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HomeMy WebLinkAbout10-City ClerkCITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Rachel G. Clark, CMC, City Clerk Subject: Receive and File - 2003-2004 Annual Audit of the Water Department's Water and Sewer Utilities. Dept: City Clerk ORIGINAL Date: January 18,2005 MlCC Meeting Date: February 7, 2005 Synopsis of Previous Council Action: Similar action taken each year following completion of the annual Audit Report. Recommended Motion: That the Mayor and Council receive and file the 2003-2004 Annual Audit of the Water Department's Water and Sewer Utilities. -~h.~ Signature Contact person: DQ...h~1 G rlarlr Phone: y 1'10 Supporting data attached: Yes Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct. No.) (Acct. Description) Finance: Council Notes: Agenda Item No. -1D- :J./7/fJS ~,~ -~~_."' . CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report TO: FROM: DATE: SUBJECT: Honorable Mayor and Members of the Common Council Rachel G. Clark, CMC, City Clerk January 18, 2005 2003-2004 Audit Report for Water Department Water and Sewer Utilities BACKGROUND INFORMATION: The firm of Conrad and Associates, L.L.P. has completed the 2003-2004 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 of January 11, 2005. RECOMMENDED MOTION: That the Mayor and Council receive and file the completed 2003-2004 Annual Audit of the Water Department's Water and Sewer Utilities. ~h_~ Rachel G. Clark, CMC City Clerk ~'<~~<W''''''''~p'~~>''<>'"'-- '''.........- -~- I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Financial Statements Year ended June 30, 2004 CONRAD AND ASSOCIATES, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS ~"_Jm uf~--'-~' I - - -. ~. ~- .~ I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Financial Statements Year ended June 30, 2004 TABLE OF CONTENTS Page FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements: Statement of Net Assets Statement of Revenues, Expenses, and Changes in Net Assets Statement of Cash Flows Notes to Basic Financial Statements 1 5 10 13 14 16 SUPPLEMENTARY INFORMATION Statistical Schedules: Board of Water Commissioners and Organization Schedule of Insurance Coverage Schedule of Water System Demographics Schedule of Water Production Schedule of Water Rates Schedule of Sundry Water Statistical Data Schedule of Service Area and Customers Schedule of Sewer Rates and Statistics Schedule - 1992 Certificates of Participation, San Bernardino Public Safety Authority Schedule - 1998 Refunding Sewer Revenue Certificates of Participation, San Bernardino Public Safety Authority Series 1998A Water and Wastewater Revenue Bonds Bond Schedule - General Obligation Waterworks Bonds, Series C 41 42 44 45 46 48 50 51 54 55 56 57 60 62 63 64 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Financial Statements Year ended June 30, 2004 TABLE OF CONTENTS. (CONTINUED) SUPPLEMENTARY INFORMATION, (CONTINUED) Water Utility (Individual Fund Statements and Schedules): Statements of Net Assets Statements of Revenues and Expenses Statements of Changes in Net Assets Statements of Cash Flows Schedules of Operating Expenses Schedules of Board of Water Commissioners Expenses Sch~dules of Administration Expenses Schedules of Safety and Loss Control Expenses Schedules of Personnel Expenses Schedules of Finance and Accounting Expenses Schedules of Data Processing Expenses Schedules of Purchasing and Stores Expenses Schedules of Administrative Services Expenses Schedules of Customer Services Expenses Schedules of Billing and Posting Expenses Schedules of Cashiering Expenses Schedules of Field and Meter Services Expenses Schedules of Water Utility Administration Schedules of Operations Administration Expenses Schedules of Production and Pumping Expenses Schedules of Geothermal Expenses Schedules of Plant and Facilities Maintenance Expenses Schedules of Specialized Construction Expenses Schedules of Electrical. Repair Expenses Schedules of Distribution Administration Expenses Schedules of Service and Repair Expenses Page ~:""':~"":"'~~~ ':~,c i("'" ',p'''''~ "j 1\ ~~, 'T < _C_""'~" I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Financial Statements Year ended June 30, 2004 TABLE OF CONTENTS. (CONTINUED) SUPPLEMENTARY INFORMATION, (CONTINUED) Water Utility, Continued: Schedules of Distribution Maintenance Expenses Schedules of Meter Shop Expenses Schedules of Garage - Vehicle Maintenance Expenses Schedules of Engineering Expenses Schedules of Water Quality and Backflow Connection Expenses Schedules of General, Administration, and Overhead Expenses Page 88 89 90 91 92 93 Sewer Utility (Individual Fund Statements and Schedules): Statements of Net Assets Statements of Revenues and Expenses Statements of Changes in Net Assets Statements of Cash Flows Schedules of Operating Expenses Schedules of Administration Expenses Schedules of Engineering Services Expenses Schedules of Plant Operations Expenses Schedules of Bio-Solids Processing Expenses Schedules ofRIX Facility Operations Expenses Schedules of Plant Maintenance Expenses Schedules of Facilities Maintenance Expenses Schedules of Electrical Instrumentation Expenses Schedules of Environmental Control Expenses Schedules of General, Administration, and Overhead Expenses Report on Compliance and Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 96 98 99 100 102 103 104 105 106 107 108 109 110 III 112 113 (This page intentionally left blank.) I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I T~"C"C",~'"'~"' l CONRAD AND ASSOCIATES, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS 2301 DUPONT DRIVE, SUITE 200 IRVINE, CALIFORNIA 92612 (949)474-2020 Fax (949) 263-5520 Water Commissioners Board Municipal Water Department of the City of San Bernardino, California Independent Auditors' Report We have audited the accompanying basic financial statements of the Municipal Water Department of the City of San Bernardino, California as of and for the year ended June 30, 2004. These basic ftnancial statements are the responsibility of the management of, the Municipal Water Department of the City of San Bernardino, 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 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 audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic ftnancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall ftnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the ftnancial statements present only the Municipal Water Department and are not intended to present fairly, in all material respects, the ftnancial position of the City of San Bernardino, 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 ftnancial position of the Municipal Water Department of the City of San Bernardino, California, as of June 30, 2004, 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 ftnancial statements, but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding 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. MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INsmUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Water Commissioners Board Municipal Water Department of the City of San Bernardino, California Page Two Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The individual fund statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements of the Municipal Water Department of the City of San Bernardino, California. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The scope of our audit did not include the statistical schedules listed in the table of contents and we do not express an opinion on them. In accordance with Government Auditing Standards, we have also issued our report dated November 12,2004 on our consideration of the Municipal Water Department of the City of San Bernardino's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. ~../--/ ~~.~ ~.~~ November 12, 2004 2 I I I I I I I I I I I I I I I I I I I -'-R'~CTfT"'" .'r r -- I I I I I I I I 'I I I I I I I I I I I I '_..' MANAGEMENT'S DISCUSSION AND ANALYSIS 3 4 I I I I I I I I I I I I I I I I I I I (This page intentionally left blank.) _'F~7~ ~., ~ I I I I I I I I I I I I I I I I I I I MANAGEMENT'S DISCUSSION AND ANALYSIS Ol.\f 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 JWle 30, 2004. Please read it in conjWlction with the Department's basic financial statements. This annual financial 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 fmancial statements and provide more detailed data. In December 1998 the Governmental AccoWlting Standards Board (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' standards for state and local governments, cities, villages and special purpose governments. GASB No. 34 required the following changes to the Department's financial statements: 1. 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 summarization 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 Hillhllllhts During the year ended JWle 30, 2004, the Water FWld net assets increased $8.2 million. This is primarily due to a net profit of $4.4 million partially caused by a $2.5 million gain on the sale of a $3 million piece ofland as well as the $3.8 million in capital contributions for the year. The Water Department's increase of operating revenue ($1,140,841), increase of operating expense ($2,315,142) and increase of nonoperating revenue ($2,483,111) combined to increase net profit by $1,248,816. Net profit increased from a $3,094,659 gain to a $4,343,535 gain from 2003 to 2004. The net profit of $4.4 million and contributed capital of $3.8 million increased net assets by $8.2 million before prior period adjustments. The Sewer FWld net assets increased $3.0 million for the year ended June 30, 2004. The Sewer Department's increase in operating revenue ($354,980), decrease in operating expense ($320,695) and increase of nonoperating expense ($895,131) combined to increase net loss by $.2 million. Net profit decreased from a $.9 million loss to a $1.1 million loss from 2003 to 2004. The net loss of $1.1 million and contributed capital of $4.1 million increased net assets by 2.8. 5 - Financial Analvsis of the Department Equity - The Water Fund's net assets increased $8.2 million between fiscal years 2003 and 2004 _ increasing from $86.1 million to $94.3 million. One reason for the increase is due to a net profit of $4.3 million which includes a $3 million sale of property for a gain on asset disposition of 2.5 million. The other reason for the increase is the $3.8 million in capital contributions. The Sewer Fund's net assets increased from $88.9 million to $91.9 million between fiscal years 2003 and 2004. The main reason for the increase is the $4.1 million in capital contributions. Water Department's Equity (In Millions of Dollars) Water Fund Sewer Fund 2004 2003 % Change 2004 2003 % Cha1t1!e Current Other Assets 35.5 23.0 54.3 35.9 34.0 5.6 Capital Assets 79.8 73.8 8.1 112.5 114.6 0.8) Total Assets 115.3 96.8 19.1 148.4 148.6 lO.t) Long Term Debt 12.5 3.6 247.2 53.6 56.9 (5.8) Other Liabilities 8.5 7.1 19.7 2.9 2.8 3.6 Total Liabilities 21.0 10.7 96.3 56.5 59.7 (5.4) Net Assets Invested in capital assets net of related debt 77.8 70.2 10.8 62.5 57.7 8.3 Restricted 3.3 2.5 32.0 9.2 9.5 (3.2) Unrestricted 13.2 13.4 (1.5) 20.2 21.7 (6.9) Total Net Assts 94.3 86.1 9.5 91.9 88.9 3.4 Change in Net Assets - The Water Fund's operating revenues increased by 5.9% to $21.6 million. This increase is due to a greater volume of water purchased because of the continued drought conditions. The Water Fund's operating expenses increased 12.8% to $20.9 million. Operating expenses increased primarily due to an overall increase in labor and fringe benefit costs of about $1.0 million and a change to the overhead calculation rate which decreased the capitalized overhead expense by about $.9 million. The Water Fund's non-operating revenues (expenses) increased 198% to $3.7 million due to a $2.5 million gain on the sale of a $3 million piece of land. Capital contributed to the Water Department increased 15.2% to $3.8 million due to increased construction activity in our service area. The combination of non-operating revenues ($3.7 million) and contributed capital ($3.8 million) plus the current year operating gain of $.6 million caused an increase in net assets of $8.2 million before prior period adjustments. The Sewer Fund's operating revenues increased by 2.3% to $17.5 million. The Sewer Fund's operating expenses decreased 1.9% to $16.5 million. The Sewer Fund's non-operating revenues (expenses) increased 83.6% to ($2.0 million) due to an investment adjustment of $694,000 which decreased investment income by this amount. Capital contributed to the Sewer Fund increased to $4.1 million. The net loss of $1.1 million and contributed capital of$4.1 million left an increase of$3.0 million to net assets. 6 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I ~. Water Department's Changes in Net Assets (In Millions of Dollars) Wilier Fund Sewer Fund 2004 2003 " Chtllllle 2004 2003 %Chtllllle Revenues: ProlZ1'lUJl Revenues: CbarRes for Services 21.6 20.4 5.9 17.5 17.1 2.3 Contnbuted Capital 3.8 3.3 15.2 4.1 3.3 24.2 General Revenues: Investment Income .2 .7 (71.4) .5 1.5 (66.7) NoncaDita1 Grant Funds 1.2 .8 50.0 Rental Income and Other .2 27.0 25.2 7.1 22.1 21.9 0.9 Pro2I"am EXDenses: 18.8 18.9 (0.5) 19.1 19.5 (2.1) Increase in Eauitv 8.2 6.3 30.2 3.0 2.4 25.0 Prior Period Adiustment - Net (3.6) - Increase in Eauitv after Prior Period Adiustment 8.2 6.3 30.2 3.0 ( 1.2) - Total Net Assets Be of the Year 86.1 79.8 7.9 88.9 90.1 (1.3) Total Net Assets - End of the Year 94.3 86.1 9.5 91.9 88.9 3.4 Capital Assets At June 30, 2004, the Water Fund had invested $79.8 million in capital assets net of $42.7 million of accumulated depreciation. This amount represents a net increase (including additions and deductions) of $6.0 million or 8.1% from the prior year. A $.8 million increase in property, plant and equipment and a $7.6 million increase in construction in progress were partially offset by a $2.4 million increase in accumulated depreciation. The main cause for the $6.0 million increase in net capital assets is due to increased construction in progress for newer projects such as the Enhanced Reliability Schedule of hnprovements projects. At June 30, 2004, the Sewer Fund had invested $112.5 million in capital assets net of $58.8 million of accumulated depreciation. This amount represents a net decrease (including additions and deductions) of $2.1 million or 1.8% from the prior year. More detailed information about the Department's capital assets is presented in Note 3 to the financial statements. Water Department's Capital Assets (In Millions of Dollars) Water Fund Sewer Fund 2004 2003 " Chtllllle 2004 2003 "Chanlle Property, Plant. Eauipment & Water Rights 102.6 101.8 0.8 169.6 167.1 1.5 Construction in Progress 19.9 12.3 61.8 1.7 2.1 (19.0) Accumulated Depreciation & Amortization 42.7 40.3 6.0 58.8 54.6 7.7 Total 79.8 73.8 8.1 112.5 114.6 ( 1.8) 7 8 I I I I I I I I I I I I I I I I I I I LOBi!: Term Debt At June 30, 2004 the Water Fund had $12.5 million in bonds outstanding, an increase of 247% from the prior year. The Water Fund has applied and been approved for a $10 million loan from the California Infrastructure Economic Development Bank to cover the replacement of aging infrastructure and new reservoirs for water demand on the system, which was funded during fiscal year 2004. The Water Fund has also been awarded a Department of Defense grant for $8,500,000 to help replace aging infrastructure. At June 30, 2004 the Sewer Fund had $53.6 million in bonds outstanding, a decrease of 5.8% from the prior year. No new debt was issued during the year and no new debt is anticipated in the coming year. More detailed information about the Department's long term debt is presented in Note 5 to the financial statements. ~r" "..... ., I I I I I I I I I I I I I I I I I I I BASIC FINANCIAL STATEMENTS 9 I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Statement of Net Assets I June 30, 2004 (With comparative totals for 2003) Water Sewer Totals I Utility Utility Elimination 2004 2003 Assets Assets: I Current assets: Cash and investments (note 2) $ 11,888,399 19,026,236 30,914,635 31,947,749 Accounts receivable, net 4,047,631 2,430,918 6,478,549 5,436,760 Due from other entities 1,070,040 192,767 1,262,807 1,778,972 I Interfund receivable 23,388 (23,388) Related parties receivable (note 8) 285,092 477,821 762,913 647,674 Inventory 1,472,401 1,472,401 1,374,613 I Prepaid expenses 13,178 9,442 22,620 71 ,444 Total current assets 18,800,129 22,137,184 (23,388) 40,913,925 41,257,212 Noncurrent assets: I Restricted assets: Cash and investments (note 2): I Restricted for debt service 462,315 3,539,958 4,002,273 3,966,682 Restricted for capital-related fees 3,314,912 9,217,467 12,532,379 8,719,489 Restricted for consumer deposits 2,224,512 2,224,512 2,066,143 Interest receivable 41,772 80,765 122,537 80,765 I Note proceeds held by state 10,000,000 10,000,000 Total restricted assets 16,043,511 12,838,190 28,881,701 14,833,079 Notes receivable 600,000 600,000 I Capital assets (note 3): Land & easements 2,709,175 12,470,740 15,179,915 15,172,773 Water rights, wells, pumping plants 35,492,836 3,192,218 38,685,054 38,885,688 I Distribution systems 54,605,417 54,605,417 54,277,581 Building, plants and store yards 1,334,031 147,617,857 148,951,888 146,604,528 Tools and equipment 2,055,082 3,803,195 5,858,277 5,524,346 Autos 2,901,318 994,644 3,895,962 3,567,437 I Office leasehold improvements 141,926 141,926 112,594 Office, computer, engineering equipment 2,568,894 936,785 3,505,679 3,408,419 I Radio and interoffice communication equipment 304,959 111,811 416,770 262,865 Telemetry systems and equipment 248,336 336,612 584,948 584,948 Miscellaneous 233,534 193,015 426,549 426,549 I Construction in progress 19,886,793 1,672,160 21,558,953 14,420,384 Less accumulated depreciation and amortization (42,650,895) (58,791,615) (101,442,510) (94,910,267) I Total capital assets (net of accumulated depreciation and amortization) 79,831,406 112,537,422 192,368,828 188,337,845 I Other assets: Debt issue costs, net 16,753 387,688 404,441 465,913 Deferred call premium 530,073 530,073 572,198 Total other assets 16,753 917,761 934,514 1,038,111 I Total Noncurrent assets 96,491,670 126,293,373 222,785,043 204,209,035 Total assets 115,291,799 148,430,557 (23,388) 263,698,968 245,466,247 I (Continued) 10 I -" . -"T~nn. I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Statement of Net Assets I (Continued) Water Sewer Totals I Utility Utility Elimination 2004 2003 Liabilities and net assets Liabilities : I Current liabilities: Accounts payable 2,005,546 1,244,437 3,249,983 2,604,084 Interfimd payable 23,388 (23,388) I Related parties payable (note 8) 618,618 89,242 707,860 908,217 Accrued expenses 38,956 8,720 47,676 24,540 Accrued compensation 2,039,710 752,868 2,792,578 2,463,335 I Claims payable (note 10) 416,099 29,275 445,374 527,579 Other deposits 976,727 570 977,297 571,163 Deferred revenue 21,495 21,495 I Current portion of notes payable (note 5) 414,147 1,728,295 2,142,442 1,670,365 Total current liabilities 6,531,298 3,876,795 (23,388) 10,384,705 8,769,283 I Current liabilities payable from restricted assets: Current portion of certificates of participation (note 5) 1,705,304 1,705,304 1,624,877 I Current portion of bonds payable (note 5) 1,160,640 1,160,640 1,107,662 Accrued interest payable 122,267 761,710 883,977 838,433 Consmner deposits 2,270,516 2,270,516 2,024,812 I Total current liabilities payable from restricted assets 3,553,423 2,467,014 6,020,437 5,595,784 I Noncurrent liabilities: Notes payable (note 5) 9,585,853 20,652,476 30,238,329 22,380,771 I Certificates of participation (note 5) 29,523,426 29,523,426 31,228,730 Bonds payable (note 5) 1,324,524 1,324,524 2,485,164 Total Noncurrent liabilities 10,910,377 50,175,902 61,086,279 56,094,665 I T otalliabilities 20,995,098 56,519,711 (23,388) 77,491,421 70,459,732 I Net assets: Invested in capital assets, net of related debt (note 12) 77,789,726 62,467,879 140,257,605 131,049,290 I Restricted for: Capital-related fees 3,314,912 9,217,467 12,532,379 8,719,489 Unrestricted 13,192,063 20,225,500 33,417,563 35,237,736 I Total net assets $ 94,296,701 91,910,846 186,207,547 175,006,515 I See accompanying notes to basic financial statements. 11 I 12 I I I I I I I I I I I I I I I I I I I (This page intentionally left blank) I I MUNlCIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Statement of Revenues, Expenses, and Changes in Net Assets I Year Ended June 30, 2004 (With comparative totals for 2003) Water Sewer Totals I Utility Utility Eliminations 2004 2003 Operating revenues: I Charges for services $19,738,868 16,782,511 (37,617) 36,483,762 35,249,518 Other operating revenues 1,816,802 642,377 (852,073) 1,607,106 1,454,379 Total operating revenues 21,555,670 17,424,888 (889,690) 38,090,868 36,703,897 I Operating expenses: Administration and customer service 4,993,846 4,993,846 4,783,093 Engineering, operations, and distribution I administration 676,688 1,317,061 (839,960) 1,153,789 1,185,961 Plant operations 5,670,649 7,584,176 (3,697) 13,251,128 13,580,401 Maintenance 1,209,713 2,237,681 (11,898) 3,435,496 3,235,652 I Environmental control 377,638 377,638 316,238 Distribution 2,881,570 (215) 2,881,355 2,441,369 Engineering 1,468,972 1,468,972 1,288,902 I General, administration, and overhead 1,229,032 753,354 (33,920) 1,948,466 1,197,154 Depreciation and amortization (note 3) 2,817,822 4,274,823 7 ,092,645 6,628,368 Total operating expenses 20,948,292 16,544,733 (889,690) 36,603,335 34,657,138 I Operating income (loss) 607,378 880,155 1,487,533 2,046,759 Non-operating revenues (expenses): I Investment income 219,377 525,183 744,560 2,260,293 Rental income 68,098 26,710 94,808 98,415 Noncapital grant funds 1,214,167 1,214,167 794,044 Gain (loss) on asset disposition 2,488,606 (13,519) 2,475,087 (131,829) I Interest expense and fiscal charges (369,371) (2,431,334) (2,800,705) (2,800,919) Amortization of issuance costs (15,634) (45,839) (61,473) (68,040) Other 130,914 (26,356) 104,558 33,187 I Total non-operating revenues (expenses) 3,736,157 (1,965,155) 1,771,002 185,151 Net profit (loss) 4,343,535 (1,085,000) 3,258,535 2,231,910 I Capital contributions: Capital grants 1,351,197 1,351,197 1,159,787 Acquisition fees 2,055,130 2,055,130 1,248,701 I Capacity fees 239,249 3,939,379 4,178,628 3,091,579 Other capital restricted fees 188,048 169,494 357,542 1,020,502 I Total capital contributions 3,833,624 4,108,873 7,942,497 6,520,569 Net assets: Balance at beginning of year 86,119,542 88,886,973 175,006,515 166,254,036 I Balance at end of year $94,296,701 91,910,846 186,207,547 175,006,515 I See accompanying notes to basic fmancial statements. 13 I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Statement of Cash Flows Year Ended June 30, 2004 (With comparative totals for 2003) Totals Water Sewer 2004 2003 Cash flows from operating activities: Cash received from customers $21,656,375 17,143,680 38,800,055 37,069,869 Rental income 68,098 26,710 94,808 98,415 Nonoperating miscellaneous revenue (expenses) 2,019,520 (39,875) 1,979,645 (101,437) Cash paid to suppliers of goods and services (8,298,248) (815,672) (9,113,920) (10,370,331) Cash paid to employees for services (6,119,249) (8,800,082) (14,919,331) (15,288,725) Net cash provided by operating activities 9,326,496 7,514,761 16,841,257 11,407,791 Cash flows from noncapital financing activities: Grant proceeds received 1,214,167 1,214,167 794,044 Net cash provided by noncapital financing activities 1,214,167 1,214,167 794,044 Cash flows from capital and related financing activities: Capital fees received 2,482,427 4,108,873 6,591,300 5,166,068 Grant proceeds received 1,351,197 1,351,197 1,159,787 Cash paid to acquire fixed assets (11,808,534) (4,802,498) (16,611,032) (9,988,127) Principal paid on capital-related debt (1,107,662) (3,295,242) (4,402,904) (4,194,439) Interest paid on capital-related debt (285,991) (2,427,046) (2,713,037) (2,806,131) Net cash provided by (used for) capital and related fmancing activities (9,368,563) (6,415,913) (15,784,476) (10,662,842) Cash flows from investing activities: Interest received 177 ,605 525,183 702,788 2,260,293 Net cash provided by investing activities 177,605 525,183 702,788 2,260,293 Net increase in cash 1,349,705 1,624,031 2,973,736 3,799,286 Cash and cash equivalents at beginning of year 16,540,433 26,685,880 43,226,313 39,427,027 Cash and cash equivalents at end of year $17,890,138 28,309,911 46,200,049 43,226,313 (Continued) 14 I I I I I I I I I I I I I I I I I I I "". I I I I I I I I I I I I I I I I I I I "",_ OW" MUNlCIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Statement of Cash Flows (Continued) Totals Totals Water Sewer 2004 2003 Reconciliation of cash and cash equivalents to amounts reported on the balance sheet: Reported on the balance sheet: Cash and investments $11,888,399 19,026,236 30,914,635 31,947,749 Restricted assets 16,043,511 12,838,190 28,881,701 14,833,079 Less restricted assets not meeting the definition of cash equivalents: Investment agreements (3,473,750) (3,473,750) (3,473,750) Interest receivable (41,772) (80,765) (122,537) (80,765) Note proceeds held by state (10,000,000) - (10,000,000) Cash and cash equivalents at end of year $17,890,138 28,309,911 46,200,049 43,226,313 Reconciliation of operating income to net cash provided by (used for) operating activities: Operating income $ 607,378 880,155 1,487,533 2,046,759 Depreciation and amortization 2,817,822 4,274,823 7,092,645 6,628,368 Nonoperating miscellaneous revenue (expenses) 130,914 (26,356) 104,558 30,392 Rental income 68,098 26,710 94,808 98,415 Gain (loss) on asset disposition 2,488,606 (13,519) 2,475,087 (131,829) Adjustments: Change in accounts receivable (827,269) (214,520) (1,041,789) 156,843 Change in due from other entities 514,264 1,901 516,165 (1,128,536) Change in notes receivable (600,000) (600,000) Change in interfund receivable 5,402 5,402 72,432 Change in related parties receivable (41,732) (73,507) (115,239) 94,808 Change in inventory (97,788) (97,788) (48,734) Change in prepaid expenses 37,287 11,537 48,824 410,455 Change in accounts payable 250,707 395,192 645,899 100,000 Change in interfund payable (5,402) (5,402) (69,637) Change in related parties payable 78,202 (278,559) (200,357) 145,821 Change in accrued expenses 22,933 203 23,136 8,929 Change in accrued compensation 228,088 101,155 329,243 238,120 Change in claims payable 33,200 (115,405) (82,205) 153,964 Change in consumer deposits 245,704 245,704 101,516 Change in other deposits 412,753 (6,619) 406,134 (20,870) Change in deferred revenue 21,495 21,495 Change in other assets 2,930,432 2,556,972 5,487,404 2,520,575 Net cash provided by operating activities $ 9,326,496 7,514,761 16,841,257 11,407,791 Noncash Inve.<rtinll Capital and Financina Activities There were no significant non-cash investing, capital and financing activities for the year ended June 30, 2004. During the year ended June 30, 2003, developer contributions of capital assets were made in the amount of$194,714. See accompanying notes to basic financial statements. 15 16 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements Year ended June 30, 2004 (1) Summary of Significant Accounting Policies Reporting Entity The Municipal Water Department of the City of San Bernardino, California ("the Department") is governed under the Charter of the City of San Bernardino. A Board of Water Commissioners who is appointed by the Mayor of the City of San Bernardino has certain limited powers with respect to the Department. The Department has no separate organizing document and is a part of the legal entity of the City of San Bernardino. The Municipal Water Department of the City of San Bernardino operates two enterprise funds: the Water Utility Enterprise Fund (Water Utility) and the Sewer Utility Enterprise Fund (Sewer Utility). The Water Utility also provides administrative services and contracted services to the Sewer Utility. The accounting policies of the Department conform to generally accepted accounting principles (GAAP) as applicable to governments. The preparation of these financial statements requires management to make estimates and assumptions. Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Management also determines the accounting principles to be used in the preparation of the financial statements. A description of the significant accounting policies employed in the preparation of these financial statements follows: Fund Accounting The accounts of the Department are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and uses them to aid management in demonstrating compliance with finance-related legal and contractual provisions. The Department's financial statements include only enterprise funds, which are a proprietary fund type. Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the Board has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. Basis of Accounting Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The Department applies all applicable GASB pronouncements in accounting and reporting for its proprietary operations and applicable F ASBs that occurred prior to November 30, 1989. w~~.~'--'-c-. '.-T~~_" I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) Cash and Investments Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and inv,estment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. Changes in fair v.alue 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. Cash for the Department is pooled with the City of San Bernardino for investment purposes in order to maximize interest earnings. Such earnings are 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 are 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 are shown net of an allowance for uncollectible accounts based on management's estimate. Interfund Receivables and Payables Transactions between funds that are representative of lendinglborrowing arrangements outstanding at the end of the fiscal year are referred to as either. "interfund receivables/payables" (Le., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All interfund transactions are eliminated for financial reporting purposes. Inventories Inventories are valued at the lower of cost, using the average-cost method, or market. 17 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) Restricted Assets Various resources of the Department are limited as to their use by law or by certificates of participation and bond covenants and are classified on the balance sheet as restricted assets. Proceeds of the certificates of participation and bonds are restricted for the construction of wa.ter and sewer system improvements and for repayments. Assessments collected from property owners are restricted for the payment of bond principal and interest. Also, fees imposed on new real estate development are restricted by law for the construction of capital improvements that benefit the development projects. Issuance Costs and Discount Issuance costs, discounts, and deferred funding charges for certificates of participation and bonds payable are being amortized using the effective interest rate method over the term of the related certificate or bond or the straight-line method which approximates the effective interest method. Capital Assets Property, plant, equipment and water rights are recorded at cost. The Department's policy is to capitalize all property having a value of $1,000 or more and a life expectancy of 3 years or more. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period, if any. Overhead costs are capitalized at the rate of 28.9% for laborlbenefits, 10% for materials/supplies, 2% for significant contracts and are reflect in the capitalized value of the asset constructed. Depreciation has been provided for using the straight-line method over the estimated useful lives of the related assets. Useful lives for depreciation purposes are as follows: Wells, pumping plants, reservoirs, and distribution system Interceptor lines Disposal plant Leasehold improvements Shops, offices, stores, and yards Tools and equipment Office equipment Communicationequipmem Computer equipment Automotive equipment 8 to 50 years 50 years 35 to 50 years 5 to 25 years 10 to 20 years 4 to 20 years 5 to 20 years 8 to 10 years 3 to 5 years 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. 18 I I I I I I I I I I I I I I I I I I I .~ Tf I I I I I (1) I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) Summary of Significant Accounting Policies, (Continued) 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 bavethe option of receiving payment at their regular rate of pay for one week of accumulated unpaid vacation (two weeks for managers and mid-management employees). Employees' vacation benefits are 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 termination employees are entitled to 25 percent of accumulated sick leave with five years 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 are recognized as a liability of the Department. Classification of Revenues and Expenses Proprietary funds distinguish operating revenues and expenses fr.om 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 ~e Department's enterprise funds are charges 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 are reported as nonoperating revenues and expenses. Capital contributions consist of contributed capital assets and special charges that are legally restricted for capital expenditures by state law or by the Board action that established those charges. Fund Equity The Department currently has no reserved retained earnings. Eliminations The eliminations column represents entries made to eliminate inter-fund income and expenditure transactions between the water and sewer funds for the purposes of consolidated fmancial statements. 19 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies, (Continued) Prior Year Totals 2003 31,947,749 3,966,682 8,719,489 2,066,143 46.700.063 I I I I I I I I I I I I I I I I I I I Prior year data does not represent a complete presentation of prior year financial information in accordance with generally accepted accounting principles but has been presented for comparative purposes only. (2) Cash and Investments Cash and investments are reported as follows in the statement of net assets: Cash and investments Restricted cash and investments: Restricted for debt service Restricted for capital-related fees Restricted for consumer deposits 2004 $30,914,635 4,002,273 12,532,379 2,224,512 $49.673.799 Total Cash and investments held by the Department consisted of the following at June 30: 2004 2003 $ 5,400 5,400 45,370 66,619 45,639,587 42,678,292 3,983,442 3,949,752 $49.673.799 46.700.063 Petty cash Demand deposits Internal investment pool with City of San Bernardino Investments with fiscal agent Total The Department maintains substantially all of its operating funds in the City of San Bernardino Treasury (an internal investment pool). These funds are reported at estimated fair value. Investment earnings are proportionately shared by all funds in the internal investment pool of the City. 20 I I I I I I I I I I I I I I I I I I I (2) MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) Cash and Investments, (Continued) The Department is generally authorized under provisions of the City of San Bernardino's investment policy and Section :;3601 of the Government Code to invest in investment instruments so long as the investment is appropriate when investment objectives and policies are 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) Medium Term Corporate Notes - (30% max) Under the California GO\fernment Code, a financial institution is required to secure deposits made by state or local governmental units by pledging securities held in the form of an undivided collateral pool. The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Department deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. 21 22 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (2) Cash and Investments, (Continued) Deposits of cities and other state or local governments are classified in three categories to give an indication of the level of custodial risk assumed by the entity. Category 1 includes deposits that are insured or collateralized with securities held by the Department or its agent in the Department's name. Category 2 includes deposits collateralized with securities held by the pledging financial institution's trust department or agent in the Department's name. Category 2 also includes deposits collateralized by an interest in an undivided collateral pool held by an authorized Agent of Depository and subject to certain regulatory requirements under State law. Category 3 includes deposits collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Department's name. Category 3 also includes any uncollateralized deposits. As of June 30, 2004, deposits were categorized as follows: Category Bank Carrying Form of Deposit 1 2 3 Balance Amount Demand deposits $32.715 32,715 45.370 Total deposits $32.715 32.715 45.370 As of June 30, 2003, deposits were categorized as follows: Category Bank Carrying Form of Deposit 1 2 3 Balance Amount Demand deposits $57.153 57,153 66.619 Total deposits $57.153 57.153 66.619 The Department's investments are 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 are 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 market funds have not been categorized because securities are not used as evidence of the investments but are an ownership interest in pooled investment funds: ..0". I I I I I I I I I I I I I I I I I I I (2) --" MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) Cash and Investments, (Continued) As of June 30, 2004, investments were categorized as follows: Form of Investment 1 Category 2 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 Bernardino Total investments As of June 30, 2003, investments were categorized as follows: Category 2 Form of Investment 1 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 Bernardino Total investments Restricted Assets 3 66,208 66.208 J. 35,255 35.255 Carrying Amount 66,208 66,208 443,484 3,473,750 45,639,587 ~49.623.029 Carrying Amount 35,255 35,255 440,747 3,473,750 42,678,292 $46.628.044 Cash and investments held and invested by fiscal agents on behalf of the Department are pledged to payment or security of certain long~term debt issuances. Fiscal agents are mandated by bond indentures as to the types of investments in which debt proceeds can be invested. The investments predominantly consist of U.S. Treasury notes, mutual funds, and investment agreements. 23 24 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (3) Capital Assets Capital asset activity for the year ended June 30, 2004 is as follows: Balance at Balance at June 30. 2003 Additions Deletions June 30. 2004 Capital projects, not being depreciated: Land and easements $ 15,172,773 8,350 (1,208) 15,179,915 Construction in progress 14,420,384 12.200.822 (5.062.253) 21.558.953 Total capital assets, not being depreciated 29.593.157 12.209.172 (5.063,461) 36.738.868 Capital assets, being depreciated: Water rights, wells and pumping plants 38,885,688 10,497 (211,131) 38,685,054 Distribution systems 54,277,581 676,476 (348,640) 54,605,417 Building, plants and store yards 146,604,528 2,546,685 (199,325) 148,951,888 Tools and equipment 5,524,346 388,401 (54,470) 5,858,277 Autos 3,567,437 494,525 (166,000) 3,895,962 Office leasehold improvements 112,594 29,332 141,926 Office, computer, engineering equipment 3,408,419 102,040 (4,780) 3,505,679 Radio and interoffice communication equipment 262,865 153,905 416,770 Telemetry system and equipment 584,948 584,948 Miscellaneous 426.549 426.549 Total capital assets, being depreciated 253.654.955 4,401.861 (984.346) 257.072,470 Less accumulated depreciation for: Water rights, wells and pumping plants (16,703,271) (1,111,467) 95,703 (17,719,035) Distribution systems (20,412,881) (1,067,645) 326,346 (21,154,180) Building, plants and store yards (50,448,222) (3,831,568) 2,094 (54,277,697) Tools and equipment (3,333,461) (264,970) 35,715 (3,562,715) Autos (1,883,469) (322,868) 96,850 (2,109,486) Office leasehold improvements (58,465) (4,987) (63,451) Office, computer and engineering equipment (1,486,989) (410,723) 3,694 (1,894,018) Radio and interoffice computer equipment (235,835) (23,857) (259,693) Telemetry system and equipment (141,898) (43,506) (185,404) Miscellaneous (205,776) (11.054) (216.831) Total accumulated depreciation (94.910.267) (7,092.645) 560,402 (101,442.510) Total capital assets, being depreciated, net 158.744.688 (2.690.784) (423.944) 155.629.960 Net property, plant and equipment $188.337.845 9.518.388 (5.487.405) 192 368.828 Depreciation expense for the year was $7,094,250. m_"',,""" I I I I I ! I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (3) Capital Assets. (Continued) Significant project commitments as of June 30, 2004 are as follows: Project Cumulative Unexpended Proiect Description Budltet Expenditures to date Commitments Water Fund: USEPA Network Groundwater Cleanup Plan Modifications $ 625,052 625,052 USEP A Muscoy site assessment 513,807 513,807 USEP A Muscoy OU EP A wells 108-112 drill and equipment 3,115,400 2,355,109 760,291 Victoria Farms Mutual Water Company 825,000 645,442 179,558 Ogden Transmission Main- ERSI Project 3,170,812 1,603,924 1,566,888 Document Management System (DMS) 600,000 527,808 72,192 Sewer Fund: Replacement of process control Gates, aeration basin 1,187,254 994,879 192,375 (4) Operating Leases The Department leases office space from the City of San Bernardino under a noncancellable operating lease that terminates on March 31, 2007. The following is a schedule of minimum lease payments as of June 30, 2003: Office Space For the year ending June 30 Water Sewer Total 2005 $156,487 21,339 177,826 2006 156,487 21,339 177 ,826 2007 117.365 16.004 133.369 ~430.339 58.682 489.021 Rent expense was $177,826 and $176,354 at June 30, 2004 and 2003, respectively. 25 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (5) Long-Term Debt The following is a summary of changes in long-term debt obligations for the year ended June 30, 2004: Amounts Amounts Due Balance at Balance at Due Within Beyond Julv 1. 2003 Additions Reductions June 30. 2004 One Year One Year Notes payable $24,051,136 10,000,000 (1,670,365) 32,380,771 2,142,442 30,238,329 Certificates of Participation 33,150,000 (1,650,000) 31,500,000 1,730,000 29,770,000 Less deferred amounts: Unamortized discounts (296,393) 25,123 (271,270) (24,696) (246,574) Bonds payable 3,710,000 (1,165,000) 2,545,000 1,200,000 1,345,000 Less deferred amounts: Unamortized discounts and advance refunding (117.174) 57.338 (59.836) (39.360) (20A 76) $60 497 569 10000000 (4402904) 66 094 665 5 008 386 61086279 Notes Payable California Infrastructure and Economic Development Bank Maturity date: 2022 Interest rate: 3.34% Repayment provisions: Annual principal and interest payments ranging from $776,905 to $750,319 Balance $10,000,000 San Bernardino 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 2,941,218 26 I I I I I I I I I I I I I I I I I I I - "--v~'~ __c__,>~_C_" I I I I I I 'I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (5) Long-Term Debt. (Continued) State Water Resources Control Board (SWRCB) Original amount: $4,015,216 Maturity date: 2011 Interest rate: 3.3% Repayment provisions: Annual principal and interest payments of $279,293 Balance 1,720,568 State Water Resources Control Board (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 Less current portion Long-term portion 17.718.985 32,380,771 (2.142.442) ~30.238.329 On March 18, 2004, the California Infrastructure and Economic Development Bank (CIEDB) issued its Infrastructure State Revolving Fund Revenue Bonds to provide funding for a portion of the costS of Phases I and n of the Water System Reliability Schedule of Improvements including transmission mains, booster stations, and a reservoir. Installment Sale Agreement No, 02-027 between the City of San Bernardino Municipal Water Department and the CmDB was pledged as security for the bonds. The Department has covenanted to set aside water revenues in an enterprise fund to make installment payments on the bonds as due. The State Revolving Fund loans between the State Water Resources Control Board and the Santa Ana Watershed Authority provided funding for the construction of the San Bernardino/Colton Rapid Infiltration Extraction (RIX) Project. The loan agreements were amended in April 2001 to transfer the loan obligations to the successors in interest, being the City of San Bernardino Board of Water Commissioners, and the City of Colton. The loans require the Department to establish a Wastewater Capital Reserve Sinking Fund (WCRF) for expansion, major repair or replacement of wastewater treatment works at one-half of one percent of the total loan amount over a period of ten years. The Department has decided to use the revenues of the Sewer Utility Fund towards repayment of the loans. 27 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (5) Long-Term Debt, (Continued) Certificates of Participation Interest Rates Annual Principal Installments Balance Issue Date Maturity Date Original Amount 1998 Refinancing Sewer 3.95% to 5.00% 1998 2017 $36,230,000 $1,505,000 to $3,220,000 $31,500,000 Less unamortized discount (271.270) 31,228,730 Less current portion payable from restricted assets, net of unamortized discount of $24,696 (1,705,304) Long-term portion, net of unamortized discount of $246,574 $29.523.426 It has been determined that the amount of $24,480 was due under Internal Revenue Code Section 148(f)(4)(B) for the temporary investments of the 1998 Refinancing Sewer Treatment Plan Certificates of Participation and for arbitrage rebate. In 1998, the Department refinanced the acquisition and construction of certain capital improvements which were originally financed by the 1992 Sewer Certificates of Participation, dated February I, 1992. The refinancing was accomplished by issue of the 1998 Refunding Sewer Revenue Certificates of Participation in the amount of $36,230,000. The proceeds of the 1998 Certificates were invested and used to pay interest on the 1998 issue until February 1, 2001. The 1992 Certificates were called on February 1,2001 at a prepayment premium of two percent. The funds from the 1998 issue were used to payoff the 1992 Certificates. The Department will now begin paying the installment payments on the 1998 Certificates from the net revenues on the Sewer System. The Department has covenanted that it will budget amounts sufficient to make all installment payments due. The required reserve for the 1998 Refunding Sewer Revenue Certificates of Participation is $1,811,500. As of June 30, 2004, the reserve was fully funded. Costs related to the issuance of the 1998 Certificates have been paid out of the proceeds of the issue. . 28 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I (5) MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements Long-Term Debt, (Continued) Bonds Payable Interest Rates 1998 Water and Wastewater Revenue Bonds 3.75% to 4.40% Waterworks Bonds, Series C 7.75% Total bonds payable Less unamortized discount and deferred advance refunding charge Less current portion payable from restricted assets, net of unamortized discount and deferred advance refunding charge of $39,360 Long-term portion, net of unamortized discount and deferred advance refunding charge of$20,476 (Continued) Issue Date Maturity Date Original Amount Annual Principal Installments Balance 1998 2005 1988 2013 $8,610,000 $860,000 to $1,260,000 $2,455,000 $150,000 $5,000 to $15,000 90,000 $2,545,000 (59,836) 2,485,164 (1,160,640) $1.324.524 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 I MUNICIPAL WATER DEPARTMENT I OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements I (Continued) I (5) Long-Term Debt, (Continued) I The annual requirements to amortize long-term debt subsequent to June 30, 2004 are as follows: June 30 Principal Interest Total I Notes payable 2005 $ 2,142,442 1,086,543 3,228,985 I 2006 2,216,594 1,054,755 3,271,349 2007 2,293,717 976,348 3,270,065 2008 2,373,955 894,783 3,268,738 I 2009 2,457,461 809,906 3,267,367 2010-2014 12,343,972 2,676,508 15,020,480 2015-2019 6,450,170 868,184 7,318,354 2020-2024 2,102,460 154,735 2,257,195 I 32,380,771 8,521,762 40,902,533 Certificates of participation 2005 $ 1,730,000 1,506,118 3,236,118 I 2006 1,815,000 1,434,323 3,249,323 2007 1,910,000 1,357,185 3,267,185 I 2008 2,010,000 1,275,055 3,285,055 2009 2,125,000 1,174,555 3,299,555 2010-2014 12,570,000 4,251,805 16,821,805 2015-2019 9,340,000 954,163 10,294,163 I 31 ,500,000 11 ,953,204 43,453,204 Bonds payable 2005 $ 1,200,000 63,109 1,263,109 I 2006 1,270,000 34,308 1,304,308 2007 10,000 5,812 15,812 2008 10,000 5,038 15,038 I 2009 10,000 4,263 14,263 2010-2014 45,000 9,298 54,298 2,545,000 121,828 2,666,828 I $66.425.771 20.596.794 87 .022.565 I Compensated Absences The Department's policies relating to compensated absences are described in note 1. This I liability, amounting to $1,905,220 and $1,858,691 at June 30, 2004 and June 30, 2003, respectively, will be paid in future years from future resources. I 30 I rr i7v~". ^.'~'T~ "T. ... l' I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (5) Long-Term Debt, (Continued) Prior Year Defeasance of Debt As of June 30, 2004, approximately $2,373,000 of outstanding 1990 Water Facilities Certificates of Participation are consider~d in substance defeased through the issuance of the Series 1998A Water and Wastewater Revenue Bonds (see Bonds Payable) and are not included as a liability of the Department in these financial statements. (6) Defined Benefit Pension Plan Qualified employees are covered under a multiple-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 participate. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by state statutes, as legislatively amended, within the Public Employees' Retirement Law. PERS issues a separate 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 Bernardino, which is available at the Department. Additional information regarding the City's participation in PERS can be found in the City's financial statements. (7) Post-Retirement Health Care Benefits In addition to the pension benefits described in note 6, the Department provides the minimum monthly premium for post-retirement medical-health care benefits to each retiree that meets the eligibility criteria. for coverage under a department group health insurance plan. The retirees may continue to participate in the health care plan provided the retirees make the arrangements for premiums to be paid with the group plan administrator. This benefit is dependent upon the continued approval of the insurance carriers. 31 2004 2003 $ 39,104 107,545 42,417 38,730 19,438 20,808 151,870 149,595 5,188 5,076 42,303 3,400 2,400 1,698,445 1,974,328 3.396 2.474 $1.963.258 2.343.259 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (7) Post-Retirement Health Care Benefits. (Continued) For those retirees who retired on or after attaining age 55 with a minimum of 15 years of service, the Department's contribution is paid directly to the group plan administrator for a portion of the premium up to $443 per month. Premium amounts in excess of the contributioh are paid by the retirees. Twenty-five Water Utility retirees and three Sewer Utility retirees are receiving the benefit. For those retirees who are not eligible to receive the monthly contribution and currently enrolled in the Department health group insurance plan, the Department pays to the group plan administrator the amount equivalent to the then current minimum eligibility amount from the previous health plan coverage with the California Public Employees Retirement System. This amount is currently $32 per month effective January 1, 2004 and is anticipated to escalate annually. Currently, twenty-five retirees are receiving this benefit. During the year ended June 30,2004, and June 30, 2003, expenses of$107,195 and $70,065, respectively, were recognized for post- retirement health care benefits and administrative costs for the Water and Sewer Utilities. (8). Related Party Transactions Following is a summary of transactions and balances with the City of San Bernardino and its various departments as of and for the years ended June 30, 2004 and 2003: Revenues City of San Be@ardino Revenue from water charges Revenue from sewer charges Revenue from geothermal charges Billing and collection charges - refuse Billing and collection charges - storm drain Utility billing system - license/hardware Cost reimbursement Interest income Economic Development Agency Revenue from geothermal charges Total revenue from related parties 32 --".... . I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (8) Related Party Transactions. (Continued) Expenses 2004 2003 City of San Bernardino 1 0% water revenue $1,957,748 1,888,704 Sewer collection system maintenance 1 ,252,287 1 ,222,992 Worker's compensation - administration charges 102,172 77,408 Printing services 11,327 16,663 Postage 10,661 11,955 City Hall rent 177,827 . 176,353 Phone charges 123,225 109,511 Refuse disposal service 70,321 83,549 Civil service 45,000 45,000 Legal services/affirmative action 105,000 105,000 Rideshare coordination 3,000 3,000 Employee assistance 6,200 15,351 Data processing services 373,400 417,800 Engineering and other services 13,740 8,793 Miscellaneous charges 14,891 8,771 Economic DeveloDment Agencv Consulting services 1.091 Total expenses to related parties $4.266.799 4.191.941 Receivables City of San Bernardino Finance Department $ 762.913 647.674 Total receivables from related parties $ 762.913 647.674 Payables City of San Bernardino Finance Department $ 707.860 908.217 Total payables to related parties $ 707.860 908.217 The Department collects 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 charges from Sewer Utility customers. These remittances are included in the related party expense shown above. 33 34 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (9) Joint Venture West End Water Development, Treatment and Conservation Joint Powers Authority On August 15, 1990, the City of San Bernardino joined the West End Water Development, Treatment and Conservation Joint Powers Authority (WEJPA) as a financing vehicle for construction of water facilities. A separate three-member board consisting of one representative from each agency's governing body governs the WEJP A. The financial statements for the WEJP A are available at the Department. The Departments' investment in the joint venture is included in the property, plant, and equipment of the Department. The financial statements ofWEJPA are available at West Valley Water District, 855 West Base Line, Rialto, California 92736. The joint venture is not experiencing fiscal stress. San Bernardino Public Safety Authority On April 1, 1968, the City of San Bernardino and the County of San Bernardino formed the San Bernardino Public Safety Authority (PSA), a joint powers authority, as a financing vehicle to construct (1) public safety buildings and (2) improvements to the wastewater treatment plant. According to the original joint powers agreement, title to the PSA-constructed wastewater treatment facility will automatically vest in the City with the residual cash being transferred to the City after the bonds are repaid. A separate board consisting of three members, one appointed by the San Bernardino City Council and two members appointed by the San Bernardino County Board of Supervisors, governs PSA. Effective with the transfer of the Sewer Utility to the Department, all the assets and activities of PSA related to the wastewater treatment plant were also transferred to the Department pursuant to the enabling resolution of October 1973 and are included in the property, plalit, and equipment of the Sewer Utility. The fmancial statements of PSA are available at the Clerk of the Board of Supervisors, County of San Bernardino, 385 N. Arrowhead Avenue, 2nd Floor, San Bernardino, California 92402. The joint venture is not experiencing fiscal stress. -""T'-" I I I I I I I I I I I I I I I I I I I .,. -~--- MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (9) Joint Venture, (Continued) Colton/San Bernardino Regional Tertiary 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 Extpction Facility (RIX). The Colton/San BerIUIl"dino Regional Tertiary Treatment and Water Reclamation Authority is governed by a separate board consisting of four members, two of whom are appointed by the City of San Bernardino through the Department's Board 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 (SA WPA) 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 $2,874,938 and $396,567 at June 30, 2004 and June 30, 2003, respectively. Risk Management The Department's risk management activities are 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 Bernardino'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 year or the three prior years. 35 Liability balance, June 30, 2003 Claims and changes in estimates Claim payments Liability balance, June 30, 2004 aggregate liabilities for the Total $527,579 176,854 (259,059) i445.374 aggregate liabilities for the Total $373,615 412,302 (258,338) $527 .579 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (10) Construction and Other Significant Commitments Workers' Compensation Claims Liabilities The Department records an estimated liability for workers' compensation. Claims liabilities are based on estimates of the ultimate cost of reported claims (including future claim adjustment expenses) and an estimate for claims incurred but not reported based on historical experience. Workers' compensation unpaid claims liabilities are not discounted. The following represents the changes in approximate Department for the year ended June 30, 2004: The following represents the changes in approximate Department for the year ended June 30, 2003: Liability balance, June 30, 2002 Claims and changes in estimates Claim payments Liability balance, June 30, 2003 (11) Contingencies Federal and State Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal and state governments. Any disallowed claims, including amounts already collected, may constitute a liability of the Department. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Department expects such amounts, if any, to be immaterial. 36 'M-r ~ . q "11" I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (11) ContinRencies, (Continued) Litigation In 1996, the Department filed a complaint against the United States of America, Department of the Army to recover damages, response costs and other available remedies relating to contamination alleged to have originated at a World War II Army installation known as Camp Ono. The litigation is in the settlement stage. The remaining act to settle is for the United States to file a motion with the court for entry of judgment. At the present time, a trial date is set for February 14,2005. If the motion for entry of judgment is not made and approved prior to February 14,2005, the court has stated it expects trial to commence, and this could have an affect on settlement prospects. The settlement addresses ownership of the improvements being constructed and constructed by EP A, and provides for the payment of $69 million to operate the remedy and defer costs of construction of improvements necessary for the later operation of the remedy. If the matter is not settled, ownership of the improvements and amounts available for future construction and operation of the remedy will need to be determined by the court, if the court holds the United States liable. Assets reported on the accompanying balance sheet at June 30, 2004 include approximately $8 million of improvements subject to EP A reimbursement. An additional $20 million (approximate amount) of improvements constructed directly by the EP A are 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) Net Assets Amounts invested in capital assets net of related debt is calculated as follows: Add back: Portion of debt offsetting debt service reserves Water Sewer $79,831,406 112,537,422 (22,380,771) (2,485,164) - (31,228,730) 443,484 3,539,958 $77.789.726 62.467 .879 Total capital assets (net of accumulated depreciation and accumulated amortization) Less related debt: Notes payable Water bonds payable Certificates of participation 37 MUNICIPAL WAlERDEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Basic Financial Statements (Continued) (12) Net Assets, (Continued) Amounts restricted for debt service is calculated as follows: Cash and investments with fiscal agent restricted for debt service Less portion of debt offsetting unexpended debt proceeds held in the debt service amounts 38 Water $443,484 (443,484) $ Sewer I I I I I I I I I I I I I I I I I I I 3,539,958 (3,539,958) 1 --'"~""~!Fr",",pc'''''---''"r' > I I I I I I I I I I I I I I I I I I I SUPPLEMENTARY INFORMATION 39 40 I I I I I I I I I I I I I I I I I I I (This page intentionally left blank.) -~'",' ,,. .. ~ .'1' I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Board of Water Commissioners and Organization Year Ended June 30, 2004 MAYOR OF THE CITY OF SAN BERNARDINO Judith Valles BOARD OF WATER COMMISSIONERS Name Office B. Warren Cocke Toni Callicott Martin A. Matich Judith W. Battey Norine 1. Miller President Commissioner Commissioner Commissioner Commissioner ADMINISTRATION Bernard C. Kersey General Manager Stacy R. Aldstadt Deputy General Manager W. William Bryden, P.E. Director, Water Utility John A. Perry, P.E. Director, Water Reclamation David S. Erickson Director, Administration and Finance Jon K. Turnipseed, CSP Safety Program Manager ORGANIZATION The City of San Bernardino Municipal Water Department was formed in 1904 under the Charter of the City of San Bernardino. The Department is governed by a Board of Water Commissioners who are appointed by the Mayor of the City of San Bernardino. The Charter gives the Board of Water Commissioners semi-autonomous authority to govern the Department independent of the City Council. The Department operates two enterprise funds: the Water Utility Enterprise Fund and the Sewer Utility Enterprise Fund. Water service encompasses the City, with the exception of the east end, which is serviced by the East Valley Water District. Sewer service encompasses all of the City of San Bernardino, East Valley Water District, City of Loma Linda, the former Norton Air Force Base and Patton State Hospital. 41 1,000,000 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Insurance Coverage As of Jooe 30, 2004 Insurance covemge for the Department at Jooe 30, 2004 is summarized below: Pacific Indemnity Company, Policy #78357989; boiler and machinery coverage - July I, 2003 to July I, 2004 Per occurrence limit $ 10,000,000 Multiple insurance companies and policies; all-risk property coverage, including earthquake and flood - July 1, 2003 to July I, 2004 Primary limit: Commonwealth Insurance Company, Policy #US4570 Excess limits: Great American E & S Insumnce Company, Policy #CGP5663757 Arch Specialty Insurance Company, Policy #72ESP2591300 Clarendon Insurance Company, Policy #PCA11 070 Essex Insurance Company, Policy #ESPW2228 Royal Surplus Lines Company, Policy #K2HD407933 AXA ReProperty Casualty, Policy #AXA331597 Royal Surplus Lines Company, Policy #K2HD407932 5,000,000 5,000,000 5,000,OQO 10,000,000 10,000,000 10,000,000 5,000,000 75,000,000 American Alternative Insurance Co., Policy #SDISSK9100525; general liability, including bodily injury and property damage, personal injury and advertising injury, professional liability and wrongful acts - Jooe 30, 2003 to Jooe 30, 2004 Bodily injury and property damage Per occurance Aggregrate Damages to premises rented to you Anyone premises Personal injury and advertising injury Per person Aggregrate Employee benefits liability Per person Aggregrate Professional liability Per claim Aggregrate Wrongful acts Per claim Aggregrate 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 1,000,000 3,000,000 American Alternative Insurance Co., Policy #SDISSK9100525; business automobile coverage - June 30,2003 to Jooe 30 ,2004 Owned automolbile liability limit Hired/nonowned automobile liability Hired car physical damage Uninsured motorist liability Medical 1,000,000 1,000,000 50,000 1,000,000 5,000 (Continued) 42 - ~"~-" I'" - _ - [1 -- I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Insurance Coverage (Continued) Multiple insurance companies and policies; excess liability coverage - June 30, 2003 to June 30, 2004 Primary limit: American Alternative Insurance Company Excess limits: Evanston Insurance Company 10,000,000 9,000,000 American International Specialty Lines, Policy #PLS2673997; pollution liability - October 30,2001 to October 30,2004 (each incident/aggregate) Third-Party Claims, On-Site Bodily Injury and Property Damage Third-Party Claims, Off-Site Clean-Up Resulting from New Conditions Third-Party Claims, Off-Site Bodily Injury and Property Damage 5,000,000 5,000,000 5,000,000 Travelers, Policy #104204117; employment practices liability - October 30, 2003 to October 30, 2004 1,000,000 Hartford Fire Insurance Company, Policy #72BPEAK.4746; crime coverages - March 25, 2000 until cancelled Employee theft (each incident) Theft, disappearance and destruction 250,000 250,000 The Department is self-insured through the City of San Bernardino for workers' compensation liability and material damage to rolling stock. 43 MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Water System Demographics Water ProductionlUtilization (Cubic Feet) Water utilization (shown in cubic feet) Water sold to direct customers Water sold to other agencies Water sold to or used by City* 2003-2004 2002-03 2001-02 1,965,264,900 1,785,563,100 1,848,730,500 38,268,704 86,751,578 120,061,997 69,701,161 76,133,820 93,843,373 2,073,234,765 1,948,448,498 2,062,635,870 180,575,623 178,266,332 168,368,230 8.012% 8.382% 7.547% 2,253,810,388 2,126,714,830 2,231,004,100 Loss and other factors Loss and other factors percentage Total water sold, used or lost 44 - I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I --,- _.. '-"'-"-~ MUNlCIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA , Schedule of Water Production June 30, 2004 2003-2004 2002-2003 2001-2002 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 purchlllled cost Total production, purchases, and 2,253,810 2,126,715 2,231,004 supplemental Production and pumping expenses * $5,570,502 $5,659,161 $5,074,987 Total expense before depreciation 5,570,502 $2.47159 5,659,161 $2.66099 5,074,987 $2.27475 Depreciation of plant facilities 1,034,982 0.45921 1,043,319 0.49058 915,121 0.41018 Totals $6,605,484 $2.93081 $6,702,480 $3.15156 $5,990,108 $2.68494 Summary of costs per acre foot Acre feet 51,740.367 48,822.657 51,216.808 Cost per acre feet before depreciation $107.66 $115.91 $99.09 Cost per acre feet including depreciation of plant facilities $127.67 $137.28 $116.96 45 MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Water Rates Water rates are summarized below: Single Family Dwelling Units Meter Size Minimum Monthly Charge Effective Dates January I, 2002 April I, 2000 Cubic Foot Allowance 5/8" 3/4" I" 1-1/2" 2" 3" 4" 6" 8" 10" 12" $8.05 $10.75 $12.85 $23.05 $32.20 $54.75 $92.95 $167.35 $251.00 $313.75 $376.55 $7.60 $10.10 $12.15 $21.75 $30.35 $51.65 $87.70 $157.90 $236.80 $296.00 $355.25 500 500 500 500 500 500 500 500 500 500 500 All water usage in excess of 500 cubic feet 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. Multiple Family Dwelling Units Includes duplexes, triplexes, apartments, mobile home parks, condominiums, and town homes served by one or more master meters. The minimum monthly charge for the first dwelling unit is the same as a single family dwelling with each additional dwelling unit served by the meter at the rate of $3.35 and $3. 15 per unit per month effective January 1,2002, and April 1, 2000, respectively. The cubic foot allowance for the first dwelling unit is 500 cubic feet per month with each additional dwelling unit served by the meter at the rate of 200 cubic feet per month. All water usage in excess of the allowance 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. (Continued) 46 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Water Rates (Continued) Commercial, Landscape, and Industrial Users Meter Size Minimum Monthly Charge Effective Dates January 1, 2002 April 1, 2000 5/8" 3/4" I" 1-1/2" 2" 3" 4" 6" 8" 10" 12" $8.05 $10.75 $12.85 $23.05 $32.20 $54.75 $92.95 $167.35 $251. 00 $313.75 $376.55 $7.60 $10.10 $12.15 $21.75 $30.35 $51.65 $87.70 $157.90 $236.80 $296.00 $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 furnished for municipal use to the City of San Bernardino is exempt from all water service charges as long as water usage does not exceed 110 percent of the fiscal year 1994/1995 water usage. Water usage in excess of this amount is charged at $0.288 per 100 cubic foot. Water furnished for use by the City of San Bernardino for landscape assessment districts or funded from other than the City's general fund is charged at $0.288 per 100 cubic foot. All other rates remained unchanged. Energy Surcharge Effective July 5, 2001, all consumption, except municipal, shall be charged $0.05 per cubic foot to offset the increased power costs. 47 I MUNICIPAL WATER DEP ARlMENT OF TIlE CITY OF SAN :BERNARDINO, CALIFORNIA I Schedule of Sundry Water Statistical Data I 2003-2004 2002-2003 I Production Percent Production Percent Pumping Plants in Cubic Feet Production in Cubic Feet Production I Antil Plant 82,571,200 3.79% 55,968,400 2.70% Baseline & California Well 20,784,900 0.95% 16,895,500 0.82% Cajon Boulevard Plant 98,009,400 4.50% 94,775,100 4.58% I Cajon Pass & Vincent Wells 38,443,100 1.76% 72,855,700 3.52% Devil Canyon Plant 123,324,880 5.66% 117,012,030 5.65% EP A Wells - Newmark OU 565,447,170 25.93% 502,864,300 24.28% I 40th Street Well 1,676,100 0.08% 1,569,000 0.08% Gilbert Street Well 83,912,300 3.85% 34,258,200 1.65% Kenwood Wells 166,971 ,400 7.66% 62,409,200 3.01% I LeRoy Street Well 60,969,500 2.80% 101,743,600 4.91% Lynwood Well 53,509,860 2.45% 95,388,500 4.61% I Lytle Creek Plant 31,152,100 1.43% 53,527,500 2.58% Mallory Well 21,317,100 0.98% 10,662,600 0.51% Mill & "D" Streets Well 14,140,800 0.65% 16,517,300 0.80% I Newmark Plant 158,321,800 7.26% 174,258,800 8.42% 19th Street Plant 132,848,000 6.09% 182,126,500 8.80% Olive & Garner Well 115,058,398 5.28% 47,612,000 2.30% I Perris Hill Plant 17,280,200 0.79% 18,211,200 0.88% 7th Street Well 37,796,200 1.73% 4,544,200 0.22% Sierra Way & 16th Street Wells 205,100 0.01% 422,900 0.02% I lOth & "J" Street Well 129,074,500 5.92% 107,610,600 5.20% 30th & Mountain View Wells 122,995,600 5.64% 187,466,000 9.05% 27th Street Well 31,616,500 1.45% 11,021,500 0.53% I Waterman Avenue Plant 72,891,380 3.34% 101,031,700 4.88% Total Water Produced 2,180,317,488 100.00% 2,070,752,330 100.00% I Purchased water - East Valley Water District 73,492,900 55,962,500 I Total Water Production 2,253,810,388 100.00% 2,126,714,830 100.00% I I I 48 I ,_. . rl1 I I I I 2001-2002 2000-2001 1999-2000 Production Percent Production Percent Production Percent in Cubic Feet Production in Cubic Feet Production in Cubic Feet Production I 70,400,200 3.28% 84,590,700 4.21% 108,724,200 5.02% 21,749,200 1.01% 16,913,200 0.84% 30,763,900 1.42% I 112,510,200 5.24% 110,704,500 5.50% 178,164,100 8.23% 68,773,600 3.20% 100,532,800 5.00% 73,289,300 3.38% 109,735,500 5.11% 90,029,660 4.49% 130,228,570 6.01% I 593,338,500 27.63% 595,230,100 29.59% 651,768,900 30.09% 3,085,700 0.14% 3,669,800 0.18% 5,607,000 0.26% 49,751,700 2.32% 1,483,900 0.07% 433,200 0.02% I 117,803,100 5.49% 96,952,100 4.82% 84,710,800 3.91% 29,554,700 1.38% 30,756,500 1.53% 15,075,100 0.70% 109,885,900 5.12% 62,404,600 3.10% 62,890,300 2.90% I 55,204,600 2.57% 85,137,800 4.23% 110,895,200 5.12% 13,922,100 0.65% 16,497,900 0.82% 21,138,300 0.98% I 16,969,400 0.79% 19,177,500 0.95% 23,771,900 1.1 0% 185,990,500 8.66% 159,374,100 7.92% 134,181,500 6.20% 160,675,200 7.48% 150,736,400 7.49% 146,759,900 6.78% I 102,798,600 4.79% 82,548,300 4.10% 89,972,100 4.15% 11,699,500 0.54% 1,637,900 0.08% 0 0.00% 6,108,700 0.28% 3,255,400 0.16% 487,300 0.02% I 205,500 0.01% 162,600 0.01 % 480,200 0.02% 142,552,700 6.64% 126,792,300 6.30% 114,075,400 5.27% 78,513,900 3.66% 71,341,400 3.55% 77,771,300 3.59% I 15,143,400 0.71% 14,487,800 0.72% 193,100 0.01% 70,918,400 3.30% 87,412,200 4.34% 104,445,500 4.82% I 2,147,290,800 100.00% 2,011,829,460 100.00% 2,165,827,070 100.00% I 105,745,800 89,351,500 83,879,400 2,253,036,600 100.00% 2,255,178,570 100.00% 2,170,069,065 100.00% I I I I 49 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA WATER UTILITY Schedule of Service Area and Customers Number of Active Connections by Classification of User as of June 30, 2000 through June 30, 2004 User Type 2004 2003 2002 2001 2000 Single family residential 34,075 33,762 33,512 32,991 32,550 Multiple family residential 2,929 2,886 2,839 2,792 2,793 Commercial/institutional 3,761 3,752 3,728 3,703 3,693 Other 1,223 1,154 1,139 1,148 1,081 Total all users, active 41,988 41,554 41,218 40,634 40,117 Revenue by Class of User Fiscal Year 2003-2004 User Class Fiscal Year Revenue Percentage of Annual Revenue Single family residential Multiple family residential Commercial/industrial Other and unmetered $10,486,591 3,358,579 5,087,108 580,163 53.74% 17.21% 26.07% 2.97% Total all users $19,512,441 100% Largest users: The System had no customer accounting for more than three percent of the revenues for the fiscal year 2003-2004 50 I I I I I I I I I I I I I I I I I I I "--<-y r- I I I I I I I I I I I I I I I I I I I '" -- MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Sewer Rates and Statistics Classification Regional Facilities and Treatment Charge Collection System Charge Total monthly City Charge Rates effective as of June I, 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, daycares Industry $13.25 per month $1.35 per month $14.60 $0.75/HCF $0.15/HCF $0.90/HCF $l.l O/HCF $0.15/HCF $1.25/HCF $1.20/HCF $O.l5/HCF $1.35/HCF $0.95/HCF $0.15/HCF $ 1.1 O/HCF $1.70/HCF $0. I 5/HCF $1.85/HCF $0.90/HCF $0.15/HCF $1.05/HCF $0.80/HCF $0.15/HCF $0.95/HCF $0.50/HCF $0.15/HCF $0.65/HCF $826.67/MG $264.22/1,000 LBS BOD (Discharge flow) $324.28/1,000 LBS SS Rates effective as of January I, 1994: 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, daycares Industry $13.55 per month $1.35 per month $14.90 $0.80/HCF $0. I 5/HCF $0.95/HCF $1.15/HCF $0. I 5/HCF $1.30/HCF $1.25/HCF $0.15/HCF $1.40/HCF $I.OO/HCF $0.15/HCF $1.15/HCF $1.75/HCF $0.15/HCF $1.90/HCF $0.95/HCF $0. I 5/HCF $1.10/HCF $0.85/HCF $0. I 5/HCF $I.OO/HCF $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. MG = Per million gallons of water usage. BOD = Per 1,000 pounds of biological oxygen demand. SS = Per 1,000 pounds of suspended solids. (Continued) 51 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Sewer Rates and Statistics, (Continued) June 30, 2004 Residential Nonresidential Total Number of connections City of San Bernardino $ 31,553 5,240 36,793 East Valley Water District 17,265 1,128 18,393 City of Lorna Linda 4,061 566 4,627 $ 52,879 6,934 59,813 Annual billings City of San Bernardino East Valley Water District City of Lorna Linda $5,526,450 2,970,140 617,813 $5,247,261 1,694,656 726,191 $10,773,711 4,664,796 1,344,004 $9,114,403 $7,668,108 $16,782,511 Average monthly billings City of San Bernardino East Valley Water District City of Lorna Linda $460,537 247,512 51,484 $437,272 141,221 60,516 $897,809 388,733 112,000 $759,534 $639,009 $1,398,543 52 I I I I I I I I I I I I I I I I I I I ,< -'1i '...-.," M'-O ,'''- I I I I June 30, 2003 June 30, 2002 Residential Nonresidential Total Residential Nonresidential Total I 30,948 5,160 36,108 30,692 5,135 35,827 16,910 1,126 18,036 16,525 1,125 17,650 I 3,951 563 4,514 3,864 558 4,422 51,809 6,849 58,658 51,081 6,818 57,899 I I $5,515,768 $5,095,405 $10,611,172 $5,419,223 $4,933,439 $10,352,662 2,836,617 1,627,022 4,463,638 2,817,331 1,708,931 4,526,262 I 612,488 772,148 1,384,635 603,941 745,394 1,349,335 $8,964,872 $7,494,574 $16,459,446 $8,840,495 $7,387,764 $16,228,259 I I $459,647 $424,617 $884,264 $451,602 $411,120 $862,722 236,385 135,585 371,970 234,778 142,411 377,189 I 51,041 64,346 115,386 50,328 62,116 112,445 $747,073 $624,548 $1,371,620 $736,708 $615,647 $1,352,355 I I I I I I 53 I 54 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF TIIE CITY OF SAN BERNARDINO, CALIFORNIA Schedule - 1992 Certificates of Participation San Bernardino Public Safety Authority June 30, 2004 EARLY PAYOFF During Fiscal Year 2001, the 1992 Certificates of Participation were retired by an early call and payoff. The total principal amount of $34,805,000 was paid off February 1,2001. An early call premium of $674,000 was incurred due to this transaction. This amount will be amortized annually in the amount of $42, 125 over a sixteen year period. The unamortized discount balance of $207,921 will continue to be amortized annually in the amount of $16,520 with the fmal payment of$9,681 due February 1,2017. Funds usedfor the Primary Hydraulic Reliability Project, remodel of the administration laboratory building and design of 3A secondary treatment. nr .-r'~ ^^' I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule - 1998 Refunding Sewer Revenue Certificates of Participation I San Bernardino Public Safety Authority June 30, 2004 I Principal Principal Unamortized Payments Interest I Date Due Payments Discounts (Net) Interest Total Rate 8/1/04 $ 753,059 753,059 4.15% I 2/1/05 1,730,000 8,176 1,721,824 753,059 2,474,883 4.15% 8/1/05 717,161 717,161 4.25% 2/1/06 1,815,000 7,727 1,807,273 717,161 2,524,434 4.25% I 8/1/06 678,593 678,593 4.30% 2/1/07 1,910,000 7,257 1,902,743 678,593 2,581,336 4.30% 8/1/07 637,528 637,528 5.00% 2/1/08 2,010,000 6,760 2,003,240 637,528 2,640,768 5.00% I 8/1/08 587,278 587,278 4.50% 2/1/09 2;125,000 6,238 2,118,762 587,278 2,706,040 4.50% 8/1/09 539,465 539,465 4.70% I 2/1/10 2,240,000 5,687 2,234,313 539,465 2,773,778 4.70% 8/1/10 486,825 486,825 5.00% 2/1/11 2,365,000 5,105 2,359,895 486,825 2,846,720 5.00% I 8/1/11 427,700 427,700 4.75% 2/1/12 2,510,000 4,492 2,505,508 427,700 2,933,208 4.75% 8/1/12 368,088 368,088 4.85% I 2/1/13 2,650,000 3,840 2,646,160 368,088 3,014,248 4.85% 8/1/13 303,825 303,825 4.75% 2/1/14 2,805,000 3,152 2,801,848 303,825 3,105,673 4.75% I 8/1/14 237,206 237,206 5.25% 2/1/15 2,965,000 2,424 2,962,576 237,206 3,199,782 5.25% 8/1/15 159,375 159,375 5.00% 2/1/16 3,155,000 1,655 3,153,345 159,375 3,312,720 5.00% I 8/1/16 80,500 80,500 5.00% 2/1/17 3,220,000 836 3,219,164 80,500 3,299,664 5.00% I $ 31,500,000 63,349 31,436,651 11,953,206 43,389,857 I I I I 55 I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Series 1998A Water and Wastewater Revenue Bonds June 30, 2004 Unamortized Discounts and Principal Principal Deferred Payments Interest Date Due Payments Charges (Net) Interest Total Rate 10/1/04 $ 1,195,000 39,360 1,155,640 53,413 1,209,053 4.30% 4/1/05 27,720 27,720 4.30% 10/1/05 1,260,000 20,476 1,239,524 27,720 1,267,244 4.40% $ 2,455,000 59,836 2,395,164 108,853 2,504,017 56 I I I I I I I I I I I I I I I I I I I I I I I I I. I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Bond Schedule - General Obligation Waterworks Bonds, Series C June 30, 2004 Principal Interest Date Due Payments Interest Total Rate 9/1/04 $ 3,488 3,488 7.75% 3/1/05 5,000 3,488 8,488 7.75% 9/1/05 3,294 3,294 7.75% 3/1/06 10,000 3,294 13,294 7.75% 9/1/06 2,906 2,906 7.75% 3/1/07 10,000 2,906 12,906 7.75% 9/1/07 2,519 2,519 7.75% 3/1/08 10,000 2,519 12,519 7.75% 9/1/08 2,131 2,131 7.75% 3/1/09 10,000 2,131 12,131 7.75% 9/1/09 1,744 1,744 7.75% 3/1/10 10,000 1,744 11,744 7.75% 9/1/10 1,356 1,356 7.75% 3/1/11 10,000 1,356 11,356 7.75% 9/1/11 969 969 7.75% 3/1/12 10,000 969 10,969 7.75% 9/1/12 580 580 7.75% 3/1/13 15,000 580 15,580 7.75% $ 90,000 37,974 127,974 Bonds related to water system improvements for South San Bernardino Water District, which was acquired by the Department in 1991. 57 58 I I I I I I I I I I I I I I I I I I I (This page intentionally left blank.) ~_~m I I I I I I I I I I I I I I I I I I I WATER UTILITY 59 I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA I Water Utility Statements of Net Assets I June 30, 2004 and 2003 Increase I 2illM 2llil1 (Decrease) Assets Assets: I Current assets: Cash and investments $ 11,888,399 11,990,239 (101,840) Accounts receivable, net 4,047,631 3,220,362 827,269 Due from other entities 1,070,040 1,584,304 (514,264) I Interfund receivable 23,388 28,790 (5,402) Related parties receivable 285,092 243,360 41,732 Inventory 1,472,401 1,374,613 97,788 I Prepaid expenses 13 178 50,465 (37,287) Total current assets 18,800,129 18,492,133 307,996 Noncurrent assets: I Restricted assets: Cash and investments: Restricted for debt service 462,315 457,677 4,638 I Restricted for capital-related fees 3,314,912 2,026,374 1,288,538 Restricted for consumer deposits 2,224,512 2,066,143 158,369 Interest receivable 41,772 41,772 I Note proceeds held by state 10,000,000 10,000,000 Total restricted assets 16,043,511 4,550,194 11,493,317 Notes receivable 600,000 600,000 I Capital assets: Land & easements 2,709,175 2,702,033 7,142 Water rights, wells, pumping plants 35,492,836 35,693,470 (200,634) I Distribution systems 54,605,417 54,277,581 327,836 Building, plants and store yards 1,334,031 1,322,021 12,010 Tools and equipment 2,055,082 1,983,676 71,406 I Autos 2,901,318 2,558,245 343,073 Office leasehold improvements 141,926 112,594 29,332 Office, computer, engineering equipment 2,568,894 2,420,282 148,612 Radio and interoffice communication equipment 304,959 236,375 68,584 I Telemetry systems and equipment 248,336 248,336 Miscellaneous 233,534 233,534 Construction in progress 19,886,793 12,331 ,875 7,554,918 I Less accumulated depreciation and amortization (42,650,895) (40,348,896) (2,301,999) Total capital assets (net of accumulated depreciation and amortization) 79,831,406 73,771,126 6,060,280 I Other assets: Debt issue costs, net 16,753 32,386 (15,633) Total Noncurrent assets 96,491,670 78,353,706 18,137,964 I Total assets 115,291,799 96,845,839 18,445,960 (Continued) I 60 I -, ,- .,. "-. T I I MUNICIPAL WATE~ DEPARTMENT OF TIlE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility I Statements of Net Assets (Continued) I Increase 2004 2003 (Decrease ) Liabilities and net assets I Liabilities: Current liabilities: I Accounts payable 2,005,546 1,754,839 250,707 Related parties payable 618,618 540,416 78,202 I Accrued expenses 38,956 16,023 22,933 Accrued compensation 2,039,710 1,811,622 228,088 Claims payable 416,099 382,899 33,200 I Other deposits 976,727 563,974 412,753 Deferred revenue 21,495 21,495 Current portion of notes payable 414,147 414,147 I Total current liabilities 6,531,298 5,069,773 1,461,525 I Current liabilities payable from restricted assets: Current portion of bonds payable 1,160,640 1,107,662 52,978 I Accrued interest payable 122,267 38,886 83,381 Consumer deposits 2,270,516 2,024,812 245,704 I Total current liabilities payable from restricted assets 3,553,423 3,171,360 382,063 I Noncurrent liabilities: Notes payable 9,585,853 9,585,853 Bonds payable 1,324,524 2,485,164 (1,160,640) I Total Noncurrent liabilities 10,910,377 2,485,164 8,425,213 I Total liabilities 20,995,098 10,726,297 10,268,801 I Net Assets: Retained earnings 94,296,701 86,119,542 8,177,159 I Total net assets $ 94,296,701 86,119,542 8,177,159 I 61 I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA I Water Utility I Statements of Revenues and Expenses Years ended June 30, 2004 and 2003 I Increase 2.QO:1 2003. (Decreas~ I Operating revenues: I Charges for services $ 19,738,868 18,820,801 918,067 Other operating revenues 1,816,802 1,594,028 222,774 Total operating revenues 21,555,670 20,414,829 1,140,841 I Operating expenses: I Administration and customer service 4,993,846 4,783,093 210,753 Engineering, operations, and distributio~ administration 676,688 591,367 85,321 I Plant operations 5,670,649 5,818,947 (148,298) Maintenance 1,209,713 1,062,255 147,458 Distribution 2,881,570 2,441,589 439,981 I Engineering 1,468,972 1,288,902 180,070 General, administration, and overhead 1,229,032 163,234 1,065,798 I Depreciation and amortization 2,817,822 2,423,163 394,659 Total operating expenses 20,948,292 18,572,550 2,375,742 I Operating income (loss) 607,378 1,842,279 (1,234,901) Non-operating revenues (expenses): I Investment income 219,377 749,833 (530,456) Rental income 68,098 69,828 (1,730) I Noncapital grant funds 1,214,167 794,044 420,123 Gain (loss) on asset disposition 2,488,606 (135,495) 2,624,101 Interest expense and fiscal charges (369,371) (252,552) (116,819) I Amortization of issuance costs (15,634) (20,481) 4,847 Other 130,914 47,203 83,711 I Total non-operating revenues (expenses) 3,736,157 1,252,380 2,483,777 Net profit (loss) $ 4,343,535 3,094,659 1,248,876 I I 62 I I I I I I I I I I I I I I I I I I I I MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Statement of Changes in Net Assets Years ended June 30,2004 and 2003 2004 2003 Balance at beginning of year $ 86,119,542 79,767,474 Net income 4,343,535 3,094,659 Capital contributions 3,833,624 3,257,409 Balance at end of year $ 94,296,701 86,119,542 63 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Statements of Cash Flows Years Ended June 30,2004 and 2003 2004 2003 Cash flows from operating activities: Cash received from customers $ 21,656,375 19,737,909 Rental income 68,098 69,828 Nonoperating miscellaneous revenue (expenses) 2,019,520 (88,292) Cash paid to suppliers of goods and services (8,298,248) (7,280,915) Cash paid to employees for services (6,119,249) (6,151,671) Net cash provided by operating activities 9,326,496 6,286,859 Cash flows from noncapital financing activities: Grant proceeds received 1,214,167 794,044 Net cash provided by noncapital financing activities 1,214,167 794,044 Cash flows from capital and related financing activities: Capital fees received 2,482,427 1,902,908 Grant proceeds received 1,351,197 1,159,787 Cash paid to acquire fixed assets (11,808,534) (8,778,941) Principal paid on capital-related debt (1,107,662) (1,025,984) Interest paid on capital-related debt (285.991) (263.912) Net cash provided by (used for) capital and related financing activities (9,368,563) (7,006,142) Cash flows from investing activities: Interest received 177,605 749,833 Net cash provided by investing activities 177,605 749,833 Net increase in cash 1,349,705 8~4,594 Cash and cash equivalents at beginning of year 16,540,433 15,715,839 Cash and cash equivalents at end of year $ 17,890,138 16,540,433 (Continued) 64 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1-rr'"T ~,~ w;-- " """. .""" "'",'~ MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Statements of Cash Flows (Continued) ~004 2003 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: Interest receivable Note proceeds held by state $ 11,888,399 16.043,511 11,990,239 4,550,194 (41,772) (10,000,000) Cash and cash equivalents at end of year 17,890,138 16,540,433 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Depreciation and amortization Nonoperating miscellaneous revenue (expenses) Rental income Gain (loss) on asset disposition Adjustments: Change in accounts receivable Change in due from other entities Change in notes receivable Change in interfund receivable Change in related parties receivable Change in inventory Change in prepaid expenses Change in accounts payable Change in related parties payable Change in accrued expenses Change in accrued compensation Change in claims payable Change in consumer deposits Change in other deposits Change in deferred revenue Change in other assets 607,378 1,842,279 2,817,822 2,423,163 130,914 47,203 68,098 69,828 2,488,606 (135,495) (827,269) 218,892 514,264 (1,132,763) (600,000) 5,402 72,432 (41,732) 45,183 (97,788) (48,734) 37,287 147,395 250,707 402,424 78,202 (143,527) 22,933 3,995 228,088 258,643 33,200 41,129 245,704 101,516 412,753 (28,059) 21,495 2,930,432 2,101,355 $ 9,326,496 6,286,859 Net cash provided by operating activities 65 .,~, 2004 2003 $ 31,657 23,331 863,853 727,221 302,177 261,304 135,544 138,166 656,442 656,980 237,922 313,541 510,512 437,836 163,757 166,904 718,345 628,654 507,407 522,655 264,529 276,550 601,701 629,951 4.993.846 4.783.093 676,688 591.367 258,193 192,726 5,300,954 5,466,435 111,502 159,786 5,670,649 5.818.947 526,424 562,455 168,865 243,653 514,424 256,147 1,209,713 1,062,255 272,146 242,243 974,490 826,304 688,897 603,425 474,064 370,365 471,973 399,252 2,881,570 2,441,589 787,654 673,062 681,318 615,840 1,468,972 1,288,902 1,229,032 163,234 18,130,470 16,149,387 2,817,822 2,423,163 $20,948,292 18,572,550 I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Operating Expenses For the years ended June 30,2004 and 2003 Administration and customer seIVice: Board of water commissioners Administration Safety and loss control Personnel Finance and accounting Data processing Purchasing and stores Administration seIVices Customer seIVices Billing and posting Cashiering Field and meter reading seIVices Water utility administration Plant operations: Operations administration Production and pumping Geothermal Maintenance: Plant and facilities maintenance Specialized construction Electrical repair Distribution: Administration SeIVice and repair Distnbution maintenance Meter shop Garage - vehicle maintenance Engineering: Engineering Water quality and backtlow connection General, administration, and overhead Total operating expenses before depreciation and amortization Depreciation and amortization Total operating expenses 66 I I I I I I I I I I I I I I I I I I I --Y_-T"pn- '"iT .. -~<- - --~.- MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Board of Water Commissioners Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 900 900 Fringe benefits 28,562 17,848 29,462 18,748 Maintenance and operation: Travel, meals, and conventions 2.195 4.583 2,195 4,583 Total $ 31,657 23,331 67 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Administration Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 499,292 403,720 Nonproductive salaries 159,078 103,505 Fringe benefits 79,179 45,015 737,549 552,240 Maintenance and operation: Trave~ meals, and conventions 8,203 10,526 Training 191 Employee reimbursements 129 470 Safety clothing/supplies 10 Memberships and dues 31,058 28,204 General office supplies 465 811 Books and publications 40 Printed materials 24,726 18,552 Subscriptions 1,016 Office equipment maintenance 865 60 Postage and delivery charges 931 497 Telephone 14,729 10,525 Computer equipment 297 1,255 Software 259 Office furniture 252 Contract services 43,623 102,635 Materials and supplies 72 126,304 174,981 Total $ 863,853 727,221 68 I I I I I I I I I I I I I I I I I I I 1 lIT 1 r I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Safety and Loss Control Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 171,463 136,048 Nonproductive salaries 31,162 28,886 Fringe benefits 31,013 20,446 233,638 185,380 Maintenance and operation: Trave~ meals, and conventions 2,741 4,686 Training materials and fees 26,562 14,352 Employee reimbursements 663 275 Uniform rental and cleaning 184 202 Safety clothing and supplies 10,518 9,289 Employee physical exams and x-rays 5,720 3,481 Memberships and dues 475 418 Printed materials 888 106 Books and publications 424 404 Office equipment maintenance 799 108 Postage and delivery charges 40 57 Subscriptions 1,346 1,420 Telephone 6,332 4,692 Contract services 7,163 32,961 Minor office equipment purchases 171 92 Office furniture 2,627 162 Computer equipment 723 2,398 Materials and supplies 316 5 Small tools and equipment 199 58 General office supplies 648 758 68,539 75,924 Total $ 302,177 261,304 69 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Personnel Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 65,062 56,524 Nonproductive salaries 4,919 9,901 Fringe benefits 16,705 10,106 86,686 76,531 Maintenance and operation: Trave~ meals, and conventions 2,102 1,195 Training materials and fees 829 1,180 Employee reimbursements 493 882 Employee physical exams and x-rays 2,828 2,665 General office supplies 121 897 Memberships and dues 160 1,637 Printed materials 1,097 69 Books and publications 2,458 Postage charges 33 Telephone 1,605 1,513 Minor office equipment 79 Contract services 29,400 43,614 Computer equipment 127 Advertising 7,653 7,856 48,858 61,635 Total $ 135,544 138,166 70 I I I I I I I I I I I I I I I I I I I I I I I ,I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Finance and Accounting Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 463,441 442,436 Nonproductive salaries 60,546 108,464 Fringe benefits 77,568 59,857 601,555 610,757 Maintenance and operation: Travel, meals, and conventions 1,538 3,901 Training materials and fees 1,647 2,438 Employee reimbursements 904 1,733 Memberships and dues 614 394 Printed materials 4,694 4,082 Books and publications 84 Office equipment maintenance 540 122 Subscriptions 12 851 Postage and delivery charges 96 83 Telephone 8,438 6,748 Contract services 30,715 17,013 Safety clothing and supplies 185 147 Minor office equipment purchases 461 706 Computer equipment 516 3,211 Software 86 Office furniture 1,001 499 General office supplies 3,442 4,209 54,887 46,223 Total $ 656,442 656,980 71 MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Data Processing Expenses For the years ended June 30,2004 and 2003 2004 2003 Maintenance and operation: Telephone $ 2,242 10,739 Contract services 205,275 250,150 Equipment maintenance 30,405 52,652 Total $ 237,922 313,541 72 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I T 1 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Purchasing and Stores Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits $301,251 96,697 54,744 292,896 63,589 41,575 452,692 398,060 Maintenance and operation: Trave~ meals, and conventions Training Employee reimbursements Safety clothing and supplies Memberships and dues Uniform rental and cleaning Printed materials Books and publications Office equipment maintenance Postage and delivery charges Advertising Telephone Materials and supplies Small tools and equipment Equipment maintenance Minor office equipment purchases Computer Equipment Software Office furniture Freight charges Contract services General office supplies 719 2,062 48 388 57 125 604 344 713 656 1,168 1,263 3,013 4,604 29 73 1,519 681 135 604 9,892 3,198 9,087 7,160 14,757 2,732 616 1,068 628 370 962 363 862 2,311 205 539 1,259 253 7,554 6,018 346 721 3,647 4,243 57,820 39,776 $ 510,512 437,836 Total 73 MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Administrative Services Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 109,287 109,474 Nonproductive salaries 25,964 26,363 Fringe benefits 20,137 13,935 155,388 149,772 Maintenance and operation: Travel, meals, and conventions 1,234 912 Training materials and fees 190 497 Employment reimbursement 50 Memberships and dues 150 215 General office supplies 155 62 Printed materials 30 27 Books and publications 169 Office equipment maintenance 160 622 Telephone 1,604 1,485 Contract services 4,489 11,835 Computer equipment 194 1,306 Minor office equipment purchases 113 2 8,369 17,132 Total $ 163,757 166,904 74 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1""" [T T"llll MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Customer Services Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 481,010 427,375 Nonproductive salaries 98,442 85,485 Fringe benefits 94,823 63,770 674,275 576,630 Maintenance and operation: Travel, meals, and conventions 204 48 Training materials and fees 1,398 974 Employee reimbursements 311 287 Safety clothing and supplies 59 Printed materials 2,436 5,796 Books and publications 53 79 Office equipment maintenance 2,445 General office supplies 497 1,159 Telephone 21,652 19,753 Contract services 14,118 14,244 Computer equipment 4,790 Minor office equipment purchases 3,401 2,390 44,070 52,024 Total $ 718,345 628,654 7S MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Billing and Posting Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 112,509 114,074 Nonproductive salaries 20,848 19,968 Fringe benefits 17,398 11,888 150,755 145,930 Maintenance and operation: Travel, meals, and conventions 316 363 Training materials and fees 227 Printed materials 47,351 44,017 Office equipment maintenance 900 Postage and delivery charges 301,212 326,183 Telephone 1,838 1,794 Minor office equipment purchases 702 Computer equipment 808 1,306 General office supplies 3,525 2,835 356,652 376,725 Total $ 507,407 522,655 76 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I "' '~',' MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Cashiering Expenses For the years ended June 30,2004 and 2003 2004 2003 Personnel: Productive salaries $ 169,598 184,940 Nonproductive salaries 34,617 38,695 Fringe benefits 37,691 35,154 241,906 258,789 Maintenance and operation: Trave~ meals, and conventions 93 Training materials and fees 170 Safety clothing and supplies 136 47 General office supplies 3,122 3,053 Printed materials 909 506 Office equipment maintenance 183 Telephone 1,437 1,291 Contract services 253 174 Equipment maintenance 11,531 10,355 Computer equipment 3,993 1,236 Minor office equipment purchases 1,242 653 22,623 17,761 Total $ 264,529 276,550 77 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules ofField and Meter Services Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 399,264 392,613 Nonproductive salaries 96,946 144,007 Fringe benefits 82,861 66,375 579,071 602,995 Maintenance and operation: Travel, meals, and conventions 80 Training materials and fees 170 Employee reimbursements 7,154 6,970 Safety clothing and supplies 140 149 Uniform rental and cleaning 2,108 2,260 General office supplies 469 Printed materials 34 30 Postage and delivery charges 100 185 Telephone 7,977 2,751 Minor office equipment purchases 506 886 Computer equipment 1,023 435 Contract services 5,059 Small tools and equipment 852 586 Equipment maintenance 123 Materials and supplies 2.736 6,803 22,630 26,956 Total $ 601,701 629,951 78 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I .. lIIlr r ^nlf , r ^' , MUNICIPAL WATER DEPARTMENT OF THE CITY OF. SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Water Utility Administration For the years ended June 30, 2004 and 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits 2004 2003 $ 238,255 218,366 62,030 61,976 45,461 27,849 345,746 308,191 4,317 3,763 7,794 1,451 2,072 1,213 463 153 160 426 241 11,676 8,385 12,491 2,041 2,504 17,760 502 214 642 31 9,899 7,525 3,747 931 2,308 1,469 10,014 29,312 3,478 4,436 8,931 16,546 17,544 3,665 989 878 248 388 43 108 332 65 228,766 184,197 330,942 283,176 $ 676,688 591,367 79 Maintenance and operation: Travel, meals, and conventions Training materials and fees Employee reimbursements Safety clothing and supplies Memberships and dues Postage and delivery General office supplies Printed materials Books and publications Subscriptions Office equipment maintenance Telephone Minor office equipment purchases Computer equipment Software Office furniture Advertising Software support services Computer maintenance Security services Permits and fees Radio maintenance Materials and supplies Small tools & equipment Equipment maintenance Facility maintenance Contract services Total MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Operations Administration Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 122,444 110,153 Nonproductive salaries 44,105 29,148 Fringe benefits 18,930 14,707 185,479 154,008 Maintenance and operation: Travel, meals, and conventions 20 36 Training materials and fees 56 208 Employee reimbursements 514 727 Safety clothing and supplies 26 5 Memberships and dues 82 266 Uniform rental and cleaning 288 191 General office supplies 5,827 3,124 Printed materials 566 762 Books and publications 127 Office equipment maintenance 2,694 1,106 Postage and delivery charges 496 495 Telephone 3,994 3,642 Permits and fees 49,045 23,349 Software 70 586 Office furniture 1,082 Contract services 810 2,333 Materials and supplies 1,298 599 Small tools and equipment 269 29 Fuels and lubricants - vehicle and equipment 1,348 Minor office equipment purchases 1,764 498 Equipment maintenance 2,338 762 72,714 38,718 Total $ 258,193 192,726 80 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Production and Pumping Expenses For the years ended June 30, 2004 and 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits Maintenance and operation: Travel, meals, and conventions Training materials and fees Employee reimbursements Safety clothing and supplies Memberships and dues Unifonn rental and cleaning General office supplies Printed materials Telephone Contract services Security services Pennits and fees Utilities - natural gas Utilities - electricity Materials and supplies Small tools and equipment Equipment maintenance Radio maintenance Minor office equipment purchases Facility maintenance Software Office furniture Chlorine Polymers Granular activated carbon Extractions and purchases Water stock assessments Water extraction fees Total 81 2004 $ 487,580 98,606 106,852 693,038 648 2,581 1,480 966 393 2,631 44 54 5,388 6,778 16,879 429 3,086,965 30,040 4,628 35,853 800 469 512 72,302 35,852 297,176 953,600 21,540 29.908 4,607,916 $ 5,300,954 2003 405,144 80,438 66,270 551,852 868 202 1,725 1,982 241 2,199 101 542 2,666 1,302 527 16,295 369 3,636,621 20,319 1,583 30,849 715 586 407 53,190 73,316 317,203 628,084 95,056 27.635 4,914,583 5,466,435 MUNICIPAL WAlERDEPARTMENT OF TIffi CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Geothermal Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 11,891 11,415 Nonproductive salaries 3,103 3,323 Fringe benefits 2,752 3,248 17,746 17,986 Maintenance and operation: Uniform rental and cleaning 78 Safety clothing and supplies 52 10 Permits and fees 1,985 18,100 Utilities - electricity 78,994 118,175 Materials and supplies 4,803 2,935 Outside laboratory testing 234 Small tools and equipment 23 12 General office supplies 98 99 Equipment maintenance 589 Office equipment maintenance 45 Computer equipment 151 Printed materials 5 Telephone 829 709 Contract services 6,300 1,330 93,756 141,800 Total $ 111,502 159,786 82 I I I I I I I I I I I I I I I I I I I I I I I I ! I I I I I I I I I I I I I I '--'T"::"I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules ofPIant and Facilities Maintenance Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 235,001 231,871 Nonproductive salaries 54,210 96,341 Fringe benefits 58,667 52,647 347,878 380,859 Maintenance and operation: Travel, meals, and conventions 874 Training materials and fees 55 202 Employee reimbursements 360 504 Safety clothing and supplies 995 1,281 Uniform rental and cleaning 1,815 1,869 Membership and dues 127 General office supplies 61 Printed material/printing 36 Telephone 3,424 2,314 Software 586 Contract services 67,760 73,463 Materials and supplies 69,686 65,252 Small tools and equipment 3,000 3,429 Equipment maintenance 1,491 2,275 Equipment rental 1,199 619 Vandalism repairs 177 54 Dump fees 2,784 2,043 Chlorine 36 51 Landscape services 25,540 26,780 178,546 181,596 Total $ 526,424 562,455 83 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Specialized Construction Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 37,918 89,556 Nonproductive salaries 47,943 74,453 Fringe benefits 48,797 45,130 134,658 209,139 Maintenance and operation: Travel, meals, and conventions 4 Training materials and fees 55 202 Employee reimbursements 70 501 Safety clothing and supplies 410 363 Uniform rental and cleaning 878 1,278 Printed materials 6 Telephone 2,931 1,416 Software 586 Office furniture (198) Contract services 14,435 2,453 Vandalism repair 2,853 Materials and supplies 8,861 19,284 Small tools and equipment 2,311 4,795 Equipment rental 3,009 Equipment maintenance 1,038 815 Radio maintenance 365 34,207 34,514 Total $ 168,865 243,653 84 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I .~ "'~ ~- MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Electrical Repair Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 214,262 128,618 Nonproductive salaries 74,894 5,658 Fringe benefits 49,410 3,840 338,566 138,116 Maintenance and operation: Travel and convention 1,363 Training 5,000 Employee reimbursements 277 Uniform rental/cleaning 833 Membership and dues 1,624 Safety clothing and supplies 525 14 General supplies 21 Printed material/printing 19 Telephone 2,989 Contract services 80,231 7,801 Vandalism repair 3,231 Equipment maintenance 652 Materials and supplies 72,524 110,187 Small tools and equipment 6,569 29 175,858 118,031 Total $ 514,424 256,147 85 MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Distribution Administration Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 166,846 155,330 Nonproductive salaries 48,630 39,549 Fringe benefits 35,805 28,676 251,281 223,555 Maintenance and operation: Travel, meals, and conventions 184 Training materials and fees 338 Employee reimbursements 140 150 Safety clothing and supplies 92 33 Memberships and dues 57 57 Uniform rental and cleaning 176 212 General office supplies 3,888 2,766 Printed materials 2,985 3,074 Books and publications 445 307 Office equipment maintenance 367 556 Postage and delivery charges 470 420 Telephone 9,085 7,621 Software 477 586 Janitorial/cleaning supplies 116 Contract services 1,645 5 Materials and supplies 367 913 Equipment maintenance 189 Minor office equipment purchases 316 68 Computer equipment 239 Office furniture 1,209 20,865 18,688 Total $ 272,146 242,243 86 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I flllll'l-rV1~C~'~--- T MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Service and Repair Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 500,597 406,772 Nonproductive salaries 143,042 174,573 Fringe benefits 130,046 103,033 773,685 684,378 Maintenance and operation: Travel, meals, and conventions 197 18 Training materials and fees 112 404 Employee reimbursements 1,135 1,263 Safety clothing and supplies 4,213 5,374 Physical elt"aminations 3 Memberships and dues 64 General office supplies 202 Uniform rental and cleaning 3,334 3,816 Printed materials 127 121 Telephone 4,418 4,058 Software 953 1,172 Janitorial supplies 6 Contract services 7,208 1,092 Materials and supplies 156,473 100,837 Small tools and equipment 19,098 13,859 Equipment rental 225 Equipment maintenance 3,271 9,662 CWorine 16 200,805 141,926 Total $ 974,490 826,304 87 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Distribution Maintenance Expenses For the years ended June 30, 2004 and 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits 2004 2003 $ 265,716 228,690 61,207 60,811 67,803 51,987 394,726 341,488 224 170 56 202 284 105 1,441 1,271 57 105 6,344 5,182 67 17 25 3,081 2,970 861 477 586 4,991 3,738 4,539 93,773 107,827 11,638 11,033 59,259 45,944 22,755 3,919 41,342 24,812 7,134 7,773 42,476 39,630 294,171 261,937 $ 688,897 603,425 88 Maintenance and operation: Travel, meals, and conventions Training materials and fees Employee reimbursements Safety clothing and supplies Memberships and dues Uniform rental and cleaning General office supplies Postage and delivery charges Printed materials Telephone Computer equipment Software Office furniture Janitorial and cleaning supplies Contract services Dump fees Utilities - electricity Utilities - natural gas Materials and supplies Small tools and equipment Facility maintenance Total I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 7~-'~~~' - ! - MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Meter Shop Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 223,750 199,300 Nonproductive salaries 59,527 65,456 Fringe benefits 56,963 44,490 340,240 309,246 Maintenance and operation: Employee reimbursements 486 360 Safety clothing and supplies 2,599 1,905 Uniform rental and cleaning 1,604 1,598 General office supplies 57 Printed material 83 7 Telephone 3,386 2,924 Contract services 19,655 21,850 Security services 439 Materials and supplies 95,762 24,552 Small tools and equipment 7,077 5,613 Equipment maintenance 3,115 1,871 133,824 61,119 Total $ 474,064 370,365 89 MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Garage - Vehicle Maintenance Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 150,650 126,641 Nonproductive salaries 24,100 35,629 Fringe benefits 33,827 22,553 208,577 184,823 Maintenance and operation: Travel, meals, and conventions 313 Employee reimbursements 17 64 Safety clothing and supplies 834 374 Uniform rental and cleaning 1,925 1,834 General office supplies 72 31 Printed materials 474 100 Telephone 2,649 2,014 Software 1,616 1,616 Contract services 24,637 25,768 Permits and fees 3,350 2,122 Materials and supplies 73,808 80,463 Small tools and equipment 2,053 1,464 Fuels and lubricants - vehicle and equipment 141,121 96,536 Radio maintenance 3,721 Equipment maintenance 7,119 1,730 263,396 214,429 Total $ 471,973 399,252 90 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Engineering Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits $ 310,798 65,137 65,697 441,632 Maintenance and operation: Travel, meals, and conventions Training materials and fees Employee reimbursements Safety clothing and supplies Memberships and dues Uniform rental and cleaning Physical examination General office supplies Books and publications Printed materials Office equipment maintenance Postage delivery and charges Telephone Contract services Legal services Advertising services Permits and fees Materials and supplies Small tools and equipment Equipment rental Radio maintenance Facility maintenance Minor office equipment purchases Computer equipment and software Office furniture Subscriptions 709 225 810 309 589 1,032 12,688 566 7,919 2,422 53 21,847 241,927 550 1,852 5,957 2,766 20,474 1,176 17,454 4,536 161 Total 346,022 $ 787,654 91 287,293 67,094 39,575 393,962 295 2,894 280 70 197 1,245 50 11,482 1,650 10,848 3,728 641 15,744 192,137 47 550 5,248 3,559 381 108 553 25,010 2,214 169 279,100 673,062 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of Water Quality and Backflow Connection Expenses For the years ended June 30, 2004 and 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits 2004 2003 $ 221,738 190,695 44,943 45,949 57,509 40,559 324,190 277,203 1,666 79 450 437 232 644 2,094 1,511 1,193 1,151 1,262 1,000 1,935 1,160 1,337 1,000 38 38 367 632 7,447 5,247 226 63 1,299 151 550 4,118 1,145 328,461 316,045 1,499 350 4,237 6,685 16 357,128 338,637 $ 681,318 615,840 92 Maintenance and operation: Travel, meals, and conventions Training materials and fees Employee reimbursements Safety clothing and supplies Uniform rental and cleaning Membership and dues General office supplies Printed materials Subscriptions Office equipment maintenance Telephone Computer equipment Minor office equipment purchases Office furniture Security services Contract services Small tools and equipment Laboratory sampling and testing Equipment maintenance Materials and supplies Chlorine Total I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I ,.,~- MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Water Utility Schedules of General, Administration, and Overhead Expenses For the years ended June 30, 2004 and 2003 Personnel: Disability insurance Unemployment benefits Retiree medical insurance Administrative cost - group medical Maintenance and operation: Travel, meals, and conventions Miscellaneous employee supplies Books and publications General office supplies Printed materials Contract services Office equipment maintenance Postage delivery and charges Minor office equipment Computer equipment City hall office rent Uncollectible chargeoffs Liability insurance Property insurance Workers' compensation Noninsurable accidents and losses Miscellaneous insurance and bonds Property taxes Advertising Legal services Overhead applied property, plant, and equipment Total 93 2004 2003 $ 92,945 93,251 10,284 4,446 96,136 65,057 923 3,644 200,288 166,398 10 64 21,546 11,074 1,360 1,343 30,151 25,878 3,265 6,712 51,949 29,641 3,499 2,786 40 17 17 968 940 156,488 155,191 22,246 5,797 257,212 194,982 94,002 99,794 266,871 305,501 10,600 14,157 1,241 1,863 7,002 6,658 12,113 3,577 788.599 788.144 1,729,179 1,654,119 (700,435) (1,657,283) $ 1,229,032 163,234 94 I I I I I I I I I I I I I I I I I I I (This page intentionally left blank.) cco""""'c,' '-,T, ""C''''''''''''.' c c, ,",' "cc , "C"c"C_~,_ I I I I I I I I I I I I I I I I I I I SEWER UTILITY 9S I MUNICIPAL WATER DEPARTMENT OF TIm CITY OF SAN BERNARDINO, CALIFORNIA I Sewer Utility Statements of Net Assets I June 30, 2004 and 2003 Increase 2004 2003 (Decrease) I Assets Assets: Current assets: I Cash and investments $ 19,026,236 19,957,510 (931,274) Accounts receivable, net 2,430,918 2,216,398 214,520 Due from other entities 192,767 194,668 (1,901) I Related parties receivable 477,821 404,314 73,507 Prepaid expenses 9,442 20,979 (11,537) Total current assets 22,137,184 22,793,869 (656,685) I Noncurrent assets: Restricted assets: I Cash and investments: Restricted for debt service 3,539,958 3,509,005 30,953 Restricted for capital-related fees 9,217,467 6,693,115 2,524,352 I Interest receivable 80,765 80,765 Total restricted assets 12,838,190 10,282,885 2,555,305 Capital assets: I Land & easements 12,470,740 12,470,740 Water rights, wells, pumping plants 3,192,218 3,192,218 Buildings, plants, and store yards 147,617,857 145,282,507 2,335,350 I Tools and equipment 3,803,195 3,540,670 262,525 Autos 994,644 1,009,192 (14,548) Office, computer, engineering equipment 936,785 988,137 (51,352) I Radio and interoffice communication equipment 111,811 26,490 85,321 Telemetry systems and equipment 336,612 336,612 I Miscellaneous 193,015 193,015 Construction in progress 1,672,160 2,088,509 (416,349) Less accumulated depreciation and I amortization (58,791,615) (54,561,371) (4,230,244) Total capital assets (net of accumulated depreciation and amortization) 112,537,422 114,566,719 (2,029,297) I Other assets: Debt issue costs, net 387,688 433,527 (45,839) Deferred call premium 530,073 572,198 (42,125) I Total other assets 917,761 1,005,725 (87,964) Total Noncurrent assets 126,293,373 125,855,329 438,044 Total assets 148,430,557 148,649,198 (218,641) I (Continued) I 96 I I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sew~ Utility StatemeBtsofNet Assets (Continued) 2004 2003 Increase (Decrease) Liabilities and net assets Liabilities: Current liabilities: Accounts payable Interfund payable Related parties payable' Accrued expenses Accrued compensation Claims payable Other deposits Current portion of notes payable $ 1,244,437 849,245 395,192 23,388 28,790 (5,402) 89,242 367,801 (278,559) 8,720 8,517 203 752,868 651,713 101,155 29,275 144,680 (115,405) 570 7,189 (6,619) 1,728,295 1,670,365 57,930 3,876,795 3,728,300 148,495 1,705,304 1,624,877 80,427 761,710 799,547 (37,837) 2,467,014 2,424,424 42,590 Total current liabilities Current liabilities payable from restricted assets: Current portion of certificates of participation Accrued interest payable Total current liabilities payable from restricted assets Noncurrent liabilities: Notes payable Certificates of participation 20,652,476 22,380,771 (1,728,295) 29,523,426 31,228,730 (1,705,304) 50,175,902 53,609,501 (3,433,599) 56,519,711 59,762,225 (3,242,514) 91,910,846 88,886,973 3,023,873 $ 91,910,846 88,886,973 3,023,873 Total Noncurrent liabilities Total liabilities Net Assets: Retained earnings Total net assets 97 I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA I Sewer Utility I Statements of Revenues and Expenses Years ended June 30, 2004 and 2003 I Increase 2illM 2003. (Decrease) I Operating revenues: I Charges for services $ 16,782,511 16,459,446 323,065 Other operating revenues 642,377 610,462 31,915 Total operating revenues 17,424,888 17,069,908 354,980 I Operating expenses: I Engineering, operations, and distribution administration 1,317,061 1,324,348 (7,287) I Plant operations 7,584,176 7,792,183 (208,007) Maintenance 2,237,681 2,193,534 44,147 Environmental control 377,638 316,238 61,400 I General, administration, and overhead 753,354 1,033,920 (280,566) Depreciation and amortization 4,274,823 4,205,205 69,618 I Total operating expenses 16,544,733 16,865,428 (320,695) Operating income (loss) 880,155 204,480 675,675 I Non-operating revenues (expenses): I Investment income 525,183 1,510,460 (985,277) Rental income 26,710 28,587 (1,877) I Gain (loss) on asset disposition (13,519) 3,666 (17,185) Interest expense and fiscal charges (2,431,334) (2,548,367) 117,033 Amortization of issuance costs (45,839) (47,559) 1,720 I Other (26,356) (16,811) (9,545) Total non-operating revenues (expenses) (1,965,155) (1,070,024) (895,131) I Net profit (loss) $ (1,085,000) (865,544) (219,456) I I 98 I I I I I I I I I I I I I I I I I I I I . - .. ... I" ,> '1 "['Cr' F' >'r r' r ...,,,,,~~ MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Statement of Changes in Net Assets Years ended June 30,2004 and 2003 2004 2003 Balance at beginning of year $ 88,886,973 90,130,090 Priorperioda~ustment (3,640,733) 88,886,973 86,489,357 Net income (loss) (1,085,000) (865,544) Capital contributions 4,108,873 3,263,160 Balance at end of year $ 91,910,846 88,886,973 99 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Statements of Cash Flows For the Years Ended June 30,2004 and 2003 2004 2003 Cash flows from operating activities: Cash received from customers Rental income Nonoperating miscellaneous expenses Cash paid to suppliers of goods and services Cash paid to employees for services $ 17,143,680 26,710 (39,875) (815,672) (8,800,082) Net cash provided by operating activities 7,514,761 Cash flows from capital and related financing activities: Capital fees received Cash paid to acquire fixed assets Principal paid on capital-related debt Interest paid on capital-related debt 4,108,873 (4,802,498) (3,295,242) (2,427,046) Net cash provided by (used for) capital and related financing activities 17,331,960 28,587 (13,145) (3,089,416) (9,137,054) 5,120,932 3,263,160 {I,209,186) (3,168,455) (2,542,219) I I I I I I I I I I I I I I I I I I I (6,415,913) (3,656,700) 525,183 1,510,460 525,183 1,510,460 1,624,031 2,974,692 26,685,880 23,711,188 $ 28,309,911 26,685,880 (Continued) Cash flows from investing activities: Interest received Net cash provided by investing activities Net increase in cash Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 100 I I I I I I I I I I I I I I I I I I I " -_." , "~" ," MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Statements of Cash Flows (Continued) 2004 2003 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 $ 19,026,236 12,838,190 19,957,510 10,282,885 (3,473,750) (3,473,750) (80,765) (80,765) Cash and cash equivalents at end of year $ 28,309,911 26,685,880 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income $ 880,155 204,480 Depreciation and amortization 4,274,823 4,205,205 Nonoperating miscellaneous revenue (expenses) (26,356) (16,811) Rental income 26,710 28,587 Gain (loss) on asset disposition (13,519) 3,666 Adjustments: Change in accounts receivable (214,520) (62,049) Change in due from other entities 1,901 4,227 Change in related parties receivable (73,507) 49,625 Change in prepaid expenses 11,537 263,060 Change in accounts payable 395,192 (302,424) Change in interfund payable (5,402) (69,637) Change in related parties payable (278,559) 289,348 Change in accrued expenses 203 4,934 Change in accrued compensation 101,155 (20,523) Change in claims payable (115,405) 112,835 Change in other deposits (6,619) 7,189 Change in other assets 2,556,972 419,220 Net cash provided by operating activities $ 7,514,761 5,120,932 101 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Operating Expenses For the years ended June 30, 2004 and 2003 2004 2003 Engineering, operations, and distribution administration: Administration Engineering services $ 1,155,664 161.397 1,067,771 256.577 1.317.061 1.324.348 Plant Operations: Plant operations 3,554,365 3,645,734 Bio-solids processing 1,653,358 1,737,109 RlX facility operations 2,376,453 2,409,340 7.584.176 7.792.183 Maintenance: Plant maintenance 1,194,996 1,058,895 Facilities maintenance 497,889 480,465 Electrical instrumentation 544,796 654,174 2,237,681 2,193,534 Environmental control 377,638 316,238 General, administration, and overhead 753,354 1,033,920 Total operating expenses before depreciation and amortization 12,269,910 12,660,223 Depreciation and amortization 4,274,823 4,205,205 Total operating expenses $ 16,544,733 16,865,428 102 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I nee ~ ~ 1 r""~~'C ~" , "'~~-C,'"'7~ MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Administration Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 175,047 187,737 Nonproductive salaries 32,372 41,695 Fringe benefits 36,176 32,144 243,595 261,576 Maintenance and operation: Training materials and fees 3 Memberships and dues 343 631 General office supplies 1,629 1,493 Printed materials 1,415 3,786 Books and publications 153 274 Subscriptions 522 Office equipment maintenance 3,952 3,777 Computer equipment maintenance 300 Telephone 12,684 11,912 Utilities - natural gas 533 936 Utilities - electricity 49,037 51,806 Billing and collection administration 839,960 729,754 Hazard waste disposal 1,550 Minor office equipment purchases 813 1,001 912,069 806,195 Total $ 1,155,664 1,067,771 103 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Engineering Services Expenses For the years ended June 30, 2004 and 2003 2004 2003 Maintenance and operation: Professional services $ 161,397 256,577 Total $ 161,397 256,577 104 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I C" MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Plant Operations Expenses For the years ended June 30, 2004 and 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits Maintenance and operation: Travel, meals and conventions Training materials and fees Employee reimbursements Unifonn rental and cleaning Safety clothing and supplies Memberships and dues General office supplies Books and publication Office equipment maintenance Computer equipment maintenance Contract services Pennits and fees Telephone Utilities - natural gas Utilities - electricity Materials and supplies Small tools and equipment Equipment rental Equipment maintenance Minor office equipment purchases Software Office furniture Software support services Radio maintenance Chlorine Ferric chloride Polymer treatment Other chemicals Outside laboratory testing Hazardous waste disposal Water extraction fees Total 105 2004 2003 $1,130,173 1,124,287 226,772 223,983 237,660 .193,619 1,594,605 1,541,889 23 6,174 3,409 265 4,779 5,586 5,353 4,121 3,129 3,448 4,116 3,574 483 990 1,124 151 9,208 17,007 59,281 45,490 14,308 14,175 53,381 47,061 1,329,665 1,500,772 36,543 50,294 1,940 1,300 282 4,007 1,793 664 1,193 2,359 1,425 1,587 21,564 27,034 1,900 1,741 698 162,244 154,937 3,435 37,457 46,282 189,282 157,430 4,889 10,235 4,017 1,959,760 2,103,845 $ 3,554,365 3,645,734 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules ofBio-Solids Processing Expenses For the years ended June 30, 2004 and 2003 Maintenance and operation: Contract services Laboratory testing Materials and supplies Small tools and equipment Equipment maintenance Polymers Other chemicals 2004 2003 $ 1,159,310 1,193,940 5,908 696 3,724 58 2,901 450,786 489,169 36,600 47,375 1,653,358 1,737,109 $ 1,653,358 1,737,109 Total 106 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I --- -, , --.' , -"-,- MUNICIPAL WATER DEPARTMENT OF TIIECITYOF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules ofRIX Facility Operations Expenses For the years ended June 30, 2004 and 2003 Personnel: Productive salaries Nonproductive salaries Fringe benefits 2004 2003 $ 314,579 290,620 49,534 51,137 65,736 49,335 429,849 391,092 11 1,040 2,203 520 5,879 1,433 2,278 1,381 2,033 2,916 108 300 688 578 969 12,137 4,871 23,097 11,000 344 231 308 94,162 172,846 23,208 80,793 44,833 24,997 20,115 8,800 8,354 169,898 61,006 76,763 185 17,124 550 748,628 687,463 331 512 120,455 91 ,506 148,120 171 ,208 6,981 2,975 27,590 5,995 46,678 41,023 38,941 39,373 390 180,904 193,883 173,609 2,094 170 172 20,000 15,000 34,000 25,000 81.000 182892 1,946,604 2,018,248 $ 2,376,453 2,409,340 Maintenance and operation: Training materials and fees Employee reimbursements Safety clothing and supplies Uniform rental and cleaning General office supplies Printed materials Office equipment maintenance Computer equipment maintenance Postage and delivery charges Telephone Janitorial supplies Janitorial services Contract services Legal services Other professional services Software support services Landscape services Laboratory testing Permits and fees Dwnp fees Hazardous waste disposal Utilities - electricity Utilities - water Materials and supplies UV Lamps Small tools and equipment Equipment rental Fuels and lubricants. vehicle and equipment Equipment maintenance Minor office equipment purchases Other chemicals Outside laboratory testing Travel, meals, and conventions Memberships and dues Uability insurance Property insurance Contingency fees Total 107 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Plant Maintenance Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 567,874 499,396 Nonproductive salaries 92,958 92,039 Fringe benefits 122,590 87,331 783,422 678,766 Maintenance and operation: Training materials and fees 4,375 3,504 Employee reimbursements 221 Uniform rental and cleaning 2,502 3,788 Safety clothing and supplies 4,263 3,318 Memberships and dues 935 1,377 General office supplies 2,172 1,144 Computer supplies 870 115 Printed materials 705 Computer equipment maintenance 388 1,359 Telephone 9,508 5,725 Minor office equipment purchases 1,319 753 Contract services 100,177 59,528 Software support services 19,353 13,285 Hazardous waste disposal 1,669 4,484 Materials and supplies 157,832 170,126 Small tools and equipment 8,978 8,033 Equipment rental 6,269 1,277 Fuels and lubricants - vehicle and equipment 48,573 46,125 Equipment maintenance 39,521 55,483 Radio equipment 1,616 Radio maintenance 1,033 411,574 380,129 Total $ 1,194,996 1,058,895 108 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Facilities Maintenance Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 229,436 197,883 Nonproductive salaries 45,789 55,822 Fringe benefits 44,909 37,049 320,134 290,754 Maintenance and operation: Uniform rental and cleaning 1,969 1,864 Safety clothing and supplies 2,189 1,430 General office supplies 54 37 Computer supplies 311 Computer equipment maintenance 81 Telephone 5,498 4,334 Janitorial cleaning/supplies 6,362 Contract services 105,394 124,926 Landscape services 10,800 12,178 Materials and supplies 34,723 29,886 Small tools and equipment 3,276 2,112 Janitorial services 232 10,789 Equipment rental 1,392 1,397 Equipment maintenance 5,866 366 177,755 189,711 Total $ 497,889 480,465 109 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Electrical Instrumentation Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $ 311,327 368,028 Nonproductive salaries 52,287 75,120 Fringe benefits 66,992 74,881 430,606 518,029 Maintenance and operation: General office supplies 1,563 1,335 Training expenses 4,030 6,722 Uniform rental and cleaning 1,459 2,781 Safety clothing and supplies 2,525 2,082 Memberships and dues 543 1,040 Minor office equipment 1,877 68 Computer equipment 222 1,622 Computer supplies 868 105 Books and publication 5 Printed materials 449 Telephone 6,428 7,227 Contract services 9,843 6,337 Software support services 2,092 Materials and supplies 57,551 91,163 Small tools and equipment 5,944 4,248 Computer equipment maintenance 184 810 Other chemicals 5,114 Equipment maintenance 13,942 10,156 114,190 136,145 Total $ 544,796 654,174 110 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I '" - "1'" . 1 T' -~v MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of Environmental Control Expenses For the years ended June 30, 2004 and 2003 2004 2003 Personnel: Productive salaries $219,431 177,002 Nonproductive salaries 45,964 36,543 Fringe benefits 52,363 38,144 317,758 251,689 Maintenance and operation: Training Employee reimbursements Uniform rental and cleaning Safety clothing and supplies Memberships and dues General office supplies Printed materials Subscriptions Computer equipment maintenance Telephone Materials and supplies Small tools and equipment Minor office equipment purchases Office furniture Equipment maintenance Hazardous waste disposal Laboratory sampling and testing 3,501 41 544 1,108 846 2,814 2,177 7,818 8,236 803 767 946 1,738 4,234 24,307 59,880 Total $ 377,638 111 1,240 271 643 693 1,018 2,775 899 . 95 414 8,251 9,191 2,595 1,465 1,030 1,039 4,986 27,944 64,549 316,238 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Sewer Utility Schedules of General, Administration, and Overhead Expenses For the years ended June 30, 2004 and 2003 Personnel: Disability insurance Retiree medical insurance Administrative cost - group medical Maintenance and operation: Travel, meals, and conventions Training materials and fees Safety clothing and supplies Memberships and dues Uniform rental and supplies General office supplies Computer supplies Printed materials Postage and delivery charges Advertising Telephone City hall office rent Contract services Legal services Other professional services Software support services Materials and supplies Minor office equipment purchases Liability insurance Property insurance Workers'compensation Noninsurable accidents and losses Miscellaneous insurance and bonds Permits and fees Utilities - Water Fuel and lube Uncollectible charge-offs Overhead applied property, plant, and equipment Total 112 2004 $ 40,551 11,059 500 52,110 9,256 1,509 4,694 21,647 6,778 9,513 1,171 2,357 1,014 7,617 21,339 96 72,355 226,328 1,363 12,965 2,585 181,668 175,231 9,408 3,105 1,241 33,920 807,160 (105,916) $ 753,354 2003 45,407 5,009 890 51,306 10,120 2,541 7,451 21,429 5,372 7,578 43 1,805 1,877 200 4,063 21,162 73,004 244,171 641 10,273 194 136,517 197,121 188,573 5,620 1,014 645 39,356 289 1,555 982,614 1,033,920 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I " '"~ n. '." n~ CONRAD AND ASSOCIATES, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS 2301 DUPONT DRIVE, SUITE 200 IRVINE, CALIFORNIA 92612 (949) 474-2020 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, 2004, and have issued our report thereon dated November 12,2004. 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. L ~. ~/~ ,4#tI'.,-;",~ ~.J ~ November 12, 2004 113 MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION 114 I I I I I I I I I I I I I I I I I I I (This page intentionally left blank) I I I I I I . I I I I I I I I I I I I I I I I I I . I I I I I I I I . I I I I I I