694
$ 11,925
$ 24,175
$ 19,950
$ 37,470
$ 23,925
$ 1,824,875
$1,807,952
$1,904,704
$1,879,991
4%
4%
Meeting Date
To:
From:
Presented By
Prepared By:
Subject:
SUMMARY:
ITEM NO. 5.4
AGENDA REPORT
February 24, 2014
Finance - Accounting Committee
Steve Conklin, Acting General
Manager
Delia Lugo, Finance Manager Dept: Finance
Delia Lugo, Finance Manager
Investment Report for Period Ending January 31, 2014
Staff is submitting the January 2014 Monthly Investment Reports for the Committee's review.
DISCUSSION:
The Investment Portfolio Report presents the market value and percent yield for all 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 yield for the month ending January 31, 2014 is 0.62 %.
The overall decrease in the investment balance from the previous month is approximately $1
million. A couple of the larger balance changes include a decrease in the Water Operating Fund of
approximately $1,100,000 due to the biannual payment to OCWD for the Replenishment
Assessment and an increase of $42,000 in the Water Capital Fund for recorded gains in investment
market values.
STRATEGIC PLAN:
FR 1 -F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a
Timely and Transparent Manner to the Board of Directors and Member Agencies
ATTACHMENTS:
Name:
Invst Rpt 1- 14.xlsx
Invst Agenda Backup - January 2014.xlsx
Description:
Type:
Investment Report for Period Ending January 31, 2014 Backup Material
Agenda Backup Backup Material
Yorba Linda Water District
Investment Portfolio Report
January 31, 2014
Market
%
Date of
Percent
Value
Par
of Total
Institution
Maturity
Yield
Checking Account.
$ 315,444 $
315,444
Wells Fargo Bank
39,432
39,432
Pershing
$ 354,876 $
354,876
1.76%
Total
0.00%
Money Market Accounts:
$ 54,966 $
54,966
Wells Fargo Money Market
0.03%
26,302
26,302
US Bank (Revenue Bonds)
0.03%
6,139,113
6,139,113
Bank of the West
0.27%
$ 6,220,380 $
6,220,380
30.83%
Total
0.27%
Federal Agency Securities:
$ 491,430 $
500,000
Fannie Mae
05/25/18
1.14%
490,345
500,000
Federal Home Loan Bank
06/12/18
1.01%
496,105
500,000
Fannie Mae
06/12/18
0.80%
491,900
500,000
Federal Home Loan Bank
06/13/18
1.11%
492,185
500,000
Federal Home Loan Bank
06/20/18
1.14%
2,123,735
2,115,000
Federal Home Loan Bank
05/28/14
1.37%
$ 4,585,700 $
4,615,000
22.73%
Total
1.19%
Certificates of Deposits:
$ 242,921 $
248,000
CIT Bank, Salt Lake
05/22/18
1.22%
242,720
248,000
Discover
05/22/18
1.22%
243,075
248,000
Goldman Sachs Bank
05/22/18
1.22%
242,983
248,000
Beal Bank
05/23/18
1.02%
244,486
248,000
Wells Fargo
04/27/18
0.91%
241,146
247,000
Barclays Bank
04/30/18
0.71%
243,747
248,000
State Bank of India
05/14/18
1.17%
244,864
249,000
Webster Bank
05/03/18
0.91%
242,899
248,000
American Express Centurion Bank
05/23/18
1.22%
240,813
248,000
GE Capital Bank
05/24/18
1.13%
247,269
249,000
Merrick Bank
05/24/17
0.75%
246,286
248,000
BMW Bank
05/24/17
0.90%
247,954
249,000
Firstbank Puerto Rico
05/24/16
0.75%
243,851
249,000
Oriental Bank & Trust
05/29/18
1.07%
243,935
249,000
Silvergate Bank
05/30/18
1.02%
243,833
249,000
Enterprise Bank & TR Co Lowell
05/30/18
1.02%
243,828
249,000
Safra National Bank
05/31/18
1.02%
242,859
248,000
Townebank Portsmouth
05/31/18
1.02%
243,846
249,000
Mascoma Savings Bank
05/29/18
1.02%
$ 4,633,315 $
4,719,000
22.96%
Total
0.80%
Pooled Investment Accounts:
$ 2,607,540 $
2,607,540
Local Agency Investment Fund
0.24%
CalTRUST Short Term
1,775,388
1,776,114
CalTRUST Short and Medium Term
0.60%
$ 4,382,927 $
4,383,654
21.72%
0.39%
$ 20,177,198 $ 20,292,909 100% Total Investments 0.62%
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, Finance Manager
1/31/14
Investment Summary Report
Below is a chart summarizing the yields as well as terms and maturities for the month of January 2014:
Average
# of
Month Portfolio
Days to
of 2014 Yield
Maturity
January 0.62%
560
Below is are charts comparing operating fund interest for current and prior fiscal years.
Actual Interest
16.06%
1/31/2013
5.15%
1/31/2014
Monthly - January
$
15,855
$
9,822
Year -to -Date
$
70,458
$
78,730
Budget
1,004,706
2012/2013
1,174,470
2013/2014
Interest Budget, January YTD
$
87,500
$
50,750
Interest Budget, Annual
$
150,000
$
87,000
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:
December 2013 % Alloc January 2014 % Alloc
Fund Description Balance 12/31/2013 Balance 1/31/2014
Water Operating Reserve
Water Emergency Reserve
Water Capital Project Reserve
Water Reserve for Debt Service
Maintenance Reserve
Employee Liability Reserve
COP Revenue Bond 2008 - Reserve
Sewer Operating
Sewer Emergency Reserve
Sewer Capital Project Reserve
Water Operating
Sewer Operating
$ 4,367,529
16.06%
995,509
5.15%
7,808,867
40.41%
2,726,556
14.08%
200,115
1.03%
100,000
0.52%
2,151,981
11.13%
389,360
0.35%
1,004,706
5.19%
1,174,470
6.08%
$ 20,919,093
100.00%
Wells Fargo Bank Checking
(36,060)
299,209
263,149
$ 3,267,188
16.45%
1,001,322
5.04%
7,850,770
39.53%
2,727,276
13.73%
191,563
0.96%
100,000
0.50%
2,150,037
10.83%
389,551
1.96%
1,006,534
5.07%
1,177,513
5.93%
$ 19,861,754
100.00%
(3,478)
318,922
315,444
Totals $ 21,182,242 $ 20,177,198
Meeting Date:
To:
From:
Presented By:
Prepared By:
Subject:
DISCUSSION:
ITEM NO. 5.5
AGENDA REPORT
February 24, 2014
Finance - Accounting Committee
Steve Conklin, Acting General
Manager
Delia Lugo, Finance Manager Dept: Finance
Delia Lugo, Finance Manager
Budget to Actual Results for January 2014
Attached are the District's budget to actual summary results for the Water Fund, Sewer Fund and a
combined statement for both funds pertaining to the reporting month of January 2014. For the
month of January 2014, the District water revenue is 65.4% of annual budget, which is 5.4% higher
than the historical trend for this point of the fiscal year.
The majority of the Water Fund's individual Supplies and Services expenses are below budget, with
the exceptions of Dues and Memberships, Materials, and Insurance, still due to the previous
month's reported reasons. For this reporting month, Water Variable Costs reflect a significant
increase due to a $1,566,425 payment to OCWD for the biannual Replenishment Assessment Fees.
Overall, Sewer Supplies and Services expenses are trending below budget with similar noted
exceptions as in the Water Fund. Reported expenses affiliated with the Sewer Materials account for
175% of its annual budget. In addition to the highlighted material related expenses noted in the
previous month, there are additional unbudgeted expenses recorded in the amount of $11,850 for
29 sewer manhole adjustments in the unincorporated areas with the boundaries of the City of
Placentia.
STRATEGIC PLAN:
FR 1 -F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a
Timely and Transparent Manner to the Board of Directors and Member Agencies
ATTACHMENTS:
Name:
Jan 2014 consolidated stmt.xlsx
Jan 2014 Water Stmt.xlsx
Jan 2014 Sewer Stmt.xlsx
Description:
Consolidated Statement - January 2014
Water Statement - January 2014
Sewer Statement - January 2014
Type:
Backup Material
Backup Material
Backup Material
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For Seven Months Ending January 31, 2014
Annual YTD YTD YTD YTD YTD
Budget Budget Actual Under(Over) Under(Over) % of
FY 2014 FY 2014 FY 2014 Annual Budget YTD Budget Budget
Revenue (Operating)
Water Revenue (Residential)
$16,217,590
$6,757,329 $11,116,817
$5,100,773
($4,359,488)
68.55%
Water Revenue (Commercial & Fire Det.)
2,020,223
841,760
1,238,262
781,961
(396,502)
61.29%
Water Revenue (Landscape /Irrigation)
4,794,156
1,997,565
2,979,010
1,815,146
(981,445)
62.14%
Water Revenue (Service Charge)
4,468,716
1,861,965
2,509,221
1,959,495
(647,256)
56.15%
Sewer Charge Revenue
1,550,530
646,054
928,764
621,766
(282,710)
59.90%
Locke Ranch Assessments
200,797
83,665
115,877
84,920
(32,212)
57.71%
Other Operating Revenue
717,749
299,062
668,567
49,182
(369,505)
93.15%
Total Operating Revenue:
29,969,761
12,487,400
19,556,518
10,413,243
(7,069,118)
65.25%
Revenue (Non- Operating)
Interest
87,000
36,250
78,729
8,271
(42,479)
90.49%
Property Tax
1,264,672
526,947
790,416
474,256
(263,469)
62.50%
Other Non - Operating Revenue
509,150
212,146
486,733
22,417
(274,587)
95.60%
Total Non - Operating Revenue:
1,860,822
775,343
1,355,878
504,944
(580,536)
72.86%
Total Revenue
31,830,583
13,262,743
20,912,396
10,918,187
(7,649,653)
65.70%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power)
13,767,658
5,736,524
9,967,040
3,800,618
(4,230,516)
72.39%
Salary Related Expenses
7,904,873
3,293,697
4,432,429
3,472,444
(1,138,732)
56.07%
Supplies & Services
4,225,654
1,760,689
2,152,366
2,073,293
(391,677)
50.94%
Total Operating Expenses
25,898,185
10,790,910
16,551,835
9,346,355
(5,760,925)
63.91%
Expenses (Non- Operating):
Interest on Long Term Debt
1,815,317
756,382
1,012,049
803,268
(255,667)
55.75%
Other Expense
77,400
32,250
20,223
57,177
12,027
26.13%
Total Non - Operating Expenses:
1,892,717
788,632
1,032,272
860,445
90,709
54.54%
Total Expenses
27,790,902
11,579,543
17,584,107
10,206,800
(5,670,216)
63.27%
Net Income (Loss) Before Capital Contributions
4,039,681
1,683,200
3,328,289
711,387
(1,979,437)
82.39%
Capital Contributions
-
-
5,949
5,949
(5,949)
0.00%
Net Income (Loss) Before Depreciation
4,039,681
1,683,200
3,334,238
717,336
(1,985,386)
82.54%
Depreciation & Amortization
6,897,941
2,874,142
4,267,382
2,630,554
(1,393,240)
61.86%
Total Net Income (Loss)
($2,858,260)
($1,190,942)
($933,144)
($1,913,218)
($257,797)
32.65%
Yorba Linda Water District
Water Fund
For Seven Months Ending January 31, 2014
Annual YTD Jan YTD YTD YTD YTD
Budget Budget Actual Actual Under(Over) Under(Over) % of Annual
FY 2014 FY 2014 FY 2014 FY 2014 Annual Budget YTD Budget Budget
Revenue (Operating):
24,601,179
12,300,590
2,904,996
15,830,540
8,770,639
(3,529,951)
64.35%
Water Revenue (Residential)
$16,217,590
$8,108,795
1,359,806
$11,116,817
5,100,773
(3,008,022)
68.55%
Water Revenue (Commercial & Fire Det.)
2,020,223
1,010,112
144,189
1,238,262
781,961
(228,151)
61.29%
Water Revenue (Landscape /Irrigation)
4,794,156
2,397,078
287,504
2,979,010
1,815,146
(581,932)
62.14%
Water Revenue (Service Charge)
4,468,716
2,234,358
367,558
2,509,221
1,959,495
(274,863)
56.15%
Other Operating Revenue
681,074
340,537
72,876
595,342
85,732
(254,805)
87.41%
Total Operating Revenue:
28,181,759
14,090,880
2,231,933
18,438,652
9,743,107
(4,347,773)
65.43%
Revenue (Non- Operating):
-
-
-
-
0.00%
Interest
75,000
37,500
8,884
74,193
807
(36,693)
98.92%
Property Tax
1,264,672
632,336
71,124
790,416
474,256
(158,080)
62.50%
Other Non - Operating Revenue
501,200
250,600
147,481
452,817
48,383
(202,217)
90.35%
Total Non - Operating Revenue:
1,840,872
920,436
227,489
1,317,426
523,446
(396,990)
71.57%
Total Revenue
30,022,631
15,011,316
2,459,422
19,756,078
10,266,553
(4,744,763)
65.80%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power)
13,767,658
6,883,829
1,974,662
9,967,040
3,800,618
(3,083,211)
72.39%
Salary Related Expenses
6,987,204
3,493,602
706,580
3,923,187
3,064,017
(429,585)
58.75%
Supplies & Services:
Communications
283,371
141,686
17,445
113,015
170,356
28,671
39.88%
Contractual Services
504,089
252,045
53,107
267,027
237,062
(14,983)
52.97%
Data Processing
158,779
79,390
-
96,166
62,613
(16,777)
60.57%
Dues & Memberships
67,021
33,511
4,397
56,557
10,464
(23,047)
84.39%
Fees & Permits
152,224
76,112
25,047
89,219
63,005
(13,107)
58.61%
Insurance
278,293
139,147
326
213,381
64,912
(74,235)
76.67%
Materials
568,676
284,338
49,575
402,147
166,529
(117,809)
70.72%
District Activities, Emp Recognition
23,390
11,695
609
9,207
14,183
2,488
39.36%
Maintenance
357,243
178,622
3,960
148,534
208,709
30,088
41.58%
Non - Capital Equipment
121,534
60,767
4,412
54,624
66,910
6,143
44.95%
Office Expense
42,920
21,460
2,788
18,915
24,005
2,545
44.07%
Professional Services
747,785
373,893
36,813
273,604
474,181
100,289
36.59%
Training
64,403
32,202
331
12,894
51,509
19,308
20.02%
Travel & Conferences
48,389
24,195
1,882
15,723
32,666
8,472
32.49%
Uncollectible Accounts
23,250
11,625
(406)
912
22,338
10,713
3.92%
Utilities
83,700
41,850
1,998
10,483
73,217
31,367
12.52%
Vehicle Equipment
321,250
160,625
21,470
157,905
163,345
2,720
49.15%
Supplies & Services Sub -Total
3,846,317
1,923,159
223,754
1,940,313
1,906,004
(17,155)
50.45%
Total Operating Expenses
24,601,179
12,300,590
2,904,996
15,830,540
8,770,639
(3,529,951)
64.35%
Expenses (Non- Operating):
Interest on Long Term Debt
1,815,317
907,659
139,262
1,012,049
803,268
(104,391)
55.75%
Other Expense
71,400
35,700
-
20,223
51,177
15,477
28.32%
Total Non - Operating Expenses:
1,886,717
943,359
139,262
1,032,272
854,445
(88,914)
54.71%
Total Expenses
26,487,896
13,243,948
3,044,258
16,862,812
9,625,084
(3,618,864)
63.66%
Net Income (Loss) Before Capital Contributions
3,534,735
1,767,368
(584,836)
2,893,266
641,469
(1,125,899)
81.85%
Capital Contributions
-
-
-
-
0.00%
Net Income (Loss) Before Depreciation
3,534,735
1,767,368
(584,836)
2,893,266
641,469
(1,125,899)
81.85%
Depreciation & Amortization
5,598,638
2,799,319
496,373
3,474,611
2,124,027
(675,292)
62.06%
Total Net Income (Loss)
($2,063,903)
($1,031,952)
($1,081,209)
($581,345)
($1,482,558)
($450,607)
28.17%
Capital - Direct Labor
(30,804)
(181,985)
Yorba Linda Water District
Sewer Fund
For Seven Months Ending January 31, 2014
Annual YTD Jan YTD YTD YTD YTD
Budget Budget Actual Actual Under(Over) Under(Over) % of
FY 2014 FY 2014 FY 2014 FY 2014 Annual Budget YTD Budget Annual Budget
Revenue (Operating)
Sewer Charge Revenue
$1,550,530
$775,265 $130,225
$928,764
$621,766 $
(153,499)
59.90%
Locke Ranch Assessments
200,797
100,399
4,867
115,877
84,920 $
(15,479)
57.71%
Other Operating Revenue
36,675
18,338
21,832
73,225
(36,550)
(54,888)
199.66%
Total Operating Revenue:
1,788,002
894,001
156,924
1,117,866
670,136
(223,865)
62.52%
Revenue (Non- Operating):
Total Non - Operating Expenses:
6,000
3,000
-
-
6,000
3,000
Interest
12,000
6,000
937
4,536
7,464
1,464
37.80%
Other Non - Operating Revenue
7,950
3,975
7,817
33,916
(25,966)
(29,941)
426.62%
Total Non - Operating Revenue:
19,950
9,975
8,754
38,452
(18,502)
(28,477)
192.74%
Total Revenue
1,807,952
903,976
165,678
1,156,318
651,634
(252,342)
63.96%
Expenses (Operating):
Depreciation & Amortization
1,299,298
649,649
113,253
792,771
506,527
(143,122)
Salary Related Expenses
917,669
458,835
93,295
509,242
408,427
(50,408)
56.00%
Supplies & Services:
(1,988)
(4,691)
4,691
Communications
21,829
10,915
1,313
8,264
13,565
2,651
37.86%
Contractual Services
38,751
19,376
4,211
20,676
18,075
(1,301)
53.36%
Data Processing
11,951
5,976
-
7,238
4,713
(1,263)
60.56%
Dues & Memberships
5,314
2,657
331
4,257
1,057
(1,600)
80.11%
Fees & Permits
15,141
7,571
1,801
9,319
5,822
(1,749)
61.55%
Insurance
20,947
10,474
25
16,061
4,886
(5,588)
76.67%
Materials
19,099
9,550
14,092
33,422
(14,323)
(23,873)
174.99%
District Activities, Emp Recognition
1,761
881
46
686
1,075
195
38.96%
Maintenance
121,908
60,954
1,901
47,269
74,639
13,685
38.77%
Non - Capital Equipment
16,417
8,209
235
11,644
4,773
(3,436)
70.93%
Office Expense
3,231
1,616
210
1,421
1,810
195
43.98%
Professional Services
37,425
18,713
2,052
14,483
22,942
4,230
38.70%
Training
6,757
3,379
11
4,593
2,164
(1,215)
67.97%
Travel & Conferences
4,062
2,031
142
1,176
2,886
855
28.95%
Uncollectible Accounts
1,750
875
(56)
27
1,723
848
1.54%
Utilities
7,100
3,550
215
1,304
5,796
2,246
18.37%
Vehicle Equipment
45,899
22,950
3,086
30,213
15,686
(7,264)
65.82%
Supplies & Services Sub -Total
379,342
189,671
29,615
212,053
167,289
(22,382)
55.90%
Total Operating Expenses
1,297,011
648,506
122,910
721,295
575,716
(72,790)
55.61%
Expenses (Non- Operating):
Interest Expense
-
-
-
-
-
-
0.00%
Other Expense
6,000
3,000
6,000
3,000
0.00%
Total Non - Operating Expenses:
6,000
3,000
-
-
6,000
3,000
0.00%
Total Expenses
1,303,011
651,506
122,910
721,295
581,716
(69,790)
55.36%
Net Income (Loss) Before Capital Contributions
504,941
252,471
42,768
435,023
69,918
(182,553)
86.15%
Capital Contributions
-
-
-
5,949
5,949
(5,949)
0.00%
Net Income (Loss) Before Depreciation
504,941
252,471
42,768
440,972
75,867
(188,502)
87.33%
Depreciation & Amortization
1,299,298
649,649
113,253
792,771
506,527
(143,122)
61.02%
Total Net Income (Loss)
(794,357)
(397,179) ($70,485)
(351,799)
(430,660)
($45,380)
44.29%
Capital - Direct Labor
(1,988)
(4,691)
4,691