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HomeMy WebLinkAbout19- Water Department L CITY OF SAN BERN. RDINO - REQUEST F R COUNCIL A C TION From: Cheryl Flowers Subject: 1993-94 Annual Audit of the Assistant General Manager Water Department' s Water, D. Water Department Sewer and Geothermal Funds Date: February 2 , 1995 Synopsis of Previous Council action: '.DM 1 . '. FEE 9!, 4 2 i Recommended motion: hat the 1993-94 annual audit of the Water Department ' s Water, Sewer and Geothermal Funds be received and filed. Signature Contact person: Cheryl Flowers/Paul Harmon Phone: 384-5393/384-5184 Supporting data attached: Audit Reports Ward: N/A FUNDING REQUIREMENTS: Amount: N/A Source: (Acct. No.) N/A (Acct. Description) N/A Finance: N/A Cc Notes: 4 75-0262 Agenda Item No.— j� CITY OF SAN BERN " RDINO - REQUEST Fr R COUNCIL ACTION STAFF REPORT The firm of Soren ♦ McAdam ♦ Bartells has completed the 1993-94 Annual Audit of the Water Department's Water, Sewer and Geothermal Funds. These reports were presented to and accepted by the Board of Water Commissioners on January 24, 1995. Staff has been directed to transmit to the Mayor and Common Council the 1993-94 Annual Audit of the Water Deprtment's Water, Sewer and Geothermal Funds as a "receive and file" item. W ICIPAL WATER DEPARTMENT CITY OF SALT PERNARDINO WATER UTILITY ENTERPRISE FUND Financial Statements And Supplementary Information With Independent Auditors' Report For the Years Ended Jn.me 30, 1994 and 1993 SOREN • McADAM • BARTELLS CERTIFIED PUBLIC ACCOUNTANTS, INC. TABLE OF CONTENTS Page Independent Auditors' Report 1 Financial Statements Balance Sheets 3 Statements of Operations 5 Statements of Changes in Fund Equity 6 Statements of Cash Flows 8 Notes to Financial Statements 10 Supplementary Information Independent Auditors' Report on Supplementary Information 25 Schedule of Federal Financial Assistance 26 Schedule of Property, Plant, Equipment and Water Rights and Accumulated Depreciation 27 Bond Schedule - General Obligation Waterworks Bond, Series C 35 Certificates of Participation Schedule - West End Water Development, Treatment and Conservation Joint Powers Authority 36 Schedule of Direct Plant Production Expenses 37 Schedule of Direct Expenses of Other Plant Facilities 38 Schedule of Water Production and Purchased Cost 39 Schedule of Sundry Statistical Data 41 Schedule of Water System Demographics 43 Schedule of Distribution System Expenses 44 Schedule of Overhead Salaries and Related Costs 45 Schedule of General Administrative and Overhead Expenses 46 Schedule of Insurance Coverage 47 THOMAS E.AHERN,C.P.A. MEMBERS . GARY BRUCE J.BARTELLS,C.P.A. L.CHRISTENSON,C.P.A. CHARLES P.COPELAND,C.P.A. ASSOCIATED REGIONAL RHEE ELIKER,C.P.A. ACCOUNTING FIRMS(ARAF) _ _ WING K.LAU,C.P.A. DOUGLAS R.McADAM,C.P.A. AMERICAN INSTITUTE OF JESSIE C.POWELL,C.P.A. CERTIFIED PUBLIC ACCOUNTANTS SOREN • McADAM • BARTELLS JAMES L.SOREN,C.P.A. KIRK G.STITT,C.P.A. PRIVATE COMPANIES PRACTICE SECTION CERTIFIED PUBLIC ACCOUNTANTS, INC. DAVID P.TUTTLE,C.P.A. INDEPENDENT AUDITORS' REPORT Board of Water Commissioners Municipal Water Department Water Utility Enterprise Fund City of San Bernardino, California We have audited the accompanying financial statements of the Municipal Water Department - Water Utility Enterprise Fund of the City of San Bernardino, California as of and for the year ended June 30, 1994. These financial statements are the responsibility of the Municipal Water Department's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the West End Water Development, Treatment and Conservation Joint Powers Authority that has been consolidated with the Municipal Water Department - Water Utility Enterprise Fund. This represents 2 percent and .4 percent, respectively, of the assets and total revenue of the Municipal Water Department - Water Utility Enterprise Fund for the year ended June 30, 1994. That portion was audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for West End Water Development, Treatment and Conservation Joint Powers Authority, is based solely on the report of the other auditors. The financial statements of the Municipal Water Department - Water Utility Enterprise Fund as of and for the year ended June 30, 1993 were audited by other auditors whose opinion dated October 18, 1993 expressed an unqualified opinion on those statements. As discussed in Note 2 to the financial statements, the Department has restated its 1993 financial statements during the current year to reflect a correction of an error in the recording of revenue earned from utility services provided, but not yet billed, and the recording of an allowance for uncollectible accounts receivable in conformity with generally accepted accounting principles. The other auditors reported on the 1993 financial statements before restatement. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 - Water Utility Enterprise Fund and are not intended to present fairly, in all material respects, the financial position of 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. -1- 2068 Orange Tree Lane,Suite 100 ♦ Post Office Box 8010 ♦ Redlands,CA 92375-1210 ♦ (909)798-2222 ♦ (909)824-5110 ♦ FAX(909)798-9772 In our opinion, based on our audit and the report of other auditors, the 1994 financial statements referred to above present fairly, in all material respects, the financial position of the Municipal Water Department - Water Utility Enterprise Fund of the City of San Bernardino, California as of June 30, 1994, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. We also audited the adjustments described in Note 2 that were applied to restate the 1993 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplementary information shown on pages 25 through 47 is presented for purposes of additional analysis and is not a required part of the financial statements. The supplementary information, except for management-supplied data on pages 41 through 43 on which we express no opinion, was subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion and the report of other auditors, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. SOREN ♦ McADAM ♦ BARTELLS Certified Public Accountants, Inc. October 31, 1994 By: Jessie C. Powell, CPA -2- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Balance Sheets .Tune 30, 1994 1993 ASSETS Current assets Cash and cash equivalents $ 68,610 $ 55,109 Equity in pooled cash and investments 3,598,058 2,743,062 Accounts receivable 4,224,572 4,120,317 Note receivable 79,834 79,834 Inventory 1,114,367 1,095,968 Prepaid expenses 115,736 113.816 Total current assets 9,201,177 8,208,106 Restricted assets Cash and cash equivalents (WEJPA) 26,526 44,008 Equity in pooled cash and investments 1,692,980 1,492,488 Cash with fiscal agent 281,298 1,613,318 Investments with fiscal agent 896,992 Taxes receivable 17,669 Total restricted assets 2,915,465 3,149,814 Property, plant, equipment and water rights Property, plant, equipment and water rights 78,246,039 73,013,720 Less accumulated depreciation and amortization 25,366,461 23,323,285 52,879,578 49,690,435 Construction in progress 1,485.278 4.313.518 Total property, plant, equipment and water rights (net) 54,364,856 54,003,953 Other assets Long-term note receivable - related party 79,834 Idle assets 326,790 344,073 Issuance costs of notes payable, net of accumulated amortization 2,878 6,742 Issuance costs of certificates of participation, net of accumulated amortization 102,909 112,159 Total other assets 432,577 542,808 Total assets $66,914,075 $65,904,681 The accompanying notes are an integral part of these financial statements. -3- June 30, 1994 1993 LIABILITIES AND FUND EQUITY Current liabilities Current portion of notes payable $ 65,417 $ 102,125 Current portion of obligation under capital lease 123,517 118,632 Accounts payable 490,462 773,259 Related parties payable 797,143 683,526 Other accrued liabilities 10,454 9,210 Accrued compensation 676,009 638,234 Deposits for performance bonds and other charges subject to refund 6,212 12,796 Consumer deposits, advance payments and credit available 256,546 177,077 Deferred revenue 4,173 4,173 Total current liabilities 2,429,933 2,519,032 Current liabilities payable from restricted assets Current portion of certificates of participation 539,181 507,494 Accrued interest payable 176,554 184,934 Consumer deposits 555,148 491,520 Total current liabilities payable from restricted assets 1,270,883 1,183,948 Long-term debt Accrued compensation 540,866 488,749 Obligations under capital lease 228,427 344,810 Notes payable 65,417 167,542 Certificates of participation 10,124,019 10,631,512 Bonds payable 150,000 150,000 11,108,729 11,782,613 Less current portion (728,115) (728.251) Total long-term debt 10,380,614 11,054,362 Total liabilities 14,081,430 14.757,342 Fund equity Contributed capital 32,994,434 30,822,174 Retained earnings 19,838,211 20,325,165 52.832,645 51,147,339 Total liabilities and fund equity $66.914.075 $65,904,681 -4- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Statements of Operations For the Years Ended Tune 30 1994 1993 Operating revenues Water sales Metered consumers $12,681,372 $12,467,508 Fire service 169,576 164,052 Contractors 48,034 40,191 Municipal 323,669 265,522 Other agencies 72,123 149,327 13,294,774 13,086,600 Service charges 54,517 40,736 Hydrogeneration 67,578 65,635 Administration charges 670,391 659,418 Contracted services 605,866 576,008 Other 106,881 78,675 Total operating revenues 14,800,007 14,507,072 Operating expenses Costs of water Production 2,464,675 2,469,815 Purchased water, delivery charges and assessments 156,930 18,556 Other plant facilities 656,027 552,239 3,277,632 3,040,610 Distribution system 1,584,923 1,365,113 Overhead salaries and related costs 3,495,889 2,894,547 General administrative and overhead 3,691,859 3,706,089 Costs of contracted services 577,726 562,396 Depreciation 2,268,328 2,204,985 Total operating expenses 14,896,357 13,773,740 Operating income (loss) (96,350) 733,332 Nonoperating revenue (expense) Interest income 449,784 424,650 Property taxes 33,198 389 Loss on capital assets and inventory items (82,948) (95,455) Interest expense (777,524) (882,418) Amortization of issuance costs (13,114) (13,930) Grant revenue 85,564 Total nonoperating revenue (expense) (390,604) (481,200) Net income (loss) $ (486,954) $ 252,132 The accompanying notes are an integral part of these financial statements. -5- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Statements of Changes in Fund Equity For the Years Ended June 30, 1994 and 1993 1994 Contributed Retained Capital Earnings Total Fund equity balance, beginning of year, as previously stated $30,887,406 $19,534,743 $50,422,149 Prior period adjustments (65,232) 790,422 725,190 Balance, beginning of year, as restated 30,822,174 20.325,165 51,147.339 Add nonoperating credits and adjustments Charges to property owners for capital purposes Service connections 219,817 219,817 Main extensions 363,499 363,499 Acquisition of service 578,150 578,150 Other 58,378 58,378 Grants from government agencies Capital improvements 952,416 952,416 2,172,260 - 2,172,260 Net income (loss) (486,954) (486,954) Balance, end of year $32,994,434 $19.838.211 $52,832,645 The accompanying notes are an integral part of these financial statements. -6- M Contributed Retained Capital Earnings Total $27,597,130 $19,277,261 $46,874,391 795,772 795,772 27,597,130 20,073,033 47,670,163 255,612 255,612 168,899 168,899 1,029,032 1,029,032 107,875 107,875 1,663,626 1,663,626 3,225,044 3,225.044 252,132 252,132 $30,822,174 120.325,165 $51,147,339 -7- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Statements of Cash Flows For the Years Ended .Tune 30, 1994 1993 Cash flows from operating activities Operating income (loss) $ (96,350) $ 733,332 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 2,268,328 2,204,985 Uncollectible accounts charged off 79,431 69,189 (Increase) decrease in Accounts receivable (236,584) (476,916) Inventory (18,399) 138,459 Prepaid expenses (1,920) 484,708 Increase (decrease) in Accounts payable (282,797) 339,617 Related parties payables 113,617 92,509 Contracts payable (135,809) Other accrued liabilities 1,244 6,274 Deposits for performance bonds and other charges (6,584) (458) Consumer deposits, advance payments and credit available 143,097 (46,894) Accrued vacation and sick leave 89,892 109,365 Net cash provided by operating activities 2,052,975 3,518,361 Cash flows from capital and related financing activities Acquisitions of property, plant and equipment (2,671,232) (5,743,305) Charges to property owners for capital purposes 1,139,921 1,561,418 Grant proceeds from government agencies 1,080,891 1,518,082 Payments received on notes receivable 79,834 163,666 Principal payments on notes payable (102,125) (96,238) Principal payments under capital lease (116,383) (124,488) Principal payments on certificates of participation (523,873) (493,057) Property taxes received 15,529 389 Interest paid (769,524) (883,612) Net cash used in capital and related financing activities (1,866,962) (4,097,145) -8- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Statements of Cash Flows For the Years Ended Tune 30, 1994 1993 Cash flows from investing activities Purchase of investments $ (896,992) Interest received 430,466 $ 322,793 Net cash provided by (used in) investing activities (466,526) 322,793 Net decrease in cash and cash equivalents (280,513) (255,991) Cash and cash equivalents at beginning of year 5,947,985 6,203,976 Cash and cash equivalents at end of year $ 5,667,472 $5,947,985 Noncash transactions During the year ended June 30, 1994, developers contributed mains and gates at a recorded value of $79,923. The accompanying notes are an integral part of these financial statements. -9- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 1. Summary of Significant Accounting Policies The City of San Bernardino Municipal Water Department (a component unit of the City of San Bernardino) 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 semiautonomous authority to govern the Department independent of the City Council. The City of San Bernardino Municipal Water Department operates three enterprise funds: the Water Utility Enterprise Fund, the Sewer Utility Fund and the Geothermal Utility Enterprise Fund. In addition, the Water Utility Enterprise Fund provides administrative services and contracted services to the Sewer and Geothermal Utility Enterprise Funds. The accounting policies of the Water Utility Enterprise Fund conform to generally accepted accounting principles (GAAP) as applicable to governments. A summary of the more significant accounting policies of the Water Utility Enterprise Fund follows: Reporting Entity As required by generally accepted accounting principles, these financial statements present the Water Utility Enterprise Fund and its component unit, an entity for which the Fund is considered to be financially accountable. The component unit, although a legally separate entity, is in substance part of the Fund's operations and, therefore, data from this unit is combined with data of the Fund. Complete financial statements for the componet unit may be obtained from the Municipal Water Department. West End Water Development, Treatment and Conservation Joint Powers Authori ty 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. In accordance with the joint powers agreement, title to the WEJPA constructed water facilities will automatically vest with the Municipal Water Department in the Water Utility Enterprise Fund upon repayment of the certificates of participation issued to fund the construction. The WEJPA is governed by a separate board consisting of a three-member commission consisting of one representative from each agency's governing body. These financial statements include only the activity of the Water Utility Enterprise Fund and its component unit. -10- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 1. Summary of Significant Accounting Policies (Continued) Fund Accounting The accounts of the Fund are organized and operated on the basis of a fund. 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 Fund's financial statements include only the proprietary fund type and its enterprise fund. 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 Fund applies all applicable FASB pronouncements in accounting and reporting for its proprietary operation. Cash and Investments Cash for the Fund is pooled with the Department and 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 Fund 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 a maturity of three months or less when purchased. Cash and cash equivalents are presented on the balance sheet as cash and cash equivalents, equity in pooled cash and investments and cash with fiscal agent. In addition, the Fund has monies and investments held by trustees or fiscal agents pledged to the payment or security of certificates of participation, which are presented on the balance sheet as cash with fiscal agent and investments with fiscal agent. Receivables Receivables are shown net of an allowance for uncollectibles; the allowance is based on management's estimate. -11- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 1. Summary of Significant Accounting Policies (Continued) Inventories Inventories are valued at the lower of cost, using the average-cost method, or market. Issuance Costs and Discount Issuance costs and discount for notes payable and certificates of participation are being amortized using the straight-line method over the term of the related note or certificate. Property, Plant, Equipment and Water Rights Property, plant and equipment 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 earned on the invested proceeds over the same period, if any. Overhead costs are capitalized at the rate of 17 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 which vary from 5 to 50 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 of eight years. Amortization is included in depreciation expense. Water company stock is stated at cost, which approximates market value. Idle Assets Idle assets consist of water wells, pumping plants and reservoirs not in production. Compensated Absences Employees gain a vested right to accumulated unpaid vacation based on years of service but cannot accumulate more than two years of accrued vacation. Once each fiscal year, employees with at least three weeks of accrued vacation have the option of receiving payment at their regular rate of pay for one week of accumulated unpaid vacation. Employees' vacation benefits are recognized as a liability of the Fund. -12- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 1. Summary of Significant Accounting Policies (Continued) 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 accumulated sick leave up to a maximum of 960 hours. Accrued sick leave benefits are recognized as a liability of the Fund. Fund Equity Contributed capital represents equity acquired through capital grants and capital contributions from developers, customers or other funds. 2. Prior Period Adjustment Retained Earnings The financial statements for 1993 have been restated to correct errors in the recording of revenue earned from utility services provided, but not yet billed, and the recording of an allowance for doubtful accounts as required by generally accepted accounting principles. The effect of the restatement was to decrease net income for 1993 by $5,530. Retained earnings at the beginning of 1993 has also been adjusted for the effects of the restatement on prior years by an increase of$795,772. 3. Cash and Investments Cash and Cash Equivalents As of June 30, 1994 and 1993, the carrying amount of the cash and cash equivalents was $95,136 and $99,117 and the bank balance was $67,341 and $40,982, respectively. The bank balance is covered by federal depository insurance (FDIC). -13- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 3. Cash and Investments (Continued) Cash and Investments with Fiscal Agent The Department has monies held by trustees or fiscal agents pledged to the payment or security of certificates of participation. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of certificates, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustees or fiscal agents make. At June 30, 1994 and 1993, cash and investments with fiscal agent in the amount of$1,178,290 and $1,613,318, respectively, were covered by collateral held by the government's agent in the government's name. 4. Accounts Receivable Accounts receivables at June 30, 1994 and 1993 consisted of the following: 1994 1993 Less Net Less Net Amount Allowance Receivable Amount Allowance Receivable Consumer $3,030,747 $185,272 $2,845,475 $2,584,312 $123,290 $2,461,022 Related parties 1,109,523 1,109,523 1,240,873 1,240,873 Grant funding 120,239 120,239 248,714 248,714 Other 188,105 38,770 149,335 198,056 28,348 169,708 $4448,614 1224,042 14,224,572 $4,271,955 $151,638 14,120,317 5. Note Receivable Note receivable at June 30, 1994 and 1993 consisted of the following: 1994 1993 City of San Bernardino Development Department Interest rate: None Repayment provision: $79,834 annual installments Balances $ 79,834 $159,668 Less current portion (79,834) (79,834) Long-term portion $ - $79,834 -14- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO - WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 6. Property, Plant, Equipment and Water Rights A summary of property, plant, equipment and water rights as of June 30 follows: 1994 1993 Sundry lands, rights-of-way, service areas and easements $ 2,368,402 $ 2,307,493 Water rights, wells, pumping plants, reservoirs, etc. 27,146,695 24,602,127 Distribution systems 42,431,774 40,462,496 Shops, office and store yards 1,094,227 695,865 Tools and equipment 1,578,163 1,587,534 Automobiles and trucks 1,705,189 1,619,726 Office leasehold improvements 55,409 47,322 Office and engineering equipment 1,395,569 1,247,793 "E" Street property 54,202 54,202 Radio and interoffice communications equipment 215,009 200,346 Telemetering systems and equipment 65,348 57,052 Miscellaneous capital items 136.052 131.764 78,246,039 73,013,720 Less accumulated depreciation and amortization 25.366,461 23.323,285 52,879,578 49,690,435 Construction in progress 1,485,278 4,313,518 Total property, plant, equipment and water rights (net) $54,364.856 $54,003,953 Details of construction in progress as of June 30 follow: 1994 1993 19th Street GAC plant $2,009,279 WEJPA water facilities 100,000 Rehabilitation yard facilities 368,749 Devils Canyon filter plant 330,134 19th Street boosting/blending station $ 333,609 Devils Canyon filter plant survey 140,659 Other miscellaneous projects 1,011.010 1,505,356 Totals $1,485.278 $4.313,518 -15- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 7. Capital Leases The Fund has entered into lease agreements for various pieces of equipment. All leases qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. The following is an analysis of equipment leased under capital lease obligations as of June 30: June 30, 1994 1993 Equipment, automobiles and trucks $611,806 $655,493 Less accumulated amortization 336,692 253,396 $275,114 $402,097 Amortization charged to depreciation expense for the years ended June 30, 1994 and 1993 amounted to $100,391 and$106,772, respectively. The following is a schedule of the future minimum lease payments under these capital lease obligations and the present value of the net minimum lease payments at June 30, 1994: For the year ended June 30, 1995 $139,469 1996 103,464 1997 6,705 Total minimum lease payments 249,638 Less amount representing interest 21,211 Present value of future minimum lease payments 228,427 Less current portion 123,517 Long-term portion of obligations under capital leases $104,910 -16- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 8. Long-Term Debt The following is a summary of changes in long-term debt obligations for the year ended June 30, 1994: Balance Balance July 1, 1993 Additions Reductions June 30, 1994 Accrued compensation $ 488,749 $52,117 $ 540,866 Capital lease obligations 344,810 $116,383 228,427 Notes payable 167,542 102,125 65,417 Certificates of participation 10,631,512 507,493 10,124,019 Bonds payable 150,000 150,000 $11,782,613 152.117 $7263001 $11,108,729 The following is a description of long-term debt as of June 30: 1994 1993 Notes payable East Valley Water District Interest rate: 7.5% Repayment provisions: Monthly principal and interest payments of$7,498 through March 1, 1995 Balances $65,417 $147,124 Herbert B. Wessel Interest rate: 4% Repayment provisions: Annual principal payments of $20,418 through March 1, 1994; interest paid at maturity Balance 20.418 65,417 167,542 Less current portion 65,417 102,125 Long-term portion $ - $ 65,417 -17- MUNICIPAL WATER DEPARTMENT _ CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 8. Long-Term Debt (Continued) Annual Outstanding Interest Issue Maturity Original Principal June 30, Rates Date Date Amount Installments 1994 1993 Certificates of participation 1990 Water facilities 6.1% 1991 2005 $11,461,581 $493,057 to to 7.0% $1,232,643 $10,124,019 $10,631,512 Bonds payable South San Bernardino Water District Waterworks Bonds, Series C 7.75% 1988 2013 $150,000 $150,000 $150,000 $150,000 The requirements to amortize notes payable and certificates of participation subsequent to June 30, 1994 are as follows: June 30, Principal Interest Total Notes payable 1995 $65,417 $2,061 $67,478 Certificates of participation 1995 $ 539,181 $ 686,123 $ 1,225,304 1996 570,910 650,835 1,221,745 1997 633,541 609,835 1,243,376 1998 665,416 565,105 1,230,521 1999 728,193 516,539 1,244,732 Thereafter 6.986,778 1,861,199 8,847,977 $10,1243019 $4,889,636 $15,013,655 The bonds payable are due in 2013 and the Fund is required to establish a sinking fund. The balance of the sinking fund and future debt service requirements as of June 30, 1994 follows: 1958 Series C Bonds $150,000 Accumulated sinking fund at 6-30-94 (10,000) Future sinking fund requirements $140,000 -18- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 8. Long-Term Debt (Continued) Sinking Fund June 30, Requirement Interest Total 1995 $ 5,000 $ 11,625 $ 16,625 1996 5,000 11,625 16,625 1997 5,000 11,625 16,625 1998 5,000 11,625 16,625 1999 5,000 11,625 16,625 Thereafter 115,000 104,625 219,625 $140,000 1162,750 1302,750 9. Operating Leases The Fund leases office space from the City of San Bernardino and equipment under a noncancellable operating lease terminating in 2002. The following is a schedule of minimum lease payments as of June 30, 1994: Office Space Equipment Total For the year ending June 30, 1995 $ 161,259 $12,556 $ 173,815 1996 161,259 1,046 162,305 1997 161,259 161,259 1998 161,259 161,259 1999 161,259 161,259 Thereafter 443.462 443.462 $1249,757 113,602 11,263,359 Rental expense for the years ended June 30, 1994 and 1993 amounted to $169,084 and $168,038, respectively. 10. Defined Benefit Pension Plan The Water Department (Water Utility Enterprise and Sewer Utility), as a component unit of the City of San Bernardino, contributes to the California Public Employees' Retirement System (PERS), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. -19- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 10. Defined Benefit Pension Plan (Continued) The City of San Bernardino is the contracting agent with PERS, and the participants' accounts are not segregated for the Department. Contributions are made in accordance with the actuarially determined employer requirements. Complete information on the funding status, actuarially determined contributions and trend information is included in the City's Comprehensive Annual Financial Report. The following condensed information applies to the total employees' accounts for the City of San Bernardino as a whole. Total unfunded pension benefit obligation applicable to employees was $9,210,320 at June 30, 1993 as follows: Pension benefit obligation Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $122,346,489 Current employees Accumulated employees' contributions including allocated investment earnings 50,845,043 Employer-financed vested 60,578,439 Employer-financed nonvested 2.431.715 Total pension benefit obligation 236,201,686 Net assets available for benefits, at cost (market value is $263,082,993) 226.991,366 Unfunded pension benefit obligation $ 92210,320 The Department's payroll for employees covered by PERS for the year ended June 30, 1994 was $8,143,780, which was 95 percent of the Department's payroll and for the year ended June 30, 1993 was $7,610,534, which was 88 percent of the Department's payroll. 11. Postretirement Health Care Benefits In addition to the pension benefits described in Note 10, the Department provides postretirement health care benefits to all employees who retire from the Department on or after attaining age 55 with a minimum of 15 years of service. Currently, eight Water Utility Enterprise Fund retirees meet those eligibility requirements. The Department pays monthly contributions for health insurance premiums up to $150 per month per retiree. The Department also pays $16 per month per retiree to PERS for administrative costs of this program. Expenditures for monthly premiums are recognized as incurred. During the years ended June 30, 1994 and 1993, expenditures of$15,848 and $11,530, respectively, were recognized for postretirement health care benefits for the Water Utility Enterprise Fund. -20- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 12. Related Party Transactions Following is a summary of transactions and balances with the City of San Bernardino, its various departments and the Sewer and Geothermal Utility Enterprise Funds: June 30, 1994 1993 Income City of San Bernardino Revenue from water charges $ 335,924 $ 354,868 Administrative charges - refuse 121,139 119,274 Repairs and maintenance 2,195 4,536 Relocation of services and mains 8,760 121,943 Reimbursement - consulting services 7,436 7,314 Interest income 383,315 348,363 Miscellaneous income 1,228 466 Redevelopment Agency Reimbursement - consulting services 7,436 7,314 Retrofit installation 50,800 26,321 Repairs and maintenance 147 New services installation 203,730 49,483 Sewer Utility Enterprise Fund Administration charges 484,400 464,185 Cost reimbursement 50,664 118,162 Water services 35,215 8,553 Computer charges 35,753 30,048 Geothermal Utility Enterprise Fund Administration charges 19,665 18,889 Equipment rental 12,167 5,215 Labor benefits 22,709 17.974 Total income $1,782,683 $1,702,908 -21- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 12. Related Party Transactions (Continued) June 30, 1994 1993 Expenses City of San Bernardino Street - cut charges $ 22,294 $ 27,003 Street collection - west side 1,114 1,047 Radio maintenance 955 3,432 Workers' compensation program 127,063 102,417 Loss prevention program 26,518 30,441 Printing services 6,395 10,268 Warehouse purchases 5,588 2,009 City Hall rent 156,528 156,528 Telephone charges 79,283 140,492 Miscellaneous repairs 407 1,816 Refuse disposal service 10,024 12,946 Employee assistance program 7,707 3,830 Civil Service 31,050 31,500 Property tax assessments 27,466 Rideshare coordination 2,130 Permits and engineering services 8,506 1,673 Miscellaneous 345 1,407 Redevelopment Agency Reimbursement - consulting services 6,000 10,500 Sewer Utility Enterprise Fund Purchases 2,714 5,918 Miscellaneous 155 20 Total expenses $492,646 $573,298 -22- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 12. Related Party Transactions (Continued) June 30, 1994 1993 Receivables City of San Bernardino Parks and Recreation $ 75 Finance Department $ 149,033 113,128 Refuse Department 81,932 Public Services 10,687 Public Works 98,680 Redevelopment Agency 106,605 23,289 Sewer Utility Enterprise Fund 233,272 202,407 Geothermal Utility Enterprise Fund 609,926 721.361 1,109,523 1,240,872 Note receivable from City of San Bernardino Redevelopment Agency - five annual receipts to $79,834 starting June 30, 1991 79,834 159.668 Total receivables $1,189,357 $1,400,540 Payables Due to the City of San Bernardino Finance Department - various terms for repayment $796,437 $680,570 Due to the City of San Bernardino Sewer Utility Enterprise Fund - various terms for repayment 706 2.956 Total payables $797,143 $683,526 The Fund collects and transmits to the City of San Bernardino 10 percent of collections on gross water sales, exclusive of sales to the City. Collections submitted to the City are as follows: 1994 1993 $1,380.223 $1,401,473 -23- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Notes to Financial Statements 13. Commitments and 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 Fund. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Fund expects such amounts, if any, to be immaterial. Litigation The Municipal Water Department is a defendant in various 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 Water Utility Enterprise Fund. Risk Management The Fund is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions and natural disasters for which the Municipal Water Department carries commercial insurance coverage for the Water Utility Enterprise Fund. In addition, the Municipal Water Department, in conjunction with the City of San Bernardino, established a limited risk management program for workers' compensation. Premiums are paid on behalf of the Water Utility Enterprise Fund by the Municipal Water Department to pay claims and administrative costs. Commitments Commitments in the form of signed contracts for costs to complete on construction projects or other improvements amounted to $3,200,377 at June 30, 1994. -24- SUPPLEMENTARY INFORMATION m THOMAS E.AHERN,C.P.A. MEMBERS BRUCE J.BARTELLS,C.P.A. GARY L.CHRISTENSON,C.P.A. ASSOCIATED REGIONAL CHARLES P.COPELAND,C.P.A. RHEE ELIKER,C.P.A. ACCOUNTING FIRMS(ARAF) WING K.LAU.C.P.A. liff DOUGLAS R.McADAM,C.P.A. AMERICAN INSTITUTE OF JESSIE C.POWELL,C.P.A. CERTIFIED PUBLIC ACCOUNTANTS SOREN • McADAM • BARTELLS JAMES L.SOREN,C.P.A. KIRK G.STITT,C.P.A. PRIVATE COMPANIES PRACTICE SECTION CERTIFIED PUBLIC ACCOUNTANTS. INC. DAVID P.TUTTLE,C.P.A. INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION Board of Water Commissioners Municipal Water Department Water Utility Enterprise Fund City of San Bernardino, California We have audited the financial statements of the Municipal Water Department - Water Utility Enterprise Fund of the City of San Bernardino, California as of and for the year ended June 30, 1994 and have issued our report thereon dated October 31, 1994. These financial statements are the responsibility of the Municipal Water Department's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the West End Water Development, Treatment and Conservation Joint Powers Authority that has been consolidated with the Municipal Water Department-Water Utility Enterprise Fund. This represents 2 percent and .4 percent, respectively, of the assets and total revenue of the Municipal Water Department - Water Utility Enterprise Fund for the year ended June 30, 1994. That portion was audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the West End Water Development, Treatment and Conservation Joint Powers Authority, is based solely on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States and Office of Management and Budget Circular A-128, Audits of State and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary financial and statistical information on pages 26 through 47, including the Schedule of Federal Financial Assistance, is presented for purposes of additional analysis and is not a required part of the financial statements. The supplementary information, except for management supplied data on pages 41 through 43, on which we express no opinion, was subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion and the report of other auditors, is fairly stated in all material respects in relation to the financial statements taken as a whole. SOREN ♦ McADAM ♦ BARTELLS Certified Public Accountants, Inc. October 31, 1994 By: essie C. Powell, CPA -25- 2068 Orange Tree Lane,Suite 100 ♦ Post Office Box 8010 ♦ Redlands,CA 92375-1210 ♦ (909)798-2222 ♦ (909)824-5110 ♦ FAX(909)798-9772 MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Federal Financial Assistance For the Year Ended June 30, 1994 Federal Grantor Catalog of Federal Pass-Through Program/ Pass-Through Grantor Domestic Assistance Grantor's Award Reimbursable Program Title Number Number Amount Expenditures U.S. Department of HUD Pass-through from the County of San Bernardino Rehabilitation of Delman Heights 14.218 B-94-MC-06-0539 $338,000 $298,237 Rehabilitation of Cardiff Farms 14.218 B-94-MC-06-0539 67,256 67,256 Center for Individuals with Disabilities 14.218 B-94-MC-06-0539 60,800 60.800 $466,056 $426,293 -26- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Property, Plant, Equipment and Water Rights and Accumulated Depreciation For the Year Ended June 30, 1994 Property, Plant, Equipment and Water Rights Balance Balance July 1, 1993 Additions Retirements June 30, 1994 Sundry lands, rights-of-way, service areas and easements $ 2,307,493 $24,069,909 $ 2,368,402 Water rights, wells, pumping plants, reservoirs, etc. Devils Canyon residence 28,589 28,589 Antil plant 674,084 30,308 $ 5,000 699,392 Baseline and California plant 74,995 119,091 194,086 Cajon Pass well/intake 166,864 3,898 170,762 Cajon Blvd. plant 1,139,117 2 1,139,119 Cajon Blvd. hydrogeneration plant 164,728 164,728 Daley Canyon reservoir 246,922 4,158 4,959 246,121 Del Rosa reservoir #1 and pumping facilities 55,922 55,922 Del Rosa reservoir #2 32,631 32,631 Del Rosa reservoir #3 730,946 730,946 Del Rosa booster station 103,796 103,796 Devils Canyon filter plant/chlorination reservoir #1 764,834 7,732 772,566 Devils Canyon reservoir #2 - college tank 188,748 188,748 Devils Canyon well #1 boosters 173,698 1 173,699 Devils Canyon well #2 100,037 17,686 117,723 Devils Canyon well #3 190,201 190,201 Devore reservoir 516,875 2,856 5,248 514,483 Devore hydrogeneration station 333,122 333,122 Mount Vernon assets 251,450 37,189 288,639 Electric Drive reservoir and pumping facility 95,819 43,875 3,721 135,973 Ellena Bros. well 100,049 100,049 Foothill booster station 165,889 165,889 40th Street well 402,241 402,241 Gilbert Street plant 125,512 5,810 499 130,823 Kenwood well 376,756 376,756 -27- Accumulated Depreciation Net Book Balance Balance Value July 1. 1993 Depreciation Retirements June 30, 1994 June 30, 1994 $ 2,368,402 $ 10,421 $ 897 $ 11,318 17,271 223,052 23,265 $ 1,300 245,017 454,375 36,718 4,487 41,205 152,881 41,109 2,229 43,338 127,424 299,506 31,386 330,892 808,227 24,779 3,313 28,092 136,636 96,520 6,257 1,240 101,537 144,584 39,771 1,248 41,019 14,903 22,518 701 23,219 9,412 157,129 15,708 172,837 558,109 30,823 4,506 35,329 68,467 257,115 22,666 279,781 492,785 95,327 4,691 100,018 88,730 81,263 6,220 87,483 86,216 83,303 2,252 85,555 32,168 30,796 4,571 35,367 154,834 101,522 10,629 984 111,167 403,316 19,986 6,662 26,648 306,474 3,428 1,791 5,219 283,420 77,489 3,129 3,610 77,008 58,965 22,122 2,285 24,407 75,642 10,833 7,222 18,055 147,834 11,632 11,632 23,264 378,977 57,325 3,722 61,047 69,776 22,715 22,715 354,041 -28- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Property, Plant, Equipment and Water Rights and Accumulated Depreciation For the Year Ended June 30, 1994 Property, Plant, Equipment and Water Rights Balance Balance July 1. 1993 Additions Retirements June 30, 1994 Water rights, wells, pumping plants, reservoirs, etc. (Continued) LeRoy Street well and pumping station $ 181,717 $ 181,717 Lynwood plant 118,881 $ 83,910 $ 4,816 197,975 Lytle Creek plant 1,847,327 1 4,434 1,842,894 Mallory plant 80,654 80,654 Meyers Canyon reservoir 1,873,763 7,208 9,393 1,871,578 Meyers Canyon pumping station 46,633 46,633 Mill and "D" Street plant 89,931 89,931 Newmark plant 1,506,099 1,506,099 Newmark stripping towers 950,951 950,951 19th Street plant 190,416 165,942 42,116 314,242 19th Street GAC plant 2,013,764 2,013,764 North "E" Street (25th and "E" Streets) 107,696 2,856 4,467 106,085 Olive and Garner Street well 516,172 18,890 5,450 529,612 Palm Avenue reservoirs #1 and#2 797,581 797,581 Palm Avenue hydrogeneration plant 235,487 235,487 Perris Hill plant 750,686 29,116 4,514 775,288 Ridgeview reservoir 36,191 21,299 57,490 Ridgeview booster station 25,805 5,379 20,426 San Bernardino Heights mountain reservoirs #1 and #2 150,888 7,365 158,253 Seventh Street plant 279,693 5,934 285,627 Shandin Hills plant #1 63,727 63,727 Shandin Hills plant#2 349,684 2,239 4,434 347,489 Sierra Way plant 449,977 4,654 454,631 17th Street GAC plant 1,047,697 1,047,697 16th Street plant 57,131 57,131 Sycamore Canyon reservoirs #1 and#2 2,000,072 2,000,072 Sycamore Canyon reservoir station #1 12,118 12,118 Sycamore Canyon reservoir station #2 12,461 12,461 Sycamore Canyon reservoir stations #3 and #4 311,034 311,034 10th and "J" Street well 576,211 576,211 30th and Mt. View plant 246,205 246,205 -29- Accumulated Depreciation Net Book Balance Balance Value �July 1. 1993 Depreciation Retirements Tune 30, 1994 Tune 30, 1994 $ 21,852 $ 6,582 $ 28,434 $ 153,283 56,437 6,899 $ 4,654 58,682 139,293 758,842 50,954 809,796 1,033,098 48,224 2,658 50,882 29,772 85,982 39,015 1,240 123,757 1,747,821 26,414 2,018 28,432 18,201 29,167 3,059 32,226 57,705 809,948 33,483 843,431 662,668 185,749 48,013 233,762 717,189 94,335 6,292 14,202 86,425 227,817 48,707 48,707 1,965,057 64,188 3,624 838 66,974 39,111 24,900 17,138 327 41,711 487,901 183,593 17,403 200,996 596,585 75,355 9,420 84,775 150,712 453,357 16,432 1,411 468,378 306,910 17,879 2,377 20,256 37,234 6,496 1,513 1,345 6,664 13,762 76,743 3,436 80,179 78,074 72,446 8,268 80,714 204,913 17,367 4,818 22,185 41,542 26,493 11,931 1,128 37,296 310,193 70,568 12,796 83,364 371,267 240,058 46,151 286,209 761,488 36,245 1,255 37,500 19,631 149,370 40,956 190,326 1,809,746 10,292 93 10,385 1,733 6,917 333 7,250 5,211 18,662 12,441 31,103 279,931 27,589 18,393 45,982 530,229 106,738 7,960 114,698 131,507 - -30- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Property, Plant, Equipment and Water Rights and Accumulated Depreciation For the Year Ended June 30, 1994 Property, Plant, Equipment and Water Rights Balance Balance July 1, 1993 Additions Retirements June 30, 1994 Water rights, wells, pumping plants, reservoirs, etc. (Continued) 27th and Acacia Street plant $ 108,715 $ 108,715 23rd and "E" Street pumping station 79,036 79,036 Vincent plant 42,722 42,722 Waterman Avenue plant 584,400 $ 13,214 597,614 Waterman Avenue stripping towers 1,649,702 1,649,702 Ground water monitoring wells 8,582 8,582 Permanent water rights - W.S.B.C.W.D. 6,447 6,447 Water stock - Del Rosa Mutual Water Company 5,810 5,810 24,602,127 2,648,998 $104,430 27,146,695 Distribution systems Mains 27,398,060 1,323,705 33,600 28,688,165 Gates 2,786,487 143,543 1,403 2,928,627 Fire hydrants 1,785,409 174,435 20 1,959,824 Meters - general 2,700,275 86,132 134,102 2,652,305 Service connections 5,792,265 464 508 53,920 6,202,853 40,462,496 2,192,323 223,045 42,431,774 Shops, office and store yards Second and "D" Street property 644,950 411,009 12,647 1,043,312 South San Bernardino shop and yard 50,915 50,915 695,865 411,009 12,647 1,094,227 Tools and equipment 1,587,534 43,414 52,785 1,578,163 Automobiles and trucks 1.619.726 139,957 54,494 1,705.189 Office leasehold improvements 47,322 8,087 55,409 -31- Accumulated Depreciation Net Book Balance Balance Value July 1, 1993 Depreciation Retirements Tune 30, 1994 Tune 30, 1994 $ 61,654 $ 3,198 $ 64,852 $ 43,863 45,253 2,222 47,475 31,561 20,335 900 21,235 21,487 223,005 13,759 236,764 360,850 261,021 84,079 345,100 1,304,602 3,081 343 3,424 5,158 6,447 5,810 6,251,042 793,103 $ 32,279 7,011,866 20,134,829 8,958,320 560,528 2,216 9,516,632 19,171,533 676,764 57,137 30 733,871 2,194,756 421,022 37,452 19 458,455 1,501,369 2,142,738 200,911 74,036 2,269,613 382,692 2,002,200 161 687 18,155 2,145,732 4 057 121 14,201,044 1,017,715 94 456 15,124,303 27,307,471 310,510 32,484 11,008 331,986 711,326 25,217 1,250 26,467 24,448 335,727 33,734 11,008 358,453 735,774 815,836 111,411 22.509 904,738 673,425 1,020,651 165,801 46,786 1,139,666 565,523 15,968 2,930 18,898 36,511 -32- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Property, Plant, Equipment and Water Rights and Accumulated Depreciation For the Year Ended June 30, 1994 Property, Plant, Equipment and Water Rights Balance Balance July 1, 1993 Additions Retirements .Tune 30, 1994 Office and engineering equipment General office equipment $ 397,344 $ 20,636 $ 2,757 $ 415,223 Computer equipment 850,449 129,897 980.346 1.247,793 150,533 2.757 1.395,569 "E" Street property 54,202 54.202 Radio and interoffice communications systems 200.346 15,419 756 215,009 Telemarketing systems and equipment 57,052 8,296 65.348 Miscellaneous capital items 131,764 4,288 136.052 Totals $73,013,720 $5,683.233 $450,914 178,246,039 -33- _ Accumulated Depreciation Net Book Balance Balance Value July 1, 1993 Depreciation Retirements June 30, 1994 June 30, 1994 $ 188,971 $ 30,125 $ 736 $ 218,360 $ 196,863 287,316 73,372 360,688 619,658 476,287 103,497 736 579,048 816,521 35,884 34 35,918 18,284 I 117,737 15,727 95 133,369 81 640 48,987 2,450 51,437 13,911 4,122 4,643 8,765 127,287 $23,323,285 12,251,045 $207,869 $25,366,461 152,879,578 -34- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Bond Schedule - General Obligation Waterworks Bond, Series C _ For the Year Ended June 30, 1994 Sinking Fund Interest Date Requirement Interest Total Rate 9-1-1994 $ 5,812 $ 5,812 7.75% 3-1-1995 $ 5,000 5,812 10,812 7.75 9-1-1995 5,812 5,812 7.75 3-1-1996 5,000 5,812 10,812 7.75 9-1-1996 5,812 5,812 7.75 3-1-1997 5,000 5,812 10,812 7.75 9-1-1997 5,812 5,812 7.75 3-1-1998 5,000 5,812 10,812 7.75 9-1-1998 5,812 5,812 7.75 3-1-1999 5,000 5,812 10,812 7.75 9-1-1999 5,812 5,812 7.75 3-1-2000 5,000 5,812 10,812 7.75 9-1-2000 5,812 5,812 7.75 3-1-2001 5,000 5,812 10,812 7.75 9-1-2001 5,812 5,812 7.75 3-1-2002 5,000 5,812 10,812 7.75 9-1-2002 5,812 5,812 7.75 3-1-2003 5,000 5,812 10,812 7.75 9-1-2003 5,812 5,812 7.75 3-1-2004 5,000 5,812 10,812 7.75 9-1-2004 5,812 5,812 7.75 3-1-2005 5,000 5,812 10,812 7.75 9-1-2005 5,812 5,812 7.75 3-1-2006 10,000 5,812 15,812 7.75 9-1-2006 5,812 5,812 7.75 3-1-2007 10,000 5,812 15,812 7.75 9-1-2007 5,812 5,812 7.75 3-1-2008 10,000 5,812 15,812 7.75 9-1-2008 5,812 5,812 7.75 3-1-2009 10,000 5,812 15,812 7.75 9-1-2009 5,812 5,812 7.75 3-1-2010 10,000 5,812 15,812 7.75 9-1-2010 5,812 5,812 7.75 3-1-2011 10,000 5,812 15,812 7.75 9-1-2011 5,812 5,812 7.75 3-1-2012 10,000 5,812 15,812 7.75 9-1-2012 5,812 5,812 7.75 3-1-2013 15.000 5.812 20,812 7.75 140,000 220,856 360,856 Amount in sinking fund at 6-30-94 10,000 10,000 $150.000 1220,856 $370,856 -35- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Certificates of Participation Schedule - West End Water Development, Treatment and Conservation Joint Powers Authority June 30, 1994 Interest Date Due Principal Interest Total Rate 10-1-1994 $ 539,181 $ 353,106 $ 892,287 6.50% 4-1-1995 335,079 335,079 6.50 10-1-1995 570,910 335,079 905,989 6.60 4-1-1996 315,757 315,757 6.60 10-1-1996 633,541 315,757 949,298 6.70 4-1-1997 294,078 294,078 6.70 10-1-1997 665,416 294,078 959,494 6.80 4-1-1998 271,027 271,027 6.80 10-1-1998 728,193 271,027 999,220 6.90 4-1-1999 245,512 245,512 6.90 10-1-1999 791,066 245,512 1,036,578 6.90 4-1-2000 217,870 217,870 6.90 10-1-2000 854,037 217,870 1,071,907 7.00 4-1-2001 187,670 187,670 7.00 10-1-2001 917,106 187,670 1,104,776 7.00 4-1-2002 155,313 155,313 7.00 10-1-2002 980,271 155,313 1,135,584 7.00 4-1-2003 120,799 120,799 7.00 10-1-2003 1,074,388 120,799 1,195,187 7.00 4-1-2004 83,049 83,049 7.00 10-1-2004 1,137,797 83,049 1,220,846 7.00 4-1-2005 43,142 43,142 7.00 10-1-2005 1,232,113 43,142 1,275,255 7.00 $10,124,019 $4,891.698 $15,015.717 -36- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Direct Plant Production Expenses For the Year Ended June 30, 1994 Materials and All 1993-94 1992-93 Increase Salaries Power Supplies Others Total Total (Decrease) Perris Hill $ 14,078 $ 32,460 $ 1,352 $ 824 $ 48,714 $ 48,904 $ (190) Sierra Way (and 16th Street) 7,641 218,311 (427) 1,596 227,121 256,531 (29,410) Antil pumping 33,055 160,791 1,764 2,132 197,742 109,541 88,201 Waterman Avenue pumping 12,860 172,674 2,573 3,357 191,464 289,585 (98,121) Mill and "D" Street 4,364 37,792 1,210 43,366 46,865 (3,499) Lytle Creek 37,172 93,289 12,761 30,927 174,149 142,394 31,755 Seccombe well - 7th Street plants 4,198 72,382 3,049 60 79,689 85,292 (5,603) Cajon Pass and Vincent plant 6,280 34,694 1,512 4 42,490 37,612 4,878 "E" Street plant (23rd and 2nd Streets) 4,844 54 331 5,229 4,221 1,008 Devils Canyon 58,589 126,516 1,880 7,939 194,924 159,120 35,804 Newmark 15,260 155,253 5,270 533 176,316 325,338 (149,022) 19th Street 23,068 169,409 4,292 69,515 266,284 15,544 250,740 Gilbert Street 14,799 21,697 2,135 12,586 51,217 24,067 27,150 Lynwood 12,806 66,101 11,692 3,886 94,485 77,301 17,184 27th Street 2,488 958 1 3,447 29,409 (25,962) Baseline and California plant 4,688 19,938 491 25,117 1,885 23,232 Ellena Bros. well 81 81 18,672 (18,591) Cajon Boulevard 14,771 142,723 3,374 2,623 163,491 100,489 63,002 Mallory well and reservoir 3,783 11,329 40 1,053 16,205 14,142 2,063 30th and Mt. View 2,749 130,655 8,118 1,474 142,996 135,028 7,968 Olive and Garner well 4,209 96,974 1,538 12,371 115,092 178,416 (63,324) LeRoy Street well 4,090 33,541 15 9 37,655 118,377 (80,722) 10th and "J" Street 3,921 76,665 763 280 81,629 157,767 (76,138) Kenwood well 3,875 64,260 412 198 68,745 65,175 3,570 40th Street well 2,131 14,570 263 63 17.027 28,140 (11,113) Totals $295,800 $1,953,036 $63,198 $152,641 $2,464,675 $2,469,815 $ (5,140) -37- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Direct Expenses of Other Plant Facilities For the Year Ended June 30, 1994 Materials Outside and Service 1993-94 1992-93 Increase Salaries Power Supplies and Other Total Total (Decrease) Chlorination through production facilities $ 1,777 $22,336 $ 24,113 $ 25,064 $ (951) Sycamore Canyon reservoir 4,168 $ 19 1,505 5,692 6,399 (707) Sycamore Canyon pumping station #1 1,647 $ 301 565 2,513 1,904 609 Sycamore Canyon pumping station #2 1,830 309 1,849 3,988 1,922 2,066 Del Rosa reservoir #1 3,946 8,846 113 12,905 14,906 (2,001) Del Rosa reservoir #2 8,407 3,122 11,529 6,017 5,512 Del Rosa reservoir #3 9,097 1,800 1,068 11,965 7,771 4,194 Quail and Daley Canyon reservoir 8,844 158 21 9,023 6,816 2,207 Electric Drive reservoir 11,690 39,127 4,079 4,166 59,062 58,477 585 San Bernardino Heights reservoir 5,337 5,337 1,391 3,946 Shandin Hills reservoir #1 4,549 2,191 495 4,575 11,810 5,916 5,894 Shandin Hills reservoir #2 4,664 5,227 495 220 10,606 10,174 432 40th and Harrison pumping station 66 66 120 (54) Ridgeview pumping station 2,373 3,065 22 5,460 7,463 (2,003) Meyers Canyon reservoir 12,999 12,679 2,972 2,433 31,083 25,568 5,515 Ridgeview reservoir 3,355 (11) 3,344 2,241 1,103 Palm Avenue reservoir 5,487 768 675 6,930 3,509 3,421 Devore reservoir 4,407 1,953 93 6,453 2,751 3,702 Newmark stripping towers 10,723 7,788 88,974 1,995 109,480 80,580 28,900 Waterman stripping towers 11,452 13,462 67,357 1,417 93,688 88,310 5,378 Del Rosa booster station 5,652 24,477 885 110 31,124 26,431 4,693 Delmann Heights system 561 14 575 1,602 (1,027) 17th Street GAC plant 10,068 99,128 2,100 111,296 108,092 3,204 Acacia Street well 311 13 3,461 3,785 579 3,206 Devils Canyon College 40,222 705 (71) 40,856 35,093 5,763 Sycamore booster stations #3 and #4 1,670 7,323 412 9,405 (9,752) 19,157 Foothill booster station 4,291 28,765 22 33,078 32,047 1,031 South San Bernardino system 861 861 848 13 $180,454 $153,560 $275,873 546,140 $656.027 $552,239 $103,788 -38- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UT LITY ENTERPRISE Schedule of Water Production and Purchased Cost For the Year Ended June 30, 1994 Purchased Water* Produced Water Per 1,000 Per 1,000 Amount Cubic Feet Amount Cubic Feet Summary of total water production and purchased cost Total production, purchases and supplemental 114,969,600 1,752,688,700 Direct plant production expense Direct expense of other plant facilities 656,027 Cost of purchased water (including assessments) $120,000 36.930 Total expense before depreciation $120,000 1.04375 $3,157,632 1.80159 Depreciation of plant facilities Totals Summary of costs per acre foot Acre feet 2,639.338 40,236.193 Cost per acre foot before depreciation $45.47 $78.48 Cost per acre foot (including depreciation of plant facilities) *Note: Includes water purchased and water produced on a substitute extraction basis. -39- 1993-94 1992-93 Total Water Total Water Per 1,000 Per 1,000 Amount Cubic Feet Amount Cubic Feet 1,867,658,300 1,837,940,400 $2,464,675 $2,469,815 656,027 552,239 I 156.930 18.556 3,277,632 1.75494 3,040,610 1.65436 793,103 .42465 803,970 .43743 $4,070,735 2.17959 13,844,580 2.09179 42,192.415 42,192.415 $77.68 $72.07 $96.48 $91.12 -40- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Sundry Statistical Data For the Year Ended June 30, 1994 1993-94 1992-93 Direct Production Cost Per Cost Per Plant in 1,000 Percent 1,000 Percent Expenses Cubic Feet* Cubic Feet Production Cubic Feet Production Perris Hill $ 48,714 29,805,300 $1.6344 1.70% $2.5616 1.07% Sierra Way (and 16th Street) 227,121 155,636,900 1.4593 8.88 1.2664 11.38 Antil pumping 197,742 73,317,200 2.6971 4.18 5.9057 1.04 Waterman Avenue pumping 191,464 79,189,400 2.4178 4.52 1.8659 8.72 Mill and "D" Streets 43,366 23,157,100 1.8727 1.32 1.7985 1.46 Lytle Creek 174,149 62,383,100 2.7916 3.56 3.2625 2.45 Seccombe well - 7th Street plants 79,689 140,632,000(') .5666 8.02 1.5897 3.01 Cajon Pass and Vicent plant 42,490 98,572,200 .4311 5.62 .3601 5.87 "E" Street plant (23rd and 2nd Streets) 5,229 Devil's Canyon 194,924 121,258,501 1.6075 6.92 .9659 9.26 Newmark 176,316 173,007,339(') 1.0191 9.87 1.2582 14.53 19th Street 266,284 89,640,700 2.9706 5.11 Gilbert Street 51,217 26,451,100 1.9363 1.51 4.6765 .29 Lynwood 94,485 72,098,600 1.3105 4.11 3.0828 1.41 27th Street 3,447 2.9871 .55 Baseline and California plant 25,117 25,665,300 .9786 1.46 Ellena Bros. well 81 18,605,160(3) .0044 1.06 2.1906 .48 Cajon #1, #2 and#3 163,491 151,083,500 1.0821 8.62 1.0322 5.47 Mallory well and reservoir 16,205 5,736,100 2.8251 .33 2.4243 .33 30th and Mt. View 142,996 103,165,400 1.3861 5.89 1.5875 4.79 Olive and Garner well 115,092 80,857,900 1.4234 4.61 1.4173 7.07 LeRoy Street well 37,655 19,324,000 1.9486 1.10 1.3348 4.98 10th and "J" Street 81,629 44,761,200 1.8237 2.55 1.505 5.89 Kenwood well 68,745 154,721,600 .4443 8.83 .3825 9.57 40th Street well 17,027 3.619.100 4.7048 .21 4.204 .38 Totals $2,464,675 1.752.688,700 $1.4062 100.00% $1.3877 100.00% *Note: The above production figures include amounts produced on a substitute extraction basis as follows: (1) 66,511,060 (2) 11,627,199 (3) 18,605,160 96,743,419 Total cubic feet -41- 1991-92 1990-91 Cost Per Cost Per 1,000 Percent 1,000 Percent Cubic Feet Production Cubic Feet Production $1.9529 2.49% $2.5329 1.34% 1.6537 9.04 1.4226 6.48 3.0759 3.97 1.2799 18.41 2.2608 9.34 3.1771 5.40 2.3495 1.52 1.8397 1.85 4.9054 1.98 2.6574 4.37 1.4478 5.02 1.0054 11.80 .6727 8.83 .5504 6.53 2.6454 .82 3.4625 .86 1.4906 7.35 1.0594 9.42 1.5236 10.52 1.1432 10.85 4.3092 1.86 1.5506 3.48 4.5083 .20 1.6742 2.36 2.3116 1.50 1.4418 1.39 1.5990 2.10 2.9814 .84 .7252 1.07 2.1731 1.31 1.6126 4.02 1.3811 4.13 6.2662 .33 2.4755 .30 1.5538 5.89 1.4310 7.36 1.1575 5.45 1.5320 2.74 1.2502 1.41 1.1808 11.33 1.1020 .11 .3772 2.59 1.9267 .04 $1.6811 100.00% $1.4490 100.00% -42- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Water System Demographics For the Year Ended June 30, 1994 July 1, 1993 Added Removed June 30, 1994 Physical changes in water utility system Miles of main in service 541.2388 8.3780 2.4085 547.2083 Gate valves in system 13,596 214 28 13,782 Fire hydrants in system 3,983 92 35 4,040 Water meters in use 43,515 3,533 3,170 43,878 1993-94 1992-93 Water utilization (shown in cubic feet) Domestic metered services 1,654,533,500 1,640,588,900 Municipal services (partially estimated) 93,392,145 81,090,725 East Valley Water - exchange agreement 42,329,822 15,708,607 Water reclamation plant 7,517,400 2,587,300 Irrigation water - AVMW 426,700 439,400 Edison - wash lines 1,203 14,037 1,798,200,770 1,740,428,969 Loss and other factors 1993-94 - 3.72% 69,457,530 1992-93 - 5.31% 97,511,431 Totals 1,867.658,300 1,837,940,400 -43- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Distribution System Expenses For the Years Ended .Tune 30, 1994 1993 Meter repair and maintenance $ 271,126 $ 229,941 Distribution system repairs 250,354 199,192 Service connection maintenance 410,988 248,775 Tools and equipment maintenance 217,384 132,234 Automobile and truck maintenance 65,066 169,638 Store yard, shop and yard security expense 281,625 288,740 Unallocated distribution system and other 88,380 96,593 $13584,923 $1,365,113 -44- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Overhead Salaries and Related Costs For the Years Ended .Tune 30, 1994 1993 Board of Water Commissioners $ 800 $ 832 General manager and assistant 165,736 164,078 General office 1,346,304 1,291,342 Engineering office, planning department and field supervision 753,708 675,806 Cross-connection program (including related expenses) 13,657 16,351 Vacations 380,100 347,865 Sick leave, holidays, nonproductive, recruitment and other time 701,465 710,577 Collections, inspection and meter reading (including related expenses) 496,267 468,339 Absorption of department overhead (362,148) (780,643) $3,495,889 $2,894,547 -45- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of General Administrative and Overhead Expenses For the Years Ended Tune 30, 1994 1993 Office supplies, expenses and postage $ 387,175 $ 385,892 Office rent 156,528 156,528 Data processing expense 191,874 177,833 Advertising 1,995 870 Insurance (general) 464,241 471,625 Workers' compensation and self-insurance 127,063 102,417 Noninsurable accidents and vandalism losses 7,982 16,143 Uniform and laundry 49,755 49,639 Legal, engineering and other professional fees 148,754 210,686 Audit fees 39,999 38,729 Bacterial determination and water quality control 149,570 129,926 Taxes 5,871 32,988 Communication system expense 1,896 4,356 Engineering and telemetering supplies and expense 2,858 29,984 Employer contribution to employee health, life and unemployment insurance 842,961 835,779 City Employees' Retirement Fund 877,347 839,056 Stores inventory adjustment 3,072 (14,093) Uncollectible accounts 79,431 69,189 Miscellaneous gardening supplies 4,752 5,000 Miscellaneous charges 148,735 163,542 $1691,859 $3,706,089 -46- MUNICIPAL WATER DEPARTMENT CITY OF SAN BERNARDINO WATER UTILITY ENTERPRISE FUND Schedule of Insurance Coverage Insurance coverage for the Municipal Water Department - Water, Sewer and Geothermal Utility Enterprise Funds at June 30, 1994 is summarized below: Rollins Hudig Hall - multiple insurance companies and policies, all-risk property coverage - April 30, 1994 to April 30, 1995 Per occurrence limit, excluding earthquake and flood $100,000,000 Sub-limit for earthquake and flood $50,000,000 Insurance Company of North America, Policy #GPPD28567078, general liability, personal injury liability and commercial automobile coverage - September 30, 1993 to September 30, 1994 General and personal injury General aggregate limit $2,000,000 Products/completed operations aggregate limit $2,000,000 Personal and advertising injury limit $1,000,000 Fire damage limit $50,000 Automobile Liability insurance per accident $1,000,000 Medical limit $5,000 Uninsured motorist $60,000 Hartford Fire Insurance Company Policy #KU0000260, primary commercial umbrella liability policy - September 30, 1993 to September 30, 1994 Per occurrence limit $10,000,000 General aggregate limit $10,000,000 CNA Insurance Companies, Policy #RDX127452988, excess third- party liability coverage - September 30, 1993 to September 30, 1994 Per occurrence limit $5,000,000 General aggregate limit $5,000,000 Hartford Accident and Indemnity Company, Policy #MBOBDO528, burglary and robbery coverage - March 15, 1993 to March 15, 1996 Inside of premises $23,000 Outside of premises $3,000 Hartford Accident and Indemnity Company, Policies #865100551258, #86S100569048, #60140801, #60140802 and #60140803, public official bonds, members of the board, each $1,000 Hartford Accident and Indemnity Company, Policy #72PEBCB7807, public employees' blanket bond - March 15, 1994 to March 15, 1995 $15,000 The Department is self-insured as to workers' compensation liability and material damage to rolling stock. -47-