HomeMy WebLinkAbout28-Water DepartmentORIGINAL
CITY OF SAN BERNARDINO
MUNICIPAL WATERDEPARTM~~~--~i1~1 ~~,_~th
INTEROFFICE MEMORANDUM
'04 JAN 22 A10 ~ 14
TO: Rachel Clark, City Clerk
FROM: Stacey R. Aldstadt, Deputy General Manager
SUBJECT: 2002-2003 AUDIT REPORT FOR WATER DEPARTMENT
WATER AND SEWER UTILITIES
DATE: January 22, 2004
CC: Bernard C. Kersey, David Erickson
The firm of Conrad and Associates, L.L.P., has completed the
Fiscal Year 2002-2003 Annual Audit of the Water Department's
Water and Sewer Utilities. This report was presented to and
accepted by the Board of Water Commissioners at their meeting
held on January 13, 2004. Transmitted herein is one copy of the
audit report for the Mayor and Common Council to "receive and
file."
Please contact me or David Erickson, Director of Administration
and Finance, if you have questions.
,(p„ S cey R. Aldstadt
~( D uty General Manager
als
Attachment
No. z8
a/x/oy
MUNICIPAL WATER DEPARTMENT OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
Financial Statements
Yeaz ended June 30, 2003
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Financial Statements
Year ended June 30, 2003
TABLE OF CONTENTS
Page
FINANCIAL SECTION
Independent Auditors' Report 1
Management's Discussion and Analysis 5
Basic Financial Statements:
Statement of Net Assets 10
Statement of Revenues, Expenses, and Changes in Net Assets 13
Statement of Cash Flows 14
Notes to Basic Financial Statements 16
SUPPLEMENTARY INFORMATION
Statistical Schedules:
Boazd of Water Commissioners and Organization 42
Schedule of Insurance Coverage 43
Schedule of Water System Demographics 44
Schedule of Water Production 45
Schedule of Water Rates 46
Schedule of Sundry Water Statistical Data 48
Schedule of Service Area and Customers 50
Schedule of Sewer Rates and Statistics 51
Schedule -1992 Certificates of Participation, San Bernazdino
Public Safety Authority 54
Schedule -1998 Refunding Sewer Revenue Certificates of Participation,
San Bemazdino Public Safety Authority 55
Series 1998A Water and Wastewater Revenue Bonds 56
Bond Schedule -General Obligation Waterworks Bonds, Series C 57
MiTNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Financial Statements
Yeaz ended June 30, 2003
TABLE OF CONTENTS, (CONTINUED)
Page
SUPPLEMENTARY INFORMATION, (CONTINUED)
Water Utility, Continued:
Schedules of Distribution Maintenance Expenses 88
Schedules of Meter Shop Expenses 89
Schedules of Gazage -Vehicle Maintenance Expenses 90
Schedules of Engineering Expenses 91
Schedules of Water Quality and Backflow Connection Expenses 92
Schedules of General, Administration, and Overhead Expenses 93
Sewer Utility (Individual Fund Statements and Schedules)
Statements of Net Assets 96
Statements of Revenues and Expenses 98
Statements of Changes in Net Assets 99
Statements of Cash Flows 100
Schedules of Operating Expenses 102
Schedules of Administration Expenses 103
Schedules of Engineering Services Expenses 104
Schedules of Plant Operations Expenses 105
Schedules of Bio-Solids Processing Expenses 106
Schedules of RIX Facility Operations Expenses 107
Schedules of Plant Maintenance Expenses 108
Schedules of Facilities Maintenance Expenses 109
Schedules of Electrical Instrumentation Expenses 110
Schedules of Environmental Control Expenses 111
Schedules of General, Administration, and Overhead Expenses 112
Report on Compliance and Internal Control over Financial Reporting
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 113
I~ONRAD AND CERTIFIED PUBLIC ACCOUNTANTS
2301 DUPONT DRIVE, SUITE 200
ASSOCIATE ~ L.L.P. IRVINE, CALIFORNIA 92612
(949) 474-2020
Fax (949) 263-5520
Water Commissioners Boazd
Municipal Water Department of the City of
San Bemazdino, California
Independent Auditors' Report
We have audited the accompanying basic financial statements of the Municipal Water
Department of the City of San Bemazdino, Califomia as of and for the yeaz ended June 30, 2003.
These basic financial statements aze the responsibility of the management of the Municipal
Water Department of the City of San Bemazdino, California. Our responsibility is to express an
opinion on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing sandazds generally accepted in the United
States of America and the Sandazds applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those sandazds
require that we plan and perform the audit to obtain reasonable assurance about whether the basic
financial statements aze free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the basic financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
~ As discussed in Note 1, the financial statements present only the Municipal Water Department
and are not intended to present fairly, in all material respects, the financial position of the City of
' San Bemazdino, California, and the results of its operations and cash flows of its proprietary fund
types, in conformity with accounting principles generally accepted in the United States of
America.
In our opinion, the basic financial statements referred to above present fairly, in all material
respects, the financial position of the Municipal Water Department of the City of San
' Bernardino, California, as of June 30, 2003, and the results of its operations and the cash flows
for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
' The information identified in the accompanying table of contents as management's discussion
and analysis is not a required part of the basic financial statements, but is supplementary
information required by the Governmental Accounting Standazds Boazd. We have applied certain
' limited procedures, which consisted principally of inquiries of management regazding the
methods of measurement and presentation of the supplementary information. However, we did
not audit the information and do not express an opinion on it.
1
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
1
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
MANAGEMENT'S DISCUSSION AND ANALYSIS
MANAGEMENT'S DISCUSSION AND ANALYSIS
Our discussion and analysis of the San Bernardino Municipal Water Department's financial
performance provides an overview of the Department's financial activities for the year ended June 30,
2003. Please read it in conjunction with the Department's basic fmancial statements.
This annual fmancial report consists of two parts -- Management's Discussion and Analysis (this
section) and the Basic Financial Statements. The financial statements include notes that explain some of
the information in the financial statements and provide more detailed data.
In December 1998 the Governmental Accounting Standazds Boazd (GASB} issued Statement No.
33, Accounting and Financial Reporting for Non-Exchange Transactions. GASB No. 33 set new revenue
recognition rules including the reporting of contributed capital as Income in the Statement of Revenues,
Expenses, and Changes in Equity. In June 1999 the GASB issued Statement No. 34, Basic Financial
Statements -- and Management's Discussion and Analysis -- for State and Local Governments. GASB
No. 34 establishes financial reporting standazds for state and local governments, cities, villages and
special purpose governments. GASB No. 34 required the following changes to the Department's financial
statements:
The format of the balance sheet has been changed. Assets and liabilities are now categorized as
current and noncurrent. The equity section is displayed in three categories: 1) Invested in
capital assets, net of related debt, 2) restricted, and 3) unrestricted. Unrestricted equiTy is no
longer reserved or designated on the face of the balance sheet.
2. The statement of revenues, expenses, and changes in equity now reports contributed capital as
revenue, rather than a direct change to equity.
3. The statement of cash flows now includes a summazization of the cash flows from operating
activities. The statement of cash flows continues to reconcile the reasons why cash from
operating activities differs from operating income.
Financial HiEhli¢hts
During the yeaz ended June 30, 2003, the Water Fund net assets increased $6.3 million. This is primarily
' due to a net profit of $3.1 million caused by recent rate increases (FY 2001) 3 as well as the $3.3 million
in capital contributions for the yeaz. The Water Department's decrease of operating revenue ($90,386),
increase of operating expense ($84,845) and decrease of nonoperating revenue ($263,762) combined to
' decrease net profit by $438,993. Net profit decreased from a $3,533,652 gain to a $3,094,659 gain from
2002 to 2003. The net profit of $3.1 million and contributed capital of $3.3 million increased net assets
by $6.3 million before prior period adjustments.
The Sewer Fund net assets decreased $1.2 million for the yeaz ended June 30, 2003. The Sewer
Department's increase in operating revenue ($210,391), increase in operating expense ($822,383) and
' increase of nonoperating expense ($31,524) combined to increase net loss by $.7 million. Net profit
decreased from a $.2 million loss to a $.9 million loss from 2002 to 2003. The net loss of $.9 million and
contributed capital of $3.3 million increased net assets by 2.4 million before prior period adjustments.
premiums for all purchased insurance policies as well as our self insured workers compensation expense
($227,945).
The Sewer Department's non-operating revenues (expenses) increased 3.0% to ($L1 million). Capital
contributed to the Sewer Department increased to $3.3 million. The net loss of $.9 million and
contributed capital of $3.3 million combined with a prior period adjustment of $3.6 million leaving a
decrease of $1.2 million to net assets.
Water Department's Changes in Net Assets
(In Millions of Dollazs)
Water Fund Sewer Fund
2003 1002 % Change 2003 1001 °6 Change
Revenues:
Opernting Revenues:
Charges for Services 20.4 20.5 .5 17.1 16.9 1.2
Contributed Capital 3.3 3.6 (8.3) 3.3 2.3 43.5
Nonopernting Revenues:
Investment Income .7 1.0 (30.0) 1.5 1.7 (11.8)
Noncapital Grant Funds .8 1.0 (20.0) - - -
25.2 26.1 (3.4) 21.9 20.9 (4.8)
Opernting and Nonoperating Expenses: 18.9 19.1 (1.0) 19.5 18.8 3.7
Increase in Equity 6.3 7.1 (11.3) 2.4 2.1 14.3
Prior Period Adjustment -Net 2.5 (100.0) (3.6) (4.7) (23.4)
Increase in Equity after Prior Period Adjustment 6.3 9.6 (34.4) (1.2) (2.6) (53.8)
Total Net Assets -Beginning of the Year 79.8 70.2 13.7 90.1 92.7 (2.8)
Total Net Assets -End of the Year 86.1 79.8 7.9 88.9 90.1 (1.3)
Capital Assets
At June 30, 2003, the Water Fund had invested $73.8 million in capital assets net of $40.3 million of
accumulated depreciation. This amount represents a net increase (including additions and deductions) of
$4.5 million or 6.5% from the prior year. A $1.4 million increase in property, plant and equipment and a
$4.9 million increase in construction in progress was partially offset by a $1.8 million increase in
accumulated depreciation. The main cause for the $4.5 million increase in net capital assets is due to
increased construction in progress for newer projects such as the Victoria Farms main replacement project
and the Enhanced Reliability Schedule of Improvements projects.
At June 30, 2003, the Sewer Fund had invested $114.6 million in capital assets net of $54.6 million of
accumulated depreciation. This amount represents a net decrease (including additions and deductions) of
$7.0 million or 5.8% from the prior year. The main cause for the significant drop in net capital assets is
due to a prior period adjustment of $3.6 million that decreased property, plant and equipment for a portion
of the RIX Demo project, which no longer exists.
More detailed information about the Department's capital assets is presented in Note 3 to the financial
statements.
BASIC FINANCIAL STATEMENTS
i
~' MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Statement of Net Assets
(Continued)
II
Liabilities and net assets
Liabilities:
' Current liabilities:
Accounts payable
Interfimd payable
' Related parties payable (note 8)
Accrued expenses
Accrued compensation
' Claims payable (note 10)
Other deposits
Current portion of notes payable (note 5)
' Total current liabilities
Current liabilities payable from restricted assets:
' Current portion of certificates of -
participation (note 5)
Current portion of bonds payable (note 5) 1,107,662
I' Accrued interest payable 38,886
Consumer deposits 2,024,812
Total current liabilities payable from
restricted assets
Long-term liabilities:
Notes payable (note 5)
Certificates of participation (note 5)
Bonds payable (note 5)
Total long-term liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related
debt
Restricted for:
Capital-related fees
Deposits
Debt service
Unrestricted
Water Sewer Totals
U~ Utility Eliminations 2003 2002
1,754,839 849,245 - 2,604,084 2,504,084
- 28,790 (28,790) - -
540,416 367,801 - 908,217 762,396
16,023 8,517 - 24,540 15,611
1,811,622 651,713 - 2,463,335 2,225,215
382,899 144,680 - 527,579 373,615
563,974 7,189 - 571,163 592,033
- 1,670,365 - 1,670,365 1,614,963
5,069,773 3,728,300 (28,790) 8,769,283 8,087,917
1,624,877 - 1,624,877 1,549,467
- - 1,107,662 1,025,984
799,547 - 838,433 885,771
- - 2,024,812 1,923,296
3,171,360 2,424,424 - 5,595,784 5,384,518
- 22,380,771 - 22,380,771 24,055,161
- 31,228,730 - 31,228,730 32,853,607
2,485,164 - - 2,485,164 3,592,826
2,485,164 53,609,501 _ - 56,094,665 60,501,594
10,726,297 59,762,225 28 790 70,459,732 73,974,029
70,178,300 57,661,976
2,026,374 6,693,115
41,331 -
418,791 2,790,223
13,454,746 21,741,659
- 127,840,276 126,252,672
- 8,719,489 6,079,305
- 41,331 59,973
- 3,209,014 3,273,576
- 35,196,405 34,229,243
Total net assets $ 86,119,542 88,886,973 - 175,006,515 169,894,769
Sec accompanying notes to basic financial statements.
11
MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Statement of Revenues, Expenses, and Changes in Net Assets
Yeaz Ended June 30, 2003
(With comparative totals for 2002)
Operating revenues:
Charges for services
Other operating revenues
Total operating revenues
Operating expenses:
Administration and customer service
Engineering, operations, and distnbution
administration
Plant operations
Maintenance
Environmental control
Distribution
Engineering
General, administration, and overhead
Depreciation and amortization
Total operating expenses
Operating income (loss)
Non-operating revenues (expenses)
Water Sewer Totals
Utility Utility Eliminations 2003 2002
$18,820,801 16,459,446 (30,724) 35,249,518 34,710,093
1,594,028 610,462 750111 1,454,379 1,892,513
20,414,829 17,069,908 780 840 36,703,897 36,602,606
4,783,093 - - 4,783,093 4,363,823
591,367 1,324,348 (729,754) 1,185,961 740,386
5,818,947 7,792,183 (30,729) 13,580,401 12,651,498
1,062,255 2,193,534 (20,137) 3,235,652 3,072,140
- 316,238 - 316,238 253,959
2,441,589 - (220) 2,441,369 2,709,824
1,288,902 - - 1,288,902 1,161,730
163,234 1,033,920 - 1,197,154 2,048,902
2,423,163 4,205,205 - _~g,368 6,769,157
18,572,550 16,865,428 7( 80,840) 34,657,138 33,771,419
1,842,279 204,480 - 2,046,759 2,831,187
Investment income 749,833 1,510,460 - 2,260,293 2,601,625
Rental income 69,828 28,587 - 98,415 127,660
Noncapital grant funds 794,044 - - 794,044 990,282
Gain (loss) on asset dispositions (135,495) 3,666 - (131,829) (242,317)
Interest expense and fiscal charges (252,552) (2,548,367) - (2,800,919) (2,982,375)
Amortization of issuance costs (20,481) (47,559) - (68,040) {74,039)
Other 47,203 16,811 2,795 33,187 56,806
Total non-operating revenues (expenses) 1,252,380 (1,070,024) 2,795 185,151 477,642
Netprofit(loss) 3,094,659 (865,544) 2,795 2,231,910 3,308,829
Capital contributions
Capital grants 1,159,787 - - 1,159,787 569,5]9
Acquisition fees 1,248,701 - - 1,248,701 1,750,127
ttyfees - 3,091,579 - 3,091,579 2,181,383
er caprtal restricted fees 848,921 171,581 - 1,020,502 1,416,929
Total capital contributions 3,257,409 3,263,160 - 6,520,569 5,917,958
Net assets
Balance at beginning of yeaz,
as restated (note 12) 79,767,474 86,489,357 2 795 166,254,036 160,667,982
Balance at end of year $86,119,542 88,886,973 - 175,006,515 169,894,769
See accompanying notes to basic financial statements.
13
II
II
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1.
MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Statement of Cash Flows
(Continued)
Totals
Reconciliation of cash and cash equivalents to amounts
reported on the balance sheet:
Reported on the balance sheet:
Cash and investments
Restricted assets
Less restricted assets not meeting the definition of
cash equivalents:
Investment agreements
Interest and other receivables
Cash and cash equivalents at end of year
Reconciliation of operating income to net cash
provided by (used for) operating activities:
Operating income
Depreciation and amortization
Nonoperating miscellaneous revenue (expenses)
Rental income
Gain (loss) on asset dispositions
Adjustments:
Change in accounts receivable
Change in due from other entities
Change in interfand receivable
Change in related parties receivable
Change in inventory
Change in prepaid expenses
Change in accounts payable
Change in interfand payable
Change in related parties payable
Change in accrued expenses
Change in accrued compensation
Change in claims payable
Change in consmner deposits
Change in other deposits
Change in other assets
Net cash provided by operating activities
Water Sewer 2003 2002
$ 11,990,239 19,957,510 31,947,749 30,759,621
4,550,194 10,282,885 14,833,079 12,221,921
- (3,473,750) (3,473,750) (3,473,750)
_ (80,765) (80,765) (80,765)
$ 16,540,433 26,685,880 43,226,313 39,427,027
$ 1,842,279 204,480 2,046,759 2,831,187
2,423,163 4,205,205 6,628,368 6,769,157
47,203 (16,811) 30,392 56,806
69,828 28,587 98,415 127,660
(135,495) 3,666 (131,829) (242,317)
218,892 (62,049) 156,843 715,431
(1,132,763) 4,227 (1,128,536) (541,247)
72,432 - 72,432 53,512
45,183 49,625 94,808 (307,317)
(48,734) - (48,734) 62,859
147,395 263,060 410,455 (154,769)
402,424 (302,424) 100,000 278,843
- (69,637) (69,637) 46,103
(143,527) 289,348 145,821 98,088
3,995 4,934 8,929 (22,064)
258,643 (20,523) 238,120 76,054
41,129 112,835 153,964 (18,061)
101,516 - 101,516 320,296
(28,059) 7,189 (20,870) 156,995
2,101,355 419,220 2,520,575 (2,126,927)
$ 6,286,859 5,120,932 11,407,791 8,180,289
Noncash Investine Capital and Financine Activities
During the year ended June 30, 2003, developer contributions of capital assets were made in the amount of $194,714.
There were no significant noncash investing, capital and financing activities for the yeaz ended June 30, 2002.
See accompanying notes to basic financial statements.
15
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
when earned and expenses are recorded at the time liabilities aze incurred. The
Department applies all applicable GASB pronouncements in accounting and reporting for
its proprietary operations and applicable FASBs that occurred prior to November 30,
1989,
Cash and Investments
Investments aze reported in the accompanying balance sheet at fair value, except for
certain certificates of deposit and investment contracts that aze reported at cost because
they are not transferable and they have terms that are not affected by changes in mazket
vnterest rates.
' Changes in fair value that occur during a fiscal year aze 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.
Cash for the Department is pooled with the City of San Bernazdino for investment
purposes in order to maximize interest earnings. Such earnings aze credited to the various
funds within the City of San Bernardino based upon average monthly cash balances. The
investment policies and the associated risk factors as they relate to the Department aze
included in the City's Comprehensive Annual Financial Report.
For the purpose of the statement of cash flows, cash and cash equivalents include all
highly liquid investments (including restricted assets) with maturity of three months or
less when purchased.
Receivables
Trade receivables aze shown net of an allowance for uncollectible accounts based on
management's estimate.
Interfund Receivables and Payables
Transactions between funds that aze representative of lending/bonowing arrangements
outstanding at the end of the fiscal yeaz aze referred to as either "interfitnd
receivables/payables" (i.e., the current portion of interfimd loans) or "advances to/from
other funds" (i.e., the non-current portion of interfimd loans). All interfimd transactions
aze eliminated for financial reporting purposes.
17
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Office equipment 5 to 20 yeazs
Communication equipment 8 to 10 yeazs
Computer equipment 3 to 5 yeazs
Automotive equipment 3 to 8 years
' Equipment leased under capital leases is recorded at cost, and amortization has been
provided for using the straight-line method over the estimated useful life. Amortization is
included in depreciation expense.
1 Compensated Absences
' Employees gain a vested right to accumulated unpaid vacation based on years of service
but cannot accumulate more than two years of accrued vacation. Once each fiscal year,
employees with at least three weeks of accrued vacation have the option of receiving
payment at their regulaz rate of pay for one week of accumulated unpaid vacation (two
weeks for managers and mid-management employees). Employees' vacation benefits aze
recognized as a liability of the Department.
' Sick leave is accumulated without limit for each employee at the rate of 3.7 hours per pay
period. Leave with pay is provided when employees are absent for health reasons. Upon
temunation employees aze entitled to 25 percent of accumulated sick leave with five
yeazs of service and a minimum of 480 hours of accumulated sick leave. Upon retirement
or death, employees are entitled to 50 percent of accumulated sick leave up to a
' maximum of 1,152 hours. Accrued sick leave benefits aze recognized as a liability of the
Department.
Classification of Revenues and Expenses
' Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing
' and delivering goods in connection with a proprietary fund's principal ongoing
operations. The principal operating revenues of the Department's enterprise funds aze
chazges to customers for services. The Department also recognizes as operating revenue
the cost of connecting new customers to the system. Operating expenses for the enterprise
funds include the cost of services, administrative expenses, and depreciation on capital
assets. All revenues and expenses not meeting this definition aze reported as nonoperating
' revenues and expenses.
19
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Cash and investments held by the Department consisted of the following at June 30:
2003 2002
Petty cash $ 5,400 5,550
Demand deposits 66,619 73,847
Internal investment pool with City
of San Bernardino 42,678,292 38,757,205
Investments with fiscal agent 3,949,752 4,064,175
Total $46.700.063 42.900.777
The Department maintains substantially all of its operating funds in the City of San
Bernardino Treasury (an internal investment pool). These funds aze reported at estimated
fair value. Investment earnings are proportionately shared by all funds in the internal
investment pool of the City.
The Department is generally authorized under provisions of the City of San Bernazdino's
investment policy and Section 53601 of the Government Code to invest in investment
instruments so long as the investment is appropriate when investment objectives and
policies aze taken into consideration. Investment instruments may include:
- Securities of the U.S. Government or its agencies
- Treasury notes, bonds
- Negotiable certificates of deposit - (30% max)
- Banker's acceptances - (40% max)
- Commercial paper - (25% max)
- Repurchase agreements
- Local Agency Investment Fund (state pool) deposits - a special fund of
the California State Treasury through which local governments may pool
investments.
- Money Market Accounts - (20% max)
21
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
The Department's investments aze categorized as either (1) insured or registered or for
which the securities are held by the Department or its agent in the Department's name, (2)
uninsured and unregistered for which the securities are held by the broker's or dealer's
trust department or agent in the Department's name, or (3) uninsured and unregistered for
which the securities aze held by the broker or dealer or by its trust department or agent
but not in the Department's name. Category 3 also includes securities held by the same
party (bond trustee) that acts as both the custodian and the counterparty for the
investment transaction. The Department's investments in the Local Agency Investment
Fund and money mazket funds have not been categorized because securities aze not used
as evidence of the investments but aze an ownership interest in pooled investment funds:
As of June 30, 2003, investments were categorized as follows:
Form of Investment
Category
1 2 3 Can'y1nQ Amount
Investments held by fiscal agent:
U.S. Treasury notes
Investments not subject to categorization:
Mutual funds
Investment agreements
Internal investment pool with the City of San Bernazdino
Total investments
23
35,255 35,255
35,255 35,255
440,747
3,473,750
42,678,292
$46,628,044
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(3) Capital Assets
Capital asset activity for the yeaz ended June 30, 2003 is as follows:
. Capital projects, not being depreciated:
Land and easements
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Water rights, wells and pumping plants
' Distribution systems
Building, plants and store yards
Tools and equipment
Autos
' Office leasehold improvements
Office, computer, engineering equipment
Radio and interoffice communication
equipment
' Telemetry system and equipment
Miscellaneous
Total capital assets, being depreciated
Less accumulated depreciation for:
Water rights, wells and pumping plants
Distribution systems
Building, plants and store yards
Tools and equipment
Autos
Office leasehold improvements
Office, computer and engineering equipment
Radio and interoffice computer equipment
Telemetry system and equipment
Miscellaneous
Balance at
June 3Q 2002, Balance a[
as restated ` Additions Deletions June 30, 2003
14,871,556
9,397,218
24,268,774
38,757,956
53,797,957
146,616,286
5,326,446
3,151,647
112,594
3,010,018
301,217
7,033,868
7,335,085
127,732
777,773
345,331
213,941
743,427
576,803
- 15,172,773
2 010 702 14,420,384
(2,010,702) 29.593,157
- 38,885,688
(298,149) 54,277,581
(357,089) 146,604,528
(16,041) 5,524,346
(327,637) 3,567,437
112,594
(178,402) 3,408,419
260,101 2,764 - 262,865
539,058 59,982 (14,092) 584,948
426,549 426,549
251,998,612 2,847,753 1191410 253,654,955
(15,690,166) (1,013,105) - (16,703,271)
(20,056,956) (656,226) 300,301 (20,412,881)
(46,677,283) (3,780,182) 9,243 (50,448,222)
(3,089,413) (250,205) 6,157 (3,333,461)
(1,898,509) (238,908) 253,948 (1,883,469)
(54,001) (4,464) - (58,465)
(994,556) (604,109) 111,676 (1,486,989)
(206,952) (28,883) - (235,835)
(102,154) (39,959) 215 (141,898)
(193,449) 12 327 (205,776)
Total accumulated depreciation (88,963,439) 6 628 368 681,540 (94,910,267)
Total capital assets, being depreciated, ne[ 163,035,173 (3,780,615) (509,870) 158,744,688
Net property, plant and equipment 187.303.947 3.884.470 •820"872) 188.337.845
* Beginning capital assets and accumulated depreciation have been restated to properly
account for individual RIX facility capital assets. See footnote 12 for further details.
Depreciation expense for the yeaz was $6,628,368.
25
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(5) Long-Term Debt, (Continued)
' Notes Payable
San Bemazdino Valley Municipal Water District
' Original amount: $5,084,729
Maturity date: 2013
Interest rate: 7.25%
' Repayment provisions: Annual principal and interest
payments of $456,250
Balance $ 3,167,802
State Water Resources Control Boazd (SWRCB)
Original amount: $4,015,216
Maturity date: 2011
Interest rate: 3.3%
' Repayment provisions: Annual principal and interest
payments of $279,293
Balance 1,935,974
State Water Resources Control Boazd (SWRCB)
Original amount: $25,978,599
Maturity date: 2016
Interest rate: 2.8%
Repayment provisions: Annual principal and interest
payments of $1,761,739
Balance 18,947,360
24
051
136
,
,
' Less current portion (1,670,365)
Long-term portion $ 22.380.771
The State Revolving Fund loans between the State Water Resources Control Boazd and
the Santa Ana Watershed Authority provided funding for the construction of the San
Bernazdino/Colton Rapid Infiltration Extraction (RI3~ Project. The loan agreements were
' amended in Apri12001 to transfer the loan obligations to the successors in interest, being
The
and the City of Colton
d of Water Commissioners
B
di
B
f
.
,
oaz
ernar
no
San
the City o
loans require the Department to establish a Wastewater Capital Reserve Sinking Fund
(WCRF) for expansion, major repair or replacement of wastewater treatment works at
Th
f
' e
ten yeazs.
one-half of one percent of the total loan amount over a period o
Department has decided to use the revenues of the Sewer Utility Fund towazds repayment
of the loans.
' 27
I~
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(5) Long-Term Debt, (Continued)
Bonds Payable
Annual
Interest Issue Maturity Original Principal
Rates Date Date Amount Installments Balance
1998 Water and Wastewater 3.75% 1998 2005 $8,610,000 860,000
Revenue Bonds to to
4.40% $1,260>000 $3,615,000
Waterworks Bonds, 7.75% 1988 2013 $150,000 $5,000
Series C to
$15,000 95,000
Total bonds payable 3,710,000
Less unamortized discount
and deferred advance
refunding charge (117,174)
3,592,826
Less current portion payable from
restricted assets, net of unamortized
discount and deferred advance
refunding charge of $57,338 (1,107,662'
Long-term portion, net of unamortized
discount and deferred advance
refunding charge of $59,836 2 4 164
The Department has covenanted to set aside Water revenues to make installment
payments on the Bonds as due. A financial guaranty insurance policy has been issued,
and accordingly, no cash reserve balance is required to be established.
29
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
' (5) Long-Term Debt, (Continued)
Prior Yeaz Defeasance of Debt
As of June 30, 2003, approximately $3,451,000 of outstanding 1990 Water Facilities
Certificates of Pazticipation aze considered in substance defeased through the issuance of the
Series 1998A Water and Wastewater Revenue Bonds (see Bonds Payable) and aze not
included as a liability of the Depaztment in these financial statements.
(6) Defined Benefit Pension Plan
' Qualified employees aze covered under amultiple-employer contributory retirement plan
maintained by an agency of the State of California, California Public Employees'
retirement System (PERS).
' Plan Description
The Department is a part of the City of San Bernardino. The City contributes to PERS,
an agent multiple-employer public employee retirement system defined benefit pension
plan administered by PERS. All employees who work 1,000 hours or more are eligible to
pazticipate. The plan provides retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. Benefit provisions aze
established by state statutes, as legislatively amended, within the Public Employees'
' Retirement Law. PERS issues a sepazate comprehensive annual financial report that
includes financial statements and required supplementary information. Copies of the
PERS annual financial report may be obtained from the PERS Executive Office, 400 "P"
Street, Sacramento, California 95814. PERS also issues a separate report on the actuarial
' valuation of the plan of the City of San Bernazdino, which is available at the Department.
Additional information regazding the City's participation in PERS can be found in the
City's financial statements.
(7) Post-Retirement Health Caze Benefits
' In addition to the pension benefits described in note 6, the Department provides the
minimum monthly premium for post-retirement medical-health caze benefits to each
retiree that meets the Public Employees Retirement System eligibility criteria for
' coverage under their medical health plan. The retirees may continue to participate in the
health caze plan provided the retirees make the arrangements for premmms to be paid
through the retirement program. This benefit is dependent upon the continued approval
' of the insurance cattier.
31
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(8) Related Party Transactions, (Continued)
Expenses 2003 2002
Citv of San Bernazdino
10% water revenue $1,888,704 1,835,251
Sewer collection system maintenance 1,222,992 1,217,717
Worker's compensation -administration charges 77,408 68,631
Printing services 16,663 8,110
Purchases - 6,282
Postage 11,955 9,524
City Hall rent 176,353 183,720
Phone charges 109,511 111,887
Refuse disposal service 83,549 82,437
Civil service 45,000 45,000
Legal services/affirmative action 105,000 105,000
Rideshaze coordination 3,000 3,000
Employee assistance 15,351
Payroll services - 15,450
Data processing services 417,800 337,680
Engineering and other services 8,793 15,780
Miscellaneous chazges 8,771 17,422
Economic Development Agency
Consulting services 1,091 1,847
Total expenses to related parties 4 191 941 4.064.738
Receivables
Citv of San Bernardino
Finance Department $ 647,674 742,482
Total receivables from related parties 647 674 742.482
Payables
Citv of San Bernardino
Finance Department $ 908,217 762,396
Total payables to related parties 908 217 762.396
The Department wllects and transmits to the City of San Bernardino ten percent of
collections on gross water revenue and one hundred percent of collections on sewer
collection system maintenance chazges from Sewer U61ity customers. These remittances
aze included in the related party expense shown above.
33
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(9) Joint Venture, (Continued)
Colton/San Bernardino Regional Tertiarv Treatment and Water Reclamation Authority
On August 2, 1994, the City of San Bernardino, through the Department, formed a joint
powers authority with the City of Colton to construct, operate, use, and maintain tertiary
wastewater treatment, disposal, and water reclamation systems, including the Regional
Rapid Infiltration and Extraction Facility (RIX). The Colton/San Bernardino Regional
Tertiary Treatment and Water Reclamation Authority is governed by a separate boazd
consisting of four members, two of whom are appointed by the City of San Bernazdino
through the Department's Boazd of Water Commissioners and two appointed by the City
Council of the City of Colton. Construction of the project was administered by the Santa
Ana Watershed Project Authority (SAWPA) and was substantially completed during
1996. Administration and operation of the project was turned over to the Colton/San
Bernardino Regional Tertiary Treatment and Water Reclamation Authority at that time.
Title to the property will be transferred upon final resolution of construction issues. Each
of the cities, San Bernardino and Colton, has an undivided interest in the real property
and any related debt of the RIX project based on a split of 80 percent and 20 percent,
respectively. The Departments' investment in the joint venture is included in the
property, plant, and equipment of the Department. The financial statements are available
at the Department. The joint venture is not experiencing fiscal stress.
(10) Construction and Other Significant Commitments
Commitments
Commitments in the form of signed contracts for costs to complete construction projects
or other improvements amounted to $396,567 and $56,784 at June 30, 2003 and June 30,
2002, respectively.
' Risk Management
The Department's risk management activities aze recorded in both of the utility funds.
' Significant losses are covered by commercial insurance for all major events except
workers' compensation, for which the Department retains risk of loss in conjunction with
the City of San Bernazdino's risk management program for workers' compensation. For
' insured events, there have been no significant reductions in insurance coverage.
Settlement amounts have not exceeded insurance coverage for the current yeaz or the
three prior yeazs.
35
MiTNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(11) Contingencies, (Continued)
Litigation
The Depaztment has filed a complaint against the United States of America, Department
of Army, in connection with alleged contamination of Camp Ono site. This lawsuit is in
the discovery phase and an estimate of recoveries, if any, azising out of this claim cannot
be made at this time. Upon resolution, a consent decree is expected that will address
several issues, including ownership of the improvements currently being constructed
under a cooperative agreement with the U.S. Environmental Protection Agency (EPA).
Ownership of such assets is generally determined by which entity has responsibility for
managing the infrastructure asset (responsibility for maintenance, replacement, pro-rata
entitlement to proceeds of sale, etc.). Assets reported on the accompanying balance sheet
at June 30, 2003 include approximately $8 million of improvements subject to EPA
reimbursement. An additional $20 million (approximate amount) of improvements
constructed directly by the EPA aze not reported on the accompanying balance sheet.
The Department is a defendant in various other lawsuits. Although the outcome of these
lawsuits is not presently determinable, it is the opinion of the Department's counsel that
resolution of these matters will not have a material adverse effect on the financial
condition of the Department.
(12) Restatement of Beginning Net Assets
The accompanying financial statements reflect adjustments, which resulted in a
restatement of beginning net assets of the Sewer Utility Fund.
The Department closely examined the RIX facility capital assets and properly accounted
for and depreciated assets on an individual basis rather than a group basis. That detailed
analysis provided for a more precise determination of capital assets and accumulated
depreciation.
37
MUNICIPAL WATER DEPARTMENT
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Notes to Basic Financial Statements
(Continued)
(13) Net Assets, (Continued)
Amounts restricted for debt service is calculated as follows:
Cash and investments restricted for debt service
Cash and investments with fiscal agent restricted for
debt service
Interest receivable
Less interest payable
Water Sewer
$ 16,930 -
440,747 3,509,005
- 80,765
3( 8,886) 799 547
418 791 2,790,223
39
SUPPLEMENTARY INFORMATION
41
II
' MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Schedule oflnsurance Coverage
As of June 30, 2003
' l
i
d b
i
s summar
ze
e
ow:
Insurance coverage for the Department at June 30, 2003
' Pacific Indemnity Company, Policy #78357989; boiler and machinery
coverage - Apri130, 2002 to July 1, 2003
Per occurrence limit $ 10,000,000
t Multiple insurance companies and policies; all-risk property coverage, including
earthquake and flood - Apri130, 2002 to July 1, 2003
Primary limit:
' Commonwealth Insurance Company, Policy #US4570 5,000,000
Excess limits:
Great American Insurance Company, Policy #CCP5905318 3,500,000
Great American Insurance Company, Policy #CCP5905318 1,500,000
Arch Specialty Insurance Company, Policy #72ESP2591300 5,000,000
Clazendon Insurance Company, Policy#PCA11070 10,000,000
' Essex Insurance Company, Policy #ESPW2228 10,000,000
Royal Surplus Lines Company, Policy #K2HD407933 10,000,000
AXA ReProperty Casualty, Policy #AXA331597 5,000,000
' Royal Surplus Lines Company, Policy #K2HD406123 75,000,000
' American Protection Insurance Co, Policy #3QX11434900; general
liability, including bodily injury and property damage, personal injury and
advertising injury, professional liability and wrongful acts -
October 30, 2002 to June 30, 2003
Per Occurrence 25,000,000
BUPD Aggregate 35,000,000
' American Protection Insurance Co., Policy #3QX11434900; business
automobile coverage -October 30, 2002 to June 30 ,2003
' Liability limit 25,000,000
Hired/nonowned liability 25,000,000
Uninsured/IJnderinsured motorists 1,000,000
' American International Specialty Lines, Policy #PLS2673997; pollution
liability -October 30, 2001 to October 30, 2004 (each incidenUaggregate)
Third-Party Claims, On-Site Bodily Injury and Property Damage 5,000,000
' Third-Party Claims, Off-Site Clean-Up Resulting from New Conditions 5,000,000
Third-Party Claims, Off-Site Bodily Injury and Property Damage 5,000,000
Lloyd's London, Policy #0001565LR2; employment practices liability -
' October 30, 2002 to October 30, 2003 1,000,000
1 Hartford Fire Insurance Company, Policy #72BPEAK4746; crime
2000 until cancelled
es - Mazch 25
covera
,
g
Employee theft (each incident) 250,000
Theft, disappeazance and destruction
' 250,000
bilit
i
li
com
The Department is self-insured through the City of San Bernardino for workers y
pensat
on
a
and material damage to rolling stock. 43
'
MUNICIPAL WATER DEPARTMENT OF THE CITY OF
SAN BERNARDINO, CALIFORNIA
SCHEDULE OF WATER PRODUCTION
June 30, 2003
2002-2003 2001-2002 2000-2001
Total Water Total Water Total Water
Per 1,000 Per 1,000 Per 1,000
Amount Cubic Feet Amount Cubic Feet Amount Cubic Feet
Summary of total water
production and purchased cost
Total production, purchases, and 2,126,715 2,231,004 2,117,575
supplemental
Production and pumping expenses $5,659,161 $5,074,987 $4,241,241
Total expense before depreciation 5,659,161 $2.66099 5,074,987 $2.27475 4,241,241 $2.00288
Depreciation of plant facilities
Totals
Summary of costs per acre foot
Acre feet
Cost per acre feet before
depreciation
Cost per acre feet including
depreciation of plant facilities
1,043,319 0. 49058 915,121 0. 41018 807,493 0. 38133
$6,702,480 $3. 15156 $5,990,108 $2. 68494 $5,048,734 $2. 38421
$115.91
$137.28
48,822.657
$99.09
$116.96
51,216.808
$87.25
$103.86
48,612.839
45
1
MUNICIPAL WATER DEPARTMENT OF THE CITY OF
' SAN BERNARDINO, CALIFORNIA
SCHEDULE OF WATER RATES
(Continued)
Commercial, Landscape, and Industrial Users
' Minimum Monthly Chazge
Meier Effective Dates
Size January 1, 2002 April 1, 2000
5/8" $8.05 $7.60
3/4" $10.75 $10.10
1" $12.85 $12.15
1-1/2" $23.05 $21.75
2~~ $32.20 $30.35
3" $54.75 $51.65
4'~ $92.95 $87.70
6" $167.35 $157.90
g" $251.00 $236.80
10" $313.75 $296.00
12~~ $376.55 $355.25
All water usage per month is at the rate of $0.88 and $0.83 per 100 cubic feet effective January 1,
2002, and April 1, 2000, respectively with no minimum allowance.
~ Municipal Water Users
Effective July 1, 1995, water famished for municipal use to the City of San Bemazdino is exempt from
all water service charges as long as water usage does not exceed 110 percent of the fiscal yeaz
1994/1995 water usage. Water usage in excess of this amount is chazged at $0.288 per 100 cubic foot.
Water famished for use by the City of San Bernardino for landscape assessment districts or funded from
other than the City's general fund is chazged at $0.288 per 100 cubic foot. All other rates remained
Energy Surchazge
Effective July 5, 2001, all consumption, except municipal, shall be chazged $0.05 per cubic foot to
offset the increased power costs.
47
2000-2001 1999-2000 1998-1999
Production Percent Production Percent Production Percent
in Cubic Feet Production in Cubic Feet Production in Cubic Feet Production
84,590,700 3.94% 108,724,200 5.02% 83,555,100 4.01%
16,913,200 0.79% 30,763,900 1.42% 33,485,800 1.61%
110,704,500 5.16% 178,164,100 8.23% 155,952,000 7.48%
100,532,800 4.68% 73,289,300 3.38% 119,104,800 5.71%
90,029,660 4.19% 130,228,570 6.01% 107,871,930 5.17%
595,230,100 27.74% 651,768,900 30.09% 530,532,200 25.43%
3,669,800 0.17% 5,607,000 0.26% 4,084,800 0.20%
1,483,900 0.07% 433,200 0.02% 16,437,500 0.79%
96,952,100 4.52% 84,710,800 3.91% 123,904,000 5.94%
30,756,500 1.43% 15,075,100 0.70% 40,226,700 1.93%
62,404,600 2.91% 62,890,300 2.90% 43,621,500 2.09%
85,137,800 3.96% 110,895,200 5.12% 238,430,635 11.43%
16,497,900 0.77% 21,138,300 0.98% 28,969,900 1.39%
19,177,500 0.89% 23,771,900 1.10% 20,915,000 1.00%
159,374,100 7.42% 134,181,500 6.20% 166,982,400 8.00%
150,736,400 7.02% 146,759,900 6.78% 80,904,000 3.88%
82,548,300 3.84% 89,972,100 4.15% 105,386,500 5.05%
1,637,900 0.08% 0 0.00% 8,395,500 0.40%
3,255,400 0.15% 487,300 0.02% 27,558,400 1.32%
162,600 0.01% 480,200 0.02% 25,123,000 1.20%
126,792,300 5.90% 114,075,400 5.27% 61,746,500 2.96%
71,341,400 3.32% 77,771,300 3.59% 34,669,100 1.66%
14,487,800 0.67% 193,100 0.01% 4,033,200 0.19%
87,412,200 4.07% 104,445,500 4.82% 24,299,200 1.16%
~ 2,011,829,460 93.70% 2,165,827,070 100.00% 2,086,189,665 100.00%
1
89,351,500 83,879,400 112,211,100
2,101,180,960 100.00% 2,249,706,470 100.00% 2,198,400,765 100.00%
1
49
'
MUNICIPAL WATER DEPARTMENT OF THE CITY OF
SAN BERNARDINO, CALIFORNIA
Schedule of Sewer Rates and Statistics
Classification
Rates effective as of June 1, 1995:
Residential
Commercial:
Multi-family, mobile home parks
(4 or more units)
Retail, commercial, light industrial
(non-office, bakeries, markets,
theaters, dry cleaners)
Auto repair, car wash
Offices, motels (without restaurants)
Restaurants, hotels (hoteVmotels
with restaurants)
Laundromats
Hospitals, convalescent homes
Schools, churches, nursery schools,
daycazes
Industry
Regional
Facilities
and Collection
Treatment System Total monthly
Charge Chazge City Chazge
$13.25 per month $1.35 per month $14.60
$0.75/HCF* $0.15/HCF* $0.90/I-ICF*
$1.10/HCF* $0.15/I-ICF* $1.25/HCF*
$1.20/HCF* $0.15/I-ICF* $1.35/HCF*
$0.95/HCF* $0.15/HCF* $1.10/HCF*
$1.70/HCF* $0.15/HCF* $1.85/I-ICF*
$0.90/I-ICF* $0.15/HCF* $1.05/I-ICF*
$0.80/HCF* $0.15/HCF* $0.95/HCF*
$0.50/HCF* $0.15/HCF* $0.65/I-ICF*
$826.67/MG $264.22/1,000 LBS BOD
(Dischazge flow) $324.28/1,000 LBS SS
Rates effective as of Januazy 1, 1994:
Residential
Commercial:
Multi-family, mobile home parks
(4 or more units)
Retail, commercial, light industrial
(non-office, bakeries, markets,
theaters, dry cleaners)
Auto repay, caz wash
Offices, motels (without restaurants)
Restaurants, hotels (hoteVmotels
with restaurants)
Laundromats
Hospitals, convalescent homes
Schools, churches, nursery schools,
daycares
Industry
$13.SSpermonth $1.35 per month $14.90
$0.80/I-ICF* $0.15/HCF* $0.95/I-ICF*
$1.15/HCF* $0.15/I-ICF* $1.30/HCF*
$1.25/HCF* $0.15/HCF* $1.40/I-ICF*
$1.00/HCF* $0.15/I-ICF* $L15/HCF*
$1.75/HCF* $0.15/HCF* $1.90/I-ICF*
$0.95/HCF* $0.15/HCF* $Ll0/HCF*
$0.85/HCF* $0.15/HCF* $1.00/I-ICF*
$0.55/HCF* $0.15/HCF* $0.70/HCF*
$908.33/MG $264.22/1,000 LBS BOD
(Discharge flow) $324.28/1,000 LBS SS
*HCF =Per 100 cubic feet of water usage.
51
June 30, 2002 June 30, 2001
Residential Nonresidential Total Residential Nonresidential Total
30,692 5,135 35,827 30,354 5,105 35,459
16,525 1,125 17,650 16,266 1,112 17,378
3,864 558 4,422 3,717 556 4,273
51,081 6,818 57,899 50,337 6,773 57,110
$5,419,223 $4,933,439
2,817,331 1,708,931
603,941 745,394
$8,840,495 $7,387,764
$10,352,662 $5,358,697 $4,845,227 $10,203,924
4,526,262 2,668,842 1,694,211 4,363,053
1,349,335 564,432 796,555 1,360,987
$16,228,259 $8,591,971 $7,335,993 $15,927,964
$451,602 $411,120 $862,722 $446,558 $403,769 $850,327
234,778 142,411 377,189 222,404 141,184 363,588
50,328 62,116 112,444 47,036 66,380 113,416
$736,708 $615,647 $1,352,354 $715,998 $611,333 $1,327,331
53
MUNICIPAL WATER DEPARTMENT OF THE CITY OF
SAN BERNARDINO, CALIFORNIA
Schedule - 1998 Refunding Sewer Revenue Certificates of Participation,
San Bernardino Public Safety Authority
June 30, 2003
Principal
Principal Unamortized Payments Interest
Date Due Payments Discounts (Net) Interest Total Rate
8-1-2003 786,884 786,884 4.10%
2-1-2004 $ 1,650,000 8,604 1,641,396 786,884 2,428,280 4.10%
8-1-2004 753,059 753,059 4.15%
2-1-2005 1,730,000 8,176 1,721,824 753,059 2,474,883 4.15%
8-1-2005 717,161 717,161 4.25%
2-1-2006 1,815,000 7,727 1,807,273 717,161 2,524,434 4.25%
8-1-2006 678,593 678,593 4.30%
2-1-2007 1,910,000 7,257 1,902,743 678,593 2,581,336 4.30%
8-1-2007 637,528 637,528 5.00%
2-1-2008 2,010,000 6,760 2,003,240 637,528 2,640,768 5.00%
8-1-2008 587,278 587,278 4.50%
2-1-2009 2,125,000 6,238 2,118,762 587,278 2,706,040 4.50%
8-1-2009 539,465 539,465 4.70%
2-1-2010 2,240,000 5,687 2,234,313 539,465 2,773,778 4.70%
8-1-2010 486,825 486,825 5.00%
2-1-2011 2,365,000 5,105 2,359,895 486,825 2,846,720 5.00%
8-1-2011 427,700 427,700 4.75%
2-1-2012 2,510,000 4,492 2,505,508 427,700 2,933,208 4.75%
8-1-2012 368,088 368,088 4.85%
2-1-2013 2,650,000 3,840 2,646,160 368,088 3,014,248 4.85%
8-1-2013 303,825 303,825 4.75%
2-1-2014 2,805,000 3,152 2,801,848 303,825 3,105,673 4.75%
8-1-2014 237,206 237,206 5.25%
2-1-2015 2,965,000 2,424 2,962,576 237,206 3,199,782 5.25%
8-1-2015 159,375 159,375 5.00%
2-1-2016 3,155,000 1,655 3,153,345 159,375 3,312,720 5.00%
8-1-2016 80,500 80,500 5.00%
2-1-2017 3,220,000 836 3,219,164 80,500 3,299,664 5.00%
$ 33,150,000 71,953 33,078,047 13,526,974 46,605,021
ss
MUNICIPAL WATER DEPARTMENT OF THE CITY OF
SAN BERNARDINO, CALIFORNIA
Bond Schedule -General Obligation Waterworks Bonds, Series C
June 30, 2003
' Date Due
Interest
Payments Interest Total Rate
9-1-2003 $ - 3,681 3,681 7.75%
3-1-2004 5,000 3,681 8,681 7.75%
9-1-2004 - 3,488 3,488 7.75%
3-1-2005 5,000 3,488 8,488 7.75%
9-1-2005 - 3,294 3,294 7.75%
3-1-2006 10,000 3,294 13,294 7.75%
9-1-2006 - 2,906 2,906 7.75%
3-1-2007 10,000 2,906 12,906 7.75%
9-1-2007 - 2,519 2,519 7.75%
3-1-2008 10,000 2,519 12,519 7.75%
9-1-2008 - 2,131 2,131 7.75%
3-1-2009 10,000 2,131 12,131 7.75%
9-1-2009 - 1,744 1,744 7.75%
3-1-2010 10,000 1,744 11,744 7.75%
9-1-2010 - 1,356 1,356 7.75%
3-1-2011 10,000 1,356 11,356 7.75%
9-1-2011 - 969 969 7.75%
3-1-2012 10,000 969 10,969 7.75%
9-1-2012 - 580 580 7.75%
3-1-2013 15,000 580 15,580 7.75%
$ 95,000 45,336 140,336
Bonds related to water system improvements for South San Bernardino Water District, which was
acquired by the Department in 1991.
57
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WATER UTILITY
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MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Statements of Net Assets
(Continued)
Increase
2003 2002 ecrease
Liabilities and net assets
Liabilities:
Current liabilities:
Accounts payable
Related parties payable
Accrued expenses
Accrued compensation
Claims payable
Other deposits
Total current liabilities
1,754,839 1,352,415 402,424
540,416 683,943 (143,527)
16,023 12,028 3,995
1,811,622 1,552,979 258,643
382,899 341,770 41,129
563,974 592,033 (28,059)
5,069,773 4,535,168 534,605
Current liabilities payable from restricted assets:
Current portion of bonds payable 1,107,662 1,025,984 81,678
Accrued interest payable 38,886 50,247 (11,361)
Consumer deposits 2,024,812 1,923,296 101,516
Total current liabilities payable from
restricted assets
Long-term liabilities:
Bonds payable
3,171,360 2,999,527 171,833
2,485,164 3,592,826 (1,107,662)
Total long-term liabilities
Total liabilities
Net Assets:
Retained earnings
2, 485 ,164 3,592,826 (1,107,662)
10, 726 ,297 11,127,521 (401,224)
86 ,119 ,542 79,767,474 6,352,068
Total net assets $ 86,119,542 79,767,474 6,352,068
61
MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Statement of Changes in Net Assets
Years ended June 30, 2003 and 2002
Balance at beginning of yeaz
Prior period adjustment
Accumulated depreciation
Net income
Capital contributions
Balance at end of yeaz
2003
$ 79,767,474
79,767,474
3,094,659
3,257,409
2002
70,169,785
250,815
2,213,766
72,634,366
3,533,652
3,599,456
$ 86,119,542 79,767,474
63
MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Statements of Cash Flows
(Continued)
'
2003 2002
Reconciliation of cash and cash equivalents to amounts
reported on the balance sheet:
Reported on the balance sheet:
Cash and investments $ 11,990,239 11,828,758
Restricted assets 4.550.194 3.887.081
Cash and cash equivalents at end of year 16,540,433 15,715,839
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:
Operating income (loss) 1,842,279 2,017,510
Depreciation and amortization 2,423,163 2,469,143
Nonoperating miscellaneous revenue (expenses) 47,203 59,760
Rental income
ositions
Gain (loss) on asset dis 69,828
(135
495) 98,808
(235
804)
p , ,
Adjustments:
Change in accounts receivable 218,892 367,252
Change in due from other entities (1,132,763) (428,139)
' Change in interfund receivable 72,432 53,512
Change in related parties receivable 45,183 (151,038)
Change in inventory (48,734) 62,859
Change in prepaid expenses 147,395 (50,419)
Change in accounts payable 402,424 105,756
Change in related parties payable
Change in accrued expenses (143,527)
3,995 84,593
(7,908)
Change in accmed compensation 258,643 23,780
' Change in claims payable 41,129 (2,832)
Change in consumer deposits 101,516 338,710
Change in other deposits (28,059) 156,995
Change in other assets 2,101,355 (2,157,634)
Net cash provided by operating activities $ 6,286,859 2,804,904
r
65
1
UNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNI
Water Utility
Schedules of Boazd of Water Commissioners Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 900 900
Fringe benefits 17,848 15,965
18,748 16,865
Maintenance and operation:
Travel, meals, and conventions 4.583 2 678
4,583 2,678
Total $ 23,331 19,543
67
MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Safety and Loss Control Expenses
Yeazs ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 136,048 133,775
Nonproductive salaries 28,886 27,876
Fringe benefits 20,446 18,106
185,380 179,757
Maintenance and operation:
Travel, meals, and conventions 4,686 1,704
Training materials and fees 14,352 16,510
Employee reimbursements 275 322
Uniform rental and cleaning 202 177
Safety clothing and supplies 9,289 17,256
Employee physical exams and x-rays 3,481 1,655
Memberships and dues 418 553
Printed materials 106 252
Books and publications 404 19
Office equipment maintenance 108 -
Postage and delivery chazges 57 4
Subscriptions 1,420 1,195
Telephone 4,692 3,830
Contract services 32,961 9,819
Minor office equipment purchases 92 1,838
Office furniture 162 -
Computer equipment 2,398 389
Noninsurable accidents expense - 919
Materials and supplies 5 -
Small tools and equipment 58 -
General office supplies 758 922
75,924 57,364
Total $ 261,304 237,121
69
MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Finance and Accounting Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 442,436 414,496
Nonproductive salazies 108,464 61,674
Fringe benefits 59,857 50,155
610,757 526,325
Maintenance and operation:
Travel, meals, and conventions 3,901 3,123
Training materials and fees 2,438 18,417
Employee reimbursements 1,733 8,516
Memberships and dues 394 489
Printed materials 4,082 5,195
Office equipment maintenance 122 710
Subscriptions 851 425
Postage and delivery chazges 83 72
Telephone 6,748 6,275
Contract services 17,013 63,574
Safety clothing and supplies 147 -
Minor office equipment purchases 706 777
Computer equipment 3,211 -
Softwaze 86 -
Office fiuniture 499 632
General office supplies 4,209 2,710
46,223 110,915
Total $ 656,980 637,240
71
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I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
I Schedules of Purchasing and Stores Expenses
I Years ended June 30, 2003 and 2002
I 2003 2002
Personnel:
Productive salaries $ 292,896 307,701
I Nonproductive salaries 63,589 77,201
Fringe benefits 41,575 42,914
I 398,060 427,816
I Maintenance and operation:
Travel, meals, and conventions 2,062 504
Training 388 1,647
I Employee reimbursements 125 130
Safety clothing and supplies 344 587
Memberships and dues 656 290
I Uniform rental and cleaning 1,263 1,238
Printed materials 4,604 3,233
Books and publications 73 112
I Office equipment maintenance 681 510
Postage and delivery charges 604
I Advertising 3,198 6,602
Telephone 7,160 6,716
Materials and supplies 2,732 897
I Small tools and equipment 1,068 4,510
Equipment maintenance 370
Minor office equipment purchases 363 449
I Computer Equipment 2,311 481
Software 539
Office furniture 253
I Freight charges 6,018 8,199
Subscriptions 709
Contract services 721 543
I General office supplies 4,243 1,416
I 39,776 38,773
Total $ 437,836 466,589
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MUNICIP AL WATER DEPARTMENT OF TIIE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Customer Services Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 427,375 430,323
Nonproductive salaries 85,485 59,220
Fringe benefits 63,770 60,967
576,630 550,510
Maintenance and operation:
Travel, meals, and conventions 48 13
Training materials and fees 974 112
Employee reimbursements 287 102
Safety clothing and supplies 59
Printed materials 5,796 2,663
Books and publications 79 66
Office equipment maintenance 2,445 2,823
General office supplies 1,159 3,331
Telephone 19,753 29,489
Contract services 14,244 5,302
Legal services 49
Computer equipment 4,790
Minor office equipment purchases 2,390 4,763
52,024 48,713
Total $ 628,654 599,223
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MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Cashiering Expenses
Years ended June 30,2003 and 2002
2003 2002
Personnel:
Productive salaries $ 184,940 156,702
Nonproductive salaries 38,695 27,756
Fringe benefits 35,154 25,031
258,789 209,489
Maintenance and operation:
Travel, meals, and conventions 93
Training materials and fees 170
Safety clothing and supplies 47
General office supplies 3,053 2,454
Printed materials 506 50
Office equipment maintenance 183
Telephone 1,291 1,375
Contract services 174 525
Office furniture 645
Equipment maintenance 10,355 9,993
Computer equipment 1,236
Minor office equipment purchases 653 599
17,761 15,641
Total $ 276,550 225,130
77
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I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
I Schedules of Water Utility Administration
I Years ended June 30, 2003 and 2002
I
2003 2002
I Personnel:
Productive salaries $ 218,366 180,250
Nonproductive salaries 61,976 34,713
I Fringe benefits 27,849 18,022
I 308,191 232,985
Maintenance and operation:
I Travel, meals, and conventions 3,763 1,364
Training materials and fees 1,451 1,109
Employee reimbursements 1,213 385
Safety clothing and supplies 11
I Memberships and dues 160 1,242
Postage and delivery 241 1,254
General office supplies 8,385 440
I Printed materials 2,041 2,247
Books and publications 17,760 457
Subscriptions 214
I Office equipment maintenance 31 120
Telephone 7,525 4,833
Minor office equipment purchases 931 317
I Computer equipment 1,469
Software 29,312 1,265
Office furniture 4,436 4,675
I Software support services 17,544
Computer maintenance 989
Security services 878
I Permits and fees 248 420
Radio maintenance 388
Materials and supplies 6,396
I Facility maintenance 127
Contract services 184,197 20,320
I 283,176 46,982
I Total $ 591,367 279,967
I 79
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I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
I Schedules of Production and Pumping Expenses
I Years ended June 30, 2003 and 2002
2003 2002
I Personnel:
Productive salaries $ 405,144 383,430
Nonproductive salaries 80,438 67,229
I Fringe benefits 66,270 58,228
551,852 508,887
I Maintenance and operation:
Travel, meals, and conventions 868 1,215
I Training materials and fees 202 40
Employee reimbursements 1,725 1,223
Safety clothing and supplies 1,982 620
I Memberships and dues 241 150
Uniform rental and cleaning 2,199 2,516
General office supplies 101 29
I Printed materials 542
Telephone 2,666 2,805
Contract services 1,302 3,642
I Security services 527
Permits and fees 16,295 12,546
Utilities - natural gas 369 427
I Utilities - electricity 3,636,621 3,440,236
Materials and supplies 20,319 17,296
Small tools and equipment 1,583 1,888
I Fuel and lube - vehicles and equipment 3,467
Equipment maintenance 30,849 32,746
Radio maintenance 94
I Minor office equipment purchases 715 282
Software 586
Office furniture 407
I Chlorine 53,190 59,383
Polymers 73,316 53,702
Granular activated carbon 317,203 349,732
I Extractions and purchases 628,084 348,434
Water stock assessments 95,056 50,927
Water extraction fees 27,635
I 4,914,583 4,383,400
I Total $ 5,466,435 4,892,287
I 81
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MUNICIPAL WATER DEPARTMENT OF TIffi CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Plant and Facilities Maintenance Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 231,871 220,189
Nonproductive salaries 96,341 52,289
Fringe benefits 52,647 48,122
380,859 320,600
Maintenance and operation:
Travel, meals, and conventions 874 9
Training materials and fees 202
Employee reimbursements 504 797
Safety clothing and supplies 1,281 1,102
Uniform rental and cleaning 1,869 1,822
Telephone 2,314 2,481
Software 586
Contract services 73,463 127,056
Permits and fees 1,400
Materials and supplies 65,252 36,773
Small tools and equipment 3,429 2,918
Equipment maintenance 2,275 3,629
Equipment rental 619 1,153
Vandalism repairs 54 1,195
Dump fees 2,043 2,203
Chlorine 51 186
Landscape services 26,780 20,754
181,596 203,478
Total $ 562,455 524,078
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MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Electrical Repair Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 128,618 116,066
Nonproductive salaries 5,658 4,826
Fringe benefits 3,840 6,320
138,116 127,212
Maintenance and operation:
Safety clothing and supplies 14 31
Contract services 7,801 22, 140
Materials and supplies 110,187 76,410
Small tools and equipment 29 365
118,031 98,946
Total $ 256,147 226,158
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MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Service and Repair Expenses
Years ended June 30,2003 and 2002
2003 2002
Personnel:
Productive salaries $ 406,772 606,311
Nonproductive salaries 174,573 152,587
Fringe benefits 103,033 108,586
684,378 867,484
Maintenance and operation:
Travel, meals, and conventions 18
Training materials and fees 404 175
Employee reimbursements 1,263 891
Safety clothing and supplies 5,374 8,199
Physical examinations 3
Memberships and dues 50
General office supplies 325
Uniform rental and cleaning 3,816 3,882
Printed materials 121 120
Telephone 4,058 3,510
Software 1,172
Janitorial supplies 6
Contract services 1,092 163,176
Dump fees 13,576
Materials and supplies 100,837 226,149
Small tools and equipment 13,859 10,514
Equipment rental 225
Equipment maintenance 9,662
Chlorine 16 18
141,926 430,585
Total $ 826,304 1,298,069
87
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I MUNlCIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
I Schedules of Meter Shop Expenses
I Years ended June 30,2003 and 2002
I
I 2003 2002
Personnel:
I Productive salaries $ 199,300 232,145
Nonproductive salaries 65,456 54,145
Fringe benefits 44,490 39,624
I 309,246 325,914
I Maintenance and operation:
Employee reimbursements 360 411
I Safety clothing and supplies 1,905 644
Uniform rental and cleaning 1,598 1,397
II General office supplies 334
Printed material 7 112
Telephone 2,924 1,917
I Contract services 21,850 5,342
Security services 439
Materials and supplies 24,552 40,552
I Small tools and equipment 5,613 4,424
Equipment maintenance 1,871 18
I 61,119 55,151
I Total $ 370,365 381,065
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MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
Schedules of Engineering Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 287,293 328,811
Nonproductive salaries 67,094 49,220
Fringe benefits 39,575 48,574
393,962 426,605
Maintenance and operation:
Travel, meals, and conventions 295 III
Training materials and fees 2,894 4,657
Employee reimbursements 280 1,592
Safety clothing and supplies 70 177
Memberships and dues 197 82
Uniform rental and cleaning 1,245 902
Physical examination 50
General office supplies 11,482
Books and publications 1,650 418
Printed materials 10,848 8,585
Office equipment maintenance 3,728 4,671
Postage delivery and charges 641 91
Telephone 15,744 15,909
Contract services 192,137 183,430
Legal services 47
Pennits and fees 550
Materials and supplies 5,248 27,088
Smail tools and equipment 3,559 1,441
Equipment rental 381
Radio maintenance 108
Facility maintenance 241
Minor office equipment purchases 553 2,631
Computer equipment and software 25,010 8,683
Office furniture 2,214 1,988
Subscriptions 169
279,100 262,697
Total $ 673,062 689,302
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I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Water Utility
I Schedules of General, Administration, and Overhead Expenses
I Years ended June 30,2003 and 2002
2003 2002
Personnel:
I Disability insurance $ 93,251 78,736
Unemployment benefits 4,446
I Retiree medical insurance 65,057 44,379
Administrative cost - group medical 3,644 3,122
I 166,398 126,237
Maintenance and operation:
I Travel, meals, and conventions 64 57
Miscellaneous employee supplies 11,074 10,007
Books and publications 1,343 1,445
I General office supplies 25,878 32,204
Printed materials 6,712 4,767
Contract services 29,641 35,036
I Office equipment maintenance 2,786 1,668
Postage delivery and charges 17
I Computer equipment 940
City hall office rent 155,191 162,000
General office maintenance 7,127
I Office furniture 18,234
Uncollectible chargeoffs 5,797 35,455
I Liability insurance 194,982 151,535
Property insurance 99,794 80,799
Workers' compensation 305,501 209,133
I Noninsurable accidents and losses 14,157 10,398
Miscellaneous insurance and bonds 1,863 2,773
Property taxes 6,658 6,661
I Other taxes and penalties 1,807
Advertising 3,577 3,502
I Legal services 788.144 1.184.565
1,654,119 1,959,173
I Overhead applied property, plant, and equipment (1,657,283) (799,276)
Total $ 163,234 1,286,134
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SEWER UTILITY
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I MUNICIPAL WATER DEPARTMENT OF TIIE CITY OF SAN BERNARDINO, CALIFORNIA
I Sewer Utility
Statements of Net Assets
(Continued)
I Increase
2003 2002 (pecrease )
II Liabilities and net assets
Liabilities:
I Current liabilities:
Accounts payable $ 849,245 1,151,668 (302,423)
I Interfund payable 28,790 98,427 (69,637)
Related parties payable 367,801 78,453 289,348
I Accrued expenses 8,517 3,583 4,934
Accrued compensation 651,713 672,236 (20,523)
Claims payable 144,680 31,846 112,834
I Other deposits 7,189 7,189
Current portion of notes payable 1,670,365 1,614,963 55,402
I Total current liabilities 3,728,300 3,651,176 77,124
Current liabilities payable from restricted assets:
I Current portion of certificates of participation 1,624,877 1,549,467 75,410
Accrued interest payable 799,547 835,524 (35,977)
I Total current liabilities payable from
restricted assets 2,424,424 2,384,991 39,433
I Long-term liabilities:
Notes payable 22,380,771 24,055,161 (1,674,390)
I CertificMesofparticipation 31,228,730 32,853,607 (1,624,877)
Total long-term liabilities 53,609,501 56,908,768 (3,299,267)
I Total liabilities 59,762,225 62,944,935 (3,182,710)
I Net Assets:
Retained earnings 88,886,973 90,130,090 (1,243, II 7)
I Total net assets $ 88,886,973 90,130,090 (1,243, 117)
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MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Sewer Utility
Statement of Changes in Net Assets
Years ended June 30,2003 and 2002
Balance at beginning of year
2003 2002
$ 90,130,090 92,729,197
(3,640,733) 10,735
(4,706,316)
86,489,357 88,033,616
(865,544) (222,028)
3,263,160 2,318,502
$ 88,886,973 90,130,090
Prior period adjustment
Accumulated depreciation
Net income (loss)
Capital contributions
Balance at end of year
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I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
I Sewer Utility
Statements of Cash Flows
(Continued)
I 2003 2002
Reconciliation of cash and cash equivalents to amounts
I reported on the balance sheet:
Reported on the balance sheet:
I Cash and investments $ 19,957,510 18,930,863
Restricted assets 10,282,885 8,334,840
Less restricted assets not meeting the definition of
I cash equivalents:
Investment agreements (3,473,750) (3,473,750)
Interest and other receivables (80,765) (80,765)
I
Cash and cash equivalents at end of year $ 26,685,880 23,711,188
I Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:
I Operating income 204,480 816,472
Depreciation and amortization 4,205,205 4,300,014
II Nonoperating miscellaneous revenue (expenses) (16,811) (2,954)
Rental income 28,587 28,852
Gain (loss) on asset disposition 3,666 (6,513)
I Adjustments:
Change in accounts receivable (62,049) 348,179
I Change in due from other entities 4,227 (113,108)
Change in related parties receivable 49,625 (156,279)
Change in prepaid expenses 263,060 (104,350)
I Change in accounts payable (302,424) 173,087
Change in interfund payable (69,637) 46,103
I Change in related parties payable 289,348 13,495
Change in accrued expenses 4,934 (14,156)
Change in accrued compensation (20,523) 52,274
I Change in claims payable 112,835 (15,229)
Change in consumer deposits (18,414)
Change in other deposits 7,189
I Change in other assets 419,220 27,912
I Net cash provided by operating activities $ 5,120,932 5,375,385
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MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Sewer Utility
Schedules of Administration Expenses
Years ended June 30,2003 and 2002
2003 2002
Personnel:
Productive salaries $ 187,737 176,839
Nonproductive salaries 41,695 30,315
Fringe benefits 32,144 28,116
261,576 235,270
Maintenance and operation:
Training materials and fees 3 688
Memberships and dues 631 505
General office supplies 1,493 2,090
Printed materials 3,786 2,792
Books and publications 274
Subscriptions 522
Office equipment maintenance 3,777 3,506
Computer equipment maintenance 300 191
Postage and delivery charges 4
Telephone 11,912 11 ,203
Utilities - natural gas 936 409
Utilities - electricity 51,806 49,118
Billing and collection administration 729,754 692,729
Minor office equipment purchases 1,001 1,570
806,195 764,805
Total $ 1,067,771 1,000,075
103
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I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Sewer Utility
I Schedules of RIX Facility Expenses
Years ended June 30, 2003 and 2002
I 2003 2002
Personnel:
Productive salaries $ 290,620 227,659
I Nonproductive salaries 51,137 40,531
Fringe benefits 49,335 36,379
I 391,092 304,569
Maintenance and operation:
Training materials and fees 1,040 400
I Employee reimbursements 520
Safety clothing and supplies 1,433 3,654
Uniform rental and cleaning 1,381 1,293
I General office supplies 2,916 4,260
Printed materials 300 320
Office equipment maintenance 578 1,145
Computer equipment maintenance 969
I Postage and delivery charges 4,871 5,872
Telephone 11,000 7,449
Janitorial supplies 231 473
I Janitorial services 308
Contract services 172,846 218,312
Legal services 80,793
I Software support services 20,115
Landscape services 8,354 7,648
Permits and fees 76,763 12,959
I Dump fees 185
Hazardous waste disposal 550 8,060
Utilities - electricity 687,463 790,968
Utilities - water 512
I Materials and supplies 91,506 336,837
UV Lamps 171,208
Small tools and equipment 2,975 4,749
I Equipment rental 5,995 42,307
Fuels and lubricants - vehicle and equipment 41,023 33,940
Equipment maintenance 39,373 53,859
I Minor office equipment purchases 390 1,224
Other chemicals 193,883 22,837
Outside laboratory testing 173,609 128,940
Travel, meals, and conventions 2,094 359
I Memberships and dues 172 435
Liability insurance 15,000 15,000
Property insurance 25,000 25,000
I Contingency fees 182.892 190.788
2,018,248 1,919,088
I Total $ 2,409,340 2,223,657
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MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Sewer Utility
Schedules of Facilities Maintenance Expenses
Years ended June 30,2003 and 2002
2003 2002
Personnel:
Productive salaries $ 197,883 188,291
Nonproductive salaries 55,822 33,717
Fringe benefits 37,049 31,137
290,754 253,145
Maintenance and operation:
Training materials and fees 70
Employee reimbursement 25
Uniform rental and cleaning 1,864 2,470
Safety clothing and supplies 1,430 2,751
General office supplies 37 91
Computer supplies 311
Computer equipment maintenance 81 43
Telephone 4,334 2,362
Contract services 124,926 118,239
Landscape services 12,178 10,002
Materials and supplies 29,886 25,319
Small tools and equipment 2,112 3,531
Janitorial services 10,789 7,407
Equipment rental 1,397 3,316
Equipment maintenance 366 2,880
189,711 178,506
Total $ 480,465 431,651
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MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA
Sewer Utility
Schedules of Environmental Control Expenses
Years ended June 30, 2003 and 2002
2003 2002
Personnel:
Productive salaries $ 177,002 152,467
Nonproductive salaries 36,543 29,764
Fringe benefits 38,144 32,706
251,689 214,937
Maintenance and operation:
Training 1,240 1,060
Employee reimbursements 271
Uniform rental and cleaning 643 436
Safety clothing and supplies 693 1,016
Memberships and dues 1,018 631
General office supplies 2,775 2,677
Printed materials 899
Subscriptions 95
Office equipment maintenance 503
Computer equipment maintenance 414 1,653
Telephone 8,251 5,550
Materials and supplies 9,191 7,533
Small tools and equipment 2,595 2,311
Minor office equipment purchases 1,465 887
Office furniture 1,030
Equipment maintenance 1,039 719
Hazardous waste disposal 4,986
Laboratory sampling and testing 27,944 14,046
64,549 39,022
Total $ 316,238 253,959
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CONRAD AND
ASSOCIATES,
L.L.p.
CERTIFIED PUBLIC ACCOUNTANTS
2301 DUPONT DRIVE, 5UlTE 200
IRVINE, CALIFORNIA 92612
(9491474-2020
Fax (949) 263-5520
Water Commissioners Board
Municipal Water Department of the City of San Bernardino, California
Report on Compliance and Internal Control Over Financial
Reportine; Based on an Audit of Financial Statements Performed
in Accordance with Government Auditine; Standards
We have audited the basic financial statements of the Municipal Water Department of the City of
San Bernardino ("Department") as of and for the year ended June 30, 2003, and have issued our
report thereon dated October 22, 2003. 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.
Compliance
As part of obtaining reasonable assurance about whether the Department's basic financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, and contracts, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. 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
that are required to be reported under Government Auditing Standards.
Internal Control over Financial Reportine;
In planning and performing the audit, we considered the Department's internal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing
our opinion on the basic financial statements, rather than to provide assurance on the internal
control over financial reporting. Our consideration of the internal control over financial reporting
would not necessarily disclose all matters in the internal control over financial reporting that
might be material weaknesses. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce to a relatively low
level the risk that misstatements in the amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period by employees in
the normal course of performing their assigned functions. We noted no matters involving the
internal control over financial reporting and its operation that we consider to be material
weaknesses.
This report is intended solely for the information and use of the Water Commissioners Board and
management of the Department and is not intended to be and should not be used by anyone other
than these specified parties.
4-<.../--/ ~fJh"'~ L..t..r.J
October 22, 2003
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MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
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