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Home My WebLink About11-Water Department c r; ,':: :.'.'(~L CITY OF SAN BERNARDINO MUNICIPAL WATERDEPARa'M~Nt!!! ..1' . INTEROFFICE MEMORANDUM "01 FE8 -1 All:j TO: Rachel Clark, City Clerk FROM: Stacey R. Aldstadt, Deputy General Manager SUBJECT: 1999-2000 AUDIT REPORT FOR WATER DEPARTMENT WATER AND SEWER UTILITIES DATE: January 26, 2001 CC: Bernard C. Kersey, John Murphy The firm of Conrad and Associates, L.L.P., has completed the 1999-2000 Annual Audit of the Water Department's Water and Sewer Utilities. This report was presented to and accepted by the Board of Water Commissioners at their meeting held on January 23, 2001. Transmitted herein is one copy of the audit report for the Mayor and Common Council to "receive and file." Please contact me or John Murphy, Director of Administration and Finance, if you have questions. ~~ - Stace~. Aldstadt Deputy General Manager als Attachment M(). " ~/slol C~"~~ r.'--+--~-""---"- ,.,_._~ ..', 'i.' 0U1~' :-:-! ;i \.:i . l n t 'J ,; '.', ' ! ~ ~ . ... ...--.-. C I T Y 0 F SAN BE R N A R DIN O!u: JAN I 62001:':', MUNICIPAL WATER DEPARTMENT Ls~lf.~o I NT E R 0 FF ICE M EM 0 RA ND UM GENERAL MANAGER'S orneE TO: 8ernard C. Kersey, General Manager FROM: John P. Murphy, Dlrector, Administration and Finance SUBJECT: PRESENTATION OF FISCAL YEAR 1999-2000 AUDIT REPORT; CONRAD AND ASSOCIATES, CERTIFIED PUBLIC ACCOUNTANTS DATE: January 9, 2001 Mr. Ken Al-Imam, Partner in the firm of Conrad and Associates, Certified Public Accountants, will present the annual audit report for the Water and Sewer Utilities for the fiscal year ending June 30, 2000, to the Board of Water Commissioners on January 23, 2001. The auditors' opinion is unqualified and reflects our conformity with generally accepted accounting principles. RECOMMENDATION: Staff recommends accepting the annual audit report for the Water and Sewer Utilities for the fiscal year ending June 30, 2000. Should the Board concur, the proper action would be: , A motion to accept the annual audit report for the Water and Sewer Utilities for the fiscal year ending June 30, 2000; and to authorize staff to submit the audit reports to the Mayor and Common Council to receive and file. Rospectfully submitted, ~~cv~R YvVl"V~~ \ f;o~~ P. Murphy ~ctor, Administratlon and Finance .JPM/kb APPROVED BY THE BOWe III Motion: Callicott Seconded: ~atte)' ! Date: 1/23/2001 Initial: {Jifa./ I.,~,,- MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Financial Statements Years ended June 30, 2000 and 1999 ~ '- '- ~ ~ CONRAD AND ASSOCIATES, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS k - .. ... ... .. ... .. ... !lit .. .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. Financial Statements !lit Years ended June 30, 2000 and 1999 ill .. .. !lit ... ... .. .. ill "'" .. .. ... ... ill !lit ... ... ... ... ... - - ... .. /II - /II .. ~ .. ~ ... ~ ... ,.. ... "" ... ~ ... !II (This page intentionally left blank.) .. !I!! ... " 1 ... lII! ,.,j 11II ... 11II .... 11II ... !!I!l .. lII! w .. .. ,f'\ ~ ... - - ... III MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. .. Financial Statements .. III Year ended June 30, 2000 and 1999 .. TABLE OF CONTENTS .. Page IItI - FINANCIAL SECTION Independent Auditors' Report Combining Financial Statements: Combining Balance Sheet Combining Statement of Revenues, Expenses, and Changes in Retained Earnings Combining Statement of Cash Flows Notes to Financial Statements 1 III - - 4 - .. 7 8 10 ... ... IItI SUPPLENlENTARYINFO~ATION Statistical Schedules: Board of Water Commissioners and Organization 35 Schedule ofInsurance Coverage 36 Schedule of Water System Demographics 38 Schedule of Water Production 39 Schedule of Water Rates 40 Schedule of Sundry Water Statistical Data 42 Schedule of Service Area and Customers 44 Schedule of Sewer Rates and Statistics 45 Schedule - Certificates of Participation, San Bernardino Public Safety Authority 48 Schedule - 1998 Refunding Sewer Revenue Certificates of Participation 50 Series 1998A Water and Wastewater Revenue Bonds 52 Bond Schedule - General Obligation Waterworks Bonds, Series C 53 .. IItI lit IItI lit .. !!III - .. III .. lit !!III ... .. .. .. .. .. !IIII - III ... " wi "" ioIi ~ ~ Itii (This page intentionally left blank.) ~ ~ ~ III! wi '" ... Ill! wi 11II . i ... '" ... '" - " , .. ~ ... II !!It ill .. .. .. .. ... .. .. CONRAD AND ASSOCIATES, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92614 (949) 474.2020 Fax (949) 263.5520 .. Water Commissioners Board Municipal Water Department of the City of ... San Bernardino, California .. .. lit .. .. .. - .. - .. .. ... .. .. lit .. .. .. .. .. ill .. .. .. lit ... lit .. ... Independent Auditors' Report We have audited the accompanying general purpose financial statements of the Municipal Water Department of the City of San Bernardino, California as of and for the year ended June 30, 2000. These general purpose financial 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 general purpose financial statements based on our audit. The general purpose financial statements of the Municipal Water Department of the City of San Bernardino, California as of and for the year ended June 30, 1999, were audited by other auditors whose report dated November 12, 1999, expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards 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 general purpose financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1, the financial statements present only the Municipal Water Department and are not intended to present fairly, in all material respects, the financial position of the City of San Bernardino, California, and the results of its operations and cash flows of its proprietary fund types, in conformity with generally accepted accounting principles. In our opinion the general purpose financial statements referred above present fairly, in all material respects, the financial position of the Municipal Water Department of the City of San Bernardino, California, as of June 30, 2000, and the results of its operations and the cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose 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 general purpose 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 general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose 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. 1 MEMBERS OF AICPA ANO CALIFORNIA SOCIE1Y OF CERTIFIED PUBLIC ACCOUNTANTS MEMRER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION .. - III! Water Commissioners Board Municipal Water Department of the City of San Bernardino Page Two - III! .. III! .. In accordance with Government Auditing Standards, we have also issued our report dated November 15,2000 on our consideration 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. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. II!I III " . ~"./#H?./ ~9U~~~ ~.? ~ II ... III! November 27, 2000 III I .. " - "'I ... !lIII - 11III ... 11III - 11II ... 11II ... 11II - 11III .. 2 III! lIlI I fvo" ... ... ... .. .. lit ... .. .. ... .. ... .. .. ... ... .. ... (This page intentionally left blank.) .. ... ... ... ... ... .. lit ... .. .. .. .. .. III' lit .. ... .. .. 3 lIII - .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Assets Assets: Current assets: Cash and investments (note 2) Accounts receivable, net Interfund receivable Related party receivables (note 9) Inventory Prepaid expenses Total current assets Restricted assets: Cash and investments: Restricted for debt service (note 2) Restricted for capital-related fees (note 2) Restricted for consumer deposits (note 2) Interest receivable Total restricted assets Property, plant, equipment, and water rights: Property, plant, equipment, and water rights (note 4) Less accumulated depreciation and amortization (note 4) Construction in progress (note 4) Total property, plant, equipment, and water rights, net Other assets: Debt issuance costs, net Total other assets Total assets - Combining Balance Sheets 11III June 30, 2000 and 1999 - .. - Water Utility 11III Sewer Utility Totals 2000 1999 Eliminations .. 11III lot $ 7,004,598 16,060,360 23,064,958 20,509,538 3,343,121 2,517,659 5,860,780 5,323,137 121,373 15,791 (137,164) 326,058 408,070 (99,740) 634,388 1,088,367 1,336,542 1,336,542 1,339,639 153,438 171,234 324,672 285.725 12,285,130 19,173,114 (236,904) 31,221,340 28,546,406 II lIli II iIlI " IIIi 669,910 38,163,001 38,832,911 40,652,971 302,853 3,415,450 3,118,303 3,671,817 1,378,108 1,378,108 1,204,067 3,180 801,988 805,168 816,919 2,354,051 42,380,439 44,734,490 46,345,774 I .. II!II ... lIII 94.522,102 166,776,808 261,298,910 254,331,591 (37,861,139) (39,163,938) (77,025,071) (71,028,126) 8,994,785 5,857,877 14,852,662 18,984,807 65,655,748 133,470,747 199,126,495 202,288,272 106,569 579,493 686,062 767,841 106,569 579,493 686,062 767,841 $ 80,401,498 195,603,793 (236,904) 275,768,387 277,948,293 (Continued) - .. ... lIII - .. ... III ... 11III ... .. - 4 '" ... ... .. II' lit ... .. ... .. ... .. II' lit II' ... OIl ... ... .. ... ... ... ... II' lit ... .. .. lit ... lit II' .. .. .. ... .. ... .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Combining Balance Sheet (Continued) Water Sewer Totals Utilitv Utility Eliminations 2000 1999 Liabilities and Eauitv Liabilities: Current liabilities: Current portion of notes payable (note 6) $ 1,512,500 1.512,500 1,462.114 Accounts payable 2,009,621 1,050,351 (118,136) 2,941,836 2,760,129 Interfund payable 19,028 (19,028) Related party payables (note 9) 530,964 182,918 (99,740) 614,142 1,069,770 Accrued expenses 9,318 1,792 11,110 5,651 Accrued compensation 1,437.539 606,025 2,043,564 2,241,110 Other deposits 351.692 25,000 376,692 360,783 Total current liabilities 4,339,134 3,397,614 (236.904) 7,499,844 7,899,557 Current liabilities payable from restricted assets: Current portion of certificates of participation (note 6) 1,105,000 1,105,000 1,004,076 Current portion of bonds payable (note 6) 1,020,000 1,020,000 857,510 Accrued interest payable 73,667 1,798,279 1,871,946 1,929,479 Consumer deposits 1,404,577 1,404,577 1,205,217 Total current liabilities payable from restricted assets 2,498,244 2,903,279 5,401.523 4,996,282 Long-term debt: Notes payable (note 6) 27,262, III 27,262, III 28,773,069 Certificates of participation (note 6) 69,556,228 69,556,228 70,661,228 Bonds payable (note 6) 5,484,990 5,484,990 6,504,990 Total long-term debt 5,484,990 96,818.339 102,303,329 105.939,287 Total liabilities 12,322,368 103,119,232 (236,904) 115,204,696 118,835,126 Fund equity: Contributed capital (note 3) 49,845,813 63,553.696 113.399,509 110,492,839 Retained earnings 18,233,317 28,930,865 47,164,182 48,620,328 Total fund equity 68079.130 92 484 561 160.563.691 159 113.167 Total liabilities and fund equity $ 80,401,498 195,603,793 (236,904) 275,768,387 277,948,293 See accompanying notes to financial statements. 5 "" - "" - ~ ... ~ ... ~ .. 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MUNICIPAL WATER DEPARTMENT OF THE crrY OF SAN BERNARDINO, CALIFORNIA Combining Statement of Revenues, Expenses, and Changes in Retained Earnings For the year ended June 30, 2000 and 1999 Water Sewer Totals Utility Utility Eliminations 2000 1999 Operating revenues: Charges for services $ 15,655,001 16,363,671 (1,526) 32,017,146 30,909,355 Other operating revenues 1,553,408 298,265 (794.665) 1,057,008 858,039 Total operating revenues 17,208,409 16.661,936 (796,191) 33,074,154 31.767,394 Operating expenses: Administration and customer service 4,482,098 4,482,098 4,407,015 Engineering, operations, and distribution administration 127,972 1,129,724 (640,073) 617,623 615,018 Plant operations 3,774,684 6,247,584 (14,085) 10,008,183 8,707,474 Maintenance 1,307,745 2,103,495 (108,983) 3,302,257 2,764,406 Environmental control 346,707 (62) 346,645 315,418 Distribution 2,868,944 2,868,944 2,411,495 Engineering 1,033,141 1,033,141 1,055,386 General, administration, and overhead 2,806,885 630,684 (32,988) 3,404,581 4,911,555 Depreciation and amortization 2,405,737 4,241,692 6,647,429 6.937,400 Total operating expenses 18,807,206 14.699,886 (796,191) 32,710,901 32,125,167 Operating income (loss) (1,598,797) 1,962,050 363,253 (357.773) Non-operating revenues (expenses): Investment income 398,836 2,919,171 3,318,007 3,426,853 Rental income 78,721 30,154 108,875 70,137 Net gain (loss) on disposition of assets 327,689 (73,916) 253,773 (117,076) Interest expense and fiscal charges (437,335) (5,021,953) (5,459,288) (5,471,918) Amortization of issuance costs (32,575) (49,204) (81,779) (64,236) Other 37,487 3,526 41,013 58,213 T ota! non-operating revenues (expenses) 372,823 (2,192,222) (1,819,399) (2,098,027) Net profrt (loss) (1,225,974) (230,172) (1,456,146) (2,455,800) Retained earnings: Balance at be8inning of year 19,459,291 29,161,037 48,620,328 51,076,128 Balance at end of year $ 18,233,317 28,930,865 47,164,182 48.620,328 See accompanying notes to financial statements. 7 MUNICIPAL WATER DEPARTMENT OF TIffi CITY OF SAN BERNARDINO, CALIFORNIA Combining Statement of Cash Flows For the year ended June 30, 2000 and 1999 Water Sewer Totals Utility Utility 2000 1999 Cash flows from operating activities: Cash received from customers $ 17,181,433 16,936,750 34,118,183 32,685,692 Rental income 78,721 30,154 108,875 70,137 Nonoperating miscellaneous revenue received 37,487 3,526 41,013 42,671 Cash paid to suppliers of goods & services (8,281,337) (6,174,978) (14,456,315) (14,070,416) Cash paid to employees for services (7,592,983) (4,006,986) (11,599,969) (10,978,379) Net cash provided by (used for) operating activities 1,423,321 6,788,466 8,211,787 7,749,705 Cash flows from capital and related fmancing activities: Sale of fixed assets 327,689 327,689 Charges to property owners for capital purposes 988,274 1,148,253 2,136,527 3,305,115 Grant proceeds received 506,721 506,721 2,536,213 Cash paid to acquire fixed assets (1,997,781) (2,719,836) (4,717,617) (5,548,352) Proceeds from issuance of long-tenn debt 35,612,314 Principal paid on capital.related debt (857,510) (2,464,649) (3,322,159) (3,137,681) Interest paid on capital-related debt (446,558) (5,070,263) (5,516,821) (4,701,217) Net cash provided by (used for) capital and related fmancing activities (1,479,165) (9,106,495) (10,585,660) 28,066,392 Cash flows from investing activities: Proceeds from sale of investments 5,037,095 Purchase of investments (34,283,817) Interest received 398,743 2,931,016 3.329,759 1,991,099 Net cash provided by (used for) investing activities 398,743 2,931.016 3,329,759 (27,255,623) Net increase (decrease) in cash 342,899 612,987 955,886 8,560,474 Cash and cash equivalents at beginning of year 9,012,570 19,145,444 28,158,014 19,597,540 Cash and cash equivalents at end of year $ 9,355,469 19,758,431 29,113,900 28,158,014 (Continued) 8 - - ,.. ... ., ... ., ... III! ... , ... II! ooi III ... !II! ... III! .. II!! - II!! ... ,.. ... III! ... III! ... - ... ,.. - III! ... " .. "" .. .. .. .. .. .. .. .. .. .. .. "" .. .. .. .. .. .. .. "" .. .. .. .. .. .. .. .. .. .. .. "" .. .. .. .. .. MUNICIPAL WATER DEPARTMENT OF TIIE CITY OF SAN BERNARDINO, CALIFORNIA Combining Statement of Cash Flows (Continued) Water Utility Sewer Utility Totals 2000 1999 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 defurition of cash equivalents: U.S. Treasury notes Investment agreements mterest and other receivables $ 7,004,598 16,060,360 23,064,958 20,509,538 2,354,051 42,380,439 44,734,490 46,532,895 (34,283,817) (34,283,817) (34,283,817) (3,596,563) (3,596,563) (3,596,563) (3,180) (801 ,988) (805.168) (1,004,039) $ 9,355,469 19,758,431 29,113,900 28,158,014 Cash and cash equivalents at end of year Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Depreciaton and amortization Nonoperating miscellaneous revenue Rental income Bad debt expense $ (1,598,797) 1,962,050 363,253 (357,773) 2,405,737 4,241,692 6,647,429 6,937,400 37,487 3,526 41,013 42,497 78,721 30,154 108,875 70,137 128,204 (365,922) (19,685) (385,607) (14.056) 5,666 (4,709) . 957 172,108 299,967 472,075 41,712 3,097 3,097 35,818 (38,188) (759) (38,947) 5,836 (381,407) (340,537) (721,944) 376,292 16,519 16,519 132,174 391,662 523,836 (25,194) 9,033 (3,574) 5,459 (17,753) (134,207) (63,339) (197,546) 203,360 199,360 25,000 224,360 322,898 (9,091) (9,091) 327 907,550 250,499 1,158,049 $ 1,423,321 6,788,466 8,211,787 7,749,705 Adjustments: Change in accounts receivable Change in interfund receivable Change in related parties receivable Change in inventory Change in prepaid expenses Change in accounts payable Change in interfund payable Change in related parties payable Change in accrued expenses Change in accrued compensation Change in consumer deposits Change in other deposits Change in other assets Net cash provided by (used for) operating activities See accompanying notes to financial statements. 9 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements Year ended June 30, 2000 and 1999 (1) Summary of Significant Accounting Policies 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: Reporting Entity Generally accepted accounting principles require that these financial statements present the accounts of the Department and any of its component units. Component units are legally separate entities for which the Department is considered to be financially accountable or otherwise has a relationship, which is such that the exclusion of the entity would cause the financial statements to be misleading. Accordingly, there were no component units. 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 fmance-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. 10 - II! - ... - II! ... Ill! , ... III ... Ill! ... IlIl .... III .... " oli " .... III , ... IIlI ... " ... III ... 'II! ... Ill! ... III ... lIII - .. ... ... .. ... .. ... .. ... .. (1) ... .. ... III ... III ... III tit III "" .. ... III ... III ... III ... ... ... .. ... ... ... .. ... .. MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) Summary of Significant Accounting Policies, (Continued) 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. Cash and Investments Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and investment 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 value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value and any gains or losses realized upon the liquidation or sale of investments. 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. 11 11II .. 11II MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. ~ Notes to Financial Statements .. (Continued) !Ill, .. (1) Summary of Significant Accounting Policies, (Continued) 11III 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" (i.e., the current portion of interfund loans) or 'advances tolfrom other funds" (i.e., the non-current portion of interfund loans). All interfund transactions are eliminated for fmancial reporting purposes. '" iOl " ... Inventories 11III .J .. Inventories are valued at the lower of cost, using the average-cost method, or market. !Ill, 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 water 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. !Ill, ... "" .. Property, Plant. and Equipment and Water Rights 11III ... Property, plant, and equipment and water rights are recorded at cost. 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 eamed on the invested proceeds over the same period, if any. Overhead costs are capitalized at the rate of 24.75 percent of direct construction cost and are reflected 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: III!l ... ~ .. 11III .. 12 III!l .. .. "'" .. .. .. .. .. .. "'" . (1) .. .. ... .. .. .. .. "'" .. .. .. .. .. . .. . .. . ... . .. .. - .. .. .. .. .. MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) Summary of Significant Accounting Policies, (Continued) Wells, pumping plants, reservoirs, and distribution system Interceptor lines Disposal plant Leasehold improvements Shops, offices, stores, and yards Tools and equipment Office equipment Communication equipment 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 8to 10 years 5 to 10 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. 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 (two weeks for managers and mid-management employees) of accrued vacation have the option of receiving payment at their regular rate of pay for one week of accumulated unpaid vacation. 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 and 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. Fund Equity The Department currently has no reserved retained earnings. The Department's contributed capital represents equity acquired through capital grants and capital contributions from developers, customers, or other funds. 13 .. - .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - .. Notes to Financial Statements ... (Continued) II! ... .. (1) Summary of Significant Accounting Policies, (Continued) ... Comparative Data for Prior Year III ... Comparative data for the prior year has been presented in selected sections of the accompanying financial statements for comparative purposes. For comparative purposes, lII! certain amounts presented in the prior year have been reclassified in order to be consistent .. with the current year's presentation. " Eliminations .. The edli.minations co!umn brepresentsthentries maded to elimifunnated infiter-fund income and ! expen lture transactIOns etween e water an sewer s or the purposes of .. consolidated financial statements. (2) Cash and Investments lII! .. Cash and investments held by the Department at June 30, 2000 consisted of the following: III! ... Demand deposits $ Internal investment pool with City of San Bernardino Investments with fiscal agent 40,010 28,141,093 38,813,177 .. ... Total $66.994.280 II'! ... Cash and investments are reported as follows in the combining balance sheets: " Total $23,064,958 38,832,911 3,718,303 1,378,108 $66.994.280 ... Cash and investments Restricted cash and investments: Restricted for debt service Restricted for capital-related fees Restricted for consumer deposits .. ... II! ... 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 ofthe City. .. ... .. ... 14 II'! ... - .. "" ill "" .. .. .. .. .. (2) "" .. - ill ... lilt - .. - lilt "" lilt .. lilt .. .. .. ill ... .. .. .. - - - - - ill MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to 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 53601 of the Goverrunent 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. Goverrunent or its agencies Treasury notes, bonds Negotiable certificates of deposit - (30% max) Banker's acceptances - (30% max) Commercial paper - (15% max) Repurchase agreements - (10% max) Local Agency Investment Fund (state pool) deposits - a special fund of the California State Treasury through which local goverrunents may pool investments. Money Market Accounts - (20% max) Medium Term Corporate Notes - (30% max) Under the California Goverrunent Code, a financial institution is required to secure deposits made by state or local govemmental 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. Deposits of cities and other state or local govemments 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 15 - - JIll MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - JIll Notes to Financial Statements ... (Continued) JIll ... . , (2) Cash and Investments, (Continued) ... 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, 2000, deposits were categorized as follows: IIIl ... !!II .. Form of Deposit Demand deposits Total deposits 1 Category 2 3 Bank Balance Carrying Amount " III $ 44,128 $ 44.128 44,128 44.128 40,010 40.010 " iIIi As of June 30, 1999, deposits were categorized as follows: Category Bank Carrying Form of Deposit 1 2 3 Balance Amount Demand deposits $ 143,552 709,775 853,327 902,105 Total deposits $ 143.552 709.775 853.327 902.1 05 II!! . " ... JIll 1 ,..j II!! 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: ... !III , ... IIIlI ... IIIl ... 11II ... JIll ... 16 " ... .. .. '" III '" .. ... .. .. III (2) .. . .. .. .. .. ... III .. III .. .. .. .. .. .. "" .. .. .. .. .. "" .. ... .. ... .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA As of June 30, 2000, investments were categorized as follows: Category 2 Notes to Financial Statements (Continued) Cash and Investments, (Continued) Form ofInvestment 1 Investments held by bond trustee: U.S. Treasury notes $ $ 3 34,283,817 34.283.817 Investments not subject to categorization: Mutual funds Investment agreements Internal investment pool with the City of San Bernardino As of June 30, 1999, investments were categorized as follows: Category 2 Total investments Form ofInvestment 1 Investments held by bond trustee: U.S. Treasury notes $ $ 3 34,283,817 34.283.817 Investments not subject to categorization: Mutual funds Investment agreements Internal investment pool with the City of San Bernardino Total investments 17 Carrying Amount 34,283,817 34,283,817 932,797 3,596,563 28,141,093 $66.954.270 Carrying Amount 34,283.817 34,283,817 1,870,485 3,596,563 25,385,423 $65.136.288 jIl III! MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - "" Notes to Financial Statements ... (Continued) "" ... .. (2) Cash and Investments, (Continued) ... Restricted Assets III! .. 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. " Wi 'III ... (3) Changes in Contributed Capital Water Sewer Utility Utility 2000 1999 Balance at beginning of year $48,165,082 62,327,757 110,492,839 105,862,563 Adjustment of prior year grants receivable 185,736 77,686 263,422 Contributions in aid of construction 236,124 236,124 270,049 Impact fees for service connections 752,150 752,150 384,750 Impact fees for capacity rights - net of repurchase, refunds, and write-off's 1,060,840 1,060,840 2,509,110 East trunk line fees 87,413 87,413 125,099 Grants from other agencies for capital improvement 506,721 506,721 1,341 ,268 Balance at end of year $49.845.813 63.553.696 113.399.509 110.492.839 !'!l .. ~ .. ~ ... .. ;1 ... " .. III! ... III!I ... !Ill ... till ... till .. 18 ~ . .. .. ... .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. III Notes to Financial Statements .. (Continued) .. (4) Property, Plant and Equipment .. The following is a sununary of fixed assets at June 30, 2000: ... Water Sewer .. Utility Utility Total .. Land and easements $ 2,732,017 12,200,021 14,932,038 Water rights, wells and pumping plants 31,233,601 3,192,218 34,425,819 .. Distribution systems 53,186,047 53,186,047 ... Buildings, plants, and store yards 1,279,387 147,237,974 148,517,361 Tools and equipment 1,723,968 2,847,296 4,571,264 Autos 1,930,874 618,203 2,549,077 III Office leasehold improvements 111,125 111,125 ... Office, computer, engineering equipment 1,811,666 488,081 2,299,747 Radio and interoffice communication .. equipment 178,644 178,644 ... Telemetry systems and equipment 134,303 134,303 Miscellaneous 200,470 193,015 393,485 III Construction in progress 8,994,785 5,857,877 14,852,662 .. Total 103,516,887 172,634,685 276,151,572 Accumulated Depreciation (37,861,139) (39,163,938) (77,025,077) .. Net $ 65.655.748 133.470.747 199.126.495 IlII The following is a sununary of fixed assets at June 30, 1999: !III Water Sewer III Utility Utility Total - Land and easements $ 2,732,017 12,200,021 14,932,038 .. Water rights, wells and pumping plants 30,111,567 3,192,217 33,303,784 Distribution systems 49,027,540 49,027,540 - Buildings, plants, and store yards 1,224,905 145,390,352 146,615,257 Tools and equipment 1,889,829 2,655,751 4,545,580 .. Autos 1,990,917 514,020 2,504,937 Office leasehold improvements 109,356 109,356 .. Office, computer, engineering equipment 1,959,899 435,686 2,395,585 .. "E" Street property 54,202 54,202 Radio and interoffice communication III equipment 3 02,400 302,400 Telemetry systems and equipment 135,709 135,709 .. Miscellaneous 205,469 199,734 405,203 III Construction in progress 12,637,279 6,347,528 18,984.807 Total 102,381,089 170,935,309 273,316,398 .. Accumulated Depreciation (35,716,282) (35,311,844) (71,028,126) .. Net $ 66.664.807 135.623.465 202.288.272 .. !II 19 III III - III MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - '" Notes to Financial Statements ... (Continued) III! .. (5) Operating Leases '" ! "'" The Department leases office space from the City of San Bernardino under a III! noncancellable operating lease terminating in 2002. The following is a schedule of "j minimum lease payments as of June 30, 2000: Office Space For the year ending June 30: Water Sewer Total 2001 $161,918 21,802 183,720 2002 121,439 16,351 137,790 $283.357 38.153 321.510 I Iii ~ ... .. iIIl Rental expense, including equipment rentals for the year ended June 30, 2000, amounted to $237,285. III! ... (6) Long-Term Debt III! The following is a summary of changes in long-term debt obligations for the year ended ... June 30, 2000: Balance Balance July 1, 1999 Reductions June 30, 2000 Current Long-Term Notes payable $ 30,235,183 1,460,572 28,774,611 1,512,500 27,262,111 Certificates of Participation 71,665,304 1,004,076 70,661,228 1,105,000 69,556,228 Bonds payable 7 ,362,500 857,510 6,504,990 1,020,000 5,484,990 $109 .262.987 3.322.158 105.940.829 3.637.500 102.303.329 Notes Payable ~ ... m " ..I III! ... Santa Ana Watershed Project Authority (SA WP A) Maturity date: 2011 Interest rate: 3.3~ Repayment provisions: Annual principal and interest payments of$279,293 Balance Ill! .. .. $2,541,776 .. IIlI .. 20 "l - .. ... .. ... .. ... .. ... .. .. (6) "" lit II' lOt .. lOt ,.. lOt II' lit "" lOt "" lOt '" lOt .. lOt 11II lOt .. lOt .. IIti .. ... .. .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) Long-Term Debt, (Continued) San Bernardino Valley Municipal Water District Maturity date: 2013 Interest rate: 7.25% Repayment provisions: Annual principal and interest payments of$456,250 Balance 3,759,725 Santa Ana Watershed Project Authority (SA WPA) Maturity date: 2016 Interest rate: 2.8% Repayment provisions: Annual principal and interest payments of$I,761,739 Balance 22,473,110 28,774,611 1,512,500 $27.262.111 Less Current portion Long-term portion The loan through the Santa Ana Watershed Project Authority from the State Water Resources Control Board had been provided for the construction of the San BernardinolColton Rapid Infiltration Extraction (RIX) Project. The loan requires 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 often years. The Department has decided to use the revenues of the Sewer Utility towards repayment of the1oan. 21 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) (6) Long-Term Debt, (Continued) Certificates of Participation Interest Rates Annual Original Principal Amount Installments Balance $41,300,000 625,000 to 3,385,000 34,805,000 $36,230,000 1,505,000 to 3,220,000 36,230,000 71,035,000 373.772 70,661,228 Issue Date Maturity Date 1992 Sewer Treatment Plant 6.25% to 9.25% 1992 2018 1998 Refmancing Sewer 3.95% to 5.00% 1998 2017 Less unamortized discount Less current portion payable from restricted assets 1.105,000 Long-term portion $69 556.228 It has been determined that no amounts are currently due under IRS Code Section 148(f)(4)(B) for the temporary investments of the 1992 Sewer Treatment Plant Certificates of Participation and for rebate arbitrage. In 1998, the Department refinanced the acquisition and construction of certain capital improvements which were originally fmanced by the 1992 Sewer Certificates of Participation, dated February 1, 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 are callable on February 1, 2001 at a prepayment premium of two percent. At that time, the funds from the 1998 issue will be used to payoff the 1992 Certificates. The Department will then 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. 22 - - III! - III! - III! ... ~ iii I .. I "' iIlI I iIIII I . III! ... 11II ... III! ... III! ... III! ... 11II ... III! ... III! - .., Wi .. ... .. .. .. .. .. .. .. lot (6) .. .. .. .. .. ... .. .. .. .. .. .. '" .. .. .. .. .. I!I' .. .. .. .. .. .. .. .. ... MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) Long-Term Debt, (Continued) Costs related to the issuance of the 1998 Certificates have been paid out of the proceeds of the issue. The advance refinancing has resulted in economic savings to the Department, represented by the difference between the debt service payments on the 1992 and 1998 Certificates. The present value of these savings has been computed as approximately $1.2 million. These savings were made available to the Department upon issue of 1998 Certificates and a portion of those proceeds will be used to finance new Sewer capital improvements. As of June 30, 2000, approximately $7,000,000 of outstanding 1990 Water Facilities Certificates of Participation are considered 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. Bonds Payable Interest Rates Maturity Date Annual Original Principal Amount Installments Balance $8,610,000 860,000 to $1,260,000 $6,780,000 $150,000 . $5,000 to $15,000 110.000 6,890,000 Issue Date 1998 Water and Wastewater Revenue Bonds 2005 3.75% to 4.40% 1998 Waterworks Bonds, Series C 1988 2013 7.75% Total bonds payable Less unamortized discount and deferred advance refunding charge 385,010 6,504,990 Less current portion payable from restricted assets 1.020.000 Long-tenn portion $5.484.990 The Department has covenanted to set aside Water revenues to make installment payments on the Bonds as due. 23 '" - '" MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - 11III Notes to Financial Statements - (Continued) II!I ... (6) Long-Term Debt, (Continued) The annual requirements to amortize long-term debt subsequent to June 30, 2000 are as follows: June 30 Principal Interest Total Notes payable 2001 $ 1,512,500 984,782 2,497,282 2002 1,563,931 933,351 2,497,282 2003 1,616,642 880,640 2,497,282 2004 1,672,352 824,930 2,497,282 2005 1,730,338 766,944 2,497,282 Thereafter 20,678,848 4,027,588 24,706,436 28,774,611 8,418,235 37,192,846 Certificates of participation 2001 1,105,000 3,905,464 5,010,464 2002 2,690,000 3,803,252 6,493,252 2003 2,845,000 3,669,742 6,514,742 2004 3,010,000 3,526,580 6,536,580 2005 3,190,000 3,373,930 6,563,930 Thereafter 58,195,000 23,461,776 81,656,776 71,035,000 41,740,744 112,775,744 Bonds payable 2001 1,020,000 272,033 1,292,033 2002 1,060,000 230,490 1,290,490 2003 1,100,000 186,016 1,286,016 2004 1,165,000 138,547 1,303,547 2005 1,200,000 88,109 1,288,109 Thereafter 1,345,000 58,718 1,403,718 6,890,000 973,913 7,863,913 $106.699 .611 51.132.892 157.832.503 Compensated Absences The Department's policies relating to compensated absences are described in note 1. This liability, amounting to $1,624,150 and $1,429,107 at June 30, 2000 and June 30, 1999, respectively, will be paid in future years from future resources. II! IIii II ., 11II II ",'" iii , iii "'l ltii .- .. II <"1'; 11II II!! ... ~ ... 11III ... .. - 11II ... III! ... 11III ... 24 11II ... ... .. .. .. .. .. .. .. .. .. (7) .. III ... .. ... III .. .. "'" .. .. .. .. .. ... .. ... .. ... .. .. .. ... .. ... .. ... .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) 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. (8) Post-Retirement Health Care Benefits In addition to the pension benefits described in note 7, the Department provides the minimum monthly premium for post-retirement medical-health care benefits to each retiree that meets the Public Employees Retirement System eligibility criteria for coverage under their medical health plan. The retirees may continue to participate in the health care plan provided the retirees make the arrangements for premiums to be paid through the retirement program. This benefit is dependent upon the continued approval of the insurance carrier. For those retirees who retired on or after attaining age 55 with a minimum of 15 years of service, the Department will reimburse them a portion of that premium up to $217 per month for those who are age 55 and older without Medicare coverage, and up to $120 per month for those who are age 65 and older with Medicare coverage. Currently, seventeen Water Utility retirees and one Sewer Utility retiree are receiving reimbursements. The Department pays $16 per month per retiree to PERS for the minimum monthly premium, and an additional one-half percent of the total premium costs for all retirees currently covered under the health benefits plan as an administrative charge to PERS. During the year ended June 30, 2000, and June 30, 1999, expenses of $39,570 and $26,434, respectively, were recognized for post-retirement health care benefits and administrative costs for the Water and Sewer Utilities. 25 (9) .. .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - II! Notes to Financial Statements ... (Continued) II! ... II! 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 year ended June 30,2000: ... " .. Revenues City of San Bernardino Revenue from water charges Revenue from sewer charges Revenue from geothermal charges Billing and collection charges - refuse Billing and collection charges - storm drain New services and mains - installation Cost reimbursement Interest income ~ ... $ 16,408 84,901 16,870 140,050 5,282 15,386 4,479 1,657,750 " ~ .,~ ... '" .. Economic Development Agency Revenue from geothermal charges Cost reimbursement " .. 1,762 3,220 $1.946,108 "! .... Total revenue from related parties " Expenses City of San Bernardino 10% water revenue Sewer collection system maintenance Worker's compensation - administration charges Printing services Purchases Postage City Hall rent Phone charges Refuse disposal service Civil service Legal services/affirmative action Rideshare coordination Payroll services Data processing services Engineering and other services Miscellaneous charges .. $1,581,166 1,141,251 53,478 5,406 581 8,454 183,720 100,864 78,552 45,000 105,000 3,000 28,000 424,340 11,381 7,246 $3.777.439 "! ..J " ... II! ... II! ... II! ... Total expenses to related parties II! ... 26 II! ... ... .. WI .. ... .. ... .. ... .. (9) ... .. ... .. ... .. ... .. ... .. ... .. ... .. '"' .. ... .. ... .. '"' .. ... ... ... .. ... .. MUNICIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) Related party Transactions, (Continued) Receivables City of San Bernardino Finance Department Facilities Management Department Public Service/Refuse Department Public Works City Library Animal Shelter Economic Development Agency Total Receivables to Related Parties Payables City of San Bernardino Finance Department Total Payables to Related Parties $574,134 26,005 23,580 o 2,304 428 7,937 $634.388 $614,142 $614.142 Following is a summary of transactions and balances with the City of San Bernardino and its various departments as of and for the year ended June 30, 1999: Revenues City of San Bernardino Revenue from water charges Revenue from sewer charges Revenue from geothermal energy Billing and collections charges - refuse Billing and collections charges - storm drain New services and mains - installation Reimbursement - consulting services Interest income Economic Development Agency Revenue from geothermal energy Reimbursement - consulting services Total revenues from related parties 27 $ 58,282 88,752 13,899 135,392 4,887 5,827 8,633 1,575,093 1,778 13,310 $1.905.853 - - MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - IIIl Notes to Financial Statements ... (Continued) .. ... .. (9) Related party Transactions, (Continued) ... Expenses City of San Bernardino 10% water revenue Sewer collection system maintenance Printing services Purchases City Hall rent Telephone charges Refuse disposal services Civil Service Legal services and Affirmative Action Rideshare coordination Permits and engineering services Postage Payroll services Data processing services Workers' compensation - administration charges Miscellaneous charges "" Total expenses to related parties $1,423,321 1,331,540 5,650 1,993 183,720 106,858 85,852 45,000 105,000 2,010 10,291 8,812 29,000 385,000 55,248 4,145 $3.783.440 ... Ill! , ... Jl!I ... !II! ,1 .... Ill! ... Ill! ... Receivables City of San Bernardino Finance Department Facilities Management Public Services Public Works Economic Redevelopment Agency Animal Shelter IIIl ... Total related party receivable $1,033,311 16,939 23,296 5,827 8,522 472 U.088.367 Ill! ... "" ... Ill! Payables Due to the City of San Bernardino Finance Department- various terms for repayment ... $1.069.770 Ill! ... The Department collects and transmits to the City of San Bernardino ten percent of collections on gross water revenue and sewer collection system maintenance charges from Sewer Utility customers. These remittances are included in the related party expense shown above. IIW ... IIW ... 28 Ill! ... - .. ... .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. .. Notes to Financial Statements ... (Continued) .. ,. .. (10) 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 WEJPA. 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 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 boarg 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, plant, and equipment of the Sewer Utility. The fmancial statements of PSA are available at the Department. The joint venture is not experiencing fiscal stress. .. .. - ... '"' .. '"' - II' .. - - - - - 29 ... - - MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - .. Notes to Financial Statements ... (Continued) .. ... Ill! (10) Joint Venture, (Continued) .. Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority . . J .. On August 2, 1994, the City of San Bernardino, through the Department, formed a joint powers authority with the City of Colton to construct, operate, use, and maintain tertiary wastewater treatment, disposal, and water reclamation systems, including the Regional Rapid Infiltration and Extraction Facility (RIX). The Colton/San Bernardino Regional Tertiary Treatment and Water Reclamation Authority is governed by a separate 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 joint venture is not experiencing fiscal stress. Ill! .. ~ 'J .. II'! ... ~ ... " ... . ... (11) Construction and Other Significant Commitments Commitments III ... Commitments in the form of signed contracts for costs to complete construction projects or other improvements amounted to $704,773 and $1,965,782 at June 30, 2000 and June 30, 1999, respectively. II!! ... 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. III! ... III! ... '" ... 30 . iIIIiiii .. lit '" lit '" lit '" lit .. lit (11) .. lit .. lit .. lit - tit - lit - lit !!II ill .. .. - lit - .. '" .. - .. !III .. .. lit MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Notes to Financial Statements (Continued) Construction and Other Significant Commitments. (Continued) 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 aggregate liabilities for the Department for the year ended June 30, 2000: Total Liability balance, June 30,1999 Claims and changes in estimates Claim payments $473,282 35,816 (185,580) $323.518 Liability balance, June 30, 2000 The following represents the changes in approximate aggregate liabilities for the Department for the year ended June 30, 1999: Total Liability balance, June 30, 1998 Claims and changes in estimates Claim payments $407,250 446,786 (380,754) $473.282 Liability balance, June 30, 1999 31 .. - 11II MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. 11II Notes to Financial Statements .. (Continued) III ~ (12) Contingencies .- ... Federal and State Grants ~ IIiI Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal and state govemments. 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. I ~ Litigation " UI The Department has filed a complaint against the United States of America, Department of Army, in connection with alleged contamination of Camp Ono site. This lawsuit is in the discovery phase and an estimate of recoveries, if any, arising out of this claim cannot be made at this time. ~ ~ 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. JlII .. " IIii " Itii lIIIl iliIii "'I. ... ., ... "! ... 32 ~ ... ... ... ... ... ... ... .. ... .. .. ... ... .. ... .. ... ... SUPPLEMENTARY INFORMATION ... .. ... .. .. .. ... .. ... .. ... .. ... .. ... .. ... .. ... .. 33 . - .. .. .. ... ~ - III! . j ... "" .. " ,') IIIIl "' .. (This page intentionally left blank.) " ... ~ ... .. ... " .. " olI II!! loI " - " - fill ... 'II .. 34 , olii '" - "" . MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA "'" .. Board of Water Commissioners and Organization "" June 30, 2000 .. MAYOR OF THE CITY OF SAN BERNARDINO "'" .. Judith Valles "'" .. BOARD OF WATER COMMISSIONERS Name Office President Commissioner Commissioner Commissioner Commissioner '" B. Warren Cocke James H. Urata Toni Callicott Martin A. Matich Judith W. Battey .. "'" .. ADMINISTRATION .. Bernard C. Kersey General Manager Stacy R. Aldstadt Deputy General Manager Joseph F. Stejskal Director, Engineering-Construction-Maintenance '" .. '" '" .. "" III John A. Perry, P.E. Director, Water Reclamation John P. Murphy Director, Administration and Finance '" III Jon K. Turnipseed, CSP Safety Program Manager .. III 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. III .. .. \OIl III '" .. \OIl 35 .. . - . MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - Schedule of Insurance Coverage lIlI As of June 30, 2000 .... lIlI Insurance coverage for the Department at June 30, 2000 is summarized below: - Federal Insurance Company, Policy #78357989; boiler and machinery coverage - April 30, 2000 to April 30, 2001 Per occurrence limit lIlI .... $ 10,000,000 II Multiple insurance companies and policies; all-risk property coverage, inclnding earthquake and flood - April 30, 2000 to April 30, 2001 Primary limit: AIG/Lexington Insurance Company, Policy #8524618 Excess limits: Commonwealth Insurance Company, Policy #US2693 Caliber One Indemnity Company, Policy #ZSIOOI03502 TIG Insurance Company, Policy #XPT38797327 Essex Insurance Company, Policy #MSP4685 Northfield Insurance Company, Policy #CFOOI566 Insurance Company of the West, Policy #XHO 170 I 031 0 I Agricultural Insurance Company, Policy #CPP3211367 Greenwich Insurance Company, Policy #ACG33 I 1367 TIG Insurance Company, Policy #XPT38797327 London Companies-Zurich Specialties, Policy #NL20026 Diamond State Insurance Company, Policy #NIM30060 Clarendon National Insurance Company, Policy #AR9800048001 Kemper Surplus Lines Insurance Company, Policy #3ZK11752400 Westchester Fire Insurance Company, Policy #FXL11752400 .. 2,500,000 III! .. 3,750,000 3,750,000 5,000,000 5,000,000 5,000,000 10,000,000 6,300,000 4,200,000 4,500,000 5,000,000 7,500,000 7,500,000 5,000,000 50,000,000 ~ ... "" ... '" :'1 .... !I!I .. '" Insurance Company of the West, Policy #XPL161920600; general liability - October 30, 1999 to October 30, 2000 General Aggregate Public Entities Errors and Omissions Anonal Aggregate .. 20,000,000 16,000,000 " .. Insurance Company of the West, Policy #XPL161920600; business automobile coverage - October 30, 1999 to October 30, 2000 Liability limit Uninsured/Underinsured motorists Medical expense Hired/nonowned liability ~ 16,000,000 1,000,000 5,000 1,000,000 II ... Insurance Company of the West, Policy #XPL161920600; umbrella liability - October 30, 1999 to October 30, 2000 Limits included in Insurance Company of the West II!I! , ... 11!1 ... Ill! .. 36 II!I! J - - toO - Schedule of Insurance Coverage MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. lot As of June 30, 2000 - .. .. .. American International Specialty Lines, Policy #PLS2673997; pollution liability - October 29, 1998 to October 30,2001 (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 "" .. Insurance Company of the West, Policy #XPLI61920600; public officials and employees liability - October 30, 1999 to October 30, 2000 Limits included in 1nsurance Company of the West toO lOt toO L10yds of London, Policy # 1565L; employment practices liability - October 30, 1999 to October 30, 2000 lOt toO Hartford Fire Insurance Company, Policy #72BPEAK4746; crime coverages - March 25, 2000 to March 2, 2001 Employee theft (each incident) Theft, disappearance and destruction .. toO .. The Department is self-insured through the City of San Bernardino for workers' compensatiou liability and material damage to rolling stock. - .. .. III toO ... .. .. toO - .. .. toO ... .. ... toO 37 lit 5,000,000 5,000,000 5,000,000 5,000,000 250,000 250,000 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Water System Demographics Physical Changes in Water Utility System 2000 July 1, 1999 Added Removed June 30, 2000 Miles of main in system 551.5203 0.1369 0.1231 551.5341 Gate valves in system 14,379 80 15 14,444 Fire hydrants in system 4,117 87 86 4,118 Water meters in system 44,750 3,411 3,107 45,054 1999 July 1, 1998 Added Removed June 30, 1999 Miles of main in system 550:5525 1.5752 0.6074 551.5203 Gate valves in system 14,233 156 10 14,379 Fire hydrants in system 4,110 11 4 4,117 Water meters in system 44,565 2,359 2,174 44,750 Water ProductionlUtilization (Cubic Feet) 1999-00 1998-99 1997-98 Water utilization (shown in cubic feet) Water sold to direct customers Water sold to other agencies Water sold to or used by City* 1,922,461,466 1,803,696,500 1,596,392,100 73,187,011 125,883,794 140,192,330 92,782,474 90,117,117 79,698,816 2,088,430,951 2,019,697,411 1,816,283,246 166,747,619 150,371,654 133,365,478 7.394% 6.929% 6.840% 2,255,178,570 2,170,069,065 1,949,648,724 Loss and other factors Loss and other factors percentage Total water sold, used or lost *Includes exempt water used by the City in the amount of 72,819,200 cubic feet for 1999-2000 and 65,326,800 cubic feet for 1998-1999. 38 .. - Ill! ... lI!I .. . .. 'II iii II .. I I iii ,. .. " ... fill ... fill ... ~ .. " Wi II! 11II !II .. " ..i III! .. " iIIiiI .. ... .. ... MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA ... - Schedule of Water Production ... June 30, 2000 - ... .. .. 1999-2000 1998-99 1997-98 Total Water Total Water Total Water Per 1,000 Per 1,000 Per 1,000 Amount Cubic Feet Amount Cubic Feet Amount Cubic Feet Summary of total water production and purchased cost Total production, purchases, and supplemental 2,255,178 2,170,069 1,949,649 Production and pumping expenses" $3,628,465 2,985,298 2,526,300 Total expense before depreciation 3,628,465 1.60895 2,985,298 1.37567 2,526,300 1.29577 Depreciation of plant facilities 879,646 0.39006 925,290 0.42639 870,338 0.44641 Totals $4,508,111 1.99900 3,910,588 1.80206 3,396,638 1.74218 Summary of costs per acre foot Acre feet 51,771.779 49,817.931 44,757.776 Cost per acre foot before depreciation $70.08 59.92 56.44 Cost per acre foot (including depreciation of plant facilities) $87.08 78.50 75.89 ... .. ... ... .. .. .. ... .. .. 11II "" 11II .. .. .. .. .. .. ... - - - _ "Includes operations administration. - ... 39 .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Water Rates Water rates are summarized below: Simde Family Dwellin~ Unit Meter Size 5/8" 3/4" I" Minimum Monthly Charge Effective Dates April 1, 2000 Aprill, 1991 $ 7.60 6.60 10.1 0 8.80 12.15 10.55 21.75 18.90 30.35 26.40 51.65 44.90 87.70 76.25 157.90 137.30 236.80 205.90 296.00 257.40 $ 355.25 308.90 1-1/2" 2" 3" 4" 6" 8" 10" 12" till ... 11II .. 11II .. " ... Cubic Foot Allowance . WI 500 500 500 500 500 500 500 500 500 500 500 II!! .. ! "If .. II ,.;., .. All water usage in excess of 500 cubic feet per month is at the rate of $0.83 and $0.72 per 100 cubic feet effective Aprill, 2000 and Aprill, 1991, respectively. 'II! ... Commercial. Landscape. and Industrial Users Meter Size Minimum Monthly Charge Effective Dates April 1, 2000 Aprill, 1991 5/8" 3/4" I" $ 7.60 10.10 12.15 21.75 30.35 51.65 87.70 157.90 236.80 296.00 $ 355.25 6.60 8.80 10.55 18.90 26.40 44.90 76.25 137.30 205.90 257.40 308.90 1-1/2" 2" 3" 4" 6" 8" 10" 12" ~ ... till ... till ... III ... Ill! ... " ill ! Aldl wAat~rl usl algge9Pler mon~ islat the rate of $0.83 and $0.72 per 100 cubic feet effective Aprill, 2000 . an pn, , respective y. iIlII ~ ~ .. .. .. .. . .. .. .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Water Rates _ Delman Heili:hts Users (Customers forrnerlv served bv Southern California Water Company) .. .. .. .. .. .. .. .. .. .. .. .. .. III ... III .. .. .. tit .. .. .. .. .. .. ... .. ... ... Meter Size Minimum Monthly Charge Effective Dates April 1,2000 Plpril 1, 1991 5/8" * 4.60 3/4" * 5.50 1" * 8.80 1-112" * 13.80 2" * 14.90 3" * 26.60 4" * 35.00 6" * 58.50 8" * 84.00 *Effective April 1 , 2000, De1mann Heights customers will be charged the same as all other City of San Bernardino Municipal Water Department customers. 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 cubic foot All other rates remained unchanged. 41 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule of Sundry Water Statistical Data 1999-2000 1998-1999 Production Percent Production Percent Pumping Plants in Cubic Feet Production in Cubic Feet Production Antil Plant 108,724,200 5.02% 83,555,100 4.01% Baseline & California Well 30,763,900 1.42% 33,485,800 1.61% Cajon Boulevard Plant 178,164,100 8.23% 155,952,000 7.48% Cajon Pass & Vincent Wells 73,289,300 3.38% 119,104,800 5.71% Devil Canyon Plant 130,228,570 6.01% 107,871,930 5.17% EPA Wells - Newmark OU 651,768,900 30.09% 530,532,200 25.43% 40th Street Well 5,607,000 0.26% 4,084,800 0.20% Gilbert Street Well 433,200 0.02% 16,437,500 0.79% Kenwood Well 84,710,800 3.91% 123,904,000 5.94% LeRoy Street Well 15,075,100 0.70% 40,226,700 1.93% Lynwood Well 62,890,300 2.90% 43,621,500 2.09% Lytle Creek Plant 110,895,200 5.12% 238,430,635 11.43% Mallory Well 21,138,300 0.98% 28,969,900 1.39% Mill & "D" Streets Well 23,771,900 1.1 0% 20,915,000 1.00% Newmark Plant 134,181,500 6.20% 166,982,400 8.00% 19th Street Plant 146,759,900 6.78% 80,904,000 3.88% Olive & Garner Well 89,972,100 4.15% 1 05,386,500 5.05% Perris Hill Plant 0 0.00% 8,395,500 0.40% 7th Street Well 487,300 0.02% 27,558,400 1.32% Sierra Way & 16th Street Wells 480,200 0.02% 25,123,000 1.20% 10th & "J" Street Well 114,075,400 5.27% 61,746,500 2.96% 30th & Mountain View Wells 77,771,300 3.59% 34,669,100 1.66% 27th Street Well 193,100 0.01% 4,033,200 0.19% Waterrnan A venue Plant 104,445,500 4.82% 24,299,200 1.16% Total Water Produced 2,165,827,070 100.00% 2,086,189,665 100.00% Purchased water - East Valley Water District 89,351,500 83,879,400 Total Water Production 2,255,178,570 100.00% 2,170,069,065 100.00% 42 . - . - 11II - '" ... . iii "! III , .. " loi ~ r'l ... ~ !'II ... III! ::1-1 WI 11II j., IIll '" ... Ill! .. 11II ,"1, .. '" .. " .. .. .. '" .. - .. .. .. 1997-1998 1996-1997 1995-1996 .. Production Percent Production Percent Production Percent .. in Cubic Feet Production in Cubic Feet Production in Cubic Feet Production .. 110,558,300 6.02% 97,372,000 4.75% 85,263,000 4.32% .. 22,726,800 1.24% 35,535,200 1.73% 19,434,900 0.99% 159,063,000 8.66% 175,541,300 8.57% 155,425,400 7.88% - 107,585,000 5.86% 109,452,800 5.34% 112,502,300 5.71% .. 114,549,050 6.23% 131,031,430 6.40% 128,098,120 6.50% .. 0 0.00% 0 0.00% 0 0.00% 4,508,800 0.25% 4,491,800 0.22% 5,552,200 0.28% .. 60,684,800 3.30% 97,630,100 4.77% 117,855,900 5.98% .. 129,339,300 7.04% 115,529,600 5.64% 132,997,600 6.75% .. 19,167,100 1.04% 4,563,800 0.22% 5,903,700 0.30% 83,322,600 4.53% 39,860,900 1.95% 136,705,700 6.93% .. 211,407,612 11.51 % 249,683,913 12.20% 196,365,448 9.95% .. 25,900,300 1.41% 13,207,600 0.64% 9,292,800 0.47% .. 24,489,400 1.33% 29,290,900 1.43% 17,000,700 0.86% .. 173,641,100 9.45% 261,064,200 12.74% 233,582,200 11.85% 148,340,400 8.07% 165,472,100 8.08% 136,200,800 6.91% III 45,237,800 2.46% 65,816,600 3.21% 87,164.300 4.42% .. 12,082,300 0.66% 5,952,100 0.29% 14,056,300 0.71% .. 121,139,100 6.59% 113,110,300 5.52% 93,492,100 4.74% 108,345,300 5.90% 106,958,600 5.22% 133,142,700 6.75% .. 42,676,300 2.32% 34,420,900 1.68% 12,346,200 0.63% ... 41,095,062 2.24% 63,512,500 3.10% 74,113,000 3.76% .. 5,933,200 0.32% 28,083,800 1.3 7% 9,015,400 0.46% 65,645,000 3.57% 100,975,900 4.93% 56,160,500 2.85% ... ... 1,837,437,624 100.00% 2,048,558,343 100.00% 1,971,671,268 100.00% ... ... 112,211,100 75,067,900 120,321,000 - 1,949,648,724 100.00% 2,123,626,243 100.00% 2,091,992,268 100.00% ... - ... - 43 ... . - II!! MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA WATER UTILITY Schedule of Service Area and Customers - . - .. - III! Number of Active Connections by Classification of User as of June 30, 1996 through June 30, 2000 User Type 2000 1999 1998 1997 1996 Single family residential 32,550 32,062 31,692 32,105 32,202 Multiple family residential 2,793 2,798 2,830 2,870 2,900 Commercial/institutional 3,693 3,336 3,268 3,126 3,115 Other 1,081 1,253 1,345 1,267 1,200 Total all users, active 40,117 39,449 39,135 39,368 39,417 Revenue by Class of User Fiscal Year 1999-2000 User Class Fiscal Year Revenue Single family residential Multiple family residential Commercial/industrial Other and unmetered $ 8,325,959 2,709,014 3,690,336 787,214 T ota! all users $15,512,523 .. III! - II iIiII " - III I, .. ~ ... ~ .. l'" Percentage of Annual Revenue .. ~ i.. 53.67% 17.46% 23.79% 5.07% I' .. !I!l ... 100% I' i.. '" , ... Largest users: The System had no customer accounting for more than three percent of the revenues for the fiscal year 1998-99. 44 '" - ~ - - - - - - - .. - .. - .. - - - - - - - .. - .. - .. - - - - - - - - - - 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, mobil 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 (hoteUmotels with restaurants) Laundromats Hospitals, convalescent homes Schools, churches, nursey schools, daycares Industry $13.25 per month $1.35 per month $14.60 $0.75/HCF* $0. I 5/HCP $0.90/HCF* $1.10/HCP $0.15/HCP $1.25/HCP $1.20/HCP $0. 15/HCF* $1.35/HCP $0.95/HCP $0.15/HCF* $1.IO/HCF* $1.70/HCP $0.15/HCP $1.85/HCP $0.90/HCF* $0. I 5/HCP $1.05/HCF* $0.80/HCP $0. I 5/HCP $0.95/HCP $0.50/HCP $0.15/HCP $0.65/HCP $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, mobil 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 (hoteUmotels with restaurants) Laundromats Hospitals, convalescent homes Schools, churches, nursey schools, daycares Industry $13.55 per month $1.35 per month $14.90 $0.80/HCF* $0. 15/HCP $0.95/HCP $1.15/HCP $0.15/HCP $1.30/HCF* $1.25/HCP $0.15/HCF* $1.40/HCF* $1.00/HCF* $0. I 5/HCP $1.15/HCP $1.75/HCP $0. 15/HCF* $1.90/HCP $0.95/HCF* $0.15/HCP $1.10/HCP $0.85/HCP $0. I 5/HCF* $1.00/HCP $0.55/HCP $0. I 5/HCP $0.70/HCP $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. - - 45 .. - .. MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - IIIl - Schedule of Sewer Rates and Statistics, (Continued) IIIl .. June 30, 2000 Residential Nonresidential Total Number of connections City of San Bernardino 32,247 3,579 35,826 East Valley Water District 16,764 1,111 17,875 City of Loma Linda 3,442 1,020 4,462 52,453 5,710 58,163 !II ... II! ... . MIl ., MIl Annual billings City of San Bernardino* East Valley Water District City of Loma Linda $5,210,927 2,583,418 548,000 5,185,652 1,622,650 779,152 10,396,579 4,206,068 1,327,152 r" .. .- ~ $8,342,345 7,587,454 15,929,799 !"! 1.0 Average monthly billings City of San Bernardino $ 434,244 432,138 866,382 East Valley Water District 215,285 135,221 350,506 City of Loma Linda 45,667 64,929 110,596 $ 695,195 632,288 1,327,483 1'" ... r' ... ~ .. IIIIt , ... ~ .. " ~ *The billings to the City of San Bernardino are net of collection system costs. l' ... 46 !III ... ... ... ... ... ... - ... ... ... June 30,1999 June 30, 1998 ... Residential Nonresidential Total Residential Nonresidential Total ... 32,553 3,718 36,271 32,517 3,711 36,228 ... 16,613 1,176 17,789 16,420 1,089 17,509 ... 3,444 818 4,262 3,438 545 3,983 ... 52,610 8,712 58,322 52,375 5,345 57,720 ... - - ... $5,126,734 4,691,828 9,818,562 $5,091,718 4,505,248 9,596,966 2,631,064 1,486,077 4,117,141 2,588,101 1,402,504 3,990,605 "'" 539,410 841 ,448 1,380,858 537,770 862,410 1,400,180 ... .. $8,297,208 7,019,353 15,316,561 8,217,589 6,770,162 14,987,751 . .. lOt $ 427,228 390,986 818,214 $ 424,310 375,437 799,747 219,255 123,840 343,095 215,675 116,875 332,550 - 44,951 70,121 115,072 44,814 71,868 116,682 .. ... $ 691,434 584,947 1,276,381 $ 684,799 564,180 1,248,979 ... - ... ... ... - - - ... 47 - ... . - ,. MUNICIPAL WATER DEPARTMENT OF THE CITY OF .. SAN BERNARDINO, CALIFORNIA . Schedule - 1992 Certificates of Participation - San Bernardino Public Safety Authority lII!! June 30, 2000 - Principal "" Principal Unamortized Payments Interest .. Date Due Payments Discounts (Net) Interest Total Rate " 8-1-2000 $1,104,231 1,104,231 9.25% .. 2-1-2001 $ 1,105,000 16,520 1,088,480 1,104,231 2,192,711 9.25% " 8-1-2001 1,053,125 1,053,125 6.25% '" .. 2-1-2002 1,185,000 16,520 1,168,480 1,053,125 2,221,605 6.25% 8-1-2002 1,016,094 1,016,094 6.25% " 2-1-2003 1,270,000 16,520 1,253,480 1,016,094 2,269,574 6.25% - 8-1-2003 976,406 976,406 6.25% 2-1-2004 1,360,000 16,520 1,343,480 976,406 2,319,886 6.25% " I" 8-1-2004 933,906 933,906 6.25% ... 2-1-2005 1,460,000 16,520 1,443,480 933,906 2,377,386 6.25% . 8-1-2005 888,281 888,281 6.25% I' Ie 2-1-2006 1,565,000 16,520 1,548,480 888,281 2,436,761 6.25% 8-1-2006 839,375 839,375 6.25% '" 2-1-2007 1,680,000 16,520 1 ,663,480 839,375 2,502,855 6.25% !to 8-1-2007 786,875 786,875 6.25% " 2-1-2008 1 ,800,000 16,520 1,783,480 786,875 2,570,355 6.25% OIl 8-1-2008 730,625 730,625 6.25% 2-1-2009 1,930,000 16,520 1,913,480 730,625 2,644,105 6.25% '" 8-1-2009 670,312 670,312 6.25% .. 2-1-2010 2,070,000 16,520 2,053,480 670,312 2,723,792 6.25% 8-1-2010 605,625 605,625 6.25% " 2-1-2011 2,220,000 16,520 2,203,480 605,625 2,809,105 6.25% ... 8-1-2011 536,250 536,250 6.25% II 2-1-2012 2,385,000 16,520 2,368,480 536,250 2,904,730 6.25% .. 8-1-2012 461,719 461,719 6.25% 2-1-2013 2,555,000 16,520 2,538,480 461,719 3,000,199 6.25% " 8-1-2013 381,875 381,875 6.25% . 2-1-2014 2,740,000 16,520 2,723,480 381,875 3,105,355 6.25% " 8-1-2014 296,250 296,250 6.25% ill 2-1-2015 2,940,000 16,520 2,923,480 296,250 3,219,730 6.25% 8-1-2015 204,374 204,374 6.25% " . 48 ! ,. .. - .. - MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA .. .. Schedule - 1992 Certificates of Participation San Bernardino Public Safety Authority, (Continued) .. .. June 30, 2000 Principal Principal Unamortized Payments Interest Date Due Payments Discounts (Net) Interest Total Rate 2-1-2016 $ 3,155,000 16,520 3,138,480 204,375 3,342,855 6.25% 8-1-2016 105,781 105,781 6.25% 2-1-2017 3,385,000 9,681 3,375,319 105,784 3,481,103 6.25% $34,805,000 274,001 34,530,999 23,182,212 57,713,211 - .. - .. - .. .. .. .. .. .. - .. - .. .. .. .. - - - - .. - .. - Funds usedfor the Primary Hydraulic Reliability Project, remodel of the administration laboratory building, and design of 3A secondary treatment. - - 49 .. .. . - III MUNICIPAL WATER DEPARTMENT OF THE CITY OF - SAN BERNARDINO, CALIFORNIA lit Schedule - 1998 Refunding Sewer Revenue Certificates of Participation - San Bernardino Public Safety Authority III June 30, 2000 - Principal II Principal Unamortized Payments Interest .. Date Due Payments Discounts (Net) Interest Total Rate 'If 8-1-2000 $ 848,501 848,501 3.95% .. 2-1-2001 $ 9,403 (9,403) 848,501 839,098 3.95% " 8-1-2001 848,501 848,501 3.95% ,.: "" 2-1-2002 $ 1,505,000 9,403 1,495,597 848,501 2,344,098 3.95% 8-1-2002 818,777 818,777 4.05% " 2-1-2003 1,575,000 9,013 1,565,987 818,777 2,384,764 4.05% - 8-1-2003 786,884 786,884 4.10% 2-1-2004 1,650,000 8,604 1,641,396 786,884 2,428,280 4.10% '" 8-1-2004 753,059 753,059 4.15% .. 2-1-2005 1,730,000 8,176 1,721,824 753,059 2,474,883 4.15% !Il! 8-1-2005 717,161 717,161 4.25% ... 2-1-2006 1,815,000 7,727 1,807,273 717,161 2,524,434 4.25% 8-1-2006 678,593 678,593 4.30% I"! 2-1-2007 1,910,000 7,257 1,902,743 678,593 2,581,336 4.30% ... 8-1-2007 637,528 637,528 5.00% ~ 2-1-2008 2,010,000 6,760 2,003,240 637,528 2,640,768 5.00% , ... 8-1-2008 587,278 587,278 4.50% 2-1-2009 2,125,000 6,238 2,118,762 587,278 2,706,040 4.50% ~ 8-1-2009 539,465 539,465 4.70% 2-1-2010 2,240,000 5,687 2,234,313 539,465 2,773,778 4.70% 8-1-2010 486,825 486,825 5.00% .. i.,; 2-1-2011 2,365,000 5,105 2,359,895 486,825 2,846,720 5.00% 8-1-2011 427,700 427,700 4.75% I" 2-1-2012 2,510,000 4,492 2,505,508 427,700 2,933,208 4.75% ... 8-1-2012 368,088 368,088 4.85% 2-1-2013 2,650,000 3,840 2,646,160 368,088 3,014,248 4.85% .. , 8-1-2013 303,825 303,825 4.75% - 2-1-2014 2,805,000 3,152 2,801,848 303,825 3,105,673 4.75% II!! 8-1-2014 237,206 237,206 5.25% ... 2-1-2015 2,965,000 2,424 2,962,576 237,206 3,199,782 5.25% 8-1-2015 159,375 159,375 5.00% ~ III 50 ~ ... ... ... .. ... .. .. - ... .. Date Due ... .. 2-1-2016 8-1-2016 .. 2-1-2017 .. ... .. ... .. ... .. ... .. - .. - ... ... .. ... ... ... .. ... ... ... ... ... ... MUNlCIP AL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Schedule - 1998 Refunding Sewer Revenue Certificates of Participation San Bernardino Public Safety Authority, (Continued) June 30, 2000 Principal Principal Unamortized Payments Interest Payments Discounts (Net) Interest Total Rate $ 3,155,000 1,655 3,153,345 159,375 3,312,720 5.00% 80,500 80,500 5.00% 3,220,000 836 3,219,164 80,500 3,299,664 5.00% $36,230,000 99,772 36,130,228 18,558,532 54,688,760 51 MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA Series 1998A Water and Wastewater Revenue Bonds June 30, 2000 Unamortized Discounts and Principal Principal Deferred Payments Interest Date Due Payments Charges (Net) Interest Total Rate 10-1-2000 $1,015,000 104,149 910,851 $141,650 1,052,501 3.90% 4-1-2001 121,857 121,857 3.90% 10-1-2001 1,055,000 89,671 965,329 121,858 1,087,187 4.05% 4-1-2002 100,494 100,494 4.05% 10-1-2002 1,095,000 74,016 1,020,984 100,494 1,121,478 4.15% 4-1-2003 77,772 77,772 4.15% 10-1-2003 1,160,000 57,338 1,102,662 77,773 1,180,435 4.20% 4-1-2004 53,412 53,412 4.20% 10-1-2004 1,195,000 39,360 1,155,640 53,413 1,209,053 4.30% 4-1-2005 27,720 27,720 4.30% 10-1-2005 1,260,000 20,476 1,239,524 27,720 1,267,244 4.40% $6,780,000 385,010 6,394,990 904,163 1,299,153 Funds used to defease and prepay 1990 Certificates of Participation issued to finance construction of reservoirs, wells and mains, and to finance future improvements of Water Facilities. 52 .. - .. ... .. ... . ... .. IIIlII .. ... .. <,..1 ... '" liiI "' ... '" ... " ... III .. I'll ... " ... !II ... !III! ... "" ... " , - " I" 1II - - - - MUNICIPAL WATER DEPARTMENT OF THE CITY OF SAN BERNARDINO, CALIFORNIA - - Bond Schedule - General Obligation Waterworks Bonds, Series C - June 30, 2000 - - Interest - Date Due Payments Interest Total Rate - $ 9-1-2000 4,263 4,263 7.75% .. 3-1-2001 $ 5,000 4,263 9,263 7.75% - 9-1-2001 4,069 4,069 7.75% .. 3-1-2002 5,000 4,069 9,069 7.75% 9-1-2002 3,875 3,875 7.75% - 3-1-2003 5,000 3,875 8,875 7.75% .. 9-1-2003 3,681 3,681 7.75% - 3-1-2004 5,000 3,681 8,681 7.75% 9-1-2004 3,488 3,488 7.75% .. 3-1-2005 5,000 3,488 8,488 7.75% - 9-1-2005 3,294 3,294 7.75% - 3-1-2006 10,000 3,294 13,294 7.75% 9-1-2006 2,906 2,906 7.75% - 3-1-2007 10,000 2,906 12,906 7.75% - 9-1-2007 2,519 2,519 7.75% - 3-1-2008 10,000 2,519 12)19 7.75% ... 9-1-2008 2,131 2,131 7.75% 3-1-2009 10,000 2,131 12,131 7.75% - 9-1-2009 1,744 1,744 7.75% - 3-1-2010 10,000 1,744 11,744 7.75% - 9-1-2010 1,356 1,356 7.75% 3-1-2011 10,000 1,356 11,356 7.75% - 9-1-2011 969 969 7.75% - 3-1-2012 10,000 969 10,969 7.75% - 9-1-2012 580 580 7.75% 3-1-2013 15,000 580 15,580 7.75% - - $ 110,000 69,750 179,750 - - Bonds related to water system improvements for South San Bernardino Water District, which was acquired by the Department in 1991. - - 53 - - . - III ... 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