HomeMy WebLinkAbout2020-10-13 - Financing Authority Meeting Agenda PacketAGENDA
YORBA LINDA WATER DISTRICT
FINANCING AUTHORITY REGULAR MEETING
Tuesday, October 13, 2020, 6:30 PM
1717 E Miraloma Ave, Placentia CA 92870
1.TELECONFERENCE INFORMATION
In an effort to help mitigate the spread of Coronavirus (COVID-19), the District will be facilitating
participation in this meeting via teleconference pursuant to Paragraph 3 of Executive Order N-29-20
issued by the Governor of California on March 17, 2020. Information for accessing this meeting is
provided below. Public comment related to items on this agenda or other matters within the District’s
jurisdiction will be facilitated on the teleconference or can be submitted in writing via e-mail to the
Board Secretary (bodsecretary@ylwd.com) at least two (2) hours prior to the start of the meeting. If
you choose to submit comments via e-mail, please identify the agenda item you wish to address. Your
comments will be shared with the Board prior to the meeting. For questions regarding participation
please call 714-701-3020.
Computer/Mobile Device: https://zoom.us/j/97891322587
Telephone: 669-900-6833 or 346-248-7799
Meeting ID: 978 9132 2587
2.CALL TO ORDER
2.1.This meeting will be called to order following consideration of Item No. 9.2. on
the agenda for the Regular Board of Directors Meeting on Tuesday, October
13, 2020 at 6:30 p.m.
3.ROLL CALL
Phil Hawkins, President
Andrew J. Hall, Vice President
Brooke Jones, Director
J. Wayne Miller, PhD, Director
Al Nederhood, Director
4.PUBLIC COMMENTS
Any individual wishing to address the Board or Committee is requested to identify themselves and state
the matter on which they wish to comment. If the matter is on the agenda, the Chair will recognize the
individual for their comment when the item is considered. No action will be taken on matters not listed
on the agenda. Comments are limited to three minutes and must be related to matters of public interest
within the jurisdiction of the Water District. (GC 54954.3)
5.ACTION CALENDAR
This portion of the agenda is for items where staff presentations and Board or Committee discussions
are needed prior to formal action.
5.1.Minutes of the Financing Authority Regular Meeting Held December 10, 2019
Recommendation: That the Board of Directors approve the minutes as
presented.
5.2.Audit Report for Fiscal Year Ending June 30, 2020
Page 1 of 22
Recommendation: That the Board of Directors receive and file the Yorba
Linda Water District Financing Authority Comprehensive Annual Financial
Report for the Fiscal Year Ending June 30, 2020.
6.ADJOURNMENT
6.1.A Board Workshop Meeting is scheduled to be held Tuesday, October 27,
2020 at 8:30 a.m. The next Regular Board Meeting will be held Tuesday,
November 10, 2020. Closed Session (if necessary) will begin at 5:30 p.m. and
regular business at 6:30 p.m.
Items Distributed to the Board Less Than 72 Hours Prior to the Meeting
Prior to the Governor’s ‘Stay-at-Home’ Executive Orders regarding COVID-19, non-exempt materials related to
open session agenda items that were distributed to a majority of the Board of Directors or Committee Members
less than seventy-two (72) hours prior to the meeting were made available for public inspection in the lobby of the
District’s Administrative building during regular business hours and posted on the District’s website shortly
thereafter (GC 54957.5). As the District’s lobby has been closed to the public in accordance with the Governor’s
Executive Orders and to help mitigate the spread of COVID-19, staff will make these materials available on the
District’s website (https://ylwd.com/) as soon as possible following receipt.
Accommodations for the Disabled
Requests for disability-related modifications or accommodations, including auxiliary aids or services, required for
participation in the above posted meeting should be directed to the Board Secretary at (714) 701-3020 at least 24
hours in advance. (GC 54954.2(a))
Page 2 of 22
ITEM NO. 5.1.
AGENDA REPORT
MEETING DATE:October 13, 2020
TO:Board of Directors
FROM:Brett R. Barbre, General Manager
STAFF CONTACTS:Annie Alexander, Board Secretary
SUBJECT:Minutes of the Financing Authority Regular Meeting Held
December 10, 2019
RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
1.Draft Meeting Minutes
Page 3 of 22
FA-2019-XXX
MINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCING AUTHORITY REGULAR MEETING
Tuesday, December 10, 2019, 6:30 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The meeting was called to order at 8:46 p.m.
2. ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Brooke Jones, President Marc Marcantonio, General Manager
Phil Hawkins, Vice President Brett Barbre, Assistant General Manager
Andrew J. Hall John DeCriscio, Operations Manager
J. Wayne Miller, PhD Gina Knight, Human Resources and Risk Manager
Al Nederhood Delia Lugo, Finance Manager
Pasquale Talarico, Director of Public Affairs
Rosanne Weston, Engineering Manager
Annie Alexander, Executive Asst/Board Secretary
Kaden Young, Sr Management Analyst
ALSO PRESENT
Andrew Gagen, General Counsel, Kidman Gagen Law LLP
3. PUBLIC COMMENTS
None.
4. CONSENT CALENDAR
Director Hall made a motion, seconded by Director Miller, to approve the
Consent Calendar. Motion carried 4-0-0-1 with Director Hawkins being absent.
4.1. Minutes of the Financing Authority Regular Meeting Held October 8, 2019
Recommendation: That the Board of Directors approve the minutes as
presented.
Minutes of the YLWD Financing Authority Regular Meeting Held December 10,2019 at 6:30 p.m. 1
Page 4 of 22
FA-2019-XXX
4.2. Affirmation of Officers for the Financing Authority
Recommendation: That the Board of Directors affirm the individuals
designated as Chair, Vice Chair, Executive Director, Treasurer, and
Secretary of the Yorba Linda Water District Financing Authority in
accordance with the Joint Exercise of Powers Agreement between the
District and the California Municipal Finance Authority.
5. ADJOURNMENT
5.1. The meeting adjourned at 8:47 p.m.
Annie Alexander
Board Secretary
Minutes of the YLWD Financing Authority Regular Meeting Held December 10,2019 at 6:30 p.m. 2
Page 5 of 22
ITEM NO. 5.2.
AGENDA REPORT
MEETING DATE:October 13, 2020
TO:Board of Directors
FROM:Brett R. Barbre, General Manager
STAFF CONTACTS:Delia Lugo, Finance Manager
SUBJECT:Audit Report for Fiscal Year Ending June 30, 2020
RECOMMENDATION:
That the Board of Directors receive and file the Yorba Linda Water District Financing Authority
Comprehensive Annual Financial Report for the Fiscal Year Ending June 30, 2020.
SUMMARY:
Staff is please to present the Board of Directors with the Yorba Linda Water District Financing
Authority Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ending June
30, 2020.
White Nelson Diehl Evans LLP, the District's external auditing firm, completed their annual
audit of the Yorba Linda Water District Financing Authority for the fiscal year ending June 30,
2020. Ms. Kassie Radermacher, Partner of White Nelson Diehl Evans LLP, will be on the
video conference to present the CAFR.
ATTACHMENTS:
1.Financing Authority Audit Report
2.Government Auditing Standards Letter
Page 6 of 22
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
(A COMPONENT UNIT OF
YORBA LINDA WATER DISTRICT)
BASIC FINANCIAL STATEMENTS
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED JUNE 30, 2020
Page 7 of 22
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
For the Fiscal Year Ended June 30, 2020
Table of Contents
Page
Number
Independent Auditors’ Report 1 - 2
Management Discussion and Analysis
(Required Supplementary Information) 3 - 4
Basic Financial Statements:
Statement of Net Position 5
Statement of Revenues, Expenses, and Changes in Net Position 6
Statement of Cash Flows 7
Notes to the Basic Financial Statements 8 - 12
Page 8 of 22
2875 Michelle Drive, Suite 300 | Irvine, California 92606 | WNDECPA.com | 714.978.1300
1
INDEPENDENT AUDITORS’ REPORT
Board of Directors
Yorba Linda Water District Financing Authority
Placentia, California
We have audited the accompanying financial statements of the Yorba Linda Water District Financing
Authority (the Authority) (a component unit of the Yorba Linda Water District) as of and for the year
ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the
Authority’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditors consider internal control relevant to the
Authority’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 Authority’s internal control. Accordingly, we express no such opinion. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Page 9 of 22
2
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Authority as of June 30, 2020, and the changes in financial position and cash
flows thereof for the year ended June 30, 2020, in accordance with accounting principles generally
accepted in the United States of America.
Emphasis of a Matter
As described more fully in Note 1A, the basic component unit financial statements present only the
Authority and are not intended to present fairly the financial position and results of operations of the
Yorba Linda Water District in accordance with accounting principles generally accepted in the United
States of America.
Other Matter
Report on Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, 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 Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
October 1, 2020, on our consideration of the Authority’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 1, 2020
Page 10 of 22
YORBA LINDA WATER DISTIRCT FINANCING AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2020
3
This section of the Authority's annual financial report presents our analysis of the Authority's financial
performance during the fiscal year that ended on June 30, 2020. Please read it in conjunction with the
financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
The Authority's net position did not change, as the revenue and interest earned on the money market equaled
the expenditures and interest expense on the bonds payable.
OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis are intended to serve as an introduction to the Yorba Linda Water District
Financing Authority's basic financial statements. The Authority's basic financial statements consist of two
components: (I) financial statements and (2) notes to the financial statements. The Authority is a self-
supporting entity and follows the enterprise fund reporting. Accordingly, the financial statements are
presented using the accrual basis of accounting.
FINANCIAL ANALYSIS OF THE AUTHORITY
Our analysis of the Authority begins on page 6 of the financial statements. The goal of the Authority is to
have the installment contract and interest income receivables remain equal to the amount of outstanding
debt in order that its proceeds are available to pay the debt. Thus, net position of the Authority (the
difference between the interest income received and the unpaid debt) should be zero. Since the Authority
is a financing entity, all of the revenues and principal collected on the investment in Yorba Linda Water
District’s Financing Authority's Revenue Bonds, Series 2017A is used to pay the interest and principal on
the Bonds resulting in no change in net position.
NET POSITION
To begin our analysis a summary of the Authority's Statement of Net Position as June 30, 2020 is as follows:
Fiscal Year Fiscal Year
2020 2019
ASSETS:
Interest receivable 316,511$ 325,111$
Installment contract receivable:
Due in one year 895,000 860,000
Due in more than one year 25,805,000 26,700,000
TOTAL ASSETS 27,016,511 27,885,111
LIABILITIES:
Interest payable 316,511 325,111
Long-term Liabilities
Due in one year 895,000 860,000
Due in more than one year 25,805,000 26,700,000
TOTAL LIABILITIES 27,016,511 27,885,111
NET POSITION -$ -$
Page 11 of 22
YORBA LINDA WATER DISTIRCT FINANCING AUTHORITY
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2020
4
The Authority's Statement of Net Position as June 30, 2019 is as follows:
REVENUES, EXPENSES AND CHANGES IN NET POSITION
The interest income of $316,511 and $325,111 was used to pay the interest expense on the bonds as of
June 30, 2020 and June 30, 2019, respectively.
BUDGETARY HIGHLIGHTS
The Authority's Board of Directors is not required to adopt a budget.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets - The Authority does not own any capital assets.
Long-term Debt - At year-end, the Authority had $26,700,000 and $27,560,000 in long-term debt
as of June 30, 2020 and June 30, 2019, respectively. More detailed information about the
Authority's long-term debt is presented on page 11 in the Notes to the Financial Statements.
CONTACTING THE AUTHORITY’S FINANCIAL MANAGER
This financial report is designed to provide our citizens, customers, investors, and creditors with a general
overview of the Authority's finances and to demonstrate the Authority's accountability for the money it
receives. If you have questions about the report or need additional financial information, please contact the
District at 1717 E. Miraloma Avenue, Placentia, California 92807 or the Finance Department at (714) 701-
3040.
Page 12 of 22
Interest receivable 316,511$
Installment contract receivable:
Due in one year 895,000
Due in more than one year 25,805,000
TOTAL ASSETS 27,016,511
Interest payable 316,511
Long-term liabilities:
Due in one year 895,000
Due in more than one year 25,805,000
TOTAL LIABILITIES 27,016,511
-$ NET POSITION
ASSETS
LIABILITIES
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
STATEMENT OF NET POSITION
June 30, 2020
See accompanying notes to the basic financial statements.
5
Page 13 of 22
OPERATING REVENUES -$
OPERATING EXPENSES -
OPERATING INCOME -
NONOPERATING INCOME (EXPENSES)
Interest income 1,274,644
Interest expense (1,274,644)
TOTAL NONOPERATING INCOME (EXPENSES) -
CHANGE IN NET POSITION -
NET POSITION - BEGINNING OF PERIOD -
NET POSITION - END OF PERIOD -$
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
For the year ended June 30, 2020
See accompanying notes to the basic financial statements.
6
Page 14 of 22
CASH FLOWS FROM OPERATING ACTIVITIES
Total operating revenues -$
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Principal paid on 2017A Revenue Bonds (860,000)
Interest paid on 2017A Revenue Bonds (1,283,244)
Contract receivable installment payments received 2,143,244
NET CASH PROVIDED BY CAPITAL AND
RELATED FINANCING ACTIVITIES -
NET CHANGE IN CASH AND CASH EQUIVALENTS -
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR -
CASH AND CASH EQUIVALENTS - END OF YEAR -$
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
STATEMENT OF CASH FLOWS
For the year ended June 30, 2020
See accompanying notes to the basic financial statements.
7
Page 15 of 22
8
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
For the Fiscal Year Ended June 30, 2020
Notes to Basic Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Reporting Entity
The Yorba Linda Water District Financing Authority (the Authority) was organized pursuant to
a Joint Exercise of Powers Agreement (the JPA Agreement) between the Yorba Linda Water
District (the District) and California Municipal Finance Authority, dated April 11, 2017. The
Authority is statutorily authorized by Article 4 of Chapter 5 of Division 7 of Title 1 of the
California Government Code and is empowered under the JPA Agreement to issue its bonds for,
among other things, the purposes of the plan of financing described herein.
The Authority is an integral part of the reporting entity of the District. The financial activity of
the Authority has been included within the scope of the basic financial statements of the
District because the Board of Directors of the District is the governing board over the
operations of the Authority. Only the financial activity of the Authority is included herein;
therefore, these financial statements do not purport to represent the financial position or results
of operations of the District.
B. Basic Financial Statements
The basic financial statements are composed of the statement of net position, the statement of
revenues, expenses, and changes in net position, the statement of cash flows, and the notes to
the basic financial statements.
C. Basis of Presentation
The accounts of the Authority are that of an enterprise fund. An enterprise fund is a proprietary
type fund used to account for operations (a) that are financed and operated in a manner similar
to private business enterprises where the intent of the governing body is that the costs
(expenses) of providing goods or services to the general public on a continuing basis be
financed or recovered primarily through user charges; or (b) where the governing body has
decided that periodic determination of revenues earned, expenses incurred, and/or net income
is appropriate for capital maintenance, public policy, management control, accountability, or
other purposes.
D. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe which transactions are recorded within the
financial statements. Basis of accounting refers to when transactions are recorded regardless of
the measurement focus applied. The accompanying financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting. Under the
economic measurement focus, all assets and liabilities (whether current or noncurrent)
associated with these activities are included on the statement of net position. The statement of
revenues, expenses, and changes in net position presents 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.
Page 16 of 22
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
For the Fiscal Year Ended June 30, 2020
Notes to Basic Financial Statements
9
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. New Accounting Pronouncements
GASB Current-Year Standards
GASB 95 - Postponement of the Effective Dates of Certain Authority Guidance, effective
during fiscal year 2019-2020 and resulted delaying the implementation requirements for certain
Statements and Implementation Guides to provide temporary relief to governments and other
stakeholders in light of the COVID-19 pandemic.
GASB 97 - Certain Component Unit Criteria, and Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB
Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32, effective for
fiscal years beginning after June 15, 2021, paragraphs 4 and 5. The requirements of these
paragraphs did not impact the District.
GASB Pending Accounting Standards
GASB has issued the following statements, which may impact the Authority’s financial
reporting requirements in the future:
GASB 84 - Fiduciary Activities, effective for periods beginning after December 15, 2019.
GASB 87 - Leases, effective for periods beginning after June 15, 2021.
GASB 89 - Accounting for Interest Cost Incurred before the End of a Construction Period,
effective for periods beginning after December 15, 2020.
GASB 90 - Majority Equity Interests – an amendment of GASB Statements No. 14 and No.
61, effective for periods beginning after December 15, 2019.
GASB 91 - Conduit Debt Obligations, effective for periods beginning after December 15,
2021.
GASB 92 - Omnibus 2020, primarily effective for periods beginning after June 15, 2020.
GASB 93 - Replacement of Interbank Offered Rates, effective for periods beginning after
June 15, 2021.
GASB 94 - Public-Private and Public-Public Partnerships and Availability Payment
Arrangements, effective for periods beginning after June 15, 2022.
GASB 96 – Subscription-Based Information Technology Arrangements, effective for fiscal
years beginning after June 15, 2022
Page 17 of 22
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
For the Fiscal Year Ended June 30, 2020
Notes to Basic Financial Statements
10
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. New Accounting Pronouncements (Continued)
GASB Pending Accounting Standards (Continued)
GASB 97 - Certain Component Unit Criteria, and Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of
GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32,
effective for fiscal years beginning after June 15, 2021, except for the requirements of
paragraphs 4 and 5.
F. Cash and Investments
The Authority considers all highly liquid investments with a maturity of three months or less at
the time of purchase to be cash equivalents.
G. Investments
Investments are stated at fair value, which is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the
measurement date. Changes in fair value that occur during a fiscal year are recognized as
investment income reported for that fiscal year. Investment income includes interest earnings,
changes in fair value, and any gains or losses realized upon the liquidation or sale of
investments.
H. 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.
2. INSTALLMENT CONTRACT RECEIVABLE
In May 2017, the Authority issued $29,335,000 of Revenue Bonds, Series 2017A (the 2017A
Revenue Bonds) (see Note 3) and loaned the proceeds to the District pursuant to an Installment
Purchase Agreement dated May 1, 2017. The loan proceeds were used by the District to refund the
District’s 2008 Revenue Certificates of Participation, as well as to provide funds for certain
improvements to the District’s water system. Under the Installment Purchase Agreement, the
District agrees to pay the Authority installment payments in an amount sufficient to pay the
principal and interest coming due on the bonds solely from water revenues of the District’s water
system that are remaining after paying operation and maintenance costs. The balance of the
receivable from the District at June 30, 2020, was $26,700,000.
Page 18 of 22
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
For the Fiscal Year Ended June 30, 2020
Notes to Basic Financial Statements
11
2. INSTALLMENT CONTRACT RECEIVABLE (CONTINUE)
For the year ended June 30, 2020, the receivable of the Authority consists of the following:
Balance Balance
July 1, 2019 Additions Deletions June 30, 2020
2017 Installment Purchase A greement 27,560,000$ -$ (860,000)$ 26,700,000$
3. LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities of the Authority for the year ended
June 30, 2020:
Due in
Balance Balance Due Within More Than
July 1, 2019 Additions Deletions June 30, 2020 One Year One Year
2017A Revenue
Bonds 27,560,000$ -$ (860,000)$ 26,700,000$ (895,000)$ 25,805,000$
2017A Revenue Bonds
In May 2017, the Authority issued $29,335,000 of 2017A Revenue Bonds to provide funds for the
refunding of the District’s 2008 Revenue Certificates of Participation, as well as to provide funds
to the District for certain improvements to the District’s water system.
The 2017A Revenue Bonds bear interest at rates ranging from 3% to 5%, payable semiannually on
April 1 and October 1. There is no reserve requirement for the 2017A Revenue Bonds.
The 2017A Revenue Bonds are payable solely from installment payments to be made to the
Authority from the District, with annual principal payments starting October 1, 2017. The
installment payments required from the District are scheduled to provide sufficient monies to retire
the revenue bonds as they become due and payable. The balance outstanding on the 2017A
Revenue Bonds at June 30, 2020, was $26,700,000.
Page 19 of 22
YORBA LINDA WATER DISTRICT FINANCING AUTHORITY
For the Fiscal Year Ended June 30, 2020
Notes to Basic Financial Statements
12
3. LONG-TERM LIABILITIES (CONTINUED)
2017A Revenue Bonds (Continued)
The annual debt service requirements for the 2017A Revenue Bonds outstanding at June 30, 2020
are as follows:
Year
Ending
June 30, Principal Interest Total
2021 895,000$ 1,243,669$ 2,138,669$
2022 945,000 1,197,669 2,142,669
2023 990,000 1,149,294 2,139,294
2024 1,045,000 1,098,419 2,143,419
2025 1,095,000 1,044,919 2,139,919
2026-2030 6,320,000 4,337,569 10,657,569
2031-2035 7,745,000 2,861,841 10,606,841
2036-2039 7,665,000 785,075 8,450,075
26,700,000$ 13,718,455$ 40,418,455$
4. SUBSEQUENT EVENTS
In preparing these financial statements, the Authority has evaluated events and transactions for
potential recognition or disclosure through October 1, 2020, the date the financial statements were
available to be issued.
Page 20 of 22
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1
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Directors
Yorba Linda Water District Financing Authority
Placentia, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America, the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the Yorba Linda
Water District Financing Authority (the Authority) (a component unit of the Yorba Linda Water
District) as of and for the year ended June 30, 2020, and the related notes to the financial statements,
which collectively comprise the Authority’s basic financial statements, and have issued our report
thereon dated October 1, 2020.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Authority’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 Authority’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal
control that is less severe than a material weakness, yet important enough to merit attention by those
charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Page 21 of 22
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matter that
are required to be reported under Government Auditing Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
October 1, 2020
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