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Home My WebLink About2015-11-12 - Board of Directors Meeting Agenda Packet AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, November 12, 2015, 8:30 AM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Ric Collett, President Michael J. Beverage, Vice President Phil Hawkins Robert R. Kiley Gary T. Melton 4. ADDITIONS/DELETIONS TO THE AGENDA 5. PUBLIC COMMENTS Any individual wishing to address the Board is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Board will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 6. COMMITTEE REPORTS 6.1. Citizens Advisory Committee (Collett) · Minutes of the meeting held October 26, 2015 at 8:30 a.m. (To be provided at the next regular Board meeting.) · Next meeting is scheduled to be held December 7, 2015 at 8:30 a.m. 7. CONSENT CALENDAR All items listed on the consent calendar are considered to be routine matters, status reports, or documents covering previous Board instructions. The items listed on the consent calendar may be enacted by one motion. There will be no discussion on the items unless a member of the Board, staff, or public requests further consideration. 7.1. Minutes of the Board of Directors Special Meeting held September 17, 2015 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Regular Meeting held September 24, 2015 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $545,086.88. 7.4. Directors and General Manager Fees and Expenses Report for First Quarter FY 2015/16 Recommendation: That the Board of Directors receive and file the Directors and General Manager Fees and Expenses Report for First Quarter FY 2015/16. 7.5. Quitclaim Deed for 4372 Dorthea Street Recommendation: That the Board of Directors authorize the President and Secretary to execute a Quitclaim Deed to Mrs. Nancy Davidson for abandoning the southerly 100.00 feet of the 15-foot wide District easement originally recorded December 11, 1972, in Book 10464, Page 958 of Official Records of Orange County. 8. ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action. 8.1. Audit Reports for Fiscal Year 2014/15 Recommendation: That the Board of Directors receive and file the FY 2014/15 Comprehensive Annual Financial Report, the Report on Internal Control, and the Communication to Those in Governance Letter. 9. REPORTS, INFORMATION ITEMS, AND COMMENTS 9.1. President's Report 9.2. Directors' Reports 9.3. General Manager's Report 9.4. General Counsel's Report 9.5. Future Agenda Items and Staff Tasks 10. COMMITTEE REPORTS CONTINUED 10.1. Interagency Committee with MWDOC and OCWD (Collett / Melton) · Next meeting is scheduled to be held November 24, 2015 at 4:00 p.m. 10.2. Joint Agency Committee with City of Yorba Linda (Collett / Beverage) · Minutes of the meeting held October 20, 2015 at 10:00 a.m. · Next meeting is scheduled to be held November 17, 2015 at 10:00 a.m. at YL City Hall. 10.3. Interagency Meeting with City of Placentia and Golden State Water (Melton / Kiley) · Minutes of the meeting held September 29, 2015 at 2:00 p.m. · Next meeting is scheduled to be held December 8, 2015 at 2:00 p.m. at Placentia City Hall. 11. INTERGOVERNMENTAL MEETINGS 11.1. ISDOC - October 22, 2015 (Collett/Kiley) 11.2. YL Planning Commission - October 28, 2015 (Hawkins) 11.3. OCSD - October 28, 2015 (Kiley/Beverage) 11.4. YL City Council - November 3, 2015 (Beverage) 11.5. MWDOC Board - November 4, 2015 (Melton) 11.6. OCSD Operations Committee - November 4, 2015 (Kiley/Beverage) 11.7. OCWD Board - November 4, 2015 (Collett) 11.8. WACO - November 6, 2015 (Hawkins/Kiley) 12. BOARD OF DIRECTORS ACTIVITY CALENDAR 12.1. Meetings from November 13, 2015 - December 31, 2015 13. CONFERENCES, SEMINARS, AND SPECIAL EVENTS This section of the agenda is for the Board of Directors to authorize Director attendance at the listed events. 13.1. UWI Spring Conference - February 10-12, 2016 Recommendation: That the Board of Directors authorize Director attendance at this event if desired. 14. CLOSED SESSION The Board may hold a closed session on items related to personnel, labor relations and/or litigation. The public is excused during these discussions. 14.1. Conference with Legal Counsel - Anticipated Litigation Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) of Section 54956.9 of the California Government Code Number of Potential Cases: One 15. ADJOURNMENT 15.1. A Board of Directors Workshop Meeting has been scheduled for Thursday, November 19, 2015 at 3:00 p.m. The next Regular Board of Directors Meeting will be held Wednesday, November 25, 2015 at 8:30 a.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District’s business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District’s internet website accessible at http://www.ylwd.com/. Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 7.1 AGENDA REPORT Meeting Date: November 12, 2015 Subject:Minutes of the Board of Directors Special Meeting held September 17, 2015 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2015-09-17_-_BOD_-_Minutes.doc Minutes Minutes 2015-09-17_-_BOD_-_Minutes_-_REVISED.pdf Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes Approved by the Board of Directors of the Yorba Linda Water District 11/12/2015 MB/PH 4-0-0-1 GM was absent. AS CORRECTED Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 1 2015-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Thursday, September 17, 2015, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The September 17, 2015 Yorba Linda Water District Board of Directors Special Meeting was called to order by President Collett at 6:31 p.m. The meeting was held in the Board/Training Room at the District’s Administration building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE Director Beverage led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Michael J. Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins John DeCriscio, Operations Manager Robert R. Kiley Gina Knight, Human Resources/Risk Manager Gary T. Melton Delia Lugo, Finance Manager (Arrived at 9:39 p.m.) Damon Micalizzi, Public Information Manager Annie Alexander, Executive Secretary OTHER ATTENDEES Art Kidman, Partner, Kidman Law LLP Sanjay Gaur, Vice President, Raftelis Financial Consultants 4. PUBLIC COMMENTS President Collett briefly explained the process for providing public comments during the Public Hearing. No public comments were provided at this time. 5. PUBLIC HEARING 5.1. Opening of Hearing by Presiding Officer President Collett opened the Public Hearing at 6:33 a.m. 5.2. Verification of Notice of Hearing Provided by Board Secretary Mr. Marc Marcantonio presented the Board with verification that a Notice of Public Hearing was mailed on July 31, 2015. The notice was sent to the property owners of all parcels (a total of 27,366) within the District’s Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 2 service area as identified by the Orange County Auditor-Controller Property Tax Unit. A copy of this verification will be retained in the District’s records in accordance with established policy. 5.3. Reports by General Manager, Staff and/or Consultant Mr. Marcantonio asked Mr. John DeCriscio to provide the audience with instructions in the event of an emergency. Mr. Marcantonio then provided the Board with a PowerPoint presentation regarding the proposed rate change. He touched on the legal responsibilities of the Board related to the collection of sufficient rates and charges as well as the District’s funding requirements and current business model. Mr. Marcantonio then provided an overview of the District’s plan to gradually modify its business model prior to the Governor’s declaration of a drought emergency. He also described the subsequent regulations established by the State Water Resources Control Board (SWRCB) and their impact on the District. He further explained that the State’s regulations forced the District to consider changing its business model more quickly than expected. Following this determination, the District hired a financial consultant to conduct a water and wastewater rate study and provide recommendations to the Board. Mr. Marcantonio stated that the results from this rate study would be presented by the consultant separately. He then provided information regarding Board/employee compensation and benefits, recent cost saving measures, future outlook regarding the State’s drought emergency regulations, and various awards received by the District. Mr. Marcantonio introduced Mr. Sanjay Gaur, Vice President of Raftelis Financial Consultants, who provided a PowerPoint presentation to the Board regarding the water and wastewater rate study report. Mr. Gaur reviewed the financial challenges impacting the District due to the drought and water conservation mandates implemented by the SWRCB. Mr. Gaur then provided an overview of industry standard financial policies as related to reserve balances and debt coverage ratios, as well as projected water sales through FY 2020. He also reviewed the District’s projected financial condition with pass-through costs and no revenue adjustment, and described the associated consequences. Mr. Gaur then reviewed the proposed financial plans, including a revenue adjustment which would cover the cost of service, recommended reserve balances, and debt coverage ratios. He also provided an overview of the proposed water and sewer rates and the financial impact on various types of customers. Mr. Gaur then responded to questions from the Board. 5.4. Comments from the Public Speaking In Favor of and/or Against the Issue The following individuals addressed the Board: Mr. David Ramocinski, resident, spoke against the proposed rate change and commented on a previous article published in the Orange County Register and events related to the Freeway Complex Fire. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 3 Mr. Randy Holbrook, resident, spoke against the proposed rate change and its impact on residents and local government agencies. Ms. Samantha Bevan, resident, spoke regarding the process for obtaining rebates for rain barrels, educating residents and local government agencies regarding the use of these barrels, and the District’s water conservation representatives. Mr. Peter J. Ford, resident, spoke regarding the proposed rate change, the District’s 36% conservation mandate and the proposed change in the District’s business model. Ms. Judith Harris, resident, spoke regarding the importance of water storage and the presentation provided at the beginning of the meeting. Mr. Noel Hensley, resident, spoke regarding the proposed rate change, tiered rate structures and reports he previously submitted regarding water waste. Mr. Bill Guse, resident, spoke regarding his experience serving on the District’s Citizens Advisory Committee and in favor of the proposed rate change. Dr. Jeff Decker, resident, spoke regarding the water and wastewater rate study report, the District’s reserves, and against the proposed rate change. Mr. Bruce Anderson, resident, spoke against the proposed rate change and commented on his personal conservation efforts and the District’s budget. Mr. Jon Hansen, resident, spoke against the proposed rate change. He also commented on the District’s budget, employee salaries and historical water sales. Mr. Ed Rakochy, resident, spoke against the proposed rate change. He also commented on the time of the regularly scheduled Board meetings and the minutes and audio/video recordings of these same meetings. Ms. Linda Patterson, resident, spoke against the proposed rate change and commented on District employee salaries. Mr. Fred Ulrich, resident, spoke against the proposed rate change and commented on rates at other water districts. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 4 Mr. Dan Cheney, resident, spoke against the proposed rate change and commented on previous rate hearings, the current drought, and the District’s budget Mr. Bob Wren, resident, spoke regarding his personal conservation efforts and public service. He also commented on the District’s fixed costs and the proposed rate change. Mr. Mike Benz, resident, demonstrated against the proposed rate change. Bob Avay, resident, spoke against the propose rate change. He also commented on his previous water bills, potential cost cutting measures, and the impact on residents with fixed incomes. Robert Shifokor, resident, commented on the District’s website, the proposed rate change and potential cost cutting measures. Another resident, (name unknown), commented on the proposed rate change and community outreach efforts. Mr. Dennis Fitzpatrick, resident, commented on car wash water recovery systems, his personal conservation efforts, and the recycling of grey water. Mr. Ron Ricks, resident, spoke against the proposed rate change and commented on an alternate rate structure. Mr. Eddy Jackson, resident, spoke against the proposed rate change. He also commented on the District’s budget, the water and wastewater rate study, and the protest letters submitted against the proposed rate change. Ms. Christine Dan, resident, spoke regarding employee benefit liabilities, revenue stability, and potential cost cutting measures. Mr. Rob Hunter, General Manager for Municipal Water District of Orange County, spoke regarding the state’s conservation mandate and its financial impact on local water agencies. He also spoke regarding the differences between operating a water utility versus a commercial business. Mr. Al Nederhood, resident, spoke regarding transparency, the District’s budget workshop meetings, Citizens Advisory Committee, employee benefits and turnover, and the cost for sewer services. Mr. Frank Gruder, resident, spoke regarding potential cost cutting measures, the water and wastewater rate study, community outreach and education, and the Citizens Advisory Committee. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 5 Ms. Courtney Hayes, resident, spoke regarding low water users and a tiered rate structure. Another resident, (name unknown), spoke against the proposed rate change. She also commented on her personal conservation efforts, the purpose of the rate change, and the Freeway Complex Fire. Mr. Ben Otten, resident, spoke regarding the conservation mandate and the resulting reduction in water sales, new construction in the community, and long term planning for recurring drought conditions. Mr. Ed Gunderson, resident, spoke regarding the proposed rate change. He also commented on the budget, an organization he belongs to, and the protest letters submitted against the proposed rate change. Mr. Charles Tavia, resident, spoke regarding the District’s Capital Improvement Program and potential cost cutting measures. Ms. Kathy Otten, resident, spoke regarding her personal conservation efforts and the conservation mandate. Given that no other individuals wished to speak, President Collett closed public comments regarding this matter at 9:10 p.m. 5.5. Receipt of Written Communications by the Public President Collett indicated that any additional written communications or protests against the proposed rate change would need to be submitted at this time. No other communications were received. 5.6. Closing of Hearing by Presiding Officer President Collett closed the public hearing at 9:11 p.m. 6. RECESS 6.1. Recess and Staff Validation/Tabulation of Written Protests Received Prior to Closing of the Public Hearing A recess was declared at 9:12 p.m. The meeting was reconvened at 9:39 p.m. President Collett stated that Mrs. Delia Lugo would provide a statement regarding the validation/tabulation of written protests. Mrs. Lugo then read a declaration summarized as follows: Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 6 Pursuant to and in compliance with Proposition 218 (California Constitution Art. XIII D), the District on July 31, 2015 mailed a notice of water and sewer rate increase to all property owners within the District’s service area which included the proposed water and sewer rates for FY 2015/16, FY 2016/17, FY 2017/18, FY 2018/19, and FY 2019/20. As required by Prop 218, notices were sent to the property owners at their addresses that appear on the last equalized property assessment roll of the County of Orange as provided by the Orange County Auditor- Controller Property Tax Unit. According to the Orange County Auditor- Controller Property Tax Unit the total number of parcels in the District’s service area is 27,366. Prop 218 prohibits the increase if a majority protest exists (protests received from property owners representing 13,684 parcels). As of September 17, 2015 at 3:30 p.m., there were 1,715 valid protests. After 3:30 p.m. on September 17, 2015 and before the close of the public hearing, approximately 6,100 letters were received. These letters have not been validated as protests. Even if the approximately 6,100 letters are counted as valid protests, the total amount of protests would total approximately 7,815, which would not constitute a majority protest. A copy of the declaration in its entirety will be retained in the District’s records in accordance with established policy. President Collett stated that the process of counting the letters received after 3:30 p.m. was videotaped and witnessed by the District’s legal counsel. 7. ACTION CALENDAR 7.1. Board Discussion and Action Regarding Proposed Water and Sewer Rate Increase President Collett invited the Board to comment regarding this matter. Director Hawkins commented on District employee salaries, tiered rate structures, the modification of the District’s business model, and changes in the water utility industry. Director Kiley commented on the time of the regularly scheduled Board meetings, the state’s conservation mandate, and the purpose of hiring a consultant to conduct the water and wastewater rate study. Director Melton commented on the process of determining the proposed rate changes, the purpose of hiring a consultant to conduct the water and the wastewater rate study. Director Beverage commented on the state’s conservation mandate and drought emergency regulations, and the impact on the District’s budgetary process. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 7 President Collett commented on the District’s participation in Orange County Water District’s grey water recycling program, the state’s water storage situation, and the complexities of managing a water utility. Director Collett made a motion, seconded by Director Beverage, to (1) adopt Resolution No. 15-22 Setting Water Rates Effective October 1, 2015 and Rescinding Resolution No. 14-07; and (2) adopt Resolution No. 15-23 Setting Sewer Rates Effective October 1, 2015 and Rescinding Resolution Nos. 07-13 and 11-17. Motion carried 5-0 on a Roll Call vote. 8. ADJOURNMENT 8.1. The meeting was adjourned at 10:05 p.m. The next Regular Board of Directors Meeting will be held Thursday, September 24, 2015 at 8:30 a.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 1 2015-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Thursday, September 17, 2015, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The September 17, 2015 Yorba Linda Water District Board of Directors Special Meeting was called to order by President Collett at 6:31 p.m. The meeting was held in the Board/Training Room at the District’s Administration building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE Director Beverage led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Michael J. Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins John DeCriscio, Operations Manager Robert R. Kiley Gina Knight, Human Resources/Risk Manager Gary T. Melton Delia Lugo, Finance Manager (Arrived at 9:39 p.m.) Damon Micalizzi, Public Information Manager Annie Alexander, Executive Secretary OTHER ATTENDEES Art Kidman, Partner, Kidman Law LLP Sanjay Gaur, Vice President, Raftelis Financial Consultants 4. PUBLIC COMMENTS President Collett briefly explained the process for providing public comments during the Public Hearing. No public comments were provided at this time. 5. PUBLIC HEARING 5.1. Opening of Hearing by Presiding Officer President Collett opened the Public Hearing at 6:33 a.m. 5.2. Verification of Notice of Hearing Provided by Board Secretary Mr. Marc Marcantonio presented the Board with verification that a Notice of Public Hearing was mailed on July 31, 2015. The notice was sent to the property owners of all parcels (a total of 27,366) within the District’s REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 2 service area as identified by the Orange County Auditor-Controller Property Tax Unit. A copy of this verification will be retained in the District’s records in accordance with established policy. 5.3. Reports by General Manager, Staff and/or Consultant Mr. Marcantonio asked Mr. John DeCriscio to provide the audience with instructions in the event of an emergency. Mr. Marcantonio then provided the Board with a PowerPoint presentation regarding the proposed rate change. He touched on the legal responsibilities of the Board related to the collection of sufficient rates and charges as well as the District’s funding requirements and current business model. Mr. Marcantonio then provided an overview of the District’s plan to gradually modify its business model prior to the Governor’s declaration of a drought emergency. He also described the subsequent regulations established by the State Water Resources Control Board (SWRCB) and their impact on the District. He further explained that the State’s regulations forced the District to consider changing its business model more quickly than expected. Following this determination, the District hired a financial consultant to conduct a water and wastewater rate study and provide recommendations to the Board. Mr. Marcantonio stated that the results from this rate study would be presented by the consultant separately. He then provided information regarding Board/employee compensation and benefits, recent cost saving measures, future outlook regarding the State’s drought emergency regulations, and various awards received by the District. Mr. Marcantonio introduced Mr. Sanjay Gaur, Vice President of Raftelis Financial Consultants, who provided a PowerPoint presentation to the Board regarding the water and wastewater rate study report. Mr. Gaur reviewed the financial challenges impacting the District due to the drought and water conservation mandates implemented by the SWRCB. Mr. Gaur then provided an overview of industry standard financial policies as related to reserve balances and debt coverage ratios, as well as projected water sales through FY 2020. He also reviewed the District’s projected financial condition with pass-through costs and no revenue adjustment, and described the associated consequences. Mr. Gaur then reviewed the proposed financial plans, including a revenue adjustment which would cover the cost of service, recommended reserve balances, and debt coverage ratios. He also provided an overview of the proposed water and sewer rates and the financial impact on various types of customers. Mr. Gaur then responded to questions from the Board. 5.4. Comments from the Public Speaking In Favor of and/or Against the Issue The following individuals addressed the Board: Mr. David Ramocinski, resident, spoke against the proposed rate change and commented on a previous article published in the Orange County Register and events related to the Freeway Complex Fire. REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 3 Mr. Randy Holbrook, resident, spoke against the proposed rate change and its impact on residents and local government agencies. Ms. Samantha PepinBevan, resident, spoke regarding the process for obtaining rebates for rain barrels, educating residents and local government agencies regarding the use of these barrels, and the District’s water conservation representatives. Mr. Peter J. Ford, resident, spoke regarding the proposed rate change, the District’s 36% conservation mandate and the proposed change in the District’s business model. Ms. Judith Harris, resident, spoke regarding the importance of water storage and the presentation provided at the beginning of the meeting. Mr. Noel IncleyHensley, resident, spoke regarding the proposed rate change, tiered rate structures and reports he previously submitted regarding water waste. Mr. Bill Guse, resident, spoke regarding his experience serving on the District’s Citizens Advisory Committee and in favor of the proposed rate change. Dr. Jeff Decker, resident, spoke regarding the water and wastewater rate study report, the District’s reserves, and against the proposed rate change. Mr. Bruce Anderson, resident, spoke against the proposed rate change and commented on his personal conservation efforts and the District’s budget. Mr. Jon Hansen, resident, spoke against the proposed rate change. He also commented on the District’s budget, employee salaries and historical water sales. Mr. Ed Rakochy, resident, spoke against the proposed rate change. He also commented on the time of the regularly scheduled Board meetings and the minutes and audio/video recordings of these same meetings. Ms. Linda Patterson, resident, spoke against the proposed rate change and commented on District employee salaries. Mr. Fred YarakUlrich, resident, spoke against the proposed rate change and commented on rates at other water districts. REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 4 Mr. Dan ChaneyCheney, resident, spoke against the proposed rate change and commented on previous rate hearings, the current drought, and the District’s budget Mr. Bob Wren, resident, spoke regarding his personal conservation efforts and public service. He also commented on the District’s fixed costs and the proposed rate change. Mr. Mike Benz, resident, demonstrated against the proposed rate change. Mr. Bob LeVayAvay, resident, spoke against the propose rate change. He also commented on his previous water bills, potential cost cutting measures, and the impact on residents with fixed incomes. Mr. Robert SchiffmacherShifokor, resident, commented on the District’s website, the proposed rate change and potential cost cutting measures. Mr. Art BasehartAnother resident, resident(name unknown), commented on the proposed rate change and community outreach efforts. Mr. Dennis Fitzpatrick, resident, commented on car wash water recovery systems, his personal conservation efforts, and the recycling of grey water. Mr. Ron Ricks, resident, spoke against the proposed rate change and commented on an alternate rate structure. Mr. Eddy Jackson, resident, spoke against the proposed rate change. He also commented on the District’s budget, the water and wastewater rate study, and the protest letters submitted against the proposed rate change. Ms. KristineChristine Dane, resident, spoke regarding employee benefit liabilities, revenue stability, and potential cost cutting measures. Mr. Rob Hunter, General Manager for Municipal Water District of Orange County, spoke regarding the state’s conservation mandate and its financial impact on local water agencies. He also spoke regarding the differences between operating a water utility versus a commercial business. Mr. Al Nederhood, resident, spoke regarding transparency, the District’s budget workshop meetings, Citizens Advisory Committee, employee benefits and turnover, and the cost for sewer services. Mr. Frank Gruder, resident, spoke regarding potential cost cutting measures, the water and wastewater rate study, community outreach and education, and the Citizens Advisory Committee. REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 5 Ms. Courtney Hayes, resident, spoke regarding low water users and a tiered rate structure. Another resident, (name unknown), spoke against the proposed rate change. She also commented on her personal conservation efforts, the purpose of the rate change, and the Freeway Complex Fire. Mr. Ben Otten, resident, spoke regarding the conservation mandate and the resulting reduction in water sales, new construction in the community, and long term planning for recurring drought conditions. Mr. Ed Gunderson, resident, spoke regarding the proposed rate change. He also commented on the budget, an organization he belongs to, and the protest letters submitted against the proposed rate change. Mr. Charles Tavia, resident, spoke regarding the District’s Capital Improvement Program and potential cost cutting measures. Ms. Kathy Otten, resident, spoke regarding her personal conservation efforts and the conservation mandate. Given that no other individuals wished to speak, President Collett closed public comments regarding this matter at 9:10 p.m. 5.5. Receipt of Written Communications by the Public President Collett indicated that any additional written communications or protests against the proposed rate change would need to be submitted at this time. No other communications were received. 5.6. Closing of Hearing by Presiding Officer President Collett closed the public hearing at 9:11 p.m. 6. RECESS 6.1. Recess and Staff Validation/Tabulation of Written Protests Received Prior to Closing of the Public Hearing A recess was declared at 9:12 p.m. The meeting was reconvened at 9:39 p.m. President Collett stated that Mrs. Delia Lugo would provide a statement regarding the validation/tabulation of written protests. Mrs. Lugo then read a declaration summarized as follows: REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 6 Pursuant to and in compliance with Proposition 218 (California Constitution Art. XIII D), the District on July 31, 2015 mailed a notice of water and sewer rate increase to all property owners within the District’s service area which included the proposed water and sewer rates for FY 2015/16, FY 2016/17, FY 2017/18, FY 2018/19, and FY 2019/20. As required by Prop 218, notices were sent to the property owners at their addresses that appear on the last equalized property assessment roll of the County of Orange as provided by the Orange County Auditor- Controller Property Tax Unit. According to the Orange County Auditor- Controller Property Tax Unit the total number of parcels in the District’s service area is 27,366. Prop 218 prohibits the increase if a majority protest exists (protests received from property owners representing 13,684 parcels). As of September 17, 2015 at 3:30 p.m., there were 1,715 valid protests. After 3:30 p.m. on September 17, 2015 and before the close of the public hearing, approximately 6,100 letters were received. These letters have not been validated as protests. Even if the approximately 6,100 letters are counted as valid protests, the total amount of protests would total approximately 7,815, which would not constitute a majority protest. A copy of the declaration in its entirety will be retained in the District’s records in accordance with established policy. President Collett stated that the process of counting the letters received after 3:30 p.m. was videotaped and witnessed by the District’s legal counsel. 7. ACTION CALENDAR 7.1. Board Discussion and Action Regarding Proposed Water and Sewer Rate Increase President Collett invited the Board to comment regarding this matter. Director Hawkins commented on District employee salaries, tiered rate structures, the modification of the District’s business model, and changes in the water utility industry. Director Kiley commented on the time of the regularly scheduled Board meetings, the state’s conservation mandate, and the purpose of hiring a consultant to conduct the water and wastewater rate study. Director Melton commented on the process of determining the proposed rate changes, the purpose of hiring a consultant to conduct the water and the wastewater rate study. Director Beverage commented on the state’s conservation mandate and drought emergency regulations, and the impact on the District’s budgetary process. REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17, 2015 at 6:30 p.m. 7 President Collett commented on the District’s participation in Orange County Water District’s grey water recycling program, the state’s water storage situation, and the complexities of managing a water utility. Director Collett made a motion, seconded by Director Beverage, to (1) adopt Resolution No. 15-22 Setting Water Rates Effective October 1, 2015 and Rescinding Resolution No. 14-07; and (2) adopt Resolution No. 15-23 Setting Sewer Rates Effective October 1, 2015 and Rescinding Resolution Nos. 07-13 and 11-17. Motion carried 5-0 on a Roll Call vote. 8. ADJOURNMENT 8.1. The meeting was adjourned at 10:05 p.m. The next Regular Board of Directors Meeting will be held Thursday, September 24, 2015 at 8:30 a.m. Annie Alexander Assistant Board Secretary REVISED Backup Material Distributed Less Than 72 Hours Prior to the Meeting ITEM NO. 7.2 AGENDA REPORT Meeting Date: November 12, 2015 Subject:Minutes of the Board of Directors Regular Meeting held September 24, 2015 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2015-09-24_-_BOD_-_Minutes.doc Minutes Minutes Approved by the Board of Directors of the Yorba Linda Water District 11/12/2015 MB/PH 4-0-0-1 GM was absent. Minutes of the YLWD Board of Directors Regular Meeting Held Thursday, September 24, 2015 at 8:30 a.m. 1 2015-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, September 24, 2015, 8:30 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The September 24, 2015 Regular Meeting of the Yorba Linda Water District Board of Directors was called to order by President Collett at 8:30 a.m. The meeting was held in the Board Room at the District’s Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE President Collett led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Michael J. Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins John DeCriscio, Operations Manager Robert R. Kiley Gina Knight, Human Resources/Risk Manager Gary T. Melton Damon Micalizzi, Public Information Manager Art Vega, Information Technology Manager Rachel Padilla, Customer Service Supervisor Annie Alexander, Executive Secretary ALSO PRESENT Eddy Beltran, Partner, Kidman Law LLP Brett Barbre, Director, MWDSC and MWDOC (Arrived at 9:25 a.m.) Tom Lindsey, Mayor Pro Tem, City of Yorba Linda Bruce Anderson, Resident Nancy Stevens, Resident 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. PUBLIC COMMENTS Mr. Bruce Anderson, resident, spoke regarding the variable billing cycle, drought penalties, mid-year budget review, and the water rates. Ms. Nancy Stevens, resident, spoke regarding water utility security issues. Minutes of the YLWD Board of Directors Regular Meeting Held Thursday, September 24, 2015 at 8:30 a.m. 2 6. SPECIAL RECOGNITION 6.1. Recognition of Marc Marcantonio, General Manager, for 1 Year of Service to the District President Collett presented Mr. Marcantonio with a lapel pin in recognition of his service for the District. 7. CONSENT CALENDAR President Collett requested to remove Item No. 7.4. from the Consent Calendar for separate action. Director Beverage made a motion, seconded by Director Hawkins, to approve the remainder of the Consent Calendar. Motion carried 5-0. 7.1. Minutes of the Board of Directors Special Meeting held August 25, 2015 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Regular Meeting held August 31, 2015 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $1,203,264.39. ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION 7.4. Approval of "Agreement for Sharing Consultant Costs for 2015 Urban Water Management Plan" with MWDOC Mr. Marcantonio and Mr. Conklin responded to questions from the Board regarding the savings achieved by participating in a cost sharing agreement and new federal and state related requirements. Director Melton suggested that the public be made aware of the various unfunded mandates required by the state and the associate cost. Mr. Marcantonio indicated that this information would be contained in future editions of the newsletter. Director Beverage made a motion, seconded by Director Melton, to approve the "Agreement for Sharing Consultant Costs for 2015 Urban Water Management Plans" with MWDOC, at a total estimated cost of $40,650, and authorize execution by the General Manager, subject to approval as to form by District legal counsel. Motion carried 5-0. Minutes of the YLWD Board of Directors Regular Meeting Held Thursday, September 24, 2015 at 8:30 a.m. 3 8. REPORTS, INFORMATION ITEMS, AND COMMENTS 8.1. President's Report President Collett asked if there was a desire of the Board to attend the Yorba Linda State of the City Address. Director Melton expressed an interest in attending. 8.2. Directors' Reports Director Melton commended staff for their efforts related to the Prop 218 hearing. Director Kiley commented on the number of compliments he had received regarding the District’s website. He also suggested that the District inform the public regarding unfunded mandates required by the state. 8.3. General Manager's Report Mr. Marcantonio asked each manager (or their designee) to provide a report regarding activities within their respective departments. He then provided the Board with an overview of his activities and meeting attendance. 8.4. General Counsel's Report None. 8.5. Future Agenda Items and Staff Tasks President Collett requested that the Board consider adding a future agenda item or scheduling a future workshop meeting to discuss the costs/benefits associated with the planned Fairmont Booster Pump Station Upgrade Project. 9. COMMITTEE REPORTS 9.1. Interagency Committee with MWDOC and OCWD (Collett / Melton) Minutes of the meeting held September 22, 2015 at 4:00 p.m. will be provided at the next regular Board meeting. Next meeting is scheduled to be held November 24, 2015 at 4:00 p.m. Minutes of the YLWD Board of Directors Regular Meeting Held Thursday, September 24, 2015 at 8:30 a.m. 4 9.2. Joint Agency Committee with City of Yorba Linda (Collett / Beverage) Minutes of the meeting held August 26, 2015 at 10:00 a.m. were provided in the agenda packet. Next meeting is yet to be scheduled. 9.3. Interagency Meeting with City of Placentia and Golden State Water (Melton / Kiley) Minutes of the meeting held July 27, 2015 at 2:00 p.m. will be provided at the next regular Board meeting. Next meeting is scheduled to be held September 29, 2015 at 2:00 p.m. at YLWD. 9.4. Citizens Advisory Committee (Collett) Minutes of the meeting held August 24, 2015 at 8:30 a.m. will be provided at the next regular Board meeting. Next meeting is scheduled to be held September 28, 2015 at 8:30 a.m. 10. INTERGOVERNMENTAL MEETINGS Each of the Directors reported on their attendance at the following meetings. 10.1. YL LMCAC - September 10, 2015 (Beverage - As Needed) Director Beverage did not attend. 10.2. YL City Council - September 15, 2015 (Collett) 10.3. MWDOC Board - September 16, 2015 (Melton) 10.4. OCWD Board - September 16, 2015 (Kiley) 10.5. OCSD - September 23, 2015 (Kiley/Beverage) 10.6. YL Planning Commission - September 23, 2015 (Hawkins) This meeting was cancelled. 11. BOARD OF DIRECTORS ACTIVITY CALENDAR 11.1. Meetings from September 25, 2015 – October 31, 2015 The Board reviewed the activity calendar and made no changes. Minutes of the YLWD Board of Directors Regular Meeting Held Thursday, September 24, 2015 at 8:30 a.m. 5 12. ADJOURNMENT 12.1. The meeting was adjourned at 9:30 a.m. The next Regular Board of Directors Meeting will be held Thursday, October 8, 2015 at 8:30 a.m. Annie Alexander Assistant Board Secretary ITEM NO. 7.3 AGENDA REPORT Meeting Date: November 12, 2015 Budgeted:Yes To:Board of Directors Cost Estimate:$545,086.88 Funding Source:All Funds From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Reviewed by Legal:N/A Prepared By:Richard Cabadas, Accounting Assistant I CEQA Compliance:N/A Subject:Payments of Bills, Refunds, and Wire Transfers SUMMARY: Section 31302 of the California Water Code says the District shall pay demands made against it when they have been approved by the Board of Directors. Pursuant to law, staff is hereby submitting the list of disbursements for Board of Directors’ approval. STAFF RECOMMENDATION: That the Board of Directors ratify and authorize disbursements in the amount of $545,086.88. DISCUSSION: The major items on this disbursement list are as follows: A check of $45,383.00 to Sanders Paving for multiple asphalt and paving repairs; a wire of $8,053.03 to So. California Edison for October 2015 electricity charges for multiple locations; and a wire of $5,953.39 to So. California Gas Co. for October 2015 gas charges for multiple locations. The balance of $233,766.73 is routine invoices. The Accounts Payable check register total is $293,156.15; Payroll No. 22 total is $251,930.73; and the disbursements of this agenda report are $545,086.88. A summary of the checks is attached. PRIOR RELEVANT BOARD ACTION(S): The Board of Directors approves bills, refunds and wire transfers semi-monthly. ATTACHMENTS: Name:Description:Type: 15-CS_1112.pdf CAP SHEET Backup Material CkReg111215.pdf CHECK REGISTER Backup Material 15_CC_1112.pdf CREDIT CARD SUMMARY Backup Material Approved by the Board of Directors of the Yorba Linda Water District 11/12/2015 MB/PH 4-0-0-1 GM was absent. . October 29, 2015 CHECK NUMBERS & WIRE: Computer Checks 66548—66645 $ 279,149.73 ___________ $ 279,149.73 WIRES: W 110215 So. California Edison $ 8,053.03 W111215 So. California Gas Co. $ 5,953.39 ____________ $ 14,006.42 TOTAL OF CHECKS & WIRES $293,156.15 PAYROLL NO. 22: Direct Deposits $ 160,546.38 Third Party Checks 6260—6271 $ 48,200.56 Payroll Taxes $ 43,183.79 $ 251,930.73 TOTAL OF PAYROLL $251,930.73 ---------------------------------------------------------------------------------------------------------------------- DISBURSEMENT TOTAL: $545,086.88 ================================================================== APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD MEETING OF NOVEMBER 12, 2015 ==================================================================. Check No.Date Vendor Name Amount Description 66563 11/12/2015 AC2015 CORP 230.72 CUSTOMER REFUND 66568 11/12/2015 ACRS, Inc.2,943.96 MAINTENANCE - AC HEATING 66569 11/12/2015 ACWA/JPIA 80.00 2015 JPIA TRAINING CONFERENCE 66562 11/12/2015 AE CARLSON CONSTRUCTION, INC 808.60 CUSTOMER REFUND 66570 11/12/2015 Alternative Hose Inc.42.90 HOSE 66571 11/12/2015 American Legal Publishing Corporation 2,462.61 FINAL - DISTRICT CODIFICATION 66572 11/12/2015 Aqua-Metric Sales Co.28,034.75 WAREHOUSE STOCK - METERS 66573 11/12/2015 Aramark 483.18 UNIFORM SERVICE 66555 11/12/2015 ASHLEY JOHNSON 1.08 CUSTOMER REFUND 66575 11/12/2015 AT & T 47.92 CIRCUIT #78KS315PT 66574 11/12/2015 AT & T - Calnet2 6,246.91 ATT CALNET2 66576 11/12/2015 Bee Busters, Inc 150.00 BEE ABATEMENT - 4551 CARA ORO 66567 11/12/2015 BRANDYWINE RESIDENTIAL INC 45.90 CUSTOMER REFUND 66579 11/12/2015 CalCard US Bank 38,252.20 CREDIT CARD TRANSACTIONS FROM SEPTEMBER & OCTOBER 2015 66578 11/12/2015 California Association of Sanitation 4,160.00 CASA MEMBERSHIP DUES - 2016 66577 11/12/2015 Calolympic Safety Co.84.38 LABELS - "OPEN DOOR SLOWLY" 66580 11/12/2015 City Of Anaheim 18,318.61 RICHFIELD & LAKEVIEW - ELECTRICAL CHARGES - 9/15 - 10/15 66581 11/12/2015 Clinical Lab. Of San Bern.1,220.00 LAB SAMPLES - SEPTEMBER 15 66582 11/12/2015 Coastal Ignition & Controls 2,159.76 EQUIPMENT - ALTRONIC III UNIT, 6 CYL 66557 11/12/2015 COLLEEN HOFFMAN 30.75 CUSTOMER REFUND 66585 11/12/2015 Cummins Cal Pacific, LLC 4,471.20 GENSET GENERATOR 66586 11/12/2015 Daniels Tire Service 2,901.85 (6) TIRE PLACEMENTS - UNIT #144 66561 11/12/2015 DAVID ZICKEFOOSE 56.29 CUSTOMER REFUND 66551 11/12/2015 DEBRA HUGHES 1.65 CUSTOMER REFUND 66587 11/12/2015 Dell Marketing L.P.5,803.98 IT EQUIPMENT/NOTEBOOKS 66554 11/12/2015 DORIS JONES 474.81 CUSTOMER REFUND 66589 11/12/2015 Eisel Enterprises, Inc.908.12 438 & 666 METER BOX, COVERS & LIDS 66590 11/12/2015 Elite Equipment Inc 994.73 EQUIPMENT - HUSQVARNA CUTOFF SAW 66591 11/12/2015 Enthalpy Analytical, Inc.1,987.50 LAB SAMPLES - SEMPTEMBER 2015 66592 11/12/2015 Environmental Engineering & Contracting 12,163.35 GIS PROGRAM UPDATE - SEPTEMBER 2015 66593 11/12/2015 eSecurityToGo, LLC 6,174.80 BARRACUDA SPAM FIREWALL 66594 11/12/2015 Facility Solutions Group Inc 2,978.66 ON-SITE ELECTRICAL MAINTENANCE 66595 11/12/2015 Federal Express 22.54 SHIPPING FEES 66596 11/12/2015 Fry's Electronics 165.16 IT HARDWARE & SUPPLIES 66597 11/12/2015 Golden Bell Products 734.40 SEWER MAIN REPAIRS 66598 11/12/2015 Haaker Equipment Co.140.66 AUTO REPLACEMENT PARTS 66600 11/12/2015 Infosend Inc.5,896.64 MONTHLY BILLING FEES 66603 11/12/2015 J & S Construction 2,600.00 REMOVE & REPLACE - DRIVEWAY 66601 11/12/2015 Jackson's Auto Supply - Napa 61.69 PARTS - AUTO MAINTENANCE 66564 11/12/2015 JOANNE MICELI 345.07 CUSTOMER REFUND 66602 11/12/2015 John Bogosian 517.81 MECHANIC - SHOP EQUIPMENT 66584 11/12/2015 JON POLENTZ PROPERTY MANAGEMENT 405.65 CUSTOMER REFUND 66550 11/12/2015 JULIA PIN 56.45 CUSTOMER REFUND 66549 11/12/2015 KAREN REDDING 135.21 CUSTOMER REFUND 66604 11/12/2015 Konica Minolta Business 833.78 BIZHUB C224, C552 & 181 LEASE 66559 11/12/2015 LAND CO DEVELOPMENT 77.50 CUSTOMER REFUND 66560 11/12/2015 LEA LA PORTE 74.77 CUSTOMER REFUND 66605 11/12/2015 Liebert Cassidy Whitmore 2,891.00 GENERAL LEGAL FEES 66599 11/12/2015 MailFinance 313.93 HASLER LEASE #H12011971 66607 11/12/2015 Marc Marcantonio 54.45 MILEAGE REIMBURSEMENT - MARCANTONIO 66606 11/12/2015 Marina Landscape, Inc 4,114.68 MONTHLY MAINTENANCE - SEPTEMBER 2015 66608 11/12/2015 Mc Fadden-Dale Hardware 206.13 HARDWARE SUPPLIES 66609 11/12/2015 Mc Master-Carr Supply Co.257.38 HARDWARE SUPPLIES 66610 11/12/2015 Measurement Control Systems, Inc 805.46 METERS & SENSORS 66583 11/12/2015 Merging Communications, Inc.560.00 INSTALLATION OF NEW EXCH SERVER 66611 11/12/2015 Michael J. Beverage 51.75 MILEAGE REIMBURSEMENT - BEVERAGE, M 66612 11/12/2015 Murcal, Inc.1,386.06 ENGINE THROTTLE CONTROLLER 66613 11/12/2015 Muzak LLC 81.68 CUSTOMER MESSAGE/PHONE SERVICE - NOV 2015 66614 11/12/2015 NatPay Online Business Solutions 296.95 DOCULIVERY - JULY & SEPTEMBER 2015 66615 11/12/2015 Neopost Inc 5,000.00 PERFORMANCE EVALUATION SOFTWARE LICENSE 66616 11/12/2015 Nicholas A. Hollon 60.00 CERT REIMBURSEMENT - T2 66617 11/12/2015 Nickey Kard Lock Inc 5,253.61 FUEL 66618 11/12/2015 Norm's Refrigeration &250.00 ON SITE SERVICE - 10/15-4/16 66558 11/12/2015 OAKWOOD CORPORATE HOUSING 161.14 CUSTOMER REFUND Yorba Linda Water District Check Register For Checks Dated: 10/23/2015 thru 11/12/2015 66619 11/12/2015 Occu-Med, Ltd.226.50 OUT OF AREA EXAM - PRE-EMPOLYMENT - MADRID J 66620 11/12/2015 Office Solutions 2,161.34 OFFICE SUPPLIES, TONER & PAPER 66621 11/12/2015 Orange County Register 91.26 OC REGISTER -M-F- 3 MONTHS 66625 11/12/2015 P.T.I. Sand & Gravel, Inc.1,039.17 BASE MATERIAL - +30 FILL SAND & 3/4" CL2 66622 11/12/2015 Powerstride Battery 132.46 BATTERIES 66623 11/12/2015 Praxair Distribution 153.45 TANK RENTAL - SPEC MD ALUM 66624 11/12/2015 Prudential Group Insurance 3,984.01 INSURANCE LIFE/ADD/LTD&STD 66626 11/12/2015 Quinn Power Systems Associates 65.31 SEAL O-RING 66636 11/12/2015 Rachel Padilla/Petty Cash 231.21 PETTY CASH - O092915 66627 11/12/2015 Raftelis Financial Consultants, Inc.3,276.54 SEPTEMBER 2015 - PROFESSIONAL SERVICE - FINAL 66548 11/12/2015 REBECCA AUGUSTIN 1.09 CUSTOMER REFUND 66628 11/12/2015 RKI Engineering, LLC 1,680.00 SCADA WORK - SEPTEMBER 2015 66629 11/12/2015 Robert Kiley 26.11 MILEAGE REIMBURSEMENT - KILEY, R 66553 11/12/2015 ROSHNI LAL 72.06 CUSTOMER REFUND 66565 11/12/2015 RUBY MC CAULEY 1.65 CUSTOMER REFUND 66552 11/12/2015 RYAN JAKOBSON 126.53 CUSTOMER REFUND 66630 11/12/2015 Safety-Kleen Systems Inc 65.00 USED OIL SERVICE 66631 11/12/2015 Sanders Paving, Inc.45,383.00 ASPHALT REPAIR & PAVING WORK 66556 11/12/2015 SANDRA FISCHER 40.31 CUSTOMER REFUND 66632 11/12/2015 Schorr Metals, Inc.38.71 SURPLUS STEEL 66633 11/12/2015 Solarwinds Inc.693.00 NETWORK CONFIG MANAGER 66634 11/12/2015 Solesbee Auto Crafts Inc.6,746.74 REPAIR DAMAGE TO VEHICLE #160 W110215 11/02/2015 Southern Calif Edison Co.8,053.03 ELECTRICITY - MULTIPLE LOCATIONS - OCTOBER 2015 66635 11/12/2015 Southern Calif Gas Co.7,970.17 HIGHLAND AVE - OCTOBER 2015 W111215 11/12/2015 Southern Calif Gas Co.5,953.39 GAS - MULTIPLE LOCATIONS - OCTOBER 2015 66638 11/12/2015 Stantec Consulting Services Inc.1,317.50 J2014-23 - PROFESSIONAL SERVICES 66637 11/12/2015 Staples Business Advantage 561.27 OFFICE SUPPLIES & TONER 66639 11/12/2015 Steve Conklin 123.50 PROFESSIONAL ENGINEERING RENEWAL LICENSE & MI REIMBURSEMENT 66640 11/12/2015 Sunrise Medical Group 1,406.34 FLU VACCINES - ONSITE - (42) 66641 11/12/2015 Switch Ltd 500.00 HALF CABINET - THERMAL CONFIG 66642 11/12/2015 SWRCB 7,837.16 LARGE WATER SYSTEM FEES- 7/14-6/15 66643 11/12/2015 Time Warner Cable 3,812.72 BASIC CABLE, ETHERNET INTERSTATE & DED INTERNET ACCESS 66644 11/12/2015 Townsend Public Affairs, Inc.5,000.00 CONSULTING SERVICES - NOV 2015 - LOBBYIST 66645 11/12/2015 United Industries 851.25 PPE EQUIPMENT 66566 11/12/2015 VIETTHANH CAO 1.65 CUSTOMER REFUND 66588 11/12/2015 White Nelson Diehl Evans LLP 5,000.00 4TH INTERIM BILLING & GASB 68 293,156.15 Date Vendor Name Amount Description 9/23/2015 Zena's Lebanese Cuisine 90.72 Meeting expense (5 people) 10/8/2015 Lind Electronics 141.97 Power adapter & mounting brackets 10/12/2015 Harbor Freight Tools 54.50 Air needle scaler - Valve truck 10/12/2015 Bell Pipe Supply 27.13 Hardware supplies 10/13/2015 Light Bulbs Etc.866.72 Light bulbs for district facilities 10/13/2015 Omni Western 50.06 Tools & equipment 10/13/2015 Fullerton Paint & Flooring 258.69 (4) cases of marking paint 10/13/2015 Village Nursery 51.35 SOD for repair work 10/13/2015 ISDOC 85.00 ISDOC Quarterly Luncheon - (5) 10/14/2015 CDW-G 147.42 Computer equipment - power adapter 10/14/2015 Software Supply Group 78.96 Computer equipment - wireless mouse 10/14/2015 PARMA 150.00 PARMA membership - 7/15-6/16 10/15/2015 Verizon Wireless 2,861.16 August 2015 - Wireless service 10/15/2015 Answer One Communication 431.85 Monthly billing - answering service 10/15/2015 Online Information Services 460.75 Collection Fees & Utility exchange report 10/15/2015 Placentia Disposal 506.08 (2) Front load - Richfield 10/19/2015 The Queen Mary Hotel 307.88 Travel Expense - PELRAC conference - Knight (2 NIGHTS) 10/19/2015 The Queen Mary Hotel 331.88 Travel Expense - PELRAC conference - Melton (2 NIGHTS) 10/19/2015 National Notary Association 92.57 Notary bond and stamps 10/20/2015 Home Depot 163.62 (1) Concrete pallet 10/20/2015 Automated Gate Services 379.96 Maintenance parts - Directional valves 10/20/2015 Inland Group 1,153.44 Trifold - Penalties assessments to customers 10/21/2015 National Seminar Training 249.00 Star12 Access Training membership 10/22/2015 Praxair 133.09 Welding Supplies 10/22/2015 Orchard Supply Hardware 43.19 Measuring wheel 10/22/2015 United Water Works 14,614.89 August & September 2015 Invoices 10/26/2015 Dan Copp Crushing 150.00 Dump fees 10/27/2015 United Water Works 14,370.32 September 2015 Invoices 38,252.20 Cal Card Credit Card U S Bank 9/23/15-10/27/15 ITEM NO. 7.4 AGENDA REPORT Meeting Date: November 12, 2015 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Richard Cabadas, Accounting Assistant I Subject:Directors and General Manager Fees and Expenses Report for First Quarter FY 2015/16 SUMMARY: Presented are the First Quarter Directors and General Manager Fees and Expenses Report for FY 2015/16. STAFF RECOMMENDATION: That the Board of Directors receive and file the Directors and General Manager Fees and Expenses Report for First Quarter FY 2015/16. ATTACHMENTS: Name:Description:Type: Travel___Expense_Report.xlsx Travel and Expense Report Backup Material BOD___GM_Qtr_Summary.xlsx FY 2015-16 First Qtr Summary Report Backup Material Approved by the Board of Directors of the Yorba Linda Water District 11/12/2015 MB/PH 4-0-0-1 GM was absent. DIRECTOR'S&GENERAL MANAGER'S RECAP OF TRAVEL/CONFERENCE EXPENSES FIRST QUARTER OF FY 2015-16 JULY-SEPTEMBER 2015 GL Trip Trip Trip Event/ Director Date Date Name Location Meals Lodging Travel Conf.Fee Misc. Total trip Total Beverage 7/30/15 7/1/15 OCSD-Operations meeting Fountain Valley,CA $ $ $ 18 $ $ - $ 18 $ $ 18 Collett 7/30/15 7/1/15 OCWD-Regular meeting Fountain Valley,CA $ $ $ 26 $ - $ 26 7/30/15 7/29/15 MWDOC Water Policy Forum Fountain Valley,CA $ $ $ 21 $ $ - $ 21 $ $ 47 Hawkins 7/30/15 7/10/15 WACO Fountain Valley,CA $ $ $ 32 $ $ - $ 32 7/30/15 7/29/15 MWDOC Water Policy Forum Fountain Valley,CA $ $ $ 19 $ $ - $ 19 $ $ 51 Kiley 7/1/15 7/1/15 ISDOC-Quarterly meeting Fountain Valley,CA $ $ $ - $ 17 $ - $ 17 7/30/15 7/15,17,29/15 OCWD,MWDOC&ISDOC Fountain Valley,CA $ $ $ 105 $ - $ - $ 105 7/30/15 8/11/15 ISDOC-Meeting Fountain Valley,CA $ $ $ - $ 13 $ - $ 13 7/30/15 12/1-4/15 ACWA Fall Conference Indian Wells,CA $ $ $ - $ 695 $ - $ 695 9/14/15 8/7/15 WACO Fountain Valley,CA $ $ $ 25 $ - $ - $ 25 9/14/15 8/19-21/15 CASA Conference San Diego,CA $ 78 $ 588 $ 131 $ 525 $ 112 $ 1,434 9/14/15 8/26-28/15 Urban Water Institute Conference San Diego,CA $ $ 224 $ 245 $ - $ 22 $ 491 9129/15 9/4&9/17/15 WACO&OCWD Fountain Valley,CA $ $ - $ 51 $ $ - $ 51 $ $ 2,831 Melton $ $ - $ - $ $ - $ Total Director's $ 78 $ 812 $ 672 $ 1,250 $ 134 $ 2,947 $ 2,947 General Manager Marcantonio 7/1/15 7/1/15 ISDOC-Quarterly meeting Fountain Valley,CA $ $ - $ - $ 17 $ - $ 17 7/30/15 7/1-30/15 Meetings at various locations. Multiple Locations $ $ $ 68 $ - $ - $ 68 7/30/15 8/19/15 OCWA-Meeting Irvine,CA $ $ $ $ 30 $ - $ 30 7130/15 8/26-28/15 Urban Water Institute Conference San Diego,CA $ $ $ $ 475 $ - $ 475 9/14/15 8/1-31/15 Meetings at various locations. Multiple Locations $ $ $ 103 $ - $ - $ 103 Total GM $ $ $ 172 $ 522 $ - $ 694 $ 694 Total Director's&GM $ 78 $ 812 $ 844 $ 1,772 $ 134 $ 3,640 $ 3,640 YORBA LINDA WATER DISTRICT DIRECTORS AND GENERAL MANAGER FEES AND EXPENSES 1ST QUARTER REPORT FROM 07-01-2015 TO 09-30-2015 FISCAL YEAR 2015-2016 BEVERAGE COLLETT HAWKINS KILEY MELTON SUB-TOTAL MARCANTONIO TOTAL REGULAR MEETINGS ATTENDED 6 5 6 6 5 28 COMMITTEE MEETINGS ATTENDED 3 8 0 1 3 15 OFF SITE MEETINGS ATTENDED 7 5 5 8 6 31 SPECIAL MEETINGS ATTENDED 4 4 4 4 3 19 OTHER MEETINGS ATTENDED 2 4 0 7 1 14 TOTAL MEETINGS ATTENDED QTD 22 26 15 26 18 107 107 DIRECTOR FEES QTD $3,300 $3,900 $2,250 $3,900 $2,700 $16,050 $16,050 MEETING FEES BUDGET QTD $4,500 $4,500 $4,500 $4,500 $4,500 $22,500 $22,500 TRAVEL&CONF.EXPENSES QTD $18 $47 $51 $2,831 $0 $2,947 $2,947 TRAVEL&CONF.BUDGET QTD $830 $830 $830 $830 $830 $4,150 $4,150 DIR.FEES AND EXPENSES QTD $3,318 $3,947 $2,301 $6,731 $2,700 $18,997 $18,997 FEES AND EXPENSES BUDGET QTD $5,330 $5,330 $5,330 $5,330 $5,330 $26,650 $26,650 GEN MGR EXPENSES QTD $694 $694 GEN MGR TRAVEL/CONF.BUDGET QTD $3,681 $3,681 TOTAL FEES&EXPENSES QTD $3,318 $3,947 $2,301 $6,731 $2,700 $18,997 $694 $19,691 TOTAL FEES&EXPENSES BUDGET QTD $5,330 $5,330 $5,330 $5,330 $5,330 $26,650 $3,681 $30,331 ITEM NO. 7.5 AGENDA REPORT Meeting Date: November 12, 2015 Budgeted:N/A To:Board of Directors Funding Source:N/A From:Marc Marcantonio, General Manager Presented By:Steve Conklin, Engineering Manager Dept:Engineering Reviewed by Legal:N/A Prepared By:Ricardo Hipolito Jr., Engineering Tech II CEQA Compliance:N/A Subject:Quitclaim Deed for 4372 Dorthea Street SUMMARY: The homeowner at 4372 Dorthea Street (Lot No. 26), Mrs. Nancy Davidson, requested the District to quitclaim an existing 15-foot wide easement along their southerly property line so they can utilize this portion of their property, as depicted on the attached exhibit. Staff investigated this request and recommends execution of the Quitclaim Deed, as attached. STAFF RECOMMENDATION: That the Board of Directors authorize the President and Secretary to execute a Quitclaim Deed to Mrs. Nancy Davidson for abandoning the southerly 100.00 feet of the 15-foot wide District easement originally recorded December 11, 1972, in Book 10464, Page 958 of Official Records of Orange County. DISCUSSION: On December 11, 1972, the District was granted a 15-foot wide easement along the southerly property lines of Lot(s) 1, 26, 24, 23, 22, and 21 of Tract No. 5077, located west of Ohio Street and north of Oriente Drive. The easement was granted by H.D.R. Homes Inc. for an existing 14-inch cast iron water main constructed in December 1925 and was abandoned in-place as part of J2010- 06, Ohio St. and Oriente Drive Pipeline Replacement Project. An exhibit depicting the location of the project with a detailed meets and bounds description are attached for your review. Staff reviewed the homeowner's request and determined that the existing 15-foot wide easement is not required and that the abandonment of this easement will not unduly hinder any future plans to construct a water main. PRIOR RELEVANT BOARD ACTION(S): The Board of Directors authorized execution of similar Quitclaim Deeds with various developers and property owners. ATTACHMENTS: Name:Description:Type: Quitclaim_Deed.pdf Quitclaim Deed for 4372 Dorthea Street Backup Material Exhibit_B.pdf Exhibit of Existing Easement to be Quitclaim for 4372 Dorthea Street Backup Material Approved by the Board of Directors of the Yorba Linda Water District 11/12/2015 MB/PH 4-0-0-1 GM was absent. RECORDING REQUESTED BY: Yorba Linda Water District WHEN RECORDED, MAIL TO: Nancy J. Davidson 4372 Dorthea Street Yorba Linda, CA 92886 THIS SPACE FOR RECORDER'S USE ONLY FREE GOVERNMENT RECORDING PURSUANT TO GOVERNMENT CODE SEC. 6103 AND 27383 QUITCLAIM DEED For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Yorba Linda Water District (“Transferor”) does remise, release, and forever quitclaim to NANCY J. DAVIDSON, all right, title, and interest Transferor has in the real property and appurtenances described and depicted in Exhibits A and B, respectively, attached hereto and incorporated herein by reference. Executed as of ________, ______ YORBA LINDA WATER DISTRICT By: __________________________________ Name: Marc Marcantonio Title: General Manager [MUST BE NOTARIZED] Exhibit"A" LEGAL DESCRIPTION: THE SOUTHERLY 15' OF LOT 26 OF TRACT NO. 5077 AS SHOWN ON MAP RECORDED IN BOOK 308 PAGES 49 AND 50 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY,CALIFORNIA. THE ABOVE DESCRIBED PARCEL OF LAND CONTAINS 1500 SQUARE FEET OR 0.034 ACRES,MORE OR LESS. AS SHOWN ON EXHIBIT `B"ATTACHED HERETO AND MADE A PART HEREOF. PREPARED UNDER THE SUPERVISION OF: l onklin, P.E. PROFESS/O R. cq/ ' w c/) rn No. 24633 * Exp. 12-31-15 CIV1\- 9TF OF- c A'6F � 1 N 89° N 89°39'23"W -- -- 3 '23"W 323.74'- - 104 ' 10 _ _ _ -- .97- / 4 5 6 7 8 9 I I TRACT NO. 5077 3 / co 1�I THEA 20 � 2 25 21 I \ I I N 89'39'23'W 100' 24 23 22 w 1 H 1b b) 26 0 EXISTING 15 WIDE g I W I�a o YLWD EASEMENT ° 0 i z z z N — — — — — -- - — n D ---- ----- � �� - -�- ----- -- ------ -- -- m I Q I N 89°39'23"W 728.73' Iw I rl 00 = II o F- I ' PORTION O EXISTING EASEMENT TO BE QUITCLAI ED I I I I PREPARED BY: SCALE: 1" = 80' YORBA LINDA WATER DISTRICT EXHIBIT "B" DATE: 11/12/2015 El 1717 E. MIRALOMA AVENUE PLACENTIA, CALIFORNIA 92870 FILENAME: (714) 701-3100 1 N 89° N 89°39'23"W -- -- 3 '23"W 323.74'- - 104 ' 10 _ _ _ -- .97- / 4 5 6 7 8 9 I I TRACT NO. 5077 3 / co 1�I THEA 20 � 2 25 21 I \ I I N 89'39'23'W 100' 24 23 22 w 1 H 1b b) 26 0 EXISTING 15 WIDE g I W I�a o YLWD EASEMENT ° 0 i z z z N — — — — — -- - — n D ---- ----- � �� - -�- ----- -- ------ -- -- m I Q I N 89°39'23"W 728.73' Iw I rl 00 = II o F- I ' PORTION O EXISTING EASEMENT TO BE QUITCLAI ED I I I I PREPARED BY: SCALE: 1" = 80' YORBA LINDA WATER DISTRICT EXHIBIT "B" DATE: 11/12/2015 El 1717 E. MIRALOMA AVENUE PLACENTIA, CALIFORNIA 92870 FILENAME: (714) 701-3100 ITEM NO. 8.1 AGENDA REPORT Meeting Date: November 12, 2015 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Delia Lugo, Finance Manager Subject:Audit Reports for Fiscal Year 2014/15 STAFF RECOMMENDATION: That the Board of Directors receive and file the FY 2014/15 Comprehensive Annual Financial Report, the Report on Internal Control, and the Communication to Those in Governance Letter. DISCUSSION: Staff is pleased to present the Board of Directors with Yorba Linda Water District's Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2015. 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, 2015, and have rendered an unqualified (clean) opinion in the attached CAFR. Mr. Nitin Patel, Partner of White Nelson Diehl Evans LLP, is here to present the CAFR for the fiscal year ended June 30, 2015, where he will discuss the effect on the District's financial position as a result of adopting the Governmental Accounting Standards Board's (GASB) Statement No. 68, "Accounting and Financial Reporting for Pensions" and Statement No. 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68". Mr. Patel is also here to discuss the internal control findings that rose to the level of significant deficiencies as identified in the attached Report on Internal Controls, which includes management's response to those comments. Lastly, Mr. Patel is here to report on the required disclosures in the Communication To Those In Governance. Staff will submit the CAFR for the Certificate in Achievement for Excellence in Financial Reporting award from the Government Finance Officers Association. Staff is expectant that this year's CAFR will merit the highest level of recognition, just as last years' CAFR did. 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_PDF_Final_2015_FS_CAFR.pdf YLWD FY 14.15 CAFR Backup Material YLWD_Final_GAS_Letter_FY_2014-15.pdf YLWD FY 14.15 GAS Backup Material YLWD_Final_2015_ACL_Concluding_Letter_10-YLWD FY 14.15 ACL Backup Material 2015.pdf Approved by the Board of Directors of the Yorba Linda Water District 11/12/2015 PH/RK 4-0-0-1 GM was absent. YORBA LINDA WATER DISTRICT of Yorba Linda, California Comprehensive Annual Financial Report WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS For the Fiscal Year Ending June 30, 2015 Prepared by: The Yorba Linda Water District Finance Department Delia Lugo,Finance Manager Kelly McCann, Senior Accountant Maria Trujillo, Accounting Assistant II Richard Cabadas, Accounting Assistant I and Cindy Botts, Management Analyst This page intentionally left blank YORBA LINDA WATER DISTRICT TABLE OF CONTENTS For the year ended June 30, 2015 Page Number INTRODUCTORY SECTION: Letter of Transmittal i Board of Directors and Executive Staff xi Organization Chart xii District Boundaries xiii Certificate of Achievement for Excellence in Financial Reporting xiv FINANCIAL SECTION: Independent Auditors’ Report 1 Management’s Discussion and Analysis (Required Supplementary Information) 5 Basic Financial Statements: 13 Statement of Net Position 14 Statement of Revenues, Expenses and Changes in Net Position 16 Statement of Cash Flows 17 Notes to Basic Financial Statements 19 Required Supplementary Information: 53 Schedule of Proportionate Share of the Net Pension Liability 54 Schedule of Contributions - Defined Benefit Pension Plans 55 Other Post-Employment Benefit Plan - Schedule of Funding Progress 56 Supplementary Information: 57 Combining Schedule of Net Position 58 Combining Schedule of Revenues, Expenses and Changes in Net Position 60 Combining Schedule of Cash Flows 61 Schedule of Operating Expenses by Cost Center and Nature of Expenses for Water and Sewer 63 Schedule of Capital Assets 64 YORBA LINDA WATER DISTRICT TABLE OF CONTENTS (CONTINUED) For the year ended June 30, 2015 Page Number STATISTICAL SECTION: 65 Description of Statistical Section 67 Financial Trends: Changes in Net Position 68 Revenue Capacity: Number of Connections 70 Ten Largest Customers 71 Debt Capacity: Ratio of Outstanding Debt 72 Debt Coverage 73 Demographic and Economic Information: Demographics 74 Ten Largest Employers 75 Operating Information: Number of Employees 76 Operating and Capacity Indicators 77 INTRODUCTORY SECTION This page intentionally left blank i October 29, 2015 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, 2015. This report was prepared pursuant to the guidelines set forth by the Governmental Accounting Standards Board (GASB). District staff prepared this financial report in conjunction with an unqualified opinion issued by the independent audit firm White, Nelson, Diehl, Evans LLP. The independent auditor’s report is located at the front of the financial section of this document. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. This report consists of management’s representations concerning the finances of Yorba Linda Water District. Consequently, management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, the District has established a comprehensive internal control framework that is designed both to protect the District’s assets from loss, theft or misuse, and to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal control should not outweigh 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, 2014. 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. ii 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 W ater 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 77 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 74,000 and currently provides water service through approximately 24,653 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 (MW D) through the Municipal Water District of Orange County (MW DOC) and the other half from groundwater wells within the area.In FY 2014/15 the District provided 19,786 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 CNN Money’s “Best Places to Live for 2012”, Yorba Linda was one of four Southern California cities listed. Similarly, the City of Yorba Linda’s median income is 48% greater than the overall median income for Orange County, as reported by 2010 Census data. Economic Condition and Outlook The District’s administrative offices are located in the City of Placentia in Orange County.The economic outlook for the area shows moderate growth, which is projected to continue with new commercial business and a steadily improving housing market. iii Over the FY 2011/12,FY 2012/13, and FY 2013/14 years, the District averaged annual sales of 21,228 acre-feet.Moving into the 4th consecutive year of drought conditions and due to the California Department of Water Resources snowmelt runoff report for 2014, Governor Brown announced a Drought State of Emergency for California. For FY 2014/15 the District provided 19,786 acre feet of water to its customers even with 5% voluntary conservation efforts from the District’s customer base being taken into consideration. As of May 2014, the District was granted annexation of the remaining 26% of its service area into Orange County Water District (OCWD). It is anticipated that with full annexation the District will be able to pump the maximum groundwater allowable each year, at a lower cost than purchasing the same amount of imported water from MW D. However, the District will not be able to take advantage of full annexation for FY 2015/16, as was in FY 2014/15,due to the 2003 Conjunctive Use Program (CUP) Agreement and due to the need to complete construction of capital facilities. The CUP Agreement requires the District to withdraw 1,595 acre-feet, for FY 2015/16,over and above OCWD’s Basin Production Percentage (BPP) for the upcoming fiscal year and pay for the water at current import water rates, after subtracting power and operations and the maintenance charges of $110 per acre-foot. Had the District been able to access the entirety of OCWD’s Basin Production Percentage (BPP) for the fiscal year 2014/15, the District would have been able to lower its variable water costs by approximately $1.0 million. As variable water costs comprise approximately 52% 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 the current emergency drought mandates from the State Water Resource Control Board, projected population increases,and environmental and regulatory restrictions that threaten the State’s water supply and conveyance system through the Sacramento-San Joaquin Delta—all of which lead to increasing supply costs. Within the District’s boundaries, population growth is expected to increase only minimally in the next 5-10 years, 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. iv 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 Ac complishments during FY 2014/15 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. Upon the completion of FY 2014/15 and as budgeted in future fiscal years, capital projects totaling $23.7 million are scheduled for completion over the next five fiscal years. v Fiscal year 2015/16 projects include the following: Well #21 Project Total Project Budget: $2,307,000 Proposed FY 15/16 Budget: $1,200,000 Work began in FY 12/13 on plans for the drilling of the new well. In FY13/14, a test well was drilled to confirm the quantity and quality of water for the well. Thereafter, the well was drilled out and completed with a steel casing and pump-tested. Design of the project was completed in FY 14/15. Total project costs through FY 14/15 are $1,100,000 and are estimated to be approximately $1,200,000 in FY 2015/16, respectively. Work planned for FY 15/16 includes construction of wellhead facilities and a discharge pipeline. Well #22 Project Total Project Budget: $2,500,000 Proposed FY 15/16 Budget: $211,000 Reconnaissance field investigation and site evaluations started in FY 13/14. In FY14/15, a site was identified on OCWD property for which conceptual approval was granted by the OCWD Board for a 50-year lease for a well site. In FY 15/16 it is expected that negotiations with OCWD for the well site lease agreement will be completed and the lease agreement approved by the OCWD and the YLW D boards. Planned for early 2016 is to retain an engineering consultant to prepare the environmental documents for the project and to prepare design specifications for the drilling of the well at a cost of $211,000. Budgeted for FY16/17 is the drilling of the well and the preparation of plans for well equipping at an estimated cost of $950,000. Budgeted for FY 17/18 and FY 18/19 is construction of wellhead facilities and a discharge pipeline at an estimated cost of $1,297,360. Richfield Road Pipeline Project Total Project Budget: $1,450,000 Proposed FY 15/16 Budget: $1,340,000 This project is the construction of new pipeline in Richfield Road sized to carry the discharge capacity of Wells #21 and #22, as described above, as well as a proposed future Well #23. The new pipeline will begin at the point where the lines from new wells 21 and 22 extend into south Richfield Avenue. The pipeline will be approximately 2,100 feet long and will connect to the District’s existing 36-inch pipeline that extends to Highland Reservoir. In FY 14/15, environmental documents were prepared and certified, and design plans were completed. Work planned for FY 15/16 and FY 16/17 is construction of the pipeline at an estimated cost of $1,375,000. vi Fairmont Pump Station Upgrade Project Total Project Budget: $6,300,000 Proposed FY 15/16 Budget: $1,000,000 The project is the refurbishment and upgrading of the Fairmont Booster Station. The existing 37-year old booster station will be demolished and its two booster pumps will be replaced by eight, pumping to three different pressure zones. A new building will be constructed to house the pumps, as well as disinfection, electrical and back-up generation facilities. The project will also include refurbishment of elements of the Fairmont Reservoir. In FY14/15 environmental documents were completed and certified and design plans were completed. Construction is estimated to begin in early 2016. Construction will continue in FY 16/17 and be completed in FY 17/18, with a total estimated construction cost of $5,600,000. Lakeview Grade Separation Project Total Project Budget: $662,000 Proposed FY 14/15 Budget: $260,000 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, the District’s water line in Lakeview Avenue through the project area had to be replaced. The District’s share of the pipeline replacement construction cost is $250,000. Construction of the pipeline was completed in FY 14/15, with minor work to be completed by OCTA in FY 15/16. 2015 Pipeline Replacement Project Total Project Budget: $1,240,000 Proposed FY 15/16 Budget: $760,000 In accordance with the District’s Asset Management Plan, the District is replacing older water pipelines as part of an ongoing program. Staff will design approximately 2,000 feet of the more critical pipeline replacement reaches during FY 15/16,with construction starting in late FY 15/16 and completion in FY16/17, at an estimated construction cost of $1,210,000. Additional waterline replacement work will be designed and installed during subsequent fiscal years Timber Ridge Booster Station Rehabilitation Total Project Budget: $250,000 Proposed FY 14/15 Budget: $240,000 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. vii PRS Rehabilitation Phase 2 Total Project Budget: $1,430,000 Proposed FY 15/16 Budget: $153,000 The District will solicit proposals for design engineering services for rehabilitation or replacement of the next group of existing Pressure Reducing Stations (PRS) that require frequent maintenance, and do not meet current District standards. Design work will be completed during FY 15/16 and construction is anticipated to be complete during FY 16/17 at a cost of $528,000. Phase 3 work will begin the following years. Other major accomplishments in fiscal year 2014/15 include the following: •Completed Construction of Yorba Linda Booster Pump Station •Completed Construction of Deville Drive Line Extension •Completed Construction of Yorba Linda High School Park Pipeline Relocation •Completed Construction of Lakeview Grade Separation Pipeline Replacement •Completed Design of Fairmont Boost Pump Station Replacement •Completed Design of Richfield Road Pipeline •Received Conceptual Approval form OCWD for W ell #22 Site •Received Positive Auditors Letter for FY 2013/14 •Received State and National Recognition for FY 2013/14 CAFR •Received State and National Recognition for FY 2014/15 Budget document •Received the District Transparency Certificate of Excellence from the Special District Leadership Foundation •Executed Multi-Year Memorandum of Understanding (MOU)With the YLW D Employee Association • Established Water Use Restrictions and Drought Penalties to Comply With State of California Mandate –YLW D Ordinance 15-01 Future Years Amidst the national economic conditions and the Governor’s state declaration of Drought Water Emergency, 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 mandated water conservation restrictions 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. In addition to the above, District staff, with the assistance of Raftelis Financial Consultants, Inc, developed a financial models for the water and sewer enterprises to ensure financial sufficiency that includes the establishment of adequate reserve balances, meets the operation and maintenance costs, and ensures sufficient funding for capital refurbishment and replacement needs. viii Water Rate & Increases In FY 2014/15, YLWD charged a uniform commodity rate of $2.70 per unit and a monthly fixed charge based on the size of the meter. Meters sized 5/8 and 3/4 inch were charged $10.06, 1 inch meters were charged $16.77, 1 ½ inch meters were charged $33.54, 2 inch meters were charged $53.66, 3 inch meters were charged $117.37, 4 inch meters were charged $211.26 and 6 inch meters were charged $469.47. One unit of water equals 748 gallons, equating one gallon of water to a cost of approximately $0.0035 (one third of a cent). At an average of 25 units of water per month (approximately 22,500 gallons),a typical 1 inch metered YLWD customer would pay about $84.27 on the average for their monthly water bill. YLW D also provided wastewater service to approximately 19,512 of the District’s water customer base in fiscal year 2014/15, at a charge of $5.50 per month for traditional single family residential customers, $3.85 per month for multi-family residential customers, and $5.50 plus a $0.46 per unit charge based on water consumption above 22 units for commercial customers. 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 London Inter-Bank Offered Rate (LIBOR), currently calculated at 1.10%. 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. In FY 2014/15, Yorba Linda Water District faced many challenges related to water supply and demand. The District’s water supply is currently derived from both groundwater (63%)and import water (47%). 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. ix Enhanced Outreach & Communications The District continues to enhance its communications presence within the community. Within the FY 2014/15 Budget, the District funded a Public Information Officer and one part-time Public Information Assistant 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. 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 District’s financial software. Internal Control Structure District management is responsible for the establishment and maintenance of the internal control structure that ensures the assets of the District are protected from loss, theft or misuse. The internal control structure also ensures adequate accounting data is compiled to allow for the preparation of financial statements in conformity with 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. 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. x Cash and Investment Management In order of priority, the District’s objectives when investing, reinve sting, 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 ge nerated from the remainder of the portfolio. 2.Liquidity:The investment portfolio is to remain sufficiently liquid to enable the District to meet all operating requirements that might be reasonably anticipated. 3.Return on Investments:The investment portfo lio is designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and the cash flow characteristics of the portfolio. Au dit 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 Di strict’s financial statements. Their unqualified (clean) Independent Auditor’s Report appears in the Financial Section. Other References More information is contained in the Management’s Discussion and Analysis and the Notes to the Basic Financial Statements found in the Financial Section of the report. Acknowledgements Preparation of this report was accomplished by the combined efforts of District staff. We appreciate the dedicated efforts and professionalism that these staff members contribute to the District. We would also like to thank the members of the Board of Directors for their continued support in planning and implementation of the Yorba Linda Water District’s fiscal policies. Respectfully submitted, __________________________ ________________________________ Marc Marcantonio Delia Lugo General Manager Finance Manager xi Yo rba Linda Water District Board of Directors and Executive Staff Ric Collett, President Michael Beverage, Vice President Robert R. Kiley Phil Hawkins Gary T. Melton Director Director Director Steven R. Conklin Marc Marcantonio John DeCriscio Engineering Manager General Manager Operations Manager Art Vega Gina Knight Damon Micalizzi Delia Lugo IT Manager HR & Risk Manager Public Affairs Manager Finance Manager xii Yorba Linda Water District Organization Chart xiii District Boundaries FINANCIAL SECTION This page intentionally left blank 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893 Offices located in Orange and San Diego Counties - 1 - INDEPENDENT AUDITORS’ REPORT Board of Directors Yorba Linda Water District Placentia, California Report on the Financial Statements We have audited the accompanying financial statements of Yorba Linda Water District (the District), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, 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. - 2 - Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Yorba Linda Water District, as of June 30, 2015, and the changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America, as well as the accounting systems prescribed by the State Controller’s Office and State regulations governing Special Districts. Emphasis of Matter As discussed in Notes 1e and 12 to the financial statements, the District adopted Governmental Accounting Standards Board’s Statement No. 68, “Accounting and Financial Reporting for Pensions” and Statement No. 71, “Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68”. The adoption of these standards required retrospective application resulting in a $6,420,251 reduction of previously reported net position. Our opinion is not modified with respect to this matter. Other Matters Report on Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, and other post-employment benefit plan - schedule of funding progress, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the 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 RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District’s basic financial statements. The introductory section, supplementary information consisting of 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. - 3 - Other Matters (Continued) Other Information (Continued) Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining schedules, 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 October 29, 2015 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. Irvine, California October 29, 2015 - 4 - This page intentionally left blank YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS For the Year Ended June 30, 2015 -5 - 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, 2015. 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 $7.2 million,or a 4.3%decrease in net position. During the year the District’s revenues were $32.1 million, down 5.7%. During the year, the District’s expenses were $33.6 million, down 4.5%. 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. YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -6 - 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 52 YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -7 - Statement of Net Position As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the District, assets and deferred outflows of resources of the District exceeded liabilities and deferred inflows of resources by $160.6 million and $167.8 million as of June 30, 2015 and 2014, respectively.The net change between these two reported fiscal years is primarily due the District recording of the net pension liability, deferred outflows of resources, and deferred inflows of resources related to the cost-sharing defined benefit pension plans as required by the adoption of the Governmental Accounting Standards Board’s (GASB) Statement No. 68 and Statement No. 71. By far the largest portion of the District’s net position (98%and 96% as of June 30, 2015 and 2014, 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 30,2015, the District showed a positive balance in its unrestricted net position of $3.5 million, which indicates that there are reserves to be utilized in future years, which is a significant decrease from the stated balance of $6.6 million for the year ended June 30,2014. YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -8 - Statement of Revenues, Expenses and Changes in Net Position YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -9 - 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 $7.2 million and increased by $6.1 million for the fiscal years ended June 30, 2015 and 2014, respectively. Of the $7.2 million decrease in net position,$733,953 is associated with an actual change in the net position within the fiscal year and $6,420,251 is due to the implementation of Governmental Accounting Standards Board’s (GASB) Statement 68 and 71 (refer to Note 12). A closer examination of the sources of changes in net position reveals that: In 2015, the District’s total revenues decreased by $1.9 million, primarily due to a decrease in water sales of $1.9 million as a result of conservation efforts by District customer base. Total expenses decreased by $1.6 million primarily due to decreased variable water costs of $1.9 million due to decreased water purchases. In 2014, the District’s total revenues increased by $3.1 million, primarily due to an increase in water sales of $2 million as a result of warmer patterns than that of the two previous years and an increase in non-operating other income of $736 thousand due to recorded gains for the sale of assets. In addition, total expenses increased by $1.3 million primarily due to increased variable water costs of $1.2 million due to increased water purchases and an overall increase of $115 thousand in the remaining operating expense categories. YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -10 - Capital Assets At the end of fiscal year 2015 and 2014, the District’s investment in capital assets amounted to $194.4 million and $199.5 million, respectively (net of accumulated depreciation). This investment in capital assets includes land, transmission and distribution systems, reservoirs, tanks, pumps, buildings and structures, equipment, vehicles and construction-in-process, etc. Major capital assets projects in fiscal year 2014-15 include Yorba Linda Boulevard Pump Station project, construction of various water and sewer mains for development, and the purchase of various district vehicles. Additional information regarding capital assets can be found in note 4 in Notes to Basic Financial Statements. YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -11 - Long-Term Liabilities Additional information regarding long-term liabilities can be found in note 5 in Notes to Basic Financial Statements. YORBA LINDA WATER DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) For the Year Ended June 30, 2015 -12 - Requests for Information This financial report is designed to provide the District’s funding sources, customers, stakeholders and other interested parties with an overview of the District’s financial operations and financial condition. Should the reader have questions regarding the information included in this report or wish to request additional financial information, please contact the District at 1717 E. Miraloma Avenue,Placentia, California 92807 or the Finance Department at (714) 701-3040. - 13 - BASIC FINANCIAL STATEMENTS CURRENT ASSETS: UNRESTRICTED ASSETS: Cash and cash equivalents (Note 2)24,026,870$ Investments (Note 2)7,283,882 Accounts receivable - water and sewer services 3,342,733 Accounts receivable - property taxes 16,168 Note receivable 72,634 Accrued interest receivable 36,563 Prepaid expenses and deposits 270,984 Inventory 262,162 TOTAL UNRESTRICTED ASSETS 35,311,996 RESTRICTED ASSETS: Cash and cash equivalents (Note 2)55,756 Investments (Note 2)2,121,768 TOTAL RESTRICTED ASSETS 2,177,524 TOTAL CURRENT ASSETS 37,489,520 NONCURRENT ASSETS: Capital assets (Note 4): Non-depreciable 3,533,928 Depreciable, net of accumulated depreciation 190,817,182 Note receivable 154,107 Other post-employment benefit (OPEB) asset (Note 6)142,700 TOTAL NONCURRENT ASSETS 194,647,917 TOTAL ASSETS 232,137,437 DEFERRED OUTFLOWS OF RESOURCES: Deferred amount from pension plans 587,176 Deferred loss on refunding 450,051 TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,037,227 See accompanying notes to basic financial statements.(Continued) - 14 - YORBA LINDA WATER DISTRICT STATEMENT OF NET POSITION June 30, 2015 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES CURRENT LIABILITIES: PAYABLE FROM UNRESTRICTED CURRENT ASSETS: Accounts payable 3,456,202$ Accrued expenses 280,197 Compensated absences payable - current portion (Note 5)301,149 Customer and construction deposits 417,992 Unearned revenue 342,064 Accrued interest payable 424,015 TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS 5,221,619 PAYABLE FROM RESTRICTED ASSETS: Certificates of Participation - current portion (Note 5)1,045,000 TOTAL PAYABLE FROM RESTRICTED ASSETS 1,045,000 TOTAL CURRENT LIABILITIES 6,266,619 LONG-TERM LIABILITIES (LESS CURRENT PORTION): Unearned annexation revenue 13,642,769 Compensated absences (Note 5)903,446 Payable on line of credit (Note 5)5,994,099 Certificates of Participation (Note 5)38,841,475 Net pension liability (Note 7)5,092,626 TOTAL LONG-TERM LIABILITIES (LESS CURRENT PORTION)64,474,415 TOTAL LIABILITIES 70,741,034 DEFERRED INFLOWS OF RESOURCES: Deferred amounts from pension plans 1,810,965 NET POSITION: Net investment in capital assets (Note 8)157,092,210 Unrestricted 3,530,455 TOTAL NET POSITION 160,622,665$ See accompanying notes to basic financial statements. - 15 - YORBA LINDA WATER DISTRICT STATEMENT OF NET POSITION (CONTINUED) June 30, 2015 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES OPERATING REVENUES: Water sales 26,446,618$ Sewer revenues 1,775,676 Other operating revenues 1,461,106 TOTAL OPERATING REVENUES 29,683,400 OPERATING EXPENSES: Variable water costs 12,733,762 Personnel services 7,778,763 Supplies and services 3,806,900 Depreciation 7,432,586 TOTAL OPERATING EXPENSES 31,752,011 OPERATING LOSS (2,068,611) NONOPERATING REVENUES (EXPENSES): Property taxes 1,496,489 Investment income 187,316 Interest expense (1,683,039) Other nonoperating revenues 744,572 Other nonoperating expenses (116,528) TOTAL NONOPERATING REVENUES (EXPENSES)628,810 NET LOSS BEFORE CAPITAL CONTRIBUTIONS (1,439,801) CAPITAL CONTRIBUTIONS 705,848 CHANGES IN NET POSITION (733,953) NET POSITION - BEGINNING OF YEAR, AS RESTATED (NOTE 12)161,356,618 NET POSITION - END OF YEAR 160,622,665$ See accompanying notes to basic financial statements. - 16 - YORBA LINDA WATER DISTRICT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For the year ended June 30, 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers 30,303,296$ Cash payments to employees for salaries and wages (7,712,084) Cash payments to suppliers of goods and services (17,815,294) Other revenues 250,274 Other expenses (91,640) NET CASH PROVIDED BY OPERATING ACTIVITIES 4,934,552 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Proceeds from line of credit 1,351,443 Proceeds from property taxes and assessments 1,504,786 NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 2,856,229 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from annexation fees and capital contributions 791,037 Acquisition and construction of capital assets (1,989,442) Proceeds from sales of capital assets 17,638 Principal paid on long-term liabilities (1,010,000) Interest paid on long-term liabilities (1,798,933) NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (3,989,700) CASH FLOWS FROM INVESTING ACTIVITIES: Sale/purchase of investments, net (125,820) Interest and investment earnings 181,119 NET CASH PROVIDED BY INVESTING ACTIVITIES 55,299 NET INCREASE IN CASH AND CASH EQUIVALENTS 3,856,380 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 20,226,246 CASH AND CASH EQUIVALENTS - END OF YEAR 24,082,626$ See accompanying notes to basic financial statements.(Continued) YORBA LINDA WATER DISTRICT STATEMENT OF CASH FLOWS For the year ended June 30, 2015 - 17 - RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating loss (2,068,611)$ Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation 7,432,586 Other revenues 250,274 Other expenses (91,640) Changes in operating assets and liabilities: (Increase) decrease in assets: Accounts receivable 633,922 Inventory (23,959) Prepaid expenses and deposits (3,723) Other post-employment benefits (OPEB) asset (3,757) Deferred outflows of resources from pension plans (49,067) Increase (decrease) in liabilities: Accounts payable and accrued expenses (1,369,234) Accrued salaries and wages 17,019 Accrued compensated absences 157,253 Customer and construction deposits 108,258 Net pension liability (1,865,734) Deferred inflows of resources from pension plans 1,810,965 Total adjustments 7,003,163 NET CASH PROVIDED BY OPERATING ACTIVITIES 4,934,552$ CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION: Unrestricted 24,026,870$ Restricted 55,756 TOTAL CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION 24,082,626$ NONCASH INVESTING, CAPITAL AND RELATED FINANCING ACTIVITIES: Amortization related to long-term debt 74,124$ Capital contributions 258,331$ Note receivable paid through capital contributions 245,116$ See accompanying notes to basic financial statements. - 18 - YORBA LINDA WATER DISTRICT STATEMENT OF CASH FLOWS (CONTINUED) For the year ended June 30, 2015 - 19 - NOTES TO BASIC FINANCIAL STATEMENTS - 20 - YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2015 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 73,990 residents and sewer service to approximately 72,498 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 Financing 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 Statement of Net Position, the Statement of Revenues, Expenses and Changes in Net Position, the Statement of Cash Flows and the notes to the basic financial statements. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 21 - 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, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or noncurrent) associated with these activities are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. e. New Accounting Pronouncements: GASB Current Year Standards: In fiscal year 2014-2015, the District implemented Governmental Accounting Standards Board (GASB) Statement No. 68, “Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27” and GASB Statement No. 71 - “Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68”. These Statements establish standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expenses. For defined benefit pension plans, these Statements identify the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 22 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): e. New Accounting Pronouncements (Continued): GASB Current Year Standards (Continued): Accounting changes adopted to conform to the provisions of these statements should be applied retroactively. The result of the implementation of these standards decreased the net position at July 1, 2014 by $6,420,251. GASB Statement No. 69 - “Government Combinations and Disposals of Government Operations” was required to be implemented in the current fiscal year and did not impact the District. GASB Pending Accounting Standards: GASB has issued the following statements which may impact the District’s financial reporting requirements in the future.  GASB 72 - “Fair Value Measurement and Application”, effective for periods beginning after June 15, 2015.  GASB 73 - “Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68”, effective for periods beginning after June 15, 2015 - except for those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement 68, which are effective for periods beginning after June 15, 2016.  GASB 74 - “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans”, effective for periods beginning after June 15, 2016.  GASB 75 - “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions”, effective for periods beginning after June 15, 2017.  GASB 76 - “The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments”, effective for periods beginning after June 15, 2015. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 23 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): f. Cash and Cash Equivalents: The District considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. g. Investments and Investment Policy: The District has adopted an investment policy directing the District’s General Manager or Finance Manager to invest, reinvest, sell or exchange securities. Investments are stated at fair value which 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. h. Accounts Receivable: The District extends credit to customers in the normal course of operations. Management has evaluated the accounts and believes they are all collectible. Management evaluates all accounts receivable and if it is determined that they are uncollectible they are written off as a bad debt expense. A charge of $14,026 was made to bad debt expense for the fiscal year ended June 30, 2015. i. 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. j. Inventory: Inventory consists primarily of materials and supplies used in the construction and maintenance of the water and sewer systems and are stated at cost using the average-cost method on a first in, first out basis. k. Capital Assets: Capital assets acquired and/or constructed are capitalized at historical cost. District policy has set the capitalization threshold for reporting capital assets at $5,000. 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. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 24 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): k. Capital Assets (Continued): Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets as follows: Source of Supply 30 to 75 years Pumping Plant 20 to 40 years Water Treatment Plant 12 to 40 years Sewer Plant 5 to 60 years Transmission and Distribution Plant 10 to 40 years General Plant 3 to 40 years l. Interest Expense: The District incurs interest charges on the Line of Credit and Certificates of Participation. Interest expense of $33,046 has been capitalized as an addition to the cost of construction for the year ended June 30, 2015. 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 future periods and so will not be recognized as an outflow of resources (expense) until that time. The District has two items that qualify for reporting in this category. The first item 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. The second item is the deferred outflow related to pensions. This amount is equal to employer contributions made after the measurement date of the net pension liability. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The District has two items that qualify for reporting in this category. The first item is a deferred inflow related to pensions resulting from the difference in projected and actual earnings on investments of the pension plan fiduciary net position. This amount is amortized over five years. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 25 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): m. Deferred Outflows/Inflows of Resources (Continued): The second item is a deferred inflow related to pensions for the changes in proportion and differences between employer contributions and the proportionate share of contributions. This amount is amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the Plans determined as of June 30, 2013 (the beginning of the measurement period ended June 30, 2014), which is 3.8 years. 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 California 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 CalPERS account. The District has accrued 100% of the unused sick leave as a liability as it expects most employees to meet the CalPERS 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. 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. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 26 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 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 40 years of the 1% 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 and is amortized on a straight-line basis over 40 years. This unearned revenue source may be used for capital facilities in the future if approved by the Board. 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”. 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. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 27 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 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. Property taxes receivable at year-end are related to property taxes collected by the Orange County Tax Collector which have not been credited to the District’s cash balance as of June 30. The property tax calendar is as follows: Lien Date: January 1 Levy Date: July 1 Due Dates: First Installment - November 1 Second Installment - March 1 Collection Dates: First Installment - December 10 Second Installment - April 10 w. Water and Sewer Sales: The District recognizes water and sewer service charges based on cycle billings rendered to the customers each month. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 28 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 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. Pensions: For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. z. Budgetary Policies: The District adopts annual nonappropriated budget for planning, control and evaluation purposes. Budgetary control and evaluation are affected by comparisons of actual revenues and expenses with planned revenues and expenses for the period. Encumbrance accounting is not used to account for commitments related to unperformed contracts for construction and services. aa. Use of Estimates: The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on management’s best estimates and judgments. Accordingly, actual results could differ from the estimates. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 29 - 2. CASH AND INVESTMENTS: Cash and Investments: Cash and investments as of June 30, 2015 are reported in the accompanying statement of net position as follows: Unrestricted Current Assets: Cash and cash equivalents $ 24,026,870 Investments 7,283,882 Restricted Assets: Cash and cash equivalents 55,756 Investments 2,121,768 Total Cash and Investments $ 33,488,276 Cash and investments as of June 30, 2015 consisted of the following: Cash on hand $ 1,250 Deposits with financial institutions 1,060,724 Investments 32,426,302 Total Cash and Investments $ 33,488,276 YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 30 - 2. CASH AND INVESTMENTS (Continued): Investments Authorized by the California Government Code and the District’s Investment Policy: The table below identifies the investment types that are authorized for the District by the California Government Code (or the District’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the District’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the District, rather than the general provisions of the California Government Code or the District’s investment policy. Maximum Maximum Percentage Investment Minimum Maximum of in One Credit Authorized Investment Type Maturity Portfolio * Issuer Rating Bank or Savings and Loans 5 years None None FDIC or FSLIC Negotiable Certificates of Deposit 5 years 30% None A and FDIC/ collateralized Local Agency Investment Fund (LAIF) N/A None None N/A Orange County Commingled Investment Pool N/A None None N/A California Asset Management Program N/A (1) None N/A United States Treasury Bills, Notes and Bonds 5 years None None N/A United States Government Sponsored Agency Securities 5 years None None N/A Corporate Bonds 5 years 30% None A Bankers Acceptances 180 days 10% 5% A-1 Commercial Paper 270 days 25% 5% A-1 CalTRUST Investment Pool N/A None None N/A Money Market Funds N/A 20% 10% N/A * 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 YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 31 - 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. 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. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 32 - 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, 2015. Remaining Maturity (in Months) 12 Months 13 to 24 25 to 36 37 to 48 48 to 60 Investment Type or Less Months Months Months Months Totals CalTRUST Investment Pool $ 13,855,071 $ - $ - $ - $ - $13,855,071 LAIF 9,165,581 - - - - 9,165,581 United States Government Sponsored Agency Securities - - 2,491,785 - - 2,491,785 Negotiable Certificates of Deposit 249,829 499,418 4,042,850 - - 4,792,097 Held by bond trustee: United States Government Sponsored Agency Securities - 2,121,768 - - - 2,121,768 $ 23,270,481 $ 2,621,186 $ 6,534,635 $ - $ - $32,426,302 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, 2015 for each investment type. Minimum Legal Not Investment Type Rating Total Rated AA+ CalTRUST Investment Pool N/A $13,855,071 $13,851,694 $ 3,377 LAIF N/A 9,165,581 9,165,581 - United States Government Sponsored Agency Securities N/A 2,491,785 - 2,491,785 Negotiable Certificates of Deposit N/A 4,792,097 4,792,097 - Held by bond trustee: United States Government Sponsored Agency Securities N/A 2,121,768 - 2,121,768 $32,426,302 $27,809,372 $ 4,616,930 YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 33 - 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 CalTRUST Investment Pool). The California Government Code and the District’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure District deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2015, 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. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 34 - 2. CASH AND INVESTMENTS (CONTINUED): Investment in CalTRUST Investment Pool: CalTRUST is a Joint Powers Agency Authority created by local public agencies to provide a convenient method for local public agencies to pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises the activities of the investment manager and other agents. CalTRUST maintains and administers four pooled accounts within the program: Money Market, Short-Term, Medium-Term and Long-Term. The Money Market account permits daily transactions, with same-day liquidity (provided redemption requests are received by 1:00 p.m. Pacific time), with no limit on the amount of funds that may be invested. The Short-Term account permits an unlimited number of transactions per month (with prior day notice), with no limit on the amount of funds that may be invested. The Medium- and Long-Term accounts permit investments, withdrawals and transfers once per month, with five days advance notice. All CalTRUST accounts comply with the limits and restrictions placed on local agency investments by the California Government Code. CalTRUST imposes a $250,000 minimum investment; however, there is no maximum limit. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s percentage interest of the fair value provided by CalTRUST for the CalTRUST accounts (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by CalTRUST. 3. RESTRICTED ASSETS: Restricted assets were provided by, and are to be used for the following as of June 30, 2015: Source Use Amount Bond proceeds Repayment of debt $ 2,177,524 YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 35 - 4. CAPITAL ASSETS: Changes in capital assets for the year ended June 30, 2015 is as follows: Balance Balance June 30, 2014 Additions Deletions June 30, 2015 Capital assets, not being depreciated: Land, mineral and water rights $ 287,419 $ - $ - $ 287,419 Construction in progress 6,609,895 1,892,905 (5,256,291) 3,246,509 Total capital assets, not being depreciated 6,897,314 1,892,905 (5,256,291) 3,533,928 Capital assets, being depreciated: Source of supply 6,096,155 - - 6,096,155 Pumping plant 24,312,697 1,291,534 - 25,604,231 Water treatment plant 3,130,572 - - 3,130,572 Transmission and distribution plant 213,847,580 3,871,489 - 217,719,069 General plant 20,459,792 481,182 (113,540) 20,827,434 Total capital assets, being depreciated 267,846,796 5,644,205 (113,540) 273,377,461 Less accumulated depreciation for: Source of supply (2,146,918) (168,655) - (2,315,573) Pumping plant (6,640,072) (915,771) - (7,555,843) Water treatment plant (1,356,254) (197,191) - (1,553,445) Transmission and distribution plant (56,992,184) (4,976,501) - (61,968,685) General plant (8,105,805) (1,174,468) 113,540 (9,166,733) Total accumulated depreciation (75,241,233) (7,432,586) 113,540 (82,560,279) Total capital assets, being depreciated, net 192,605,563 (1,788,381) - 190,817,182 Total capital assets, net $ 199,502,877 $ 104,524 $ (5,256,291) $ 194,351,110 Depreciation expense for the depreciable capital assets was $7,432,586 in 2015. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 36 - 5. LONG-TERM LIABILITIES: Changes in long-term liabilities for the year ended June 30, 2015 were as follows: Balance Balance Due Within June 30, 2014 Additions Reductions June 30, 2015 One Year Certificates of Participation: 2008 Revenue Certificates of Participation $ 31,365,000 $ - $ (735,000) $ 30,630,000 $ 765,000 2012A Refunding Certificates of Participation 8,070,000 - (275,000) 7,795,000 280,000 Subtotal 39,435,000 - (1,010,000) 38,425,000 1,045,000 Add (Less): 2008 Premium 625,275 - (26,420) 598,855 - 2012A Premium 910,324 - (47,704) 862,620 - Total Certificates of Participation 40,970,599 - (1,084,124) 39,886,475 1,045,000 Line of credit 4,642,656 1,351,443 - 5,994,099 - Compensated absences 1,047,342 735,888 (578,635) 1,204,595 301,149 Total $ 46,660,597 $ 2,087,331 $ (1,662,759) $ 47,085,169 $ 1,346,149 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, 2015 the reserve fund had a balance of $2,153,538. At June 30, 2015 the 2008 Certificates outstanding balance was $30,630,000. 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 2015, the net revenues equal to 233% of the debt service. The Certificates of Participation are subject to federal arbitrage regulations. The District calculated no arbitrage rebate due as of March 2013. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 37 - 5. LONG-TERM LIABILITIES (CONTINUED): 2008 Revenue Certificates of Participation (Continued): The annual debt service requirements for the 2008 Revenue Certificates of Participation outstanding at June 30, 2015 are as follows: Year Ending Principal Interest Total 2016 $ 765,000 $ 1,364,596 $ 2,129,596 2017 795,000 1,333,396 2,128,396 2018 825,000 1,300,996 2,125,996 2019 860,000 1,267,296 2,127,296 2020 895,000 1,232,196 2,127,196 2021 - 2025 5,040,000 5,582,601 10,622,601 2026 - 2030 6,170,000 4,413,004 10,583,004 2031 - 2035 7,675,000 2,861,764 10,536,764 2036 - 2039 7,605,000 783,375 8,388,375 Subtotal $ 30,630,000 $ 20,139,224 $ 50,769,224 2012A 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. There is no reserve requirement for the 2012A Certificates of Participation. 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 2015, the net revenues equal to 233% of the debt service. The Certificates of Participation are subject to federal arbitrage regulations. The District has no arbitrage calculation due until September 2017. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 38 - 5. LONG-TERM LIABILITIES (CONTINUED): 2012A Refunding Certificates of Participation (Continued): The annual debt service requirements for the 2012A Revenue Refunding Certificates of Participation outstanding at June 30, 2015 are as follows: Year Ending Principal Interest Total 2016 $ 280,000 $ 311,962 $ 591,962 2017 285,000 303,487 588,487 2018 295,000 293,312 588,312 2019 310,000 281,212 591,212 2020 315,000 268,712 583,712 2021 - 2025 1,810,000 1,119,216 2,929,216 2026 - 2030 2,300,000 619,965 2,919,965 2031 - 2033 2,200,000 143,083 2,343,083 Subtotal $ 7,795,000 $ 3,340,949 $ 11,135,949 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, 2016, 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, 2015, the District has drawn down $5,994,099 of the available line and has incurred $60,538 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 2015, the net revenues equal to 236% 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 1n). YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 39 - 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. 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, 2015, the District made a contribution of $192,919 to the OPEB trust. c. Annual OPEB Cost and Net OPEB 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 $ 187,756 Interest on net OPEB asset (10,073) Adjustment to annual required contribution 11,479 Annual OPEB cost (expense) 189,162 Actual contributions made (192,919) Increase in net OPEB asset (3,757) Net OPEB asset - beginning of year (138,943) Net OPEB asset - end of year $ (142,700) YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 40 - 6. OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED): c. Annual OPEB Cost and Net OPEB Asset (Continued): The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for the years ended June 30, 2015, 2014 and 2013 were as follows: Percentage Fiscal Annual of Annual Net Year OPEB OPEB Costs OPEB Ended Cost Contributed Asset 6/30/13 $ 170,501 163.87% $ (140,364) 6/30/14 189,177 99.25% (138,943) 6/30/15 189,162 101.99% (142,700) d. Funded Status and Funding Progress: As of July 1, 2013, the most recent actuarial valuation date, the plan was 28.36 percent funded. The actuarial accrued liability for benefits was $1,896,791, and the actuarial value of assets was $537,913, resulting in an unfunded actuarial accrued liability (UAAL) of $1,358,878. Assets were valued using a five year smoothing formula with a 20% corridor around market value. The covered payroll (annual payroll of active employees covered by the plan) was $5,200,000 and the ratio of the UAAL to the covered payroll was 26.13%. 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. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 41 - 6. OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED): 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 July 1, 2013 actuarial valuation, the entry age normal cost method was used. The actuarial assumptions included an inflation rate of 2.75% per annum, an investment return of 7.25% per annum, a projected salary increase of 2.75% 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. 7. PENSION PLANS: a. General Information about the Pension Plans: Plan Descriptions: All qualified permanent and probationary employees are eligible to participate in the District’s 2.0% at 55 (Tier I), 2.0% at 60 (Tier II), and 2.0% at 62 (Tier III PEPRA) Miscellaneous Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and District resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Benefits Provided: CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age fifty (50) with statutorily reduced benefits. All members are eligible for non-industrial disability benefits after five (5) years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 42 - 7. PENSION PLANS (CONTINUED): a. General Information about the Pension Plans (Continued): Benefits Provided (Continued): The Plans’ provisions and benefits in effect at June 30, 2015, are summarized as follows: Tier I Tier IITier III - PEPRA Prior toOn or After On or After Hire dateDecember 22, 2011December 22, 2011January 1, 2013 Benefit formula2%@552%@602%@62 Benefit vesting schedule5 years of service5 years of service5 years of service Benefit paymentsmonthly for lifemonthly for lifemonthly for life Retirement age50 - 6350 - 6352 - 67 Monthly benefits, as a % of eligible compensation1.426% to 2.418%1.092% to 2.418%1.0% to 2.5% Required employee contribution rates7%7%6.25% Required employer contribution rates10.781%8.486%6.25% Miscellaneous Contributions: Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2015, the contributions recognized as part of pension expense for all Plans were as follows: Miscellaneous Contributions - employers673,736$ Contributions - employee (paid by employer)-$ YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 43 - 7. PENSION PLANS (CONTINUED): b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions: As of June 30, 2015, the District reported net pension liabilities for its proportionate shares of the net pension liability of all Plans as follows: Proportionate Share of Net Pension Liability Miscellaneous5,092,626$ The District’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2014, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2013 rolled forward to June 30, 2014 using standard update procedures. The District’s proportionate share of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The District’s proportionate share of the net pension liability for all Plans as of June 30, 2013 and 2014 was as follows: Miscellaneous Proportion - June 30, 20130.21237% Proportion - June 30, 20140.20606% Change - Increase (Decrease)-0.00631% YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 44 - 7. PENSION PLANS (CONTINUED): b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): For the year ended June 30, 2015, the District recognized pension expense of $519,031. At June 30, 2015, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred OutflowsInflows of Resourcesof Resources Pension contributions subsequent to measurement date587,176$ -$ Differences between actual and expected experience- - Change in assumptions- - Change in employer's proportion and differences between the employer's contributions and the employer's proportionate share of contributions- (99,607) Net differences between projected and actual earnings on plan investments- (1,711,358) Total587,176$ (1,810,965)$ $587,176 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ending June 30, Amount 2016(463,413)$ 2017(463,413) 2018(456,301) 2019(427,838) 2020- Thereafter - YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 45 - 7. PENSION PLANS (CONTINUED): b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): Actuarial Assumptions: The total pension liabilities in the June 30, 2013 actuarial valuations were determined using the following actuarial assumptions: Miscellaneous Valuation DateJune 30, 2013 Measurement DateJune 30, 2014 Actuarial Cost MethodEntry-Age Normal Cost Method Actuarial Assumptions: Discount Rate7.50% Inflation2.75% Payroll Growth3.00% Projected Salary Increase3.3% - 14.2% (1) Investment Rate of Return7.5% (2) Mortality(3) (1)Depending on age, service and type of employment (2)Net of pension plan investment expenses, including inflation (3)TheprobabilitiesofmortalityarederivedusingCalPERS'membershipdataforallfunds. ThemortalitytableusedwasdevelopedbasedonCalPERS'specificdata.Thetable includes20yearsofmortalityimprovementsusingSocietyofActuariesScaleBB.For more details on this table, please refer to the 2014 experience study report. Discount Rate: The discount rate used to measure the total pension liability was 7.50% for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing’, none of the tested plans run out of assets. Therefore, the current 7.50 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.50 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 46 - 7. PENSION PLANS (CONTINUED): b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): Discount Rate (Continued): According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. The 7.50 percent investment return assumption used in this accounting valuation is net of administrative expenses. Administrative expenses are assumed to be 15 basis points. An investment return excluding administrative expenses would have been 7.65 percent. Using this lower discount rate has resulted in a slightly higher Total Pension Liability and Net Pension Liability. CalPERS checked the materiality threshold for the difference in calculation and did not find it to be a material difference. CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management (ALM) review cycle that is scheduled to be completed in February 2018. Any changes to the discount rate will require Board action and proper stakeholder outreach. For these reasons, CalPERS expects to continue using a discount rate net of administrative expenses for GASB 67 and 68 calculations through at least the 2017-18 fiscal year. CalPERS will continue to check the materiality of the difference in calculation until such time as a change in the methodology occurs. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 47 - 7. PENSION PLANS (CONTINUED): b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): Discount Rate (Continued): The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses. NewReal ReturnReal Return StrategicYearsYears Allocation1 - 10 (a)11+ (b) Global Equity47.00%5.25%5.71% Global Fixed Income19.00%0.99%2.43% Inflation Sensitive6.00%0.45%3.36% Private Equity12.00%6.83%6.95% Real Estate11.00%4.50%5.13% Infrastructure and Forestland3.00%4.50%5.09% Liquidity2.00%-0.55%-1.05% Total100.00% (a)An expected inflation of 2.5% used for this period (b)An expected inflation of 3.0% used for this period Asset Class YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 48 - 7. PENSION PLANS (CONTINUED): b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued): Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate: The following presents the District’s proportionate share of the net pension liability for all Plans, calculated using the discount rate for each Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: Miscellaneous 1% Decrease6.50% Net Pension Liability9,073,486$ Current Discount Rate7.50% Net Pension Liability5,092,626$ 1% Increase8.50% Net Pension Liability1,788,891$ Pension Plan Fiduciary Net Position: Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. c. Payable to the Pension Plan: At June 30, 2015, the District had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2015. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 49 - 8. NET INVESTMENT IN CAPITAL ASSETS: The balance of net investment in capital assets consisted of the following as of June 30, 2015: Capital assets, net of accumulated depreciation $ 194,351,110 Certificates of participation - current (1,045,000) Certificates of participation - long-term (38,841,475) Unspent debt proceeds 2,177,524 Deferred amount on refunding 450,051 Net investment in capital assets $ 157,092,210 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, 2015, 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 $150 million limited to insurable value, subject to a $1,000 deductible, except for a $500 deductible on vehicles. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 50 - 9. RISK MANAGEMENT (CONTINUED):  Boiler and machinery coverage for the replacement cost up to $150 million per occurrence limited to insurable value, 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 2015, 2014, and 2013. 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 claims payable as of June 30, 2015, 2014 and 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, 2015 was $226,741 plus interest receivable of $18,375. The current portion of the note receivable and interest receivable as of June 30, 2015 is $72,634 and $9,070, respectively. As of June 30, 2015 the District reservoir improvements have been completed. The District has completed its obligation in its entirety and has earned the rights to the entire amount. Therefore, the outstanding balance is recorded in the District’s books as a note receivable. YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 - 51 - 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 $418,479 of open construction contracts as of June 30, 2015. Construction contracts include: Total Construction Balance Approved Costs to Project Name Contract to Date Complete Well No. 21 $ 147,258 $ 113,726 $ 33,532 Lakeview Grade Separation 250,000 - 250,000 YLWD-Fairmont/Zone 5 BPS Project 657,588 557,440 100,148 Richfield Road Pipeline 87,966 53,167 34,799 $ 1,142,812 $ 724,333 $ 418,479 Litigation: The District is a defendant in certain legal actions arising in the normal course of operations. In the opinion of management and legal counsel, any liability resulting from these actions will not result in a material adverse effect on the District’s financial statements. 12. RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS: The implementation of GASB Statement Numbers 68 and 71 requires reporting the net pension liability of the District’s defined benefit pension plans in the financial statements and is applied retroactively by restating the net position as of the beginning of the fiscal year. The implementation of GASB Numbers 68 and 71 resulted in a reduction of net position by $6,420,251 as of July 1, 2014. 13. SUBSEQUENT EVENTS: In preparing these financial statements, the District has evaluated events and transactions for potential recognition or disclosure through October 29, 2015, the date the financial statements were available to be issued. - 52 - This page intentionally left blank - 53 - REQUIRED SUPPLEMENTARY INFORMATION 2015 Plan's proportion of the net pension liability 0.08184% Plan's proportionate share of the net pension liability 5,092,626$ Plan's covered - employee payroll 5,054,265$ Plan's proportionate share of the net pension liability as a percentage of its covered - employee payroll 100.76% Plan's proportionate share of the fiduciary net position as a percentage of the Plan's total pension liability 83.03% Plan's proportionate share of aggregate employer contributions 673,737$ Notes to Schedule: Benefit Changes: Changes in Assumptions: * - Fiscal year 2015 was the 1st year of implementation, therefore only one year is shown. YORBA LINDA WATER DISTRICT SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Last Ten Fiscal Years* There were no changes in benefits. There were no changes in assumptions. - 54 - 2015 Contractually required contribution (actuarially determined)587,176$ Contributions in relation to the actuarially determined contributions (587,176) Contribution deficiency (excess)-$ Covered - employee payroll 5,564,327$ Contributions as a percentage of covered - employee payroll -10.55% Notes to Schedule: Valuation Date 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates: Cost-sharing employers Entry age Amortization method Level percentage of payroll, closed Remaining amortization period Asset valuation method Market Inflation 3.50% Salary increases 3.30% to 14.20% depending on age, service, and type of employment Investment rate of return 7.50%, net of pension plan investment expense, including inflation Retirement age 50 years (2%@55 and 2%@60), 52 years (2%@62) Mortality * - Fiscal year 2015 was the 1st year of implementation, therefore only one year is shown. YORBA LINDA WATER DISTRICT SCHEDULE OF CONTRIBUTIONS Last Ten Fiscal Years* - 55 - Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board,first used in the June 30,2009 valuation.For purposes of the post-retirement mortality rates,those revised rates include 5 years of projected on-going mortality improvement using Scale AA published by the Society of Actuaries until June 30,2010.There is no margin for future mortality improvement beyond the valuation date. 30 year fixed with 5 year ramp up at beginning and 5 year ramp down at the end of the amortization period.Changes in liability for plan amendments,changes in actuarial methodology and assumptions are amortized over a 20 year period. Retiree Health Plan Unfunded 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) 03/01/2011 1,594,667$ -$ 1,594,667$ 0.00%5,044,860$ 31.61% 06/30/2011 1,597,488$ 164,291$ 1,433,197$ 10.28%4,773,686$ 30.02% 07/01/2013 1,896,791$ 537,913$ 1,358,878$ 28.36%5,200,000$ 26.13% - 56 - For the year ended June 30, 2015 YORBA LINDA WATER DISTRICT REQUIRED SUPPLEMENTARY INFORMATION OTHER POST-EMPLOYMENT BENEFIT PLAN SCHEDULE OF FUNDING PROGRESS - 57 - SUPPLEMENTARY INFORMATION Water Sewer Totals CURRENT ASSETS: UNRESTRICTED ASSETS: Cash and cash equivalents 20,268,232$ 3,758,638$ 24,026,870$ Investments 7,085,194 198,688 7,283,882 Accounts receivable - water and sewer services 3,171,976 170,757 3,342,733 Accounts receivable - property taxes 14,540 1,628 16,168 Note receivable 72,634 - 72,634 Accrued interest receivable 34,160 2,403 36,563 Prepaid expenses and deposits 270,984 - 270,984 Inventory 262,162 - 262,162 TOTAL UNRESTRICTED ASSETS 31,179,882 4,132,114 35,311,996 RESTRICTED ASSETS: Cash and cash equivalents 55,756 - 55,756 Investments 2,121,768 - 2,121,768 TOTAL RESTRICTED ASSETS 2,177,524 - 2,177,524 TOTAL CURRENT ASSETS 33,357,406 4,132,114 37,489,520 NONCURRENT ASSETS: Capital assets: Non-depreciable 3,272,009 261,919 3,533,928 Depreciable, net of accumulated depreciation 152,637,495 38,179,687 190,817,182 Note receivable 154,107 - 154,107 Other post-employment benefit (OPEB) asset 132,711 9,989 142,700 TOTAL NONCURRENT ASSETS 156,196,322 38,451,595 194,647,917 TOTAL ASSETS 189,553,728 42,583,709 232,137,437 DEFERRED OUTFLOWS OF RESOURCES: Deferred amount from pension plans 519,786 67,390 587,176 Deferred loss on refunding 450,051 - 450,051 TOTAL DEFERRED OUTFLOWS OF RESOURCES 969,837 67,390 1,037,227 ASSETS AND DEFERRED OUTFLOWS - 58 - YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF NET POSITION June 30, 2015 OF RESOURCES Water Sewer Totals CURRENT LIABILITIES: PAYABLE FROM UNRESTRICTED CURRENT ASSETS: Accounts payable 3,422,231$ 33,971$ 3,456,202$ Accrued expenses 280,197 - 280,197 Compensated absences payable - current portion 301,149 - 301,149 Customer and construction deposits 376,060 41,932 417,992 Unearned revenue 342,064 - 342,064 Accrued interest payable 424,015 - 424,015 TOTAL PAYABLE FROM UNRESTRICTED CURRENT ASSETS 5,145,716 75,903 5,221,619 PAYABLE FROM RESTRICTED ASSETS: Certificates of Participation - current portion 1,045,000 - 1,045,000 TOTAL PAYABLE FROM RESTRICTED ASSETS 1,045,000 - 1,045,000 TOTAL CURRENT LIABILITIES 6,190,716 75,903 6,266,619 LONG-TERM LIABILITIES (LESS CURRENT PORTION): Unearned annexation revenue 13,642,769 - 13,642,769 Compensated absences 903,446 - 903,446 Payable on line of credit 5,994,099 - 5,994,099 Certificates of Participation 38,841,475 - 38,841,475 Net pension liability 4,508,143 584,483 5,092,626 TOTAL LONG-TERM LIABILITIES (LESS CURRENT PORTION)63,889,932 584,483 64,474,415 TOTAL LIABILITIES 70,080,648 660,386 70,741,034 DEFERRED INFLOWS OF RESOURCES: Deferred amounts from pension plans 1,603,120 207,845 1,810,965 NET POSITION: Net investment in capital assets 118,650,604 38,441,606 157,092,210 Unrestricted 189,193 3,341,262 3,530,455 TOTAL NET POSITION 118,839,797$ 41,782,868$ 160,622,665$ June 30, 2015 - 59 - LIABILITIES AND DEFERRED YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF NET POSITION (CONTINUED) INFLOWS OF RESOURCES Water Sewer Totals OPERATING REVENUES: Water sales 26,446,618$ -$ 26,446,618$ Sewer revenues - 1,775,676 1,775,676 Other operating revenues 1,312,235 148,871 1,461,106 TOTAL OPERATING REVENUES 27,758,853 1,924,547 29,683,400 OPERATING EXPENSES: Variable water costs 12,733,762 - 12,733,762 Personnel services 6,885,991 892,772 7,778,763 Supplies and services 3,482,354 324,546 3,806,900 Depreciation 6,088,966 1,343,620 7,432,586 TOTAL OPERATING EXPENSES 29,191,073 2,560,938 31,752,011 OPERATING LOSS (1,432,220) (636,391) (2,068,611) NONOPERATING REVENUES (EXPENSES): Property taxes 1,496,489 - 1,496,489 Investment income 168,872 18,444 187,316 Interest expense (1,683,039) - (1,683,039) Other nonoperating revenues 715,022 29,550 744,572 Other nonoperating expenses (116,528) - (116,528) TOTAL NONOPERATING REVENUES (EXPENSES)580,816 47,994 628,810 NET LOSS BEFORE CAPITAL CONTRIBUTIONS (851,404) (588,397) (1,439,801) CAPITAL CONTRIBUTIONS 547,855 157,993 705,848 CHANGES IN NET POSITION (303,549) (430,404) (733,953) NET POSITION - BEGINNING OF YEAR, AS RESTATED 119,143,346 42,213,272 161,356,618 NET POSITION - END OF YEAR 118,839,797$ 41,782,868$ 160,622,665$ - 60 - YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For the year ended June 30, 2015 Water Sewer Totals CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers 28,366,000$ 1,937,296$ 30,303,296$ Cash payments to employees for salaries and wages (6,807,132) (904,952) (7,712,084) Cash payments to suppliers of goods and services (17,453,632) (361,662) (17,815,294) Other revenues 216,584 33,690 250,274 Other expenses (91,640) - (91,640) NET CASH PROVIDED BY OPERATING ACTIVITIES 4,230,180 704,372 4,934,552 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Proceeds from line of credit 1,351,443 - 1,351,443 Proceeds from property taxes and assessments 1,504,786 - 1,504,786 NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 2,856,229 - 2,856,229 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from annexation fees and capital contributions 671,341 119,696 791,037 Acquisition and construction of capital assets (1,811,063) (178,379) (1,989,442) Proceeds from sales of capital assets 17,638 - 17,638 Principal paid on long-term liabilities (1,010,000) - (1,010,000) Interest paid on long-term liabilities (1,798,933) - (1,798,933) NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (3,931,017) (58,683) (3,989,700) CASH FLOWS FROM INVESTING ACTIVITIES: Sale/purchase of investments, net (118,667) (7,153) (125,820) Interest and investment earnings 163,423 17,696 181,119 NET CASH PROVIDED BY INVESTING ACTIVITIES 44,756 10,543 55,299 NET INCREASE IN CASH AND CASH EQUIVALENTS 3,200,148 656,232 3,856,380 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 17,123,840 3,102,406 20,226,246 CASH AND CASH EQUIVALENTS - END OF YEAR 20,323,988$ 3,758,638$ 24,082,626$ (Continued) YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF CASH FLOWS For the year ended June 30, 2015 - 61 - Water Sewer Totals RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating loss (1,432,220)$ (636,391)$ (2,068,611)$ Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation 6,088,966 1,343,620 7,432,586 Other revenues 216,584 33,690 250,274 Other expenses (91,640) - (91,640) Changes in operating assets and liabilities: (Increase) decrease in assets: Accounts receivable 619,282 14,640 633,922 Inventory (23,959) - (23,959) Prepaid expenses and deposits (3,723) - (3,723) Other post-employment benefits (OPEB) asset (3,494) (263) (3,757) Deferred outflows of resources from pension plans (43,436) (5,631) (49,067) Increase (decrease) in liabilities: Accounts payable and accrued expenses (1,327,991) (41,243) (1,369,234) Accrued salaries and wages 17,019 - 17,019 Accrued compensated absences 157,253 - 157,253 Customer and construction deposits 106,022 2,236 108,258 Net pension liability (1,651,603) (214,131) (1,865,734) Deferred inflows of resources from pension plans 1,603,120 207,845 1,810,965 Total adjustments 5,662,400 1,340,763 7,003,163 NET CASH PROVIDED BY OPERATING ACTIVITIES 4,230,180$ 704,372$ 4,934,552$ CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION: Unrestricted 20,268,232$ 3,758,638$ 24,026,870$ Restricted 55,756 - 55,756 TOTAL CASH AND CASH EQUIVALENTS - FINANCIAL STATEMENT CLASSIFICATION 20,323,988$ 3,758,638$ 24,082,626$ NONCASH INVESTING, CAPITAL AND RELATED FINANCING ACTIVITIES: Amortization related to long-term debt 74,124$ -$ 74,124$ Capital contributions 221,034$ 37,297$ 258,331$ Note receivable paid through capital contributions 245,116$ -$ 245,116$ (CONTINUED) For the year ended June 30, 2015 - 62 - YORBA LINDA WATER DISTRICT COMBINING SCHEDULE OF CASH FLOWS Water Sewer Totals OPERATING EXPENSES: Variable Water Costs: Imported water 4,939,604$ -$ 4,939,604$ OCWD replenishment assessment 3,704,207 - 3,704,207 Continuous use program 1,399,994 - 1,399,994 MWD connection charge 1,207,623 - 1,207,623 Fuel and power/pumping 1,482,334 - 1,482,334 Total Variable Water Costs 12,733,762 - 12,733,762 Personnel Services: Unit salaries 5,070,696 647,604 5,718,300 Fringe benefits 1,745,332 239,981 1,985,313 Director's fees 69,963 5,187 75,150 Total Personnel Services 6,885,991 892,772 7,778,763 Supplies and Services: Communications 194,722 9,341 204,063 Contractual services 449,250 30,879 480,129 Data processing 169,314 8,426 177,740 District activities 15,111 1,138 16,249 Dues and memberships 68,603 5,312 73,915 Fees and permits 192,602 9,991 202,593 Insurance 249,215 12,545 261,760 Maintenance 445,838 77,719 523,557 Materials 663,744 29,321 693,065 Noncapital equipment 135,225 29,501 164,726 Office expense 46,203 3,082 49,285 Professional services 402,097 46,033 448,130 Training 42,650 5,078 47,728 Travel and conferences 32,159 2,459 34,618 Uncollectible accounts 12,135 1,891 14,026 Utilities 71,252 6,148 77,400 Vehicle expense 292,234 45,682 337,916 Total Supplies and Services 3,482,354 324,546 3,806,900 TOTAL OPERATING EXPENSES 23,102,107$ 1,217,318$ 24,319,425$ - 63 - YORBA LINDA WATER DISTRICT SCHEDULE OF OPERATING EXPENSES BY COST CENTER AND NATURE OF EXPENSES FOR WATER AND SEWER For the year ended June 30, 2015 Water Sewer Totals Land, Mineral and Water Rights: Land 78,558$ -$ 78,558$ Water rights 86,300 - 86,300 Mineral rights 63,650 - 63,650 Land rights and easements 385 58,526 58,911 Total Land, Mineral and Water Rights 228,893 58,526 287,419 Source of Supply: Wells 5,531,788 - 5,531,788 MWD connection 564,367 - 564,367 Total Source of Supply 6,096,155 - 6,096,155 Pumping Plant: Structures and improvements 13,532,628 - 13,532,628 Equipment 11,640,027 431,576 12,071,603 Total Pumping Plant 25,172,655 431,576 25,604,231 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 78,048,708 46,960,666 125,009,374 Reservoirs and tanks 61,565,605 - 61,565,605 Service and meter installation 5,993,735 2,695,425 8,689,160 Fire hydrants 6,837,901 - 6,837,901 Meters 9,351,794 - 9,351,794 Fire mains 717,746 - 717,746 Structures and improvements 2,875,095 - 2,875,095 Control system 2,638,909 33,485 2,672,394 Total Transmission and Distribution Plant 168,029,493 49,689,576 217,719,069 General Plant: Structures and improvements 13,373,615 - 13,373,615 Transportation equipment 1,698,630 1,182,655 2,881,285 Power operated equipment 601,673 - 601,673 Communication equipment 511,268 - 511,268 Computer equipment 1,961,628 238,071 2,199,699 Office furniture 1,098,711 - 1,098,711 Tools, shops and garage equipment 96,292 - 96,292 Other 4,650 - 4,650 Store equipment 60,241 - 60,241 Total General Plant 19,406,708 1,420,726 20,827,434 Construction in Progress 3,043,116 203,393 3,246,509 Total Capital Assets 225,107,592$ 51,803,797$ 276,911,389$ YORBA LINDA WATER DISTRICT SCHEDULE OF CAPITAL ASSETS For the year ended June 30, 2015 - 64 - - 65 - STATISTICAL SECTION - 66 - This page intentionally left blank YORBA LINDA WATER DISTRICT DESCRIPTION OF STATISTICAL SECTION CONTENTS June 30, 2015 - 67 - 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. 68 Revenue Capacity these schedules contain information to help the reader assess the District’s most significant local revenue source, water sales. 70 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. 72 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. 74 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. 76 Changes in Net Position:2015 2014 2013 2012 Operating Revenues Water Sales 26,446,618$ 28,376,082$ 26,369,940$ 24,998,673$ Sewer Revenues 1,775,676 1,762,816 1,762,039 1,785,804 Other Operating Revenues 1,461,106 1,047,625 723,577 848,238 Operating Expenses Variable Water Costs 12,733,762 14,673,144 13,509,336 12,275,853 Personnel Services 7,778,763 7,529,481 7,225,729 6,979,088 Supplies and Services 3,806,900 3,849,183 4,222,398 3,811,125 Depreciation 7,432,586 7,315,084 6,884,213 6,595,720 Operating Loss (2,068,611) (2,180,369) (2,986,120) (2,029,071) Nonoperating Revenues (Expenses) Property Taxes 1,496,489 1,394,722 1,340,916 1,273,855 Investment Income 187,316 145,048 137,569 277,137 Interest Expense (1,683,039) (1,715,429) (1,781,416) (1,626,190) Bond Issuance Costs - - (192,410) - Other Nonoperating Revenues 744,572 1,325,685 588,854 805,654 Other Nonoperating Expenses (116,528) (47,948) (35,954) (108,984) Total Nonoperating Revenues (Expenses)628,810 1,102,078 57,559 621,472 Net Income (Loss) Before Capital Contributions and Extraordinary Items (1,439,801) (1,078,291) (2,928,561) (1,407,599) Capital Contributions 705,848 2,128,579 1,174,673 17,214,138 Extraordinary Items - 5,000,000 - (5,000,000) Changes in Net Position (733,953)$ 6,050,288$ (1,753,888)$ 10,806,539$ Net Position by Component: Net Investment in Capital Assets 157,092,210$ 161,159,541$ 161,494,158$ 161,672,565$ Restricted - - - 9,598,420 Unrestricted 3,530,455 6,617,328 232,423 (6,228,771) Total Net Position 160,622,665$ 167,776,869$ 161,726,581$ 165,042,214$ Source: YLWD Audited Financial Statements (Continued) - 68 - Yorba Linda Water District Changes in Net Position Last Ten Fiscal Years Fiscal Year 2011 2010 2009 2008 2007 2006 22,686,251$ 21,806,164$ 19,626,738$ 19,470,109$ 18,944,233$ 17,017,275$ 1,274,579 1,275,980 1,259,723 1,247,907 806,897 778,275 1,035,545 1,102,143 439,302 380,175 393,285 382,917 11,268,306 10,688,318 10,859,328 10,516,507 10,703,037 8,930,535 6,902,995 6,677,757 6,498,959 5,751,384 5,276,878 4,635,464 3,686,333 3,576,147 4,151,058 4,361,512 3,395,303 2,877,288 5,279,860 5,153,891 4,167,958 3,572,726 3,445,868 2,923,288 (2,141,119) (1,911,826) (4,351,540) (3,103,938) (2,676,671) (1,188,108) 1,258,769 1,269,441 1,283,521 1,263,656 1,186,441 335,075 274,152 244,857 689,108 1,508,193 2,180,067 1,425,663 (1,172,503) (1,170,498) (1,469,925) (824,387) (468,087) (472,163) - - - - - - 739,062 589,201 479,911 270,429 455,067 534,385 (406,575) (151,300) (177,553) (133,604) (138,501) (336,649) 692,905 781,701 805,062 2,084,287 3,214,987 1,486,311 (1,448,214) (1,130,125) (3,546,478) (1,019,651) 538,316 298,203 706,319 6,278,135 4,363,527 4,100,051 6,913,095 26,026,524 - - - - - - (741,895)$ 5,148,010$ 817,049$ 3,080,400$ 7,451,411$ 26,324,727$ 146,235,362$ 146,877,122$ 141,514,024$ 139,677,663$ 121,317,296$ 106,376,683$ 12,620,256 15,797,432 14,063,802 14,523,549 23,089,201 22,274,814 (4,619,943) (7,696,984) (6,158,513) (4,898,647) 1,815,668 10,119,257 154,235,675$ 154,977,570$ 149,419,313$ 149,302,565$ 146,222,165$ 138,770,754$ - 69 - Fiscal Year Yorba Linda Water District Number of Connections Single Family Multi-Family Commercial/Direct Rate Fiscal Year Residential Residential Industrial Irrigation (Billing Unit) 2006 21,300 217 847 838 1.57 2007 21,451 228 792 868 1.57 2008 21,580 228 840 857 1.79 2009 21,672 228 831 855 2.52 2010 21,846 228 837 877 2.52 2011 21,701 231 833 879 2.52 2012 22,064 240 829 846 2.52 2013 22,480 158 908 933 2.64 2014 22,586 230 892 876 2.70 2015 22,649 230 898 876 2.70 Source: YLWD Billing System Last Ten Fiscal Years - 70 - 19,000 20,000 21,000 22,000 23,000 24,000 25,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Irrigation Industrial Residential Residential FY 2015 Customer Name Business Type Annual Revenues % of Total Revenues 1 City of Yorba Linda Government 2,331,179$ 7.85% 2 Placentia-Yorba Linda USD Government 305,915 1.03% 3 Toll Brothers Manufacturer 131,157 0.44% 4 RRE Yorba Linda Holdings Manufacturer 130,572 0.44% 5 The Hills at Yorba Linda Homeowners' Assoc.127,406 0.43% 6 Yorba Linda Villages Homeowners' Assoc.120,873 0.41% 7 Fairmont Hill Coummunity Assoc Homeowners' Assoc.190,828 0.64% 8 Lake Park Mobile Home Community Homeowners' Assoc.77,327 0.26% 9 Aspetic Tech Manufacturer 65,020 0.22% 10 Woodgate Condominiums Homeowners' Assoc.63,688 0.21% 3,543,965$ 11.94% FY 2011* Customer Name Business Type Annual Revenues % of Total Revenues 1 City of Yorba Linda Government 1,614,372$ 6.46% 2 Placentia-Yorba Linda USD Government 289,092 1.16% 3 Yorba Linda Villages Homeowners' Assoc.106,004 0.42% 4 Rancho Dominquez Assoc.Homeowners' Assoc.99,387 0.40% 5 Archstone Apts.Apartment Complex 91,111 0.36% 7 Cal Water Manufacturer 88,672 0.35% 6 Tac West Inc Manufacturer 81,068 0.32% 8 Placentia Linda Hospital Hospital 72,838 0.29% 9 Advanced Management Apartment Complex 68,314 0.27% 10 St Francis of Assissi Private School 66,345 0.27% 2,577,203$ 10.31% NOTE: * Last available data Source: YLWD Billing Department Yorba Linda Water District Ten Largest Customers Current and Four Years Ago - 71 - Yorba Linda Water District Ratio of Outstanding Debt General Wells Certificates As a Share of Fiscal Obligation Fargo Bank of Per Per Personal Year Bonds Line of Credit Participation Debt Connection Capita Income 2006 -$ -$ 9,873,717$ 9,873,717$ 426$ 139 0.38% 2007 - - 10,540,139 10,540,139 451 149 0.41% 2008 - - 45,502,080 45,502,080 1,932 639 1.64% 2009 - - 44,911,092 44,911,092 1,900 629 1.51% 2010 - - 44,065,104 44,065,104 1,848 616 1.47% 2011 - - 43,189,117 43,189,117 1,827 599 1.47% 2012 - - 42,278,129 42,278,129 1,764 591 1.41% 2013 - 1,171,131 42,009,722 43,180,853 1,802 588 1.35% 2014 - 4,642,656 40,970,599 45,613,255 1,858 609 1.35% 2015 - 5,994,099 39,886,475 45,880,574 1,861 620 1.33% Source: YLWD Audited Financial Statements Last Ten Fiscal Years Total - 72 - $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 Composition of Debt Line of Credit Participation Bonds $- $500 $1,000 $1,500 $2,000 $2,500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Debt per Connection Debt Service Fiscal Operating &Net Coverage Year Revenues Maint. Costs Revenues Principal Interest Total Ratio 2006 19,563$ 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 2014 29,309 24,853 4,456 965 1,813 2,778 1.60 2015 27,759 23,102 4,657 1,010 1,714 2,724 1.71 NOTE: Excludes depreciation and debt service payments Source:YLWD Audited Financial Statements Yorba Linda Water District Debt Coverage Last Ten Fiscal Years - 73 - Personal Income Year Population *City of YL Population Personal Income per Capita 2006 70,935 66,797 2,600,167,565$ 36,656$ 2007 71,258 67,904 2,772,221,232 38,904 2008 71,428 68,312 2,974,469,711 41,643 2009 71,507 68,852 2,996,211,308 41,901 2010 72,083 69,816 2,943,660,024 40,837 2011 71,520 70,681 2,993,957,236 41,862 2012 73,498 72,706 3,192,753,120 43,440 2013 74,861 65,777 3,374,570,547 45,078 2014 73,990 67,069 3,461,036,956 46,777 2015 74,787 67,826 3,451,134,500 46,146 Personal Income Year Population Unemployment Rate Personal Income per Capita 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 2014 3,081,804 6.2%168,966,068 54,827 2015 3,113,991 5.4%177,412,900 56,973 NOTES: ^No personal income data available for County of Orange, used State of California data. #No population data available for County of Orange, used State of California data. Sources:City of Yorba Linda CAFR County of Orange CAFR State of California, Employment Development Department State of California, Department of Finance - 74 - County of Orange YLWD Yorba Linda Water District Demographics Last Ten Fiscal Years 2015*2006+ Employer ^Employees Employees Placentia Linda Hospital 460 0.029 %441 0.023 % Nobel Biocare USA, Inc.350 0.022 %323 0.017 % Viasys Respiratory Care, Inc. (CareFusion)332 0.021 %359 0.019 % Costco Wholesale Corp.260 0.016 %204 0.011 % Kohl's Inc.230 0.014 %145 0.007 % Vons 200 0.012 %167 0.009 % City of Yorba Linda 171 0.011 %180 0.009 % Stater Brothers 135 0.008 %129 0.007 % Braid Group 110 0.007 %104 0.005 % Sunrise Retirement Homes 93 0.006 %120 0.006 % Total 2,341 0.146 %2,172 0.112 % NOTES: * Most current available data + Oldest available data ^ The Placentia- Yorba Linda Unified School District has 2,500 employees and serves the entire communities of Yorba Linda and Placentia, and also serves parts of the Cities of Brea, Anaheim and Fullerton. YLWD cannot provide the number of employees working within the boundaries of Yorba Linda. Source: City of Yorba Linda CAFR Yorba Linda Water District Ten Largest Employers Current and Nine Years Ago - 75 - % of Total % of Total Labor Force Labor Force Fiscal Human Year Administration Engineering Finance Resources IT Operations Total 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 2014 5.5 10.0 13.0 4.0 7.0 38.0 77.5 2015 7.0 10.0 13.0 4.0 5.0 38.0 77.0 NOTE: *Number of employees in each department are authorized and funded positions. Source:YLWD Human Resources Department - 76 - Department Full Time Equivalent Employees by Department * Yorba Linda Water District Number of Employees Last Ten Fiscal Years 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Operations IT Resources Finance Engineering Fiscal Miles of Water Yearly Water Average Number of Year Mains Installed*Production (MG)Production (MGD)Field Service Calls 2006 2.52 7,505 20.6 1,484 2007 9.72 8,360 22.9 1,565 2008 9.72 8,027 22.0 1,943 2009 9.72 7,590 20.8 1,674 2010 9.72 6,569 18.0 1,640 2011 2.00 6,282 17.2 1,924 2012 2.02 6,780 18.6 1,693 2013 1.10 7,099 19.4 1,561 2014 0.77 7,329 20.1 1,579 2015 1.53 6,447 17.7 1,247 Fiscal Number of Capacity by Booster Number of Capacity by Year Booster Pumps Pump (GPM)Reservoirs Reservoir (MG) 2006 11 43,025 11 41 2007 11 43,025 11 41 2008 11 43,025 11 41 2009 11 43,025 12 49 2010 11 43,025 12 49 2011 12 46,525 14 57 2012 12 46,525 14 57 2013 12 46,525 14 57 2014 12 46,525 14 57 2015 12 52,025 14 57 MG - Millions of Gallons MGD - Millions of Gallons per Day GPM - Gallon per Minute NOTE: * Miles of Water Main estimated Sources: YLWD Asset Management Plan 2010 YLWD Operations Department - 77 - Yorba Linda Water District Operating and Capacity Indicators Last Ten Fiscal Years - 78 - This page intentionally left blank 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893 Offices located in Orange and San Diego Counties - 1 - INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 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, 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 the financial statements of the Yorba Linda Water District (the District) as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements and have issued our report thereon dated October 29, 2015. 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. We did identify certain deficiencies in internal control, described below, that we consider to be significant deficiencies. - 2 - Internal Control Over Financial Reporting (Continued) Year-Ending Closing Procedures over Capital Assets Auditor’s Comment and Recommendation During our review of capital assets we noted that some detail schedules did not agree to the general ledger balances. An important part of the reporting function is maintaining accurate and current detail schedules for account balances. We recommend the District review the capital asset detail schedules for accuracy and ensure the totals agree to the general ledger prior to finalizing the capital asset section. Management’s Response YLWD Management will ensure that staff is trained in the procedures of preparing the year end capital asset detail schedules and stress the importance of submitting accurate and balanced schedules for auditing purposes. A “Standard Operating Procedure” will be developed and it will include the importance of communication amongst peers to ensure capital assets are closed in a timely basis for reporting efficiencies. Custodial Agreement over Certain Investments Auditor’s Comment and Recommendation During our review of investments we reviewed an account agreement between First Empire (the broker) and the District. With regard to the responsibilities of Pershing, the account agreement includes the following, “Pershing will hold in custody securities and cash received for your account, and will collect and disburse dividends and interest and process reorganization and voting instructions with respect to securities held in custody. Pershing is responsible for the custody of your cash and securities only after it comes into Pershing’s physical possession or control.” During our confirmation procedures, Pershing was believed to be the custodian of the investments and First Empire was believed to be the broker. This segregation would allow the investment purchases to be recommended by First Empire and the custody of the investments to be with Pershing. Pershing confirmed by letter that they act as the custodial agent for investments of the District. In addition, Pershing responded in writing that their internal records reflect the investments are owned by the District. However, Pershing did not respond in writing to our inquiry regarding if there was a custodial agreement for investments between the District and Pershing. We were unable to confirm if the District has a custodial agreement with Pershing. We recommend the District review its relationship with Pershing. Management’s Response District Staff will review and discuss the current ”Account Agreement” that sets forth the responsibilities of First Empires and Pershing over Yorba Linda Water District’s investments held in an active account with First Empire Securities, Inc.. Upon completion of the review, District Staff will conference with representatives from both First Empire Securities, Inc. and Pershing LLC to determine if the terms and listed responsibilities as set forth in the “Account Agreement” can and will be satisfactorily adhered to for the needs and requirements of Yorba Linda Water District. - 3 - Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. District’s Responses to the 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 District’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 District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California October 29, 2015 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893 Offices located in Orange and San Diego Counties - 1 - Board of Directors Yorba Linda Water District Placentia, California We have audited the financial statements of the Yorba Linda Water District (the District) for the year ended June 30, 2015, and have issued our report thereon dated October 29, 2015. 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 March 5, 2015 and our planning communication letter to you dated July 14, 2015. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the District are described in Note 1 to the financial statements. As discussed in Notes 1e and 12 to the financial statements, the District has recorded the net pension liability, deferred outflows of resources, and deferred inflows of resources related to the cost-sharing defined benefit pension plans due to the adoption of Governmental Accounting Standards Board’s (GASB) Statement No. 68, “Accounting and Financial Reporting for Pensions” and Statement No. 71, “Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68”. The adoption of these standards required retrospective application resulting in a $6,420,251 reduction of previously reported net position. No other accounting policies were adopted and the application of other existing polices was not changed during the year ended June 30, 2015. We noted no transactions entered into by the District during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. - 2 - 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 contributions, pension expense, net pension liability and corresponding deferred outflows of resources and deferred inflows of resources for the District’s public defined benefit plans with CalPERS are based on an actuarial valuation provided by CalPERS. e. The 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 7 regarding the pension plans, and Note 12 regarding the restatement of prior year financial statements due to the implementation of GASB Numbers 68 and 71. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. The following material misstatement detected as a result of audit procedures was corrected by management: agreeing capital asset general ledger balances to the detail schedules. 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. - 3 - Significant Audit Findings (Continued) Management Representations We have requested certain representations from management that are included in the management representation letter dated October 29, 2015. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the District’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the District’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, and OPEB schedule of funding progress, which are required supplementary information (RSI) that supplement the financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on combining schedule of net position, combining schedule of revenues, expenses and changes in net position, combining schedule of cash flows, schedule of operating expenses by cost center and nature of expenses for water and sewer, and schedule of capital assets, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. - 4 - Restriction on Use This information is intended solely for the use of the Board of Directors and management of the Yorba Linda Water District and is not intended to be and should not be used by anyone other than these specified parties. Irvine, California October 29, 2015 ITEM NO. 10.2 AGENDA REPORT Meeting Date: November 12, 2015 Subject:Joint Agency Committee with City of Yorba Linda (Collett / Beverage) · Minutes of the meeting held October 20, 2015 at 10:00 a.m. · Next meeting is scheduled to be held November 17, 2015 at 10:00 a.m. at YL City Hall. ATTACHMENTS: Name:Description:Type: Minutes_10.20.15.docx Minutes Minutes YLWD/CC Joint Advisory Committee Agenda September 23, 2015 Page 1 of 2 CITY OF YORBA LINDA Land of Gracious Living YORBA LINDA WATER DISTRICT/ CITY COUNCIL JOINT ADVISORY COMMITTEE MEETING MINUTES October 20, 2015 10:00 a.m. CALL TO ORDER The Yorba Linda Water District/City Council Joint Advisory Committee meeting convened at 10:00 a.m. in the Council Chambers at 4845 Casa Loma Avenue, Yorba Linda. PLEDGE OF ALLEGIANCE YLWD President Ric Collett ROLL CALL Committee Members City Council: Gene Hernandez, Tom Lindsey Water District: Ric Collett, Mike Beverage Staff Members: Marc Marcantonio, Mark Pulone PUBLIC COMMENTS Julia Lawson, resident, wished Mayor Hernandez a happy birthday and said she brought treats to share with the Committee. ACTION CALENDAR 1. Minutes of the YLWD/City Council Joint Advisory Committee meeting held on September 23, 2015. The YLWD/City Council Joint Advisory Committee approved the minutes of the September 23, 2015 Joint Advisory meeting. YLWD/CC Joint Advisory Committee Agenda October 20, 2015 Page 2 of 2 DISCUSSION ITEMS 2. Drought Response, Water Conservation/Drought Penalty Ordinances, and Community Outreach Efforts President Collett gave an overview of the cumulative total water conservation to date. He also reminded everyone that beginning November 1st, outdoor watering would be limited to one day a week. 3. Potential Future Agenda Items President Collett stated that the “Drought Response, Water Conservation/Drought Penalty Ordinances, and Community Outreach Efforts” item should remain on the next meeting agenda. President Collett announced the final numbers for the Proposition 218 votes: out of 27,366 potential protests, 21,042 did not protest the Prop 218 rates which is 77% of the District; 6,324 were valid protests and 1,632 were invalid protests. President Collett also reported that on October 14, 2015 the Yorba Linda Taxpayers Association delivered to the District a Petition for Referendum seeking repeal or voter confirmation of Resolution No.15-22, setting the new increased water rates. General Manager Marcantonio stated that the District’s legal counsel’s advice is to process the purported referendum petition in accordance with CA Elections Code, even though the referendum may not be applicable to Resolution No. 15-22. As the Board Secretary and Election Official, Mr. Marcantonio conducted a prima facie count of the signatures which came to 5,519. The Petition has been sent to the Registrar of Voters (ROV) for validation of the signatures and the ROV has 30 days to authenticate those signatures. President Collett announced that the Yorba Linda Water District is being recognized by the California Special District Association with a “District of Distinction Award” for their prudent fiscal practices and effectively operating and governing a special district. Mayor Hernandez congratulated the District for receiving the distinguished award. ADJOURNMENT City Manager Pulone adjourned the meeting at 10:24 a.m. to the next Yorba Linda Water District/City Council Joint Advisory Committee meeting on Tuesday, November 17, 2015 at 10:00a.m. ITEM NO. 10.3 AGENDA REPORT Meeting Date: November 12, 2015 Subject:Interagency Meeting with City of Placentia and Golden State Water (Melton / Kiley) · Minutes of the meeting held September 29, 2015 at 2:00 p.m. · Next meeting is scheduled to be held December 8, 2015 at 2:00 p.m. at Placentia City Hall. ATTACHMENTS: Name:Description:Type: 09.29.15_Minutes.doc Minutes Minutes 1 MINUTES OF THE YORBA LINDA WATER DISTRICT INTERAGENCY MEETING WITH CITY OF PLACENTIA AND GSW Tuesday, September 29, 2015 2:00 PM 1717 E Miraloma Ave, Placentia CA 92870 The September 29, 2015 meeting of the YLWD/City of Placentia/GSW Interagency Committee was called to order at 2:00 p.m. The meeting was held in the YLWD Administration Conference Room located at 1717 E Miraloma Avenue, Placentia, California 92870. 1. CALL TO ORDER 2. ROLL CALL YLWD COMMITTEE MEMBERS YLWD STAFF Gary T. Melton, Director Marc Marcantonio, General Manager Robert R. Kiley, Director Steve Conklin, Engineering Manger Damon Micalizzi, Public Information Manager CITY OF PLACENTIA MEMBERS CITY OF PLACENTIA STAFF Craig Green, Councilmember Damien R. Arrula, Acting City Administrator Joel Cardenas, Public Works Supt GSW COMMITTEE MEMBERS OTHER ATTENDEES Ken Vecchiarelli, General Manager Brett Barbre, Director, MWDSC and MWDOC Angel Marquez, Superintendent Nancy Stevens, Resident Julia Schultz, Resident Eddy Jackson, Resident 3. PUBLIC COMMENTS None. 4. ACTION CALENDAR 4.1. Minutes of the YLWD/City of Placentia Joint Agency Committee Meeting held July 27, 2015 The minutes for this meeting were approved as presented. 5. DISCUSSION ITEMS 5.1. Fluoride in Water Sources Director Brett Barbre reported on the fluoridation of MWD water, which began in 2010, after receipt of a $5.5 million grant to design and construct fluoridation facilities. MWD water is provided to portions of Placentia by GSW. Groundwater is also provided to Placentia by GSW and by YLWD, which has a naturally occurring low-level of fluoride. Mr. Marc 2 Marcantonio reported that the fluoridation of drinking water has been and remains an issue of concern for many communities and residents. 5.2. City of Placentia Compliance with Drought Mandate Mr. Ken Vecchiarelli reported that GSW was mandated to achieve a 24% reduction in water use and has achieved a 31% reduction for the months of June through September for its Placentia/Yorba Linda service area. Mr. Marcantonio reported that YLWD was mandated to achieve a 36% reduction and has achieved a cumulative 41% reduction in this same time frame. 5.3. YLWD Drought Response, Water Conservation/Drought Penalty Ordinances, and Community Outreach Efforts YLWD drought response is as noted above. Mr. Marcantonio reported that on September 17, YLWD conducted a Public Hearing to consider increases in its water and sewer rates. Following receipt of public comments, and the counting of protest letters (which were less that the necessary threshold) the Board voted unanimously to increase rates effective October 1, 2015. Mr. Damien Arrula asked if YLWD could provide an estimate of the impact of the rate increase on the City of Placentia’s water meter accounts in YLWD. Mr. Damon Micalizzi indicted that YLWD would calculate and provide that information to the City. 5.4. Enforcement of Governor's Mandate on Water-Use Restrictions Mr. Micalizzi reported that the State Water Resources Control Board has initiated action against eight water retailers in the State that have not made an adequate response to meet their mandated water-use restrictions. Mr. Marcantonio pointed out that the State Board has initiated action to force two small mutual water companies with water quality problems to be taken over by an adjacent larger city water system. He also noted that there have been comments made by State Board staff in recent meetings that indicate that the State Board likely will call for the continuation of the 25% state-wide water reduction beyond its February 2016 end date, regardless if there is a wet winter or not. 5.5. Items for Next Agenda These same items will be placed on the agenda for the next meeting. 6. ADJOURNMENT 6.1. The meeting was adjourned at 2:50 p.m. The next YLWD/City of Placentia/Golden State Water Company Interagency Committee meeting will be held on December 8, 2015 at 2:00 p.m. at the City of Placentia. ITEM NO. 11.3 AGENDA REPORT Meeting Date: November 12, 2015 Subject:OCSD - October 28, 2015 (Kiley/Beverage) SUMMARY: Minutes from the meeting held September 23, 2015 can be viewed on OCSD's website: http://www.ocsd.com/Home/ShowDocument?id=17609 ITEM NO. 11.6 AGENDA REPORT Meeting Date: November 12, 2015 Subject:OCSD Operations Committee - November 4, 2015 (Kiley/Beverage) SUMMARY: Minutes from the meeting held October 7, 2015 can be viewed on OCSD's website: http://www.ocsd.com/Home/ShowDocument?id=17609 ITEM NO. 12.1 AGENDA REPORT Meeting Date: November 12, 2015 Subject:Meetings from November 13, 2015 - December 31, 2015 ATTACHMENTS: Name:Description:Type: BOD_-_Activities_Calendar.pdf Backup Material Backup Material Event Date Attendance by: November 2015 Joint Committee Meeting with City of Yorba LindaTue, Nov 17Collett/Beverage Yorba Linda City CouncilTue, Nov 17Collett LAFCOWed, Nov 18Beverage (As Needed) MWDOCWed, Nov 18Melton OCWDWed, Nov 18Kiley Yorba Linda Planning CommissionWed, Nov 18Hawkins Board of Directors Workshop MeetingThu, Nov 19 Interagency Committee Meeting with MWDOC and OCWDTue, Nov 24Collett/Melton Board of Directors Regular MeetingWed, Nov 25 OCSDWed, Nov 25Kiley/Beverage District Offices ClosedThu, Nov 26 ACWA/JPIA Fall ConferenceMon, Nov 30 December 2015 ACWA Fall ConferenceTue, Dec 1Kiley Yorba Linda City CouncilTue, Dec 1Beverage ACWA Fall ConferenceWed, Dec 2Kiley MWDOCWed, Dec 2Melton OCSD Operations CommitteeWed, Dec 2Kiley/Beverage OCWDWed, Dec 2Collett ACWA Fall ConferenceThu, Dec 3Kiley ACWA Fall ConferenceFri, Dec 4Kiley Citizens Advisory Committee MeetingMon, Dec 7 Interagency Meeting with City of Placentia and GSWTue, Dec 8Melton/Kiley LAFCOWed, Dec 9Beverage (As Needed) Yorba Linda Planning CommissionWed, Dec 9Melton Public Financing Corporation Regular MeetingThu, Dec 10 Board of Directors Regular MeetingThu, Dec 10 WACOFri, Dec 11Hawkins/Kiley Yorba Linda City CouncilTue, Dec 15Collett CRWUA Annual ConferenceWed, Dec 16Beverage/Melton MWDOCWed, Dec 16Melton OCWDWed, Dec 16Kiley CRWUA Annual ConferenceThu, Dec 17Beverage/Melton CRWUA Annual ConferenceFri, Dec 18Beverage/Melton Board of Directors Regular MeetingWed, Dec 23 OCSDWed, Dec 23Kiley/Beverage District Offices ClosedThu, Dec 247:00AM 8:30AM 5:30PM 8:00AM 8:00AM 8:30AM 6:30PM 6:30PM 8:30AM 8:30AM 7:30AM 6:30PM 8:00AM 5:30PM 8:00AM 8:00AM 8:30AM 2:00PM 8:00AM 8:00AM 6:30PM 8:00AM 8:30AM 5:00PM 4:00PM 8:30AM 6:30PM 7:00AM 8:00AM 6:30PM 8:00AM 8:30AM 5:30PM 6:30PM 3:00PM Board of Directors Activity Calendar Time 10:00AM 11/9/2015 7:30:51 AM ITEM NO. 13.1 AGENDA REPORT Meeting Date: November 12, 2015 Subject:UWI Spring Conference - February 10-12, 2016 STAFF RECOMMENDATION: That the Board of Directors authorize Director attendance at this event if desired. ATTACHMENTS: Name:Description:Type: UWI_Conf.pdf Backup Material Backup Material URBAN WATER INSTITUTE’S Spring Water Conference Waste Not, Want Not Mining Water In The West February 10-12, 2016 Hilton Palm Springs Hotel 400 East Tahquitz Canyon Way ● Palm Springs, CA 92262 (760) 320-6868 To register please visit our website www.urbanwater.com Come Hear From A Diverse Group of Water Experts On These Pressing Topics: xApplying The Lessons Of History To California’s Water Future. xThe United States’ Largest Desal Plant Is Running In Carlsbad. How Did It Happen? xTwo Water Giants Are Collaborating On A Supersized Recycling Plant. How Will It Work? xColorado River In The 21st Century. How Reliable Will It Be? xHow Has The Business Sector Been Coping With The Drought? xSalton Sea: Have We Turned The Corner? Conϐirmed Speakers Ron Gastelum Principal Water Conservation Partners Grace Hyde General Manager & Chief Engineer LA County Sanitation Districts Carly Jerla Colorado River Basin Study Manager U.S. Bureau of Reclamation Debra Man Assistant General Manager Metropolitan Water District of Southern California Woody Wodraska President Wodraska Partners, Inc. Invited Speakers Honorable John Laird California Secretary for Natural Resources Don Ostler Executive Director Upper Colorado River Commission Assembly Member Anthony Rendon California State Assembly 63rd District Mayor Steve Pougnet City of Palm Springs For more information please contact Julie Ackman at (949) 679-9676 or julie@urbanwater.com NAME: ________________________________________________TITLE: ___________________________________________ ORGANIZATION:_______________________________________________________________________________________ ADDRESS:_________________________________________CITY/STATE/ZIP:_____________________________________ TEL:____________________FAX:____________________E-MAIL:_________________________________________________ Registration fees include handouts, breakfasts, luncheon, breaks and receptions. Note: Self parking for hotel guests is complimentary ____$375 Urban Water Member Registration Fee for Conference February 10-12, 2016 (Must be a member of the Urban Water Institute with 2016 dues paid in full) _____$475 Non-Member Registration Fee for Conference February 10-12, 2016 _____$100 Spouse Registration - Includes breakfasts, luncheon, breaks and receptions. Spouse Name For Nametag: The Spring Water Conference will be conducted in Palm Springs at The Hilton Palm Springs Hotel located at: 400 East Tahquitz Canyon Way, Palm Springs, CA 92262 Please contact the hotel directly to reserve your room, we have a special conference rate of $148 per night plus tax. To make your room reservations, call the Hilton Palm Springs Hotel directly at (760) 320-6868 and reference Urban Water Institute. Please note the cut-off date for the group rate is January 26, 2016. Reservations can also be made online at www.hilton.com. (All Registrations Should Be Made In Advance) To pay by credit card visit our website www.urbanwater.com. You can register online and pay with a Visa, MasterCard or American Express. To pay by check, please complete the Registration Form and send it along with a check made payable to: Urban Water Institute: 24651 Evereve Circle, Suite 1, Lake Forest, CA 92630. After January 27, 2016 registrations will be accepted at the door on a space available basis, with an additional $25 administrative charge. Cancellations must be received in writing by January 27, 2016. Faxes are accepted at (949) 305-9919. Registration fee will be refunded, less a $50 administrative charge if received by January 27, 2016. Substitutes are accepted. No refunds after January 27, 2016. The Institute reserves the right to substitute announced speakers and assumes no responsibility for personal expenses. Information on exhibiting and sponsoring may be obtained by calling (949) 679-9676 or can be found on the Urban Water Institute Website www.urbanwater.com. MAIL CONFERENCE REGISTRATION CHECKS PAYABLE TO: Urban Water Institute: 24651 Evereve Circle, Suite 1 x Lake Forest, CA 92630 Tax ID # 33-0578523 For More Information Contact Julie Ackman at (949) 679-9676 or julie@urbanwater.com