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HomeMy WebLinkAbout05-07-25 Board Packet1 OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY BOARD OF DIRECTORS MEETING 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA WEDNESDAY May 7, 2025 3:30 P.M. AGENDA 1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. APPROVAL OF AGENDA 4. APPROVAL OF THE MINUTES OF THE REGULAR BOARD MEETING ON APRIL 2, 2025 5. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD’S JURIS- DICTION INCLUDING AN ITEM ON TODAY’S AGENDA The District’s meeting is live streamed. Information on how to watch and listen to the Dis- trict’s meeting can be found at this link: https://otaywater.gov/board-of-directors/agenda- and-minutes/board-agenda/ 6. BOARD SECURITIES AND EXCHANGE COMMISSION TRAINING a) DISCLOSURE RESPONSIBILITIES UNDER FEDERAL SECURITIES LAW (SUZANNE HARRELL) CONSENT ITEM 7. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PARTICU- LAR ITEM: 2 a) AUTHORIZE THE GENERAL MANAGER TO ENTER INTO A CONTRACT WITH U.S. BANK FOR BANKING SERVICES, INCLUDING FIXED FEE SCHEDULE, FOR A PERIOD OF UP TO FIVE YEARS (KEVIN KOEPPEN) ACTION ITEMS 8. BOARD a) RECEIVE THE DISTRICT’S INVESTMENT POLICY, POLICY NO. 27 OF THE DIS- TRICT’S CODE OF ORDINANCES, FOR REVIEW AND RE-DELEGATE AUTHOR- ITY FOR ALL INVESTMENT RELATED ACTIVITIES TO THE CHIEF FINANCIAL OF- FICER, IN ACCORDANCE WITH GOVERNMENT CODE SECTION 53607 (KEVIN KOEPPEN) b) APPROVAL OF FUNDING AND TERM FOR CONTINUED PARTICIPATION IN THE WATER CONSERVATION GARDEN AUTHORITY (WCA) BEGINNING JULY 1, 2025 (TENILLE OTERO) c) ADOPT RESOLUTION NO. 4454, A RESOLUTION OF THE BOARD OF DIREC- TORS OF THE OTAY WATER DISTRICT, PLACING IN NOMINATION JOSE MAR- TINEZ AS A MEMBER OF THE ASSOCIATION OF CALIFORNIA WATER AGEN- CIES REGION 10 BOARD MEMBER (PRESIDENT LOPEZ) d) ADOPT RESOLUTION NO. 4453 AMENDING SECTION 25 OF THE DISTRICT’S CODE OF ORDINANCES TO INCORPORATE “ESTABLISHING A PROCEDURE FOR RATEPAYER OBJECTIONS TO PROPOSED WATER AND SEWER FEES AND CHARGES” (KEVIN KOEPPEN) e) DISCUSS THE 2025 BOARD MEETING CALENDAR (TITA RAMOS-KROGMAN) REPORTS 9. GENERAL MANAGER’S REPORT 10. SAN DIEGO COUNTY WATER AUTHORITY UPDATE 11. DIRECTORS' REPORTS/REQUESTS 12. PRESIDENT’S REPORT/REQUESTS RECESS TO CLOSED SESSION 13. CLOSED SESSION a) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERNMENT CODE §54956.9] MARK COZIAHR, ET AL. vs. OTAY WATER DISTRICT, CASE NO. 37-2015-000-CU- MC-CTL 3 b) ANTICIPATED LITIGATION GOVERNMENT CODE §54956.9 (E) (3) CLAIMANT: Sue Jin Lee c) ANTICIPATED LITIGATION GOVERNMENT CODE §54956.9 (E) (3) CLAIMANT: Robinhood Court RETURN TO OPEN SESSION 14. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION. OTAY WATER DISTRICT FINANCING AUTHORITY 15. NO MATTERS TO DISCUSS 16. ADJOURNMENT All items appearing on this agenda, whether or not expressly listed for action, may be deliber- ated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the District’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda and all attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability which would require accommodation in order to enable you to partici- pate in this meeting, please call the District Secretary at (619) 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on May 2, 2025, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 72 hours in advance of the regular meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on May 2, 2025. /s/ Tita Ramos-Krogman, District Secretary 1 MINUTES OF THE BOARD OF DIRECTORS MEETINGS OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY April 2, 2025 1.The meeting was called to order by President Lopez at 3:34 p.m. 2.ROLL CALL Directors Present:Croucher, Gonzalez, Lopez, Rivera, and Robak Directors Absent:None Staff Present:General Manager Jose Martinez, General Counsel Dan Shinoff, Chief of Engineering Michael Long, Chief Financial Officer Joe Beachem, Chief of Administration Adolfo Segura, Acting Chief of Operations Jake Vaklavek, Asst. Chief of Finance Kevin Koeppen, and District Secretary Tita Ramos-Krogman. 3.PLEDGE OF ALLEGIANCE 4.APPROVAL OF AGENDA A motion was made by Director Croucher, seconded by Director Robak, and carried with the following vote: Ayes: Directors Croucher, Gonzalez, Lopez, Rivera, and Robak Noes: None Abstain: None Absent: None to approve the agenda. 5.APPROVAL OF THE MINUTES OF THE REGULAR MEETINGS OF FEBRUARY 5, 2025 AND MARCH 5, 2025 A motion was made by Director Robak, seconded by Director Gonzalez, and carried with the following vote: Ayes: Directors Croucher, Gonzalez, Lopez, Rivera, and Robak Noes: None Abstain: None Absent: None Smith to approve the minutes of the regular meetings of February 5, 2025, and March 5, 2025. AGENDA ITEM 4 2 6. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA There were no public comments to be heard. ACTION ITEMS 7. BOARD a) PRESENT THE RESULTS OF THE CURRENT SEWER COST OF SERVICE STUDY, PREPARED BY RAFTELIS FINANCIAL CONSULTANTS, INC., AND OBTAIN DIRECTION FROM THE BOARD TO INCORPORATE THE COST-OF- SERVICE STUDY’S RESULTS INTO THE FY 2026 BUDGET Assistant Chief Financial Officer Kevin Koeppen provided the staff report to the board and noted that this new study uses the fiscal year 2025 budget and six-year rate model. He stated that the findings of the current study recommend updating the district’s sewer rates to reflect current usage characteristics and costs. The most recent hearing for sewer rates occurred in October 2020 and the actions taken are effective until the end of 2025. Mr. Koeppen stated that implementation of new rates beyond 2025 requires a new Proposition 218 Notice and Hearing. Staff is proposing a modification to the district’s Proposition 218 Notice Hearing, which Mr. Koeppen discussed in detail. He introduced Steve Gagnon, Vice President at Raftelis Financial Consultants, Inc. (Raftelis), who provided a PowerPoint presentation of the results of the current sewer cost of service study. Mr. Gagnon indicated that there were several text changes to today’s PowerPoint Presentation from the one he provided at the Finance and Administration Committee on March 19, 2025, and noted that the results and numbers are all the same. See the attached PowerPoint presentation for details. Chief Financial Officer Joe Beachum stated that this agenda item is a resetting of existing rates. Currently, staff is not requesting a sewer rate increase. In response to a question from Director Robak, Mr. Koeppen stated that the last sewer cost of service study was completed in 2020. Director Croucher inquired about the studies for potable and reclaimed water. Mr. Koeppen stated that those studies are scheduled to begin in 2026, complete in 2027, and brought to a Proposition 218 Public Hearing in October of 2027 for a rate increase effective January 1, 2028. Director Croucher discussed the district’s plan to incorporate an administrative exhaustion process. Staff responded to additional questions from Director Croucher and indicated that a Proposition 218 Notice Public Hearing will be held in October 2025. Director Croucher requested to discuss this matter in closed session before the October 2025 public hearing. In response to a question from Director Gonzalez, staff stated that the return to sewer factor was based on the month of April 2024. 3 Director Rivera recommended that staff add to the report a hyperlink to the map or a figure that would show the district’s sewer service area. He also recommended that a Classification ID Number/System be added to indicate which industries are high, medium or low. Mr. Koeppen responded to additional questions from Director Robak and stated that the sewer rates presented in the attached report have been calculated using acceptable rate setting standards and meet the requirements of Proposition 218. He also stated that if directed by the board, staff will incorporate these rates in the Fiscal Year 2026 Budget, which will be presented at the June 4, 2025, board meeting. A motion was made by Director Robak, seconded by Director Croucher and carried with the following vote: Ayes: Directors Croucher, Gonzalez, Lopez, Rivera and Robak Noes: None Abstain: None Absent: None to incorporate the results of the sewer service study rates into the Fiscal Year 2026 Budget. b) DISCUSS THE 2024 BOARD MEETING CALENDAR District Secretary Ramos-Krogman indicated that a special board meeting is scheduled for April 16, 2025, at 2:30pm. PUBLIC HEARING 8. THE BOARD WILL HOLD A PUBLIC HEARING TO CONSIDER APPROVING THE FOLLOWING AGENDA ITEM AND INVITES THE PUBLIC TO PROVIDE COMMENTS ON THE ITEM: a) ADOPT ORDINANCE NO 596 TO APPROVE THE 4.62% INCREASE TO THE BOARD OF DIRECTORS’ PER DIEM RATE FOR ATTENDING MEETINGS AND PERFORMING THE DUTIES OF THEIR OFFICE; AND ADOPT RESOLUTION NO. 4452 AMENDING POLICY NO. 8 TO REFLECT THE NEW PER DIEM RATE President Lopez closed the regular board meeting and opened a public hearing at 4:24 p.m. and asked District Secretary Ramos-Krogman if there were any speakers who wished to provide comments to the board. District Secretary Ramos-Krogman stated that there were no speaker slips and/or public participation for this public hearing. With no public participation and discussion from the board, President Lopez closed the public hearing at 4:25 p.m. 4 A motion was made by Director Robak, seconded by Director Rivera and carried with the following vote: Ayes: Directors Croucher, Gonzalez, Lopez, Rivera, and Robak Noes: None Abstain: None Absent: None to adopt Ordinance No. 596 to approve the 4.62% increase to the Board of Directors’ Per Diem rate for attending meetings and performing the duties of their office; and adopt Resolution No. 4452, amending Policy No. 8 to reflect the new Per Diem rate. The regular board meeting resumed at 4:25 p.m. CONSENT ITEMS 9. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PARTICULAR ITEM: Director Robak requested that Agenda Item 8c, 2025 Legislative Program Policy Guidelines and Top 10 Legislative and Regulatory Priorities, be pulled for discussion. A motion was made by Director Croucher, seconded by President Lopez and carried with the following vote: Ayes: Directors Croucher, Gonzalez, Lopez, Rivera and Robak Noes: None Abstain: None Absent: None to approve the following consent calendar items: a) REJECT ALL BIDS RECEIVED FOR THE AS-NEEDED CONSTRUCTION SERVICES BID #FY25-3232-1216 b) AWARD A PROFESSIONAL ENGINEERING SERVICES AGREEMENT TO WOODARD & CURRAN AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE THE AGREEMENT FOR UPDATES TO THE WATER FACILITIES MASTER PLAN AND PROGRAM ENVIRONMENTAL IMPACT REPORT, URBAN WATER MANAGEMENT PLAN, AND INTEGRATED WATER RESOURCES PLAN IN AN AMOUNT NOT-TO-EXCEED $1,321,867 c) 2025 LEGISLATIVE PROGRAM POLICY GUIDELINES AND TOP 10 LEGISLATIVE AND REGULATORY PRIORITIES d) AUTHORIZE THE WATER CONSERVATION GARDEN JOINT POWERS AUTHORITY (JPA) INVOICE FOR THE REMAINDER OF FISCAL YEAR ENDING JUNE 30, 2025 5 e) AWARD A PROFESSIONAL SERVICE CONTRACT TO AXIM GEOSPATIAL FOR THE ARCGIS GEOMETRIC NETWORK TO UTILITY NETWORK MIGRATION IN AN AMOUNT NOT-TO-EXCEED $450,000 INFORMATIONAL ITEM 10. ITEMS ARE PROVIDED TO THE BOARD FOR INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEMS a) WATER CONSERVATION GARDEN JOINT POWERS AUTHORITY (JPA) UPDATE General Manager Jose Martinez provided the staff report to the board and noted that this agenda item was discussed at the Conservation/Public Relations/Legal/Legislative Committee meeting on March 18, 2025. He noted that in June 2024, the Otay Water District (District) submitted its letter to opt out of the WCG and said that the District can choose to rescind that letter to continue to support the WCG. A decision on this matter must be made by the next board meeting. Mr. Martinez responded to comments and questions from the board and introduced Ms. Lauren Magnuson, Director of Garden Operations, to provide additional updates and details of the WCG. A letter from Ms. Kathleen Coates Hedberg, President of the WCG, was provided to the board. It requested that the District withdrawal letter from the WCG. See attached letter from the WCG dated March 27, 2025, for details. Attached to that letter was WCG’s proposed budget for the next fiscal year, in which Ms. Magnuson provided details of the budget and responded to the board’s questions and comments. President Lopez indicated that a final decision will be made at the District’s May 7, 2025, board meeting. Director Rivera commented that support for the WCG is feasible if the District considers splitting the necessary funding with the Sweetwater Authority and Helix Water District and have the Cuyamaca College be responsible for the costs of utilities and insurance. Director Gonzalez suggested advertising the WCG in local media and the District’s social media to help promote the Garden. Director Croucher suggested that the WCG reach out to CalFire Captain Thomas Shoots to see if Homeland Security grants are available for the WCG. b) SECOND QUARTER FISCAL YEAR 2025 CAPITAL IMPROVEMENT PROGRAM REPORT Public Services Manager Kevin Cameron provided a PowerPoint presentation to the board and responded to their comments and questions. 6 Director Croucher suggested that a graph showing percentages of baseline completion on project timelines be added to the CIP Budget Forecast vs. Expenditures slide. c) FISCAL YEAR 2025 MID-YEAR UPDATE FOR THE DISTRICT’S FISCAL YEAR 2023-2026 STRATEGIC PLAN Information Technology Manager Michael Kerr provided a PowerPoint presentation to the board and responded to their comments and questions. Director Croucher stated that it would be helpful if staff could note in the staff report and presentation when changes are made to the Strategic Plan’s baselines and targets. REPORTS 11. GENERAL MANAGER REPORT General Manager Jose Martinez stated that he had nothing to report. 12. SAN DIEGO COUNTY WATER AUTHORITY UPDATE Directors Croucher and Robak provided CWA, LAFCO, and MWD updates. 13. DIRECTORS' REPORTS/REQUESTS Director Croucher indicated that he will be working with Communication Officer Tenille Otero to schedule a tour of CalFire facilities. Directors Croucher, Gonzalez, Rivera, and Robak shared and/or submitted written reports of meetings they attended. See attached reports. 14. PRESIDENT’S REPORT President Lopez encouraged board members to attend the 2025 WateReuse California Annual Conference and noted that the Early-Bird Registration for the conference ends on June 24, 2025. He noted that he and Director Gonzalez are assigned to the General Manager’s Evaluation Ad Hoc Committee and plans to activate the Legal Counsel’s Evaluation Ad Hoc Committee. A written report of meetings he attended was submitted to District Secretary Ramos- Krogman. See the attached report. 15. CLOSED SESSION The board recessed to closed session at 6:10 p.m. to discuss the following matters: 7 a) CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to California Government Code §54956.8 Property: SALT CREEK GOLF COURSE 525 HUNTE PARWAY CHULAVISTA, CA 91914 Agency negotiator: General Counsel b) Under negotiation: Disposition of PropertyCONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERNMENT CODE §54956.9] OTAY WATER DISTRICT vs. CITY OF SAN DIEGO; CASE NO. 37-2017- 00019348-CU-WM-CTL c) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION [GOVERNMENT CODE §54956.9] (1 MATTER) RETURN TO OPEN SESSION 16. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION. The board reconvened from closed session at 7:16 p.m. and General Counsel Dan Shinoff reported that the board took action on Agenda Item 14a, Conference with Real Property Negotiators Pursuant to California§54956.8, with a unanimous vote (5-0) to approve a contract with CalWest. No other reportable actions were taken in closed session. OTAY WATER DISTRICT FINANCING AUTHORITY 17. NO MATTERS TO DISCUSS There were no items scheduled for discussion for the Otay Water District Financing Authority board. 18. ADJOURNMENT With no further business to come before the Board, President Lopez adjourned the meeting at 7:17 p.m. President ATTEST: District Secretary Updates to Existing Rate Structure •Revised Return to Sewer (RTS) Factors ›MFR RTS is calculated as the lowest month use divided by average month use ›Commercial is typically 90 to 100% RTS –Selected 100% •Updated Wastewater Strengths ›Low strength commercial should have a lower strength than residential customers since they do not have a kitchen 2 Fixed Charge Development (System Charge) •Added a customer service charge component to the fixed charge to reflect customer service costs •Meter capacity ratios are based on the ¾” meter as the base instead of 5/8” 3 Question and Discussion? 16 The Water Conservation Garden • 12122 Cuyamaca College Dr. West, El Cajon, CA 92019 • 619.660.0614 • www.TheGarden.org The Water Conservation Garden is a 501(c)(3) tax exempt government entity. Federal Tax ID# 33-0639414. March 27, 2025 J P A B O A R D O F D I R E C T O R S PRESIDENT Kathleen Hedberg SDCWA VICE PRESIDENT Jose Lopez Otay Water District TREASURER Jennifer Bryant Helix Water District SECRETARY Dr. Lynn Neault GCCCD Director Nicole DeSantis City of San Diego Director Steve Castanda Sweetwater Authority Director Dan McMillan Helix Water District Administrator Brian Olney Helix Water Otay Water District Board Directors 2554 Sweetwater Springs Blvd. Spring Valley, CA 91978 Sent via email: Tita Ramos-Krogman, District Secretary; Tita.Ramos-Krogman@otaywater.gov Subject: Request to Rescind Otay Water District Withdrawal Letter from the Water Conservation Garden Authority Dear Board Directors: I am writing to respectfully request that the Otay Water District reconsider and rescind its decision to withdraw from the Water Conservation Garden Authority (Authority) agreement with the Water Conservation Garden. As a valued community resource, the Garden plays a crucial role in educating the public about sustainable landscaping, water efficiency, and environmental stewardship—goals that align with Otay Water District’s mission and commitment to responsible water management. The Water Conservation Garden has long served as a vital educational tool for residents, schools, and businesses in our region. By remaining a partner in the Authority, Otay Water District can continue to support best practices in water-wise landscaping and benefits our entire community. The Garden’s programs complement Otay Water District outreach efforts to promote efficiency, and maintaining this partnership demonstrates a continued investment in public education and environmental responsibility and community service programs to your ratepayers. Additionally, the collaborative nature of the Authority ensures that financial and operational support for the Garden is distributed among multiple agencies, reducing the burden on any single entity while maximizing the benefits for the broader community. Withdrawing from the agreement could undermine the Garden’s ability to operate effectively and diminish the positive impact it has on water efficiency efforts in our region. I urge you to continue Otay Water District’s financial support for the Water Conservation Garden. Thank you for your time and consideration. Respectfully, Kathleen Coates Hedberg, PE, MPH President Attachments: 1. FY 24/25 budget summary, FY24/25 actuals, and draft proposed budget summary FY 25/26 2. Benefit Analysis of Authority Support for the Water Conservation Garden OTAY WATER DISTRICT BOARD OF DIRECTORS PER-DIEM AND MILEAGE CLAIM FORM Pay To: Jose Lopez Period Covered: Employee Number: From: 03/01/25 To: 03/31/25 ITEM DATE MEETING PURPOSE / ISSUES DISCUSSED MILEAGE HOME to OWD OWD to HOME MILEAGE OTHER LOCATIONS 1 03/04/25 SBEDC South Bay Economic & Development Council Meeting 2 03/05/25 OWD Regular Board Meeting 3 03/07/25 CVCC Chula Vista Chamber’s 1st Friday Breakfast – GM Martinez Speaker 4 03/08/25 WCG Water Conservation Garden’s Tomatomania Event 5 03/13/25 OWD Committee Agenda Briefing Meeting 6 03/17/25 OWD Engineering & Operations Committee Meeting 7 03/18/25 COWU Council of Water Utilities Meeting 8 03/19/25 OWD Finance & Admin Committee Meeting 9 03/25/25 OWD Water Conservation Garden Meeting 10 03/27/25 OWD Board Agenda Briefing Meeting Disclosure Responsibilities Under the Federal Securities Laws and Certain other Topics Created by: Stradling Yocca Carlson & Rauth Harrell & Company Advisors May 7, 2025 Otay Water District AGENDA ITEM 6a Disclosure Considerations for Initial Bond Issuance How are Bonds Sold to the Investing Public? ▪Primary Market ▪Underwriter/Broker-Dealer ▪Competitive or Negotiated ▪Secondary Market ▪After Initial Sale Through a Network of Broker- Dealers 4829-5794-3033 Disclosure Considerations for Initial Bond Issuance (Cont.) How are Bonds Offered for Sale? ▪Bonds are Marketed Through the “Official Statement” ▪This is the District’s Disclosure Document ▪Include all Information that Would be Relevant to Making an Informed Investment Decision ▪Free From Material Misstatement ▪Requires a Level of “Due Diligence” 4829-5794-3033 Why Is Disclosure Training Necessary? Why is Training Necessary? •The District issues securities in the public capital markets •Investors in municipal securities have rights under federal securities laws •Issuer must ensure that all “material” information is disclosed Why is Disclosure Training Necessary (Cont.) ▪In 2010, Securities and Exchange Commission (SEC) Found That State of New Jersey’s Violation of Federal Securities Laws Was Due to Lack of Training ▪SEC Has Declared That Elected Officials and Top Administrators Have a Duty to Review and be Familiar With Disclosure Documents ▪SEC Has Substantially Increased Enforcement Activity in Municipal Bond Sector 4829-5794-3033 The Securities Act Of 1933 •1933 Act has two substantive rules: •Registration requirement •Antifraud rule •Antifraud Rule applies to municipal securities •Prohibits any person from, directly or indirectly, obtaining money or property by means of any untrue statement of a material fact or by a misleading omission. •Negligence standard (should have known) Securities Exchange Act Of 1934 Rule 10b-5 •1934 Act creates ongoing disclosure requirements for public companies •Also contains antifraud provisions (Rule 10b-5) •Antifraud provisions apply to government issuers Rule 10b5 •“It shall be unlawful for any person . . . a)To employ any device, scheme or artifice to defraud, b)To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made,in the light of the circumstances under which they were made,not misleading ....” The “Materiality” Standard •“[w]hether or not there is a substantial likelihood that a reasonable investor or prospective investor would consider the information important in deciding whether or not to invest.” •Materiality is determined in context of all the facts and circumstances, but in hindsight •Guidance comes primarily from court decisions and SEC enforcement cases. In the MCDC “self-reporting” program from 2013, SEC staff consistently refused to provide advance guidance on what constitutes a “material” misstatement of facts What Should Be Disclosed? •Unlike corporate securities, there is no “line item” set of rules for what goes into an Official Statement (“OS”) •Various groups have suggested disclosure for particular market segments and general guidelines for OS content •Look at practices in the industry; recent developments (e.g. Pension, Continuing Disclosure Compliance) •In the end, the District must use its own good judgment Rule 15c2-12 of the Securities Exchange Act of 1934 •RULE GOVERNS CONDUCT BY THE PARTICIPATING UNDERWRITERS •No direct regulation over Issuers pursuant to Rule 15c2-12 except for antifraud provisions •But by regulating underwriters, the Rule indirectly regulates issuers by controlling access to the market •SEC plans for legislative changes to apply 15c2-12 directly to Issuers •Sets the basis for Continuing Disclosure Undertakings •Annual reports •Event Notices (i.e. bankruptcy, reserve fund draws, bond calls, rating changes, etc.) 4829-5794-3033 When Do Disclosure Rules Apply? •New offerings •Annual Report under Rule 15c2-12 •Rule 15c2-12 Material Event Notices •Any other circumstance where an Issuer is “speaking to the market” Content of Annual Reports •Audited Financial Statements •Information (i.e. tables, adopted budget) identified in Continuing Disclosure Undertaking •Additional voluntary information •Consider Rule 10b5 implications – is there more you should be saying? •Has anything happened since the date of the audited financial reports that has materially impacted your financial condition? Rule 15c2-12 Material Event Notices •Obligation to file notices of specified events (rating changes, bond redemptions, payment delinquencies, etc.) within 10 business days •There are currently 16 events for which notices must be provided •9 events regardless of materiality •7 events if material •The SEC continues to add to the list of events •Most recently in 2017 when 2 new events were added •The 2 events added in 2017 only apply to the District’s 2019 wastewater bonds Post Issuance 15c2-12 Compliance ▪GM and CFO are Designated Disclosure Representatives ▪Delegate to Staff ▪Identify Disclosure Requirements Dates/Content ▪Submission of Reports ▪Keep track of Listed Events ▪Maintains Dialogue with Municipal Advisor and Disclosure Counsel re Significant Events 4829-5794-3033 Investor Communications •No obligation to do it •Tension between market (and SEC) desire for transparency and potential issuer liability •If needed, establish a single point of contact •Speeches and presentations may be “speaking to the market” •Websites and Disclaimers •“District Website. The District maintains a website. The information on such website is not part of this Official Statement and is not intended to be relied on by investors with respect to the Bonds unless specifically set forth or incorporated herein.” •Be careful of information posted that may be contradictory or misleading when you have a POS in the market District Disclosure for New Issuances •Official Statement is offering document to investors •Must contain all material information for the particular bond sale •Official Statement is the District’s document •Underwriters, municipal advisers and lawyers can help develop the Official Statement but the District is ultimately responsible for content Disclosure Principles •Provide main points but do not overwhelm readers with detail •Highlight important developments “up front” •Determine appropriate level of importance for any particular event or budgetary item •Bringing all these factors together into final product is ongoing process of give and take •Consider maintaining Attorney-Client privilege for sensitive issues Timing Considerations For Bond Sale •Progression of an offering •POS sale final OS closing •Supplements are possible •Not preferred, can be disruptive after sale •Be mindful of public actions or releases likely to occur •District budget, Mid-Year reports •OPEB Actuarial Studies •Pension Plan Information •Status of new or ongoing litigation •Audits or Investigations Disclosure Process •Seek input from key officials •CFO and Finance Department generally oversee and coordinate the process •Empower staff at all levels •Municipal Advisor and Disclosure Counsel helps pull information together and produces a draft Preliminary Official Statement (“POS”) •Draft POS reviewed by District staff and Financing Team •“Due diligence” meeting before distribution of POS Disclosure Topics for Preliminary Official Statement •Experience of District Management Team •Revenue Sources •Pension Plans and OPEBs •Labor negotiations •Water Rates •Customer trends •Historical revenues, expenses and coverage •Multi-year projections •Litigation and investigations •Information on debt – types and amounts 4829-5794-3033 Current Hot Topics ▪Unfunded Liabilities for Pension and OPEB ▪Cybersecurity ▪Climate Change/Drought ▪Fire Hazards ▪Private Placement Covenants ▪Effect of New GASB Standards ▪Derivative Exposure ▪Preparing for next Economic Downturn ▪Impact on District from Federal Policies Disclosure Considerations •Tomorrow’s “hot topic” may be different than today’s •Disclosure must evolve to reflect changing circumstances •Read the disclosure with “fresh eyes” •If you think something may be a concern, raise the issue with District staff, municipal advisor and legal counsel, consider discussing with the working group •There are no “stupid questions” •Political sensitivity and confidentiality considerations are not exceptions to disclosure What Does an SEC Enforcement Action look like? •An investigation is NOT litigation •SEC has active whistleblower program that pays bounties •Broad document subpoenas •Team of lawyers and accountants with no automatic protections offered by a court •No designated timeline or budget •Personal subpoenas issued to officials and staff •Cooperation and credibility are paramount What Does a Settlement with the SEC look like? •Terms of settlement may take numerous forms: •Generally “neither admit nor deny,” but may require an admission •Cease and Desist Order •Financial penalty and/or disgorgement •Both against the issuer and the senior staff involved •Industry bar and/or fines for issuers and individuals •Compliance undertakings (including consultants and monitors) •Cooperation against others under investigation •Disclose your organization’s settlement with SEC to investors in future disclosure documents Topics of Recent SEC Enforcement Actions •Failure to disclose missed Continuing Disclosure Filings •Inadequate Pension or Salary Increase Disclosures •Inadequate Accounting Practice Standards •Misleading or Incomplete Financial Disclosures •Status of Fund Balance and Reserves •Use of bond proceeds Consequences of Bad Disclosure •SEC Investigation –fees for lawyers and consultants •Adverse publicity •Personal Fines •Reduced market access •May have to impose new procedures and oversight to settle SEC actions •Rating Downgrades (triggers increased credit/liquidity provider fees) SEC Enforcement against Sweetwater UHSD •The SEC found that the District bond official statement contained material misstatements and omissions, including misleading budget projections which indicated the District would end the 2017-18 fiscal year with a General Fund balance of $19.5 million, when in fact the school district expected to end the fiscal year with a negative balance of $7.2 million. •The misleading budget projections were primarily the result of the school district failing to accurately budget for a 3.75% pay raise with its employees in each of the 2017-18 General Fund Budget, the First Interim Report and the Second Interim Report. •Settlement terms: •Cease and desist order, adoption of disclosure policies/procedures, disclosure in Official Statements for next 5 years, retention of independent consultant to assist District going forward •Former District CFO pays $28,000 from personal funds and refrains from being involved in any future bond offerings (making them difficult to employ in the future) 4829-5794-3033 Disclosure Summary •Investors must be provided all material information—When in doubt, disclose •Officials participating in the disclosure process must be in a position to know material information (i.e., “the right people must be in the room”) •Top management must support and encourage vigorous disclosure program •Empower everyone in the organization •Involved officials must receive training; District must maintain rigorous disclosure practices •Protect Attorney-Client Privilege •Adopt formal disclosure policy, including policies and procedures to ensure to ensure continuing disclosure compliance; and ensure compliance with the policy •The District adopted such a policy STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 7, 2025 SUBMITTED BY: Jon Ravaglioli Finance Manager PROJECT: N/A DIV. NO.ALL APPROVED BY: Kevin Koeppen, Assistant Chief of Finance Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Authorize the General Manager to Enter Into a Contract With U.S. Bank for Banking Services, Including Fixed Fee Schedule, For a Period of up to Five Years. General Manager’s Recommendation That the Otay Water District (District) Board of Directors approve to authorize the General Manager to enter into a contract with U.S. Bank for banking services, including fixed fee schedule, for a period of up to five years. Committee Action Please see Attachment A. Purpose To obtain Board approval to authorize the General Manager to enter into a contract with U.S. Bank for banking services, including fixed fee schedule, for a period of up to five years. Analysis The District has historically performed recurring reviews of banking pricing and services against the current market to ensure that the AGENDA ITEM 7a 2 current banking partner offers competitive pricing and access to modern technologies and products. U.S. Bank has been the District’s banking partner since FY 2023, following its acquisition of MUFG Union Bank and the subsequent transition to U.S. Bank’s systems and operations. Previously, MUFG Union Bank had served as the District’s banking partner since 2006. During that time, staff performed periodic pricing and in-depth service reviews, consistently concluding that the current partner offered the best pricing, range of services, and customer service. In the most recent review, conducted in January 2019 and presented to the Board at the March 6, 2019, Board Meeting, staff recommended that the Board lock in pricing and review services in six years. This report is based on pricing received from a request for quotations conducted by the District in January 2025. Staff is recommending that the District Board of Directors continue the District’s banking partnership with U.S. Bank by authorizing the General Manager to enter into a contract with U.S. Bank for banking services for a period of up to five years. Based on the analysis performed, U.S. Bank is the lowest-cost provider in terms of monthly fees, and the District is satisfied with their overall performance. Additionally, the financial and administrative costs of changing banks, along with the potential for customer disruptions and service risks, further support the recommendation to remain with U.S. Bank. The District also utilizes U.S. Bank as its corporate trust and custody provider under a separate agreement, reinforcing the rationale to remain with U.S. Bank. Quotation Process Staff requested quotes from seven banking institutions. Prospective providers were given instructions for submitting the required fee schedules, along with their qualifications and financials, and were given a one-month deadline. Providers also received a detailed report of the services required by The District. The table below summarizes the banks and their responses to the request for quotation: Institution Response U.S. Bank Response and quote received California Bank and Trust Response and quote received J.P. Morgan Chase Declined to respond 3 Bank of America No response Wells Fargo No response BMO (Bank of the West) No response Banc of California No response For cost comparison purposes, staff evaluated U.S. Bank’s current pricing, U.S. Bank’s updated pricing, and California Bank and Trust’s pricing. Staff also reviewed the pricing of neighboring agencies that utilize banks other than U.S. Bank. Where comparable services could be identified, U.S. Bank was the lower-cost provider. Available Services The District requires a range of banking services, which were outlined in the RFQ document. These include account reconciliation, account analysis, online reporting, wire transfers, lockbox services, availability of funds, payroll services, tax payments, check fraud protection, daylight overdraft protection, and debt services. Both respondents met the District’s service requirements. Banking Facilities As part of the minimum qualifications outlined in the RFQ document, respondents must be chartered banking institutions with full-service branch banking facilities located within the District’s boundaries or within 15 miles of the District offices. Both U.S. Bank (two locations) and California Bank & Trust (one location) have facilities within the District’s boundaries and less than three miles from District headquarters. Level of Customer Service Both the Accounting and Customer Service sections have periodic, direct interactions with U.S. Bank. Neither group reported any dissatisfaction or unresolved service issues. U.S. Bank has been responsive to any issues or inquires and maintains controls over the District’s accounts. Staff is satisfied with U.S. Bank’s service offerings and assigned support personnel. Banking Fees Staff used the fee schedule provided with each quote to estimate annual fees based on an average month of service levels. The quotes from U.S. Bank and California Bank & Trust were then compared to the most recent pricing provided by U.S. Bank in 2023. The results of this analysis are presented in the following table: 4 Institution Estimated Annual Fees U.S. Bank (2023) $74,500 U.S. Bank (2025) $68,000 California Bank & Trust (2025) $110,500 Comparing the quotes received from U.S. Bank and California Bank & Trust, there was a significant cost savings with U.S. Bank, given the average volume of monthly transactions. Comparing the current U.S. Bank quote with the previous U.S Bank quote, pricing decreased by approximately 10%. Given the increase in the Consumer Price Index (CPI) and the rising costs of other services during this period, the decline in proposed banking fees is particularly notable. Additionally, U.S. Bank has agreed to fix the proposed banking fees for the five-year period. Fiscal Impact Joe Beachem, Chief Financial Officer The District’s banking fees will be slightly less than current fees. Based on the analysis performed, staff estimates total banking service fees to be $68,000, an approximate 10% decrease from the prior analysis. Strategic Goal The District ensures its continue financial health through long-term financial planning, formalized financial policies, enhanced budget controls, fair pricing, debt planning, and improved financial reporting. Legal Impact None. Attachments: Attachment A – Committee Action ATTACHMENT A SUBJECT/PROJECT: Authorize the General Manager to Enter Into a Contract With U.S. Bank for Banking Services, Including Fixed Fee Schedule, For a Period of up to Five Years. Committee Action This item was presented to the Finance & Administration Committee at a meeting held on April 15, 2025, and the following comments were made: • Staff responded to a question from the Committee stating that the district has the flexibility to seek services from other banks during U.S. Bank’s five-year contract term. • It was noted that the district has worked with other banks whose service fees were higher. As noted in the staff report, U.S. Bank is the lowest-cost provider in terms of monthly fees, and the district is satisfied with their overall performance. Staff estimates total banking service fees to be $68,000, an approximate 10% decrease from the prior analysis. Upon completion of the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent item. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 7, 2025 SUBMITTED BY: Jon Ravaglioli, Finance Manager PROJECT: DIV. NO. All APPROVED BY: Kevin Koeppen, Assistant Chief of Finance Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Annual Review of the Investment Policy (Policy No. 27) of the District’s Code of Ordinances and the Re-delegation of Authority for All Investment Related Activities to the Chief Financial Officer General Manager’s Recommendation That the Board receives the District’s Investment Policy (Policy No. 27) of the District’s Code of Ordinances for review and re-delegate authority for all investment related activities to the ChiefFinancial Officer, in accordance with Government Code Section 53607. Committee Action See Attachment A. Purpose Government Code Section 53646 recommends that the District’s Investment Policy be tendered to the Board on an annual basis for review. In addition, Government Code Section 53607 requires that for the Board’s delegation of investment responsibilities to the Chief Financial Officer to remain effective, the governing board must re- delegate authority over investment activities on an annual basis. Analysis The primary goals of the Investment Policy are to assure compliance with the California Government Code, Sections 53600 et seq. The primary objectives, in priority order, of investment activities are: AGENDA ITEM 8a 1. Protect the principal of the funds. 2. Remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated. 3. The District’s return is a market rate of return that is commensurate with the conservative investments approach to meet the first two objectives of safety and liquidity. The government code restricts local agency investment options to a conservative list of investments, including Federal Treasuries, Federal Agencies, Callable Federal Agencies, the State Pool, the County Pool, high-grade corporate debt. Each year, staff reviews legislative updates to ensure our Investment Policy reflects the most recent and relevant updates approved by the California State Legislature. During this year’s policy review, there were no relevant legislative changes that affect our Investment Policy. On an annual basis, staff submits the Investment Policy to our list of Broker/Dealers for their professional review and to ensure they acknowledge and understand the District’s Investment Policy. This year, District Brokers/Dealers did not recommend any changes be made to our Investment Policy. Because of the District’s adherence to a conservative range of authorized investments, we have been able to maintain a healthy and diversified portfolio that meets our overall investment objectives and supports our long-term financial plans. The current policy is consistent with the current law and the overall objectives of the policy are being met; therefore, there are no recommended changes to the District’s Investment Policy at this time. Fiscal Impact Joe Beachem, Chief Financial Officer None. Strategic Goal Demonstrate financial health through formalized policies, prudent investing, and efficient operations. Legal Impact None. Attachments: A) Committee Action B) Policy No. 27 C) Presentation Slides ATTACHMENT A SUBJECT/PROJECT: Annual Review of the Investment Policy (Policy No. 27) of the District’s Code of Ordinances and the Re-delegation of Authority for All Investment Related Activities to the Chief Financial Officer Committee Action This item was presented to the Finance & Administration Committee at a meeting held on April 15, 2025, and the following comments were made: • It was noted that there are no specific changes to Policy No. 27 for the upcoming year. • In response to a question from the Committee, staff stated that there are benefits of having different pools to invest in as it allows the district to meet liquidity needs in a timely manner by having same-day or next-day access to funds. • The Committee recommended that staff be prepared for anticipated political affects (i.e. tariffs) that may arise. Staff stated that the District’s practice is to invest primarily in government sponsored entities and hold those investments until maturity. This practice safeguards the District from realizing any losses as the investments mature at full value. Upon completion of the discussion, the Committee supported staffs’ recommendation and presentation to the full board as an action item. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 1 of 17 1.0 POLICY It is the policy of the Otay Water District to invest public funds in a manner which will provide maximum security with the best interest return, while meeting the daily cash flow demands of the entity and conforming to all state statues governing the investment of public funds. 2.0 SCOPE This investment policy applies to all financial assets of the Otay Water District. The District pools all cash for investment purposes. These funds are accounted for in the District’s audited Comprehensive Annual Financial Report (CAFR) and include: 2.1) General Fund 2.2) Capital Project Funds 2.2.1) Designated Expansion Fund 2.2.2) Restricted Expansion Fund 2.2.3) Designated Betterment Fund 2.2.4) Restricted Betterment Fund 2.2.5) Designated Replacement Fund 2.2.6) Restricted New Water Supply Fund 2.3) Other Post Employment Fund (OPEB) 2.4) Debt Reserve Fund Exceptions to the pooling of funds do exist for tax-exempt debt proceeds, debt reserves and deferred compensation funds. Funds received from the sale of general obligation bonds, certificates of participation or other tax-exempt financing vehicles are segregated from pooled investments and the investment of such funds are guided by the legal documents that govern the terms of such debt issuances. 3.0 PRUDENCE Investments should be made with judgment and care, under current prevailing circumstances, which persons of prudence, discretion and intelligence, exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Attachment B OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 2 of 17 The standard of prudence to be used by investment officials shall be the “Prudent Person” and/or "Prudent Investor" standard (California Government Code 53600.3) and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. 4.0 OBJECTIVE As specified in the California Government Code 53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and managing public funds, the primary objectives, in priority order, of the investment activities shall be: 4.1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the Otay Water District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the District will diversify its investments by investing funds among a variety of securities offering independent returns and financial institutions. 4.2) Liquidity: The Otay Water District’s investment portfolio will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated. 4.3) Return on Investment: The Otay Water District’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio. 5.0 DELEGATION OF AUTHORITY Authority to manage the Otay Water District’s investment program is derived from the California Government Code, Sections 53600 through 53692. Management responsibility for the investment program is hereby OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 3 of 17 delegated to the Chief Financial Officer (CFO), who shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials and their procedures in the absence of the CFO. The CFO shall establish written investment policy procedures for the operation of the investment program consistent with this policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the CFO. 6.0 ETHICS AND CONFLICTS OF INTEREST Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the District. 7.0 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS The Chief Financial Officer shall maintain a list of District selected financial institutions and security broker/dealers authorized and approved to provide investment services in the State of California. Investment services include the buying or selling of permissible investments such as treasuries, government agencies, etc. for delivery to the custodian bank. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3- 1 (Uniform Net Capital Rule). No public deposit shall be made except in a qualified public depository as established by state laws. All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the District with the following, as appropriate: OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 4 of 17 Audited Financial Statements. Proof of Financial Industry Regulatory Authority (FINRA) certification. Proof of state registration. Completed broker/dealer questionnaire. Certification of having read the District’s Investment Policy. Evidence of adequate insurance coverage. An annual review of the financial condition and registrations of qualified bidders will be conducted by the CFO. A current audited financial statement is required to be on file for each financial institution and broker/dealer through which the District invests. 8.0 AUTHORIZED AND SUITABLE INVESTMENTS From the governing body perspective, special care must be taken to ensure that the list of instruments includes only those allowed by law and those that local investment managers are trained and competent to handle. The District is governed by the California Government Code, Sections 53600 through 53692, to invest in the following types of securities, as further limited herein: 8.01) United States Treasury Bills, Bonds, Notes or those instruments for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity limitation is applicable. 8.02) Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, may be used up to the maximum permitted by State Law (currently $75 million). The District may also invest bond proceeds in LAIF with the same but independent maximum limitation. 8.03) Bonds, debentures, notes and other evidence of indebtedness issued by any of the following government agency issuers: OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 5 of 17 Federal Home Loan Bank (FHLB) Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") Federal National Mortgage Association (FNMA or "Fannie Mae") Government National Mortgage Association (GNMA or “Ginnie Mae”) Federal Farm Credit Bank (FFCB) Federal Agricultural Mortgage Corporation (FAMCA or “Farmer Mac”) There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity from the settlement date limitation is applicable. Government agencies whose implied guarantee has been reduced or eliminated shall require an “A” rating or higher by a nationally recognized statistical rating organization. 8.04) Interest-bearing demand deposit accounts must be made only in Federal Deposit Insurance Corporation (FDIC) insured accounts. For deposits in excess of the insured maximum of $250,000, approved collateral shall be required in accordance with California Government Code, Section 53652. Certificates of Deposit (CD) will be made only to the FDIC-insured limit of $250,000. Investments in CD’s are limited to 15 percent of the District’s portfolio. 8.05) Commercial paper, which is short-term, unsecured promissory notes of corporate and public entities. Purchases of eligible commercial paper may not exceed 2 percent of the outstanding paper of an issuing corporation, and maximum investment maturity will be restricted to 270 days. Investment is further limited as described in California Government Code, Section 53601(h). Purchases of commercial paper may not exceed 10 percent of the District’s portfolio. 8.06) Medium-term notes defined as all corporate debt securities with a maximum remaining maturity of five years from the settlement date or less, and that meet the further requirements of California Government Code, Section 53601(k). Investments in medium-term notes are limited to 10 percent of the OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 6 of 17 District’s portfolio and no more than 2 percent of the outstanding medium-term notes of any single issuer. 8.07) Money market mutual funds that invest only in Treasury securities and repurchase agreements collateralized with Treasury securities, and that meet the further requirements of California Government Code, Section 53601(l). Investments in money market mutual funds are limited to 10 percent of the District's portfolio. 8.08) The San Diego County Treasurer’s Pooled Money Fund, which is a County managed investment pool, may be used by the Otay Water District to invest excess funds. There is no percentage limitation of the portfolio which can be invested in this category. 8.09) Under the provisions of California Government Code 53601.6, the Otay Water District shall not invest any funds covered by this Investment Policy in inverse floaters, range notes, interest-only strips derived from mortgage pools, or any investment that may result in a zero-interest accrual if held to maturity. Also, the borrowing of funds for investment purposes, known as leveraging, is prohibited. 9.0 INVESTMENT POOLS/MUTUAL FUNDS A thorough investigation of the pool/fund is required prior to investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions: A description of eligible investment securities, and a written statement of investment policy and objectives. A description of interest calculations and how it is distributed, and how gains and losses are treated. A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. A description of who may invest in the program, how often, and what size deposits and withdrawals are allowed. A schedule for receiving statements and portfolio listings. Are reserves, retained earnings, etc., utilized by the pool/fund? OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 7 of 17 A fee schedule, and when and how is it assessed. Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? 10.0 COLLATERALIZATION Collateralization will be required on certificates of deposit exceeding the $250,000 FDIC insured maximum. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and accrued interest. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted. 11.0 SAFEKEEPING AND CUSTODY All security transactions entered into by the Otay Water District shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third-party custodian designated by the District and evidenced by safekeeping receipts. 12.0 DIVERSIFICATION The Otay Water District will diversify its investments by security type and institution, with limitations on the total amounts invested in each security type as detailed in Paragraph 8.0, above, so as to reduce overall portfolio risks while attaining benchmark average rate of return. With the exception of U.S. Treasury securities, government agencies, and authorized pools, no more than 50% of the District’s total investment portfolio will be invested with a single financial institution. 13.0 MAXIMUM MATURITIES To the extent possible, the Otay Water District will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the District will not directly invest in securities maturing more than five years from the settlement date of the purchase. However, for time deposits with banks or savings and OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 8 of 17 loan associations, investment maturities will not exceed two years. Investments in commercial paper will be restricted to 270 days. 14.0 INTERNAL CONTROL The Chief Financial Officer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. 15.0 PERFORMANCE STANDARDS The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. The Otay Water District’s investment strategy is passive. Given this strategy, the basis used by the CFO to determine whether market yields are being achieved shall be the State of California Local Agency Investment Fund (LAIF) as a comparable benchmark. 16.0 REPORTING The Chief Financial Officer shall provide the Board of Directors monthly investment reports which provide a clear picture of the status of the current investment portfolio. The management report should include comments on the fixed income markets and economic conditions, discussions regarding restrictions on percentage of investment by categories, possible changes in the portfolio structure going forward and thoughts on investment strategies. Schedules in the quarterly report should include the following: A listing of individual securities held at the end of the reporting period by authorized investment category. Average life and final maturity of all investments listed. Coupon, discount or earnings rate. Par value, amortized book value, and market value. Percentage of the portfolio represented by each investment category. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 9 of 17 17.0 INVESTMENT POLICY ADOPTION The Otay Water District’s investment policy shall be adopted by resolution of the District’s Board of Directors. The policy shall be reviewed annually by the Board and any modifications made thereto must be approved by the Board. 18.0 GLOSSARY See Appendix A. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 10 of 17 APPENDIX A: GLOSSARY ACTIVE INVESTING: Active investors will purchase investments and continuously monitor their activity, often looking at the price movements of their stocks many times a day, in order to exploit profitable conditions. Typically, active investors are seeking short term profits. AGENCIES: Federal agency securities and/or Government-sponsored enterprises. BANKERS’ ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments. BROKER/DEALER: Any individual or firm in the business of buying and selling securities for itself and others. Broker/dealers must register with the SEC. When acting as a broker, a broker/dealer executes orders on behalf of his/her client. When acting as a dealer, a broker/dealer executes trades for his/her firm's own account. Securities bought for the firm's own account may be sold to clients or other firms, or become a part of the firm's holdings. CERTIFICATE OF DEPOSIT (CD): A short or medium term, interest bearing, FDIC insured debt instrument offered by banks and savings and loans. Money removed before maturity is subject to a penalty. CDs are a low risk, low return investment, and are also known as “time deposits”, because the account holder has agreed to keep the money in the account for a specified amount of time, anywhere from a few months to several years. COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. COMMERCIAL PAPER: An unsecured short-term promissory note, issued by corporations, with maturities ranging from 2 to 270 days. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 11 of 17 COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the Otay Water District. It includes detailed financial information prepared in conformity with generally accepted accounting principles (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance-related legal and contractual provisions, extensive introductory material, and a detailed statistical section. COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on the bond’s face value. (b) A certificate attached to a bond evidencing interest due on a set date. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities. DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveraging factor, or (2) financial contracts based upon notional amounts whose value is derived from an underlying index or security (interest rates, foreign exchange rates, equities or commodities). DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale also is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 12 of 17 FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L’s, small business firms, students, farmers, farm cooperatives, and exporters. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures deposits in member banks and thrifts. FEDERAL FARM CREDIT BANK (FFCB): The Federal Farm Credit Bank system supports agricultural loans and issues securities and bonds in financial markets backed by these loans. It has consolidated the financing programs of several related farm credit agencies and corporations. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL AGRICULTURAL MORTGAGE CORPORATION (FAMC or Farmer Mac): A stockholder owned, publicly-traded corporation that was established under the Agricultural Credit Act of 1987, which added a new Title VIII to the Farm Credit Act of 1971. Farmer Mac is a government sponsored enterprise, whose mission is to provide a secondary market for agricultural real estate mortgage loans, rural housing mortgage loans, and rural utility cooperative loans. The corporation is authorized to purchase and guarantee securities. Farmer Mac guarantees that all security holders will receive timely payments of principal and interest. FEDERAL HOME LOAN BANK (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC or Freddie Mac): A stockholder owned, publicly traded company chartered by the United States federal government in 1970 to purchase mortgages and related securities, and then issue securities and bonds in financial markets backed by those mortgages in secondary markets. Freddie Mac, like its competitor Fannie Mae, is regulated by the United States Department of Housing and Urban Development (HUD). OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 13 of 17 FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven-member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA): An independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. It is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): A government owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because the payments to investors are guaranteed by the full faith and credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities. INTEREST-ONLY STRIPS: A mortgage-backed instrument where the investor receives only the interest, no principal, from a pool of mortgages. Issues are highly interest rate sensitive, and cash flows vary between interest periods. Also, the maturity date may occur earlier than that stated if all loans within the pool are pre-paid. High prepayments on underlying mortgages can return less to the holder than the dollar amount invested. INVERSE FLOATER: A bond or note that does not earn a fixed rate of interest. Rather, the interest rate is tied to a specific interest OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 14 of 17 rate index identified in the bond/note structure. The interest rate earned by the bond/note will move in the opposite direction of the index. An inverse floater increases the market rate risk and modified duration of the investment. LEVERAGE: Investing with borrowed money with the expectation that the interest earned on the investment will exceed the interest paid on the borrowed money. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes. LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase/reverse repurchase agreements that establish each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded. MUTUAL FUNDS: An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 15 of 17 various investment vehicles, such as stocks, bonds, and money market instruments. MONEY MARKET MUTUAL FUNDS: An open-end mutual fund which invests only in money markets. These funds invest in short term (one day to one year) debt obligations such as Treasury bills, certificates of deposit, and commercial paper. PASSIVE INVESTING: An investment strategy involving limited ongoing buying and selling actions. Passive investors will purchase investments with the intention of long-term appreciation and limited maintenance, and typically don’t actively attempt to profit from short term price fluctuations. Also known as a buy-and-hold strategy. PRIMARY DEALER: A designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria, including capital requirements and participation in Treasury auctions. These dealers submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission registered securities broker/dealers, banks, and a few unregulated firms. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state—the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. PUBLIC SECURITIES ASSOCIATION (PSA): A trade organization of dealers, brokers, and bankers who underwrite and trade securities offerings. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 16 of 17 RANGE NOTE: An investment whose coupon payment varies and is dependent on whether the current benchmark falls within a pre-determined range. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return. REGIONAL DEALER: A securities broker/dealer, registered with the Securities & Exchange Commission (SEC), who meets all of the licensing requirements for buying and selling securities. REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves. SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection. SECONDARY MARKET: A market made for the purchase and sale of outstanding securities issues following their initial distribution. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 15C3-1: See Uniform Net Capital Rule. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, FAMCA, etc.), and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised INVESTMENT POLICY 27 09/15/93 05/05/21 Page 17 of 17 TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond. Investment Policy Review Jon Ravaglioli Finance Manager 1May 7, 2025 Attachment C Policy Review Purpose: ▪Annual Investment Policy Review ❑California Government Code Section 53646 ▪Delegation of Investment Authority to CFO ❑California Government Code Section 53607 2 Investment Objectives To invest public funds in a manner which will provide maximum security while achieving the best possible interest return, meeting daily cash flow demands of the entity, and complying with all state statutes governing public fund investments. Objectives (in order of priority): ▪Safety ❑Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the District will diversify its investments by investing funds among a variety of securities offering independent returns and financial institutions. ▪Liquidity ❑The investment portfolio will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated. ▪Yield ❑The investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio. 3 Safety Liquidity Yield Portfolio Allocations California Government Code restricts the types of securities the District can invest in, as well as the amounts or percent of funds that can be allocated to each category. The District overlays additional limits that are as strict or stricter in each category. 4 Portfolio Allocations The District primarily invests in three types of securities: ▪US Treasuries ❑United States Treasury Bills, Bonds, Notes or those instruments for which the full faith and credit of the United States are pledged for payment of principal and interest. ▪Government Agencies ❑Bonds, debentures, notes and other evidence of indebtedness issued by any of the following government agency issuers like: Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), Federal Farm Credit Bank (FFCB). ▪LAIF ❑State-managed investment pool for California’s local governments and special districts, managed by the State Treasurer. 5 Ladder Investment Approach The District attempts to match its investments with anticipated cash flow requirements. The approach is to keep a percentage highly liquid (e.g., LAIF), and a percentage in fixed income with set maturity dates. These maturity dates are generally under 2 years. To limit risk inherent in longer-term investments, the State of California has mandated a max maturity of 5 years. 6 Maturity Value FY25Q4 $5,000,000 FY26Q1 $9,000,000 FY26Q2 $9,500,000 FY26Q3 $3,000,000 FY27Q2 $9,500,000 FY27Q4 $2,000,000 Policy Reviews/Changes Annual Reviews ▪The District reviews Investment Policy No. 27 annually to ensure compliance with any legislative changes. ❑No legislative changes for the current fiscal year. ▪Each year, the District recertifies its authorized security brokers and dealers by reviewing their latest audited financial statements, Financial Industry Regulatory Authority (FINRA) record, registration, and insurance. As part of this process, brokers must certify that they have read and understand the District’s Investment Policy and suggest any recommended changes. ▪No recommended changes from this year’s broker review. 7 Delegation of Investment Authority ▪Authority for managing the Otay Water District’s investment program is derived from California Government Code Section 53607. ▪The Board delegates investment management responsibility annually to the Chief Financial Officer (CFO). ▪The CFO is then responsible for all transactions undertaken and establishes a system of controls to regulate activities, as well as investment procedures aligned with policy. 8 Conclusion – Requesting that the Board: Review and approve the 2025 Investment Policy No. 27 Re-delegate authority for all investment activities to the District’s Chief Financial Officer 9 Questions 10 1 STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: May 7, 2025 SUBMITTED BY: Tenille M. Otero PROJECT: Various DIV. NO. All APPROVED BY: Jose Martinez, General Manager SUBJECT: Approval of Funding and Term for Continued Participation in the Water Conservation Garden Authority (WCA) beginning July 1, 2025 GENERAL MANAGER’S RECOMMENDATION: Approve a funding amount and term for continued participation in the Water Conservation Garden Authority (WCA) beginning July 1, 2025. COMMITTEE ACTION: No committee action. PURPOSE: To obtain board approval to rescind the Otay Water District’s withdrawal letter from the WCA Joint Powers Agreement (JPA) and to provide funding for a specific term to operate the Water Conservation Garden beginning July 1, 2025. ANALYSIS: As a member of the WCA, the Otay Water District, along with other members, has been working to assist with planning to assume operational control of the Water Conservation Garden since March 2024, after the termination of the third-party contract operator. Much has been accomplished during this time, including budget development and implementation, establishing a formal volunteer program, administrative actions to establish accounting practices and employee policies, acquiring necessary insurance, and hiring staff to support Garden operations. These efforts and accomplishments have resulted in the successful operation of the Garden during this interim period. Much work is still required to carry out the Garden’s mission and develop agreement amendments, alternate operating and membership options, long-term operating plans, and more. AGENDA ITEM 8b During this transitional period, the WCA members voiced concerns over the cost of continued support for the Garden. As a result, all five contributing members, including the Helix Water District, Otay Water District, Sweetwater Authority, City of San Diego, and San Diego County Water Authority, submitted letters of withdrawal per Article 17 of the Amended and Restated JPA Creating the Water Conservation Garden Authority. The withdrawal means that the Garden will not have a funding source after June 30, 2025. The WCA board has discussed options for continued funding support. Still, one agency, the Helix Water District, has committed to continue funding the Garden. Also, except for Helix, none of the other WCA members have rescinded their withdrawal letters. At its March 19 board meeting, Helix’s board voted to continue funding the Garden beginning July 1, 2025, for 18 months through December 31, 2026, reverting to a 12-month term if other Garden WCA members give no substantial participation commitment by June 30, 2025. Additionally, at the Otay Water District’s April 2 board meeting, staff provided an update on the WCA JPA, and the board asked staff to make a recommendation at its May 7 board meeting. The following option assumes these conditions on July 1, 2025: 1. The Helix Water District and Otay Water District are the sole contributing members. 2. The Water Conservation Garden Authority account balance is approximately $350,000. 3. The current staffing levels are maintained. 4. The estimated baseline budget requires member agency contributions in the amount of approximately $526,000. This reflects the fiscal year 2024-25 budget with an inflationary increase of 3.6% and assumes the same offsetting revenues from Garden operations of approximately $85,000. 5. If the Garden is returned to the Grossmont-Cuyamaca Community College District (GCCCD), final year operations will be at a reduced level and lower estimated budget. Option 1: The Otay Water District will rescind its withdrawal letter and continue funding the operations of the Garden. As a WCA member, the District will contribute approximately $150,000 in fiscal year 2026. The amount of funding for the remaining six months (ending December 31, 2026) for fiscal year 2027 will be determined upon others who may become members during that period and other funding sources the Garden may bring in. Option 2: The District will not rescind its withdrawal letter and will not continue funding the operation of the Garden. The restructured operating plan would include possible new members and different types of contributing members, expanded programs that would invite new membership on various sustainability issues, and would try to position the Garden for continued operations. Suppose a sustainable plan is not developed before December 31, 2025. In that case, Otay will provide an irrevocable notice to the GCCCD of the pending transfer on July 1, 2026, by an agreed-upon legal methodology (MOU or new withdrawal letter). If the board moves forward with the approved recommendation, the District and Helix (and any other members who rescind their withdrawal letters before June 30, 2025) will work with the WCA’s legal counsel to evaluate whether a memorandum of understanding is required or whether the District should rescind the letter of withdrawal and move forward under the existing agreement. The collection and use of additional donations is not appropriate, as there is no long-term commitment that the Garden will remain open after the term of these options. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The FY 2026 budget includes this amount for the Water Conservation Garden. STRATEGIC GOAL: Enhance customer and community engagement to increase public awareness of the water industry and the District while providing superior customer service. LEGAL IMPACT: None. RESOLUTION NO. 4454 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT PLACING IN NOMINATION JOSE MARTINEZ AS A MEMBER OF THE ASSOCIATION OF CALIFORNIA WATER AGENCIES REGION 10 BOARD MEMBER BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AS FOLLOWS: A.Recitals (i)The Board of Directors (Board) of the Otay Water District does encourage and support the participation of its members in the affairs of the Association of California Water Agencies (ACWA). (ii)General Manager, Jose Martinez is currently serving as a board member for ACWA Region 10. B.Resolves NOW THEREFORE, BE IT RESOLVED THAT THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT, (i)Does place its full and unreserved support in the nomination of Jose Martinez for the Board Member of ACWA Region 10. (ii)Does hereby determine that the expenses attendant with the service of Jose Martinez in ACWA Region 10 shall be borne by the Otay Water District. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting held this 7th day of May, 2025. Ayes: Noes: Abstain: Absent: __________________________________ President ATTEST: _____________________________ District Secretary AGENDA ITEM 8c I, Tita Ramos-Krogman, District Secretary to the Board of Directors of Otay Water District, hereby certify that the foregoing Resolution No. 4454 was introduced at a regular meeting of the Board of Directors of said District, held on the 7th day of May, 2025, and was adopted at that meeting by the following roll call vote: Ayes: Noes: Abstain: Absent: ___________________________________ Tita Ramos-Krogman, District Secretary STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 7, 2025 SUBMITTED BY: Kevin Koeppen Assistant Chief of Finance PROJECT: Various DIV. NO. ALL APPROVED BY: Joe Beachem, Chief of Finance Jose Martinez, General Manager SUBJECT: Adopt Resolution No. 4453 Amending Section 25 of the District’s Code of Ordinances to incorporate “Establishing a Procedure for Ratepayer Objections to Proposed Water and Sewer Fees and Charges” GENERAL MANAGER’S RECOMMENDATION: That the Board Adopt Resolution No. 4453 amending Section 25 of the District’s Code of Ordinances to incorporate “Establishing a Procedure for Ratepayer Objections to Proposed Water and Sewer Fees and Charges.” PURPOSE: The purpose of this item is to request that the Board adopt Resolution No. 4453 amending Section 25 of the District’s Code of Ordinances to incorporate “Establishing a Procedure for Ratepayer Objections to Proposed Water and Sewer Fees and Charges.” ANALYSIS: Proposition 218 established procedural requirements and limitations that agencies must follow when adopting property-related fees for water or sewer service. Assembly Bill 2257 (2024) authorizes agencies to adopt a procedure that requires any legal objections to a fee structure to be timely made in writing and allows the District to AGENDA ITEM 8d 2 respond to and resolve any objections prior to the Board adopting proposed rates. Adopting this procedure will protect the District against unanticipated legal challenges to its fee structure and will ensure a clear administrative record of the basis for, and any legal objections to, the fee structure. The District’s current budgeting and rate-setting process includes adopting water and sewer fees and charges in accordance with procedures outlined in Article XIII D of the California Constitution, commonly referred to as “Proposition 218.” Proposition 218 establishes certain procedural requirements and substantive limitations that local public agencies must follow to adopt a property-related fee, charge, or assessment (“fee”) for water or sewer service. Staff recommends that the Board adopt Resolution No. 4453, which establishes an exhaustion of administrative remedies procedure (“exhaustion procedure”) consistent with Assembly Bill No. 2257 (2024) (chaptered at Government Code sections 53759.1 and 53759.2). The exhaustion procedure allows ratepayers to raise legal objections to a proposed fee structure to the District’s attention early in the fee consideration process, providing the District with an opportunity to address or resolve any objections before the District’s Board of Directors makes a final decision on whether to adopt a proposed fee pursuant to Proposition 218. The exhaustion procedure requires that a customer present any legal objections to the fee prior to that fee’s adoption to preserve any legal right to later pursue legal action against the District regarding the fee structure. Under the exhaustion procedure, the District will generally: • Notify the public of the amount of the proposed fee; • Make publicly available (including on the District’s website) the District’s written basis for the proposed fee; • Provide a 45-day period for ratepayers to review the proposed fee and its basis and make any legal objections; • Require that any legal objection be submitted in writing to the District and specify the grounds for alleged noncompliance with Proposition 218; and • Require that the District consider and respond in writing to any timely-submitted legal objections prior to the close of the protest hearing required under Proposition 218. In connection with the District’s consideration of water or sewer rate increases, the Board will determine at the hearing whether: 3 • The written objections and the District’s response warrant clarifications to the proposed fee or assessment or the Cost of Service Report; • The proposed fee or assessment should be reduced; • Further review of the Cost of Service Report and proposed fee or assessment is necessary before making a determination on whether clarification or reduction is needed; and • The protest hearing or ballot tabulation hearing, as required under Sections 4 or 6 of Article XIII D of the California Constitution, should proceed. Approximately 15 days will be added to the 45-day window required under the District’s traditional Proposition 218 notice and protest procedures. These additional days will allow for time to respond in writing to all written objections, as required under AB 2257. Adopting this procedure will protect the District against unanticipated legal challenges to its fee structure and will ensure a well-documented administrative record of the basis for, and any legal objections to, the fee structure. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None STRATEGIC GOAL: The District ensures its continued financial health through long-term financial and debt planning. LEGAL IMPACT: None Attachments: Attachment A – Committee Action Attachment B – Resolution No. 4453 Exhibit I Strike-through Section 25 Exhibit II Proposed Section 25 ATTACHMENT A SUBJECT/PROJECT: Adopt Resolution No. 4453 Amending Section 25 of the District’s Code of Ordinances to incorporate “Establishing a Procedure for Ratepayer Objections to Proposed Water and Sewer Fees and Charges” COMMITTEE ACTION: This item was presented to the Finance & Administration Committee at a meeting held on April 15, 2025, and the following comments were made: • Staff provided the staff report to the Committee and introduced Ms. Claire Collins, Counsel from Hanson Bridgett, LLP, who responded to questions and comments from the Committee. Ms. Collins stated that the amendment promotes government efficiencies and also provides a safe harbor for public agencies in setting their rates. She also noted that she personally worked with Associaion of California Water Agencies’ Legal Affairs Committee to have this option available to agencies. • The Committee noted that the redlined language in Exhibit I of the staff report is based on legislation that recently passed. • The Committee directed staff to reach out to Raftelis Financial Consultants and ask if they have any input on staff’s proposed establishment and procedure for ratepayer objections to proposed water and sewer fees and charges. Raftelis has not taken an official position on AB2257. They have been explaining the process to their clients so that the client may make a determination on whether their agency will implement an administrative exhaustion process. Upon completion of the discussion, the Committee supported staffs’ recommendation and presentation to the full board as an action item. RESOLUTION NO. 4453 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT TO AMEND SECTION 25 OF THE DISTRICT’S CODE OF ORDINANCES ESTABLISHING A PROCEDURE FOR RATEPAYER LEGAL OBJECTIONS TO PROPOSED WATER AND SEWER FEES AND CHARGES WHEREAS, the Otay Water District Board of Directors has been presented with a resolution “ESTABLISHING A PROCEDURE FOR RATEPAYER LEGAL OBJECTIONS TO PROPOSED WATER AND SEWER FEES AND CHARGES” authorizing the establishment of an administrative remedies procedure (“exhaustion procedure”); and WHEREAS, the Otay Water District is a Municipal Water District (“District”), formed pursuant to Water Code Section 711 et seq. and provides water and sewer service to its retail customers; and WHEREAS, California law requires that certain changes to retail water and sewer fees and charges be adopted in accordance with procedures outlined in Article XIII D, of the California Constitution, commonly referred to as “Proposition 218;" and WHEREAS, Proposition 218 establishes certain procedural requirements and substantive limitations that a local public agency must follow to adopt a property-related fee, charge, or assessment (“fee”) for water or sewer service; and Attachment B WHEREAS, this resolution is intended to adopt an exhaustion procedure consistent with Assembly Bill No. 2257 (2024) (chaptered at Government Code sections 53759.1 and 53759.2). The exhaustion procedure allows ratepayers to bring a legal objection regarding the proposed fee to the District’s attention early in the fee consideration process, and provides an opportunity for the District to address or resolve any objections before the District’s Board of Directors makes a final decision on whether to adopt a proposed fee pursuant to Proposition 218. The exhaustion procedure requires ratepayers to participate in the pre-adoption objection process in order to preserve a legal right to sue the District regarding the fee structure. WHEREAS, the proposed exhaustion procedure will generally require the District to: notify the public of the amount of the proposed fee, make the District’s written basis for the proposed fee publicly available (including on the District’s website), provide 45 days for any ratepayer to review the proposed fee and its basis and make any legal objection, require any such objection to be in a writing to the District that specifies the grounds for alleged noncompliance with Proposition 218, and require the District to consider and respond in writing to timely submitted objections prior to the close of the protest hearing required under Proposition 218; and WHEREAS, the Otay Water District Board of Directors has been presented with an amended Section 25 of the District’s Code of Ordinances for the conditions for water service of the Otay Water District; and WHEREAS, the amended Section 25 has been reviewed and considered by the Board, and has determined that it is in the interest of the District to adopt the amended Section 25; and WHEREAS, the strike-through copy of the proposed policy is attached as Exhibit I to this resolution; and NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Board of Directors of the Otay Water District that the amended Section 25, attached as Exhibit II, is hereby adopted and the following is ordered: 1.The District Board hereby adopts the exhaustion of administrative remedies procedure contained in Government Code section 53759.1(c), as further described below. 2.In connection with the District’s consideration of water or sewer rate increases, the District Board hereby directs the staff to take the following actions: a.Public Hearing Date. Establish a date certain for a public hearing on any proposed water or sewer rates, at which hearing the staff shall present a summary of any written legal objections from the public during the objection period and responses from staff to those objections. The Board may consider any protests to the proposed fee increases on the same or a different date, but only after considering all objections and responses. The Board may continue the hearing from time-to-time in order to provide additional time for consideration of, and responses to, any timely- submitted legal objections and/or protests. b.Cost of Service Report. Make available to the public the written basis for the proposed fee or assessment (the “Cost of Service Report”) by: i.posting it on the District’s website, ii.making it available at the headquarters of the District, and iii.mailing it to any property owner upon request. c.Objection Period. Establish a time frame for an “objection period” of not less than 45 days between mailing of the notice described below and the public hearing, during which period the public may submit a written legal objection to any aspect of the Cost of Service Report. d.Public Notice. Notify the public in writing of the availability of the Cost of Service Report in the notice sent pursuant to subdivision (c) of Section 4 or paragraph (1) of subdivision (a) of Section 6 of Article XIII D of the California Constitution, and include in that notice: i.a prominently displayed statement that all written legal objections must be submitted within the written objection period and that a failure to timely object in writing bars any right to challenge that fee or assessment through a legal proceeding; and ii.a prominently displayed description of all substantive and procedural requirements for submitting a legal objection to the proposed fee or assessment; and iii.the process for submitting protests. 3.In connection with the District’s consideration of water or sewer rate increases, the District Board will determine at the hearing: a.Whether the written legal objections and the District’s response warrant clarifications to the proposed fee or assessment or the Cost of Service Report. b.Whether to reduce the proposed fee or assessment. c.Whether to further review the Cost of Service Report and proposed fee or assessment before making a determination on whether clarification or reduction is needed. d.Whether to proceed with the protest hearing or ballot tabulation hearing required under Section 4 or 6 of Article XIII D of the California Constitution. 4.This resolution will take effect immediately and will apply to any proposed water or sewer fees for which notice is provided pursuant to Proposition 218. 5.Pursuant to Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding that alleges non-compliance with Proposition 218 for any new, increased, or extended fee adopted by the District, unless that person or entity has timely submitted to the District a written legal objection to that fee that specifies the grounds for the alleged non-compliance. 6.The Board authorizes District staff to take such other and additional actions as may be reasonably necessary to implement the purpose of this resolution and implement the exhaustion procedure. PASSED, APPROVED and ADOPTED by the Board of Directors of the Otay Water District at a board meeting held this 7th day of May 2025, by the following vote: Ayes: Noes: Abstain: Absent: ________________________ President ATTEST: ____________________________ District Secretary APPROVED AS TO FORM: Claire Hervey Collins, Special Counsel Hanson Bridgett LLP 25-1 25 SECTION 25 CONDITIONS FOR WATER SERVICE 25.01 SERVICE AREA Water service shall be furnished by the District only to property within (annexed to) a water improvement district within the District’s service area. Water service to property located outside an improvement district may be furnished only upon prior approval of the Board of Directors. Temporary water service to property located outside an improvement district may be furnished, in accordance with Section 25.03 D.15., upon the approval of the General Manager. 25.02 DEFINITION OF "HCF" AND "UNIT OF WATER" As used in the Code the terms "HCF" and "unit of water" are interchangeable and each shall mean 100 cubic feet or 748 gallons of water. 25.03 DEFINITIONS OF WATER SERVICE CATEGORIES, WATER RATES, CHARGES AND FEES Water service furnished by the District shall be under the categories of services and at the rates, charges and fees as set forth in Appendix A, Section 25. All District water rates, charges and fees are subject to Board approval of rate increases beginning January 1, 2023 and periodically thereafter through December 31, 2027. The increases shall be the amount sufficient to cover pass-through costs from wholesale water and energy suppliers, and increases in overall non-supplier costs, in addition to increases in pass- through costs, not to exceed the annual increase in the Consumer Price Index-U for the San Diego-Carlsbad Area as of January 31 of the preceding year. Five-year periodic pass–through rate increases or decreases from District wholesalers – All District water rates, charges and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2023 through December 31, 2027. A.Set-up Fees for Accounts A set-up fee shall be charged for each account transferred to another customer. See Appendix A, 25.03 A. for charges. A deposit will be required of all customers who do not own the property to be served. See Appendix A, 25.04 A. for deposit amounts. B.Monthly Fixed MWD & CWA Charges Each potable water service customer shall pay a monthly MWD and CWA fixed system charge, as set forth in Appendix A, 25.03 B. Proceeds of the charge will be used to pay for operating and maintenance costs, including the following: MWD Readiness- Exhibit I 25-2 to-Serve Charge and Capacity Reservation Charge; CWA Infrastructure Access Charge, Customer Service Charge, Emergency Storage Charge, and Supply Reliability Charge. The MWD & CWA charge is based on the size of the water meter(s) in service with the exception of upsizing the meter for individually metered residential fire service, as described in Section 38.03 of the Code. The MWD & CWA charge shall start upon installation of the meter. C.Monthly Fixed System Charges Each water service customer shall pay a monthly fixed system charge, as set forth in Appendix A, 25.03 C. Proceeds of the charge will be used to pay for water system replacement, maintenance, and operation expenses. The system charge is based on the customer class and the size of the water meter(s) in service. For individually metered residential fire service, as outlined in Section 38.03 of the Code, the size and fee would be set based on water use requirements without additional fire capacity. The system charge shall start upon installation of the meter. D.Categories of Water Service The definitions and rates and charges for water service furnished by the District shall be as follows: 1.DOMESTIC RESIDENTIAL WATER (a)Defined as: Water service for single residential and individually metered attached households as well as other domestic uses (other than that provided for in Paragraph 2.(a)). (b) Base Rate: The tiered base rates of water furnished under this category shall be set forth in Appendix A, 25.03 D.1.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.1. 2.MULTI-RESIDENTIAL WATER (a)Defined as: Master metered water service for multiple residential households, for example, duplexes, townhomes, apartments, and mobile homes. (b)Base Rate: The tiered base rates of water furnished for each dwelling unit in this category shall be as set forth in Appendix A, 25.03 D.2.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.2. 25-3 3.BUSINESS AND COMMERCIAL WATER (a)Defined as: Potable water service for commercial and industrial establishments. (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.3.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.3. 4.NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE USING POTABLE WATER (a)Non-public irrigation is potable water service provided solely for irrigation of landscape or landscaping, as defined in Section 0.02 of this Code. (b) Commercial agricultural engaged in the growing or raising of livestock, in conformity with recognized practices of husbandry, for the purpose of commerce, trade or industry, or agricultural horticultural or floricultural products and produced, (i) for human consumption or for the market, or (ii)for the feeding of fowl or livestock produced for human consumption or for the market, or (iii) for feeding fowl or livestock for the purpose of obtaining their products for human consumption or for the market, such products to be grown or raised on a parcel of land having an area of not less than one acre utilized exclusively therefore. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.4.(c). (d) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.4. 5.PUBLICLY-OWNED WATER (a)Defined as: Potable water service for publicly- owned establishments and/or entities exempt from District property taxes. 25-4 (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.5.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.5. 6.PUBLIC IRRIGATION WATER (a)Defined as: Potable water service provided solely for irrigation of publicly-owned landscape or landscaping as defined in Section 0.02 of this Code and/or entities exempt from District property taxes. (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.6.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.6. 7.CONSTRUCTION WATER (a)Defined as: Potable water service for construction or for temporary purposes pursuant to Section 31 of this Code. (b)The rates for water furnished under this category is set forth in Appendix A, 25.03 D.7.(b). (c)Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.7. 8.RECYCLED WATER – NON-PUBLIC IRRIGATION, CONSTRUCTION, AND CERTAIN NON-IRRIGATION PURPOSES (a)Defined as: Non-potable and recycled water service provided for irrigation of landscaping, as defined in Section 0.02 of the Code, and certain non- irrigation purposes, other than domestic use, in compliance with federal, state, and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. 25-5 (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.8.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 9.RECYCLED WATER - COMMERCIAL (a)Defined as: Non-potable and recycled water service provided for commercial customers, as defined in Section 0.02 of the Code, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.9.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 10.RECYCLED WATER – PUBLIC IRRIGATION (a)Defined as: Non-potable and recycled water service provided for irrigation of publicly-owned landscaping, as defined in Section 0.02 of the Code, and/or entities exempt from District property taxes, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.10.(c). 25-6 (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 11.POTABLE INTERIM BUSINESS AND COMMERCIAL WATER (a) Defined as: Potable water service provided by the District on a temporary basis to business and commercial customers in Improvement District 7 (ID 7) pursuant to individual agreements. (b)If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.11.(b). (c)If the customer has paid equivalent capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.3.(b). (d)The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.3. (e)Conversion to Permanent Service. At such time as use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 12.POTABLE INTERIM NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE WATER (a) Defined as: Potable water service provided by the District on a temporary basis to non-public irrigation and commercial agriculture customers in Improvement District 7 (ID 7). (b)If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.12.(b). (c)If the customer has paid capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.4.(c). (d)The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.4. (e)Conversion to Permanent Service. At such time as 25-7 use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 13.TANK TRUCKS (a)Defined as: Water service provided for the filling of tanks on motor vehicles transporting water used for other than earth grading purposes, which service shall be made only through a portable meter issued by the District to a customer specifically for use in accordance with the provisions herein for such service. (b)The rate for metered water furnished under this category is reflected in Appendix A, 25.03.D.13. (b), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.4. (c)Requirements for Use of Water Meter (1)To receive such service, the customer must make a deposit for the use a water meter furnished by the District. The fee is set forth in Appendix A, 31.03 A.1. (2)Upon termination of the service, the Dis- trict will refund the amount of deposit remaining after making the following deductions: (i)Cost of repairing or replacing the meter, fire hydrant and/or any fittings damaged or lost while in use; and (ii)Unpaid charges for water or other applicable charges. (3)Prior to the end of each six month period following issuance of a meter under this section, or at the request of the District, whichever is earlier, the customer shall return the meter to the District for inspection, repair, or calibration as deemed necessary by the District. (4)Payment for water service under this cate- gory shall be made as follows: (i)The bill shall be based on the amount of water actually used, which shall be determined by the District’s reading of the meter or by a report made by the customer to the District in the manner prescribed by the District. 25-8 (ii) Where the actual amount of water used cannot be determined as provided in (i), the District will issue a bill based on a District estimate of the amount of water used, as determined by the District. Such estimates shall be reconciled with actual amounts used when the customer returns the meter to the District as provided in paragraph 3 above. (iii)Payments shall be made as specified on the bill. 14.WATER SERVICE OUTSIDE DISTRICT BOUNDARIES (a)Defined as: Water service for real property outside the service area of the District. (b)This service will be provided only upon prior approval of the General Manager when there is a surplus of water over and above the existing needs for service in the District. This service is temporary and may be terminated upon written notice from the District. Customers for this service are sometimes referred to as "outside users." (c)Customers applying for this category of service shall pay an application fee as set forth in Appendix A, 25.03 D.14.(c). (d)The rate for metered water furnished under this category shall be charged the rate as described in Appendix A, 25.03 D.14.(d), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.5. (e)Customers requesting only fire service or a fire hydrant under this category shall be charged a capacity fee based on one (1) EDU for a permanent meter in the improvement district from which the fire service derives its flow, plus a monthly system charge at the rate set forth in Appendix A, 25.03 D.16.(c). 15.WATER SERVICE OUTSIDE AN IMPROVEMENT DISTRICT (a)Defined as: Water service for property located within the boundaries of the District, but not within a water improvement district. Customers for this service are sometimes referred to as "outside users." 25-9 (b)Customers applying for this service shall pay an application fee as set forth in Appendix A, 25.03 D.15.(b). The District will review the application to determine whether the land to be served should be annexed to an improvement district. If it is determined that annexation is not practical, the Board of Directors may authorize service as an outside user. This service will be reviewed periodically until it is determined that the property must be annexed to an improvement district or that service must be terminated. (c) The rate for metered water furnished under this category is as set forth in Appendix A, 25.03 D.15.(c), plus a monthly system charge as set forth in Appendix A, 25.03 C.5. (d)Upon approval of the Board of Directors, a cus- tomer, who has paid all construction costs for facilities necessary to serve the customer's property in lieu of annexation to a water improvement district, shall be exempt from the provision for this category of service. 16.SERVICE FOR FIRE PROTECTION (a)Defined as: Water service provided by the Dis- trict solely to feed fire hydrants or fire sprinkler systems from lines or laterals con- nected to District water mains. (b)The District will not make a charge for the quantity of water used for fire protection purposes. (c)The monthly system charge for this category of service is set forth in Appendix A, 25.03 D.16.(c) for each connection to a District water main made for fire protection service. 17.WATER SERVICE UNDER SPECIAL AGREEMENTS (a)Defined as: Water service provided under express agreements approved by the Board of Directors for service to golf courses and other entities, which service may be curtailed or interrupted by the District under conditions provided in such agreements. (b)For water service under this category the base rate shall be determined on a case-by-case basis. E.Energy Charges for Pumping Water 25-10 In addition to water rates and other charges provided for in this Section 25.03, customers shall be charged an energy pumping charge based on the quantity of water used and the elevation to which the water has been lifted to provide service. 1.Potable Water Energy Pumping Charge: The energy pumping charge for potable water shall be made at the rate set forth in Appendix A, 25.03 E.1. 2.Recycled Water Energy Pumping Charge: The energy pumping charge for recycled water shall be made at the rate set forth in Appendix A, 25.03 E.2. 25.04 DEPOSITS BY LESSEES OR NON-OWNERS OF PROPERTY A.AMOUNT OF DEPOSIT The customer's deposit shall be applied to reduce or satisfy any delinquent payment or other amount due the District at the time of termination of water service to the customer. Any portion of the deposit remaining, after satisfaction of the amount due, shall be refunded to the customer that made the deposit. The deposits listed per Appendix A, 25.04 A. may be waived for a new residential applicant where the applicant demonstrates credit worthiness based upon prior utility payments or a non-delinquent water account for one year or other similar evidence of credit. B.REFUND OF DEPOSIT Where funds have been on deposit for twelve months in a domestic service account and there has been no more than one delinquent payment on that account during that period, the District will apply a credit to the water account in the amount of the deposit. C.LETTER OF CREDIT A letter of credit, in a form approved by the General Manager or Department Head of Finance, may be submitted to the District to satisfy the deposit requirements. 25.05 SERVICE TO SUBSEQUENT CUSTOMERS After a water meter has been installed for a customer and all fees and charges have been paid, water service may be furnished to a subsequent customer through the water meter installed without payment of further charges, except for the set-up fee 25-11 for transferred accounts, payment of delinquent charges for the applicant's service or other deposits that may be required by this Code. 25.06 PUBLIC NOTIFICATION AND LEGAL OBJECTION PROCESS FOR RATE CHANGES California law requires that certain changes to retail water and sewer fees and charges be adopted in accordance with procedures outlined in Article XIII D, of the California Constitution, commonly referred to as “Proposition 218." Additionally, the Otay Water District has established a formal process, an exhaustion of administrative remedies procedure (“exhaustion procedure”) consistent with Assembly Bill No. 2257 (2024) (chaptered at Government Code sections 53759.1 and 53759.2). The exhaustion procedure allows ratepayers to raise legal objections regarding proposed water or sewer rate increases. This process ensures that ratepayers have an opportunity to voice legal objections to a proposed property-related fee, charge, or assessment (“fee”) for water or sewer service, and provides an opportunity for the District to address or resolve any legal objections before the Board of Directors makes a final decision on whether to adopt a proposed fee pursuant to Proposition 218. The exhaustion procedure outlined below provides a structured framework and requires ratepayers to participate in the pre- adoption legal objection process in order to preserve the legal right to bring forward any judicial action or proceeding against the District regarding the fee structure. A.GENERAL DISTRICT REQUIREMENTS PER THE EXHAUSTION PROCEDURE 1.District will notify the public of the amount of the proposed fee by way of the Proposition 218 notice mailed to all customers and/or owners of record, 2.Make the District’s written basis for the proposed fee (including any cost of service report) publicly available (including on the District’s website), 3.Provide 45 days for any ratepayer to review the proposed fee and its basis and make any legal objection, 4.Require any such objection to be in a writing to the District that specifies the grounds for alleged noncompliance with Proposition 218, and 5.Require the District to consider and respond in writing to timely submitted objections prior to the close of the protest hearing required under Proposition 218. B.BOARD ACTIONS AND PUBLIC PARTICIPATION 1.The District Board hereby adopts the exhaustion of administrative remedies procedure contained in 25-12 Government Code section 53759.1(c), as further described below. 2.In connection with the District’s consideration of water or sewer rate increases, the District Board hereby directs the staff to take the following actions: (a)Public Hearing Date. Establish a date certain for a public hearing on any proposed water or sewer rates, at which hearing the staff shall present a summary of any written legal objections from the public during the objection period and responses from staff to those objections. The Board may consider any protests to the proposed fee increases on the same or a different date, but only after considering all objections and responses. The Board may continue the hearing from time-to-time in order to provide additional time for consideration of, and responses to, any timely-submitted legal objections and/or protests. (b)Cost of Service Report. Make available to the public the written basis for the proposed fee or assessment (the “Cost of Service Report”) by: (i)posting it on the District’s website, (ii)making it available at the headquarters of the District, and (iii)mailing it to any property owner upon request. (c)Objection Period. Establish a time frame for an “objection period” of not less than 45 days between mailing of the notice described below and the public hearing, during which period the public may submit a written legal objection to any aspect of the Cost of Service Report. (d)Public Notice. Notify the public in writing of the availability of the Cost of Service Report in the notice sent pursuant to subdivision (c) of Section 4 or paragraph (1) of subdivision (a) of Section 6 of Article XIII D of the California Constitution, and include in that notice: (i)a prominently displayed statement that all written legal objections must be submitted within the written objection period and that a failure to timely 25-13 object in writing bars any right to challenge that fee or assessment through a legal proceeding; and (ii)a prominently displayed description of all substantive and procedural requirements for submitting an objection to the proposed fee or assessment; and (iii)the process for submitting protests. 3.In connection with the District’s consideration of water or sewer rate increases, the District Board will determine at the hearing: (a)Whether the written legal objections and the District’s response warrant clarifications to the proposed fee or assessment or the Cost of Service Report. (b)Whether to reduce the proposed fee or assessment. (c)Whether to further review the Cost of Service Report and proposed fee or assessment before making a determination on whether clarification or reduction is needed. (d)Whether to proceed with the protest hearing or ballot tabulation hearing required under Section 4 or 6 of Article XIII D of the California Constitution. 4.This exhaustion procedure will apply to any proposed water or sewer fees for which notice is provided pursuant to Proposition 218. 5.Pursuant to Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding that alleges non-compliance with Proposition 218 for any new, increased, or extended fee adopted by the District, unless that person or entity has timely submitted to the District a written legal objection to that fee that specifies the grounds for the alleged non- compliance. 25-1 25 SECTION 25 CONDITIONS FOR WATER SERVICE 25.01 SERVICE AREA Water service shall be furnished by the District only to property within (annexed to) a water improvement district within the District’s service area. Water service to property located outside an improvement district may be furnished only upon prior approval of the Board of Directors. Temporary water service to property located outside an improvement district may be furnished, in accordance with Section 25.03 D.15., upon the approval of the General Manager. 25.02 DEFINITION OF "HCF" AND "UNIT OF WATER" As used in the Code the terms "HCF" and "unit of water" are interchangeable and each shall mean 100 cubic feet or 748 gallons of water. 25.03 DEFINITIONS OF WATER SERVICE CATEGORIES, WATER RATES, CHARGES AND FEES Water service furnished by the District shall be under the categories of services and at the rates, charges and fees as set forth in Appendix A, Section 25. All District water rates, charges and fees are subject to Board approval of rate increases beginning January 1, 2023 and periodically thereafter through December 31, 2027. The increases shall be the amount sufficient to cover pass-through costs from wholesale water and energy suppliers, and increases in overall non-supplier costs, in addition to increases in pass- through costs, not to exceed the annual increase in the Consumer Price Index-U for the San Diego-Carlsbad Area as of January 31 of the preceding year. Five-year periodic pass–through rate increases or decreases from District wholesalers – All District water rates, charges and fees are subject to periodic rate changes from the District’s public agency wholesalers for a five-year period beginning January 1, 2023 through December 31, 2027. A.Set-up Fees for Accounts A set-up fee shall be charged for each account transferred to another customer. See Appendix A, 25.03 A. for charges. A deposit will be required of all customers who do not own the property to be served. See Appendix A, 25.04 A. for deposit amounts. B.Monthly Fixed MWD & CWA Charges Each potable water service customer shall pay a monthly MWD and CWA fixed system charge, as set forth in Appendix A, 25.03 B. Proceeds of the charge will be used to pay for operating and maintenance costs, including the following: MWD Readiness- Exhibit II 25-2 to-Serve Charge and Capacity Reservation Charge; CWA Infrastructure Access Charge, Customer Service Charge, Emergency Storage Charge, and Supply Reliability Charge. The MWD & CWA charge is based on the size of the water meter(s) in service with the exception of upsizing the meter for individually metered residential fire service, as described in Section 38.03 of the Code. The MWD & CWA charge shall start upon installation of the meter. C.Monthly Fixed System Charges Each water service customer shall pay a monthly fixed system charge, as set forth in Appendix A, 25.03 C. Proceeds of the charge will be used to pay for water system replacement, maintenance, and operation expenses. The system charge is based on the customer class and the size of the water meter(s) in service. For individually metered residential fire service, as outlined in Section 38.03 of the Code, the size and fee would be set based on water use requirements without additional fire capacity. The system charge shall start upon installation of the meter. D.Categories of Water Service The definitions and rates and charges for water service furnished by the District shall be as follows: 1.DOMESTIC RESIDENTIAL WATER (a)Defined as: Water service for single residential and individually metered attached households as well as other domestic uses (other than that provided for in Paragraph 2.(a)). (b) Base Rate: The tiered base rates of water furnished under this category shall be set forth in Appendix A, 25.03 D.1.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.1. 2.MULTI-RESIDENTIAL WATER (a)Defined as: Master metered water service for multiple residential households, for example, duplexes, townhomes, apartments, and mobile homes. (b)Base Rate: The tiered base rates of water furnished for each dwelling unit in this category shall be as set forth in Appendix A, 25.03 D.2.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.2. 25-3 3.BUSINESS AND COMMERCIAL WATER (a)Defined as: Potable water service for commercial and industrial establishments. (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.3.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.3. 4.NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE USING POTABLE WATER (a)Non-public irrigation is potable water service provided solely for irrigation of landscape or landscaping, as defined in Section 0.02 of this Code. (b) Commercial agricultural engaged in the growing or raising of livestock, in conformity with recognized practices of husbandry, for the purpose of commerce, trade or industry, or agricultural horticultural or floricultural products and produced, (i) for human consumption or for the market, or (ii)for the feeding of fowl or livestock produced for human consumption or for the market, or (iii) for feeding fowl or livestock for the purpose of obtaining their products for human consumption or for the market, such products to be grown or raised on a parcel of land having an area of not less than one acre utilized exclusively therefore. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.4.(c). (d) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.4. 5.PUBLICLY-OWNED WATER (a)Defined as: Potable water service for publicly- owned establishments and/or entities exempt from District property taxes. 25-4 (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.5.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.5. 6.PUBLIC IRRIGATION WATER (a)Defined as: Potable water service provided solely for irrigation of publicly-owned landscape or landscaping as defined in Section 0.02 of this Code and/or entities exempt from District property taxes. (b)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.6.(b). (c) Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.6. 7.CONSTRUCTION WATER (a)Defined as: Potable water service for construction or for temporary purposes pursuant to Section 31 of this Code. (b)The rates for water furnished under this category is set forth in Appendix A, 25.03 D.7.(b). (c)Monthly system charge: The monthly system charge for water service is set forth in Appendix A, 25.03 C.7. 8.RECYCLED WATER – NON-PUBLIC IRRIGATION, CONSTRUCTION, AND CERTAIN NON-IRRIGATION PURPOSES (a)Defined as: Non-potable and recycled water service provided for irrigation of landscaping, as defined in Section 0.02 of the Code, and certain non- irrigation purposes, other than domestic use, in compliance with federal, state, and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. 25-5 (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.8.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 9.RECYCLED WATER - COMMERCIAL (a)Defined as: Non-potable and recycled water service provided for commercial customers, as defined in Section 0.02 of the Code, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.9.(c). (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 10.RECYCLED WATER – PUBLIC IRRIGATION (a)Defined as: Non-potable and recycled water service provided for irrigation of publicly-owned landscaping, as defined in Section 0.02 of the Code, and/or entities exempt from District property taxes, and certain non-irrigation purposes, other than domestic use, in compliance with federal, state and local laws and regulations regarding use of recycled water. (b)The provisions of this Code, relating to use of recycled water, set forth in Section 26 of the Code, including but not limited to cross-connections and backflow protective devices, shall be strictly enforced in connection with the use of recycled water. (c)Base Rate: The base rate for water furnished under this category shall be determined as set forth in Appendix A, 25.03 D.10.(c). 25-6 (d) Monthly system charge: The monthly system charge for recycled water service is set forth in Appendix A, 25.03 C.8. 11.POTABLE INTERIM BUSINESS AND COMMERCIAL WATER (a) Defined as: Potable water service provided by the District on a temporary basis to business and commercial customers in Improvement District 7 (ID 7) pursuant to individual agreements. (b)If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.11.(b). (c)If the customer has paid equivalent capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.3.(b). (d)The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.3. (e)Conversion to Permanent Service. At such time as use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 12.POTABLE INTERIM NON-PUBLIC IRRIGATION AND COMMERCIAL AGRICULTURE WATER (a) Defined as: Potable water service provided by the District on a temporary basis to non-public irrigation and commercial agriculture customers in Improvement District 7 (ID 7). (b)If capacity fees have not been paid by the customer, the rates for water furnished under this category is set forth in Appendix A, 25.03 D.12.(b). (c)If the customer has paid capacity and annexation fees, the rates and charges for water furnished under this category shall be the rates set forth in Appendix A, 25.03 D.4.(c). (d)The applicable monthly system charge shall be the same rates charged to customers in the same category of service on a permanent meter basis per Appendix A, 25.03 C.4. (e)Conversion to Permanent Service. At such time as 25-7 use expires, the customer shall be required to pay all unpaid fees in effect at the time the permanent use is implemented. 13.TANK TRUCKS (a)Defined as: Water service provided for the filling of tanks on motor vehicles transporting water used for other than earth grading purposes, which service shall be made only through a portable meter issued by the District to a customer specifically for use in accordance with the provisions herein for such service. (b)The rate for metered water furnished under this category is reflected in Appendix A, 25.03.D.13. (b), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.4. (c)Requirements for Use of Water Meter (1)To receive such service, the customer must make a deposit for the use a water meter furnished by the District. The fee is set forth in Appendix A, 31.03 A.1. (2)Upon termination of the service, the Dis- trict will refund the amount of deposit remaining after making the following deductions: (i)Cost of repairing or replacing the meter, fire hydrant and/or any fittings damaged or lost while in use; and (ii)Unpaid charges for water or other applicable charges. (3)Prior to the end of each six month period following issuance of a meter under this section, or at the request of the District, whichever is earlier, the customer shall return the meter to the District for inspection, repair, or calibration as deemed necessary by the District. (4)Payment for water service under this cate- gory shall be made as follows: (i)The bill shall be based on the amount of water actually used, which shall be determined by the District’s reading of the meter or by a report made by the customer to the District in the manner prescribed by the District. 25-8 (ii) Where the actual amount of water used cannot be determined as provided in (i), the District will issue a bill based on a District estimate of the amount of water used, as determined by the District. Such estimates shall be reconciled with actual amounts used when the customer returns the meter to the District as provided in paragraph 3 above. (iii)Payments shall be made as specified on the bill. 14.WATER SERVICE OUTSIDE DISTRICT BOUNDARIES (a)Defined as: Water service for real property outside the service area of the District. (b)This service will be provided only upon prior approval of the General Manager when there is a surplus of water over and above the existing needs for service in the District. This service is temporary and may be terminated upon written notice from the District. Customers for this service are sometimes referred to as "outside users." (c)Customers applying for this category of service shall pay an application fee as set forth in Appendix A, 25.03 D.14.(c). (d)The rate for metered water furnished under this category shall be charged the rate as described in Appendix A, 25.03 D.14.(d), plus a monthly system charge at the rate set forth in Appendix A, 25.03 C.5. (e)Customers requesting only fire service or a fire hydrant under this category shall be charged a capacity fee based on one (1) EDU for a permanent meter in the improvement district from which the fire service derives its flow, plus a monthly system charge at the rate set forth in Appendix A, 25.03 D.16.(c). 15.WATER SERVICE OUTSIDE AN IMPROVEMENT DISTRICT (a)Defined as: Water service for property located within the boundaries of the District, but not within a water improvement district. Customers for this service are sometimes referred to as "outside users." 25-9 (b)Customers applying for this service shall pay an application fee as set forth in Appendix A, 25.03 D.15.(b). The District will review the application to determine whether the land to be served should be annexed to an improvement district. If it is determined that annexation is not practical, the Board of Directors may authorize service as an outside user. This service will be reviewed periodically until it is determined that the property must be annexed to an improvement district or that service must be terminated. (c) The rate for metered water furnished under this category is as set forth in Appendix A, 25.03 D.15.(c), plus a monthly system charge as set forth in Appendix A, 25.03 C.5. (d)Upon approval of the Board of Directors, a cus- tomer, who has paid all construction costs for facilities necessary to serve the customer's property in lieu of annexation to a water improvement district, shall be exempt from the provision for this category of service. 16.SERVICE FOR FIRE PROTECTION (a)Defined as: Water service provided by the Dis- trict solely to feed fire hydrants or fire sprinkler systems from lines or laterals con- nected to District water mains. (b)The District will not make a charge for the quantity of water used for fire protection purposes. (c)The monthly system charge for this category of service is set forth in Appendix A, 25.03 D.16.(c) for each connection to a District water main made for fire protection service. 17.WATER SERVICE UNDER SPECIAL AGREEMENTS (a)Defined as: Water service provided under express agreements approved by the Board of Directors for service to golf courses and other entities, which service may be curtailed or interrupted by the District under conditions provided in such agreements. (b)For water service under this category the base rate shall be determined on a case-by-case basis. E.Energy Charges for Pumping Water 25-10 In addition to water rates and other charges provided for in this Section 25.03, customers shall be charged an energy pumping charge based on the quantity of water used and the elevation to which the water has been lifted to provide service. 1.Potable Water Energy Pumping Charge: The energy pumping charge for potable water shall be made at the rate set forth in Appendix A, 25.03 E.1. 2.Recycled Water Energy Pumping Charge: The energy pumping charge for recycled water shall be made at the rate set forth in Appendix A, 25.03 E.2. 25.04 DEPOSITS BY LESSEES OR NON-OWNERS OF PROPERTY A.AMOUNT OF DEPOSIT The customer's deposit shall be applied to reduce or satisfy any delinquent payment or other amount due the District at the time of termination of water service to the customer. Any portion of the deposit remaining, after satisfaction of the amount due, shall be refunded to the customer that made the deposit. The deposits listed per Appendix A, 25.04 A. may be waived for a new residential applicant where the applicant demonstrates credit worthiness based upon prior utility payments or a non-delinquent water account for one year or other similar evidence of credit. B.REFUND OF DEPOSIT Where funds have been on deposit for twelve months in a domestic service account and there has been no more than one delinquent payment on that account during that period, the District will apply a credit to the water account in the amount of the deposit. C.LETTER OF CREDIT A letter of credit, in a form approved by the General Manager or Department Head of Finance, may be submitted to the District to satisfy the deposit requirements. 25.05 SERVICE TO SUBSEQUENT CUSTOMERS After a water meter has been installed for a customer and all fees and charges have been paid, water service may be furnished to a subsequent customer through the water meter installed without payment of further charges, except for the set-up fee 25-11 for transferred accounts, payment of delinquent charges for the applicant's service or other deposits that may be required by this Code. 25.06 PUBLIC NOTIFICATION AND LEGAL OBJECTION PROCESS FOR RATE CHANGES California law requires that certain changes to retail water and sewer fees and charges be adopted in accordance with procedures outlined in Article XIII D, of the California Constitution, commonly referred to as “Proposition 218." Additionally, the Otay Water District has established a formal process, an exhaustion of administrative remedies procedure (“exhaustion procedure”) consistent with Assembly Bill No. 2257 (2024) (chaptered at Government Code sections 53759.1 and 53759.2). The exhaustion procedure allows ratepayers to raise legal objections regarding proposed water or sewer rate increases. This process ensures that ratepayers have an opportunity to voice legal objections to a proposed property-related fee, charge, or assessment (“fee”) for water or sewer service, and provides an opportunity for the District to address or resolve any legal objections before the Board of Directors makes a final decision on whether to adopt a proposed fee pursuant to Proposition 218. The exhaustion procedure outlined below provides a structured framework and requires ratepayers to participate in the pre- adoption legal objection process in order to preserve the legal right to bring forward any judicial action or proceeding against the District regarding the fee structure. A.GENERAL DISTRICT REQUIREMENTS PER THE EXHAUSTION PROCEDURE 1.District will notify the public of the amount of the proposed fee by way of the Proposition 218 notice mailed to all customers and/or owners of record, 2.Make the District’s written basis for the proposed fee (including any cost of service report) publicly available (including on the District’s website), 3.Provide 45 days for any ratepayer to review the proposed fee and its basis and make any legal objection, 4.Require any such objection to be in a writing to the District that specifies the grounds for alleged noncompliance with Proposition 218, and 5.Require the District to consider and respond in writing to timely submitted objections prior to the close of the protest hearing required under Proposition 218. B.BOARD ACTIONS AND PUBLIC PARTICIPATION 1.The District Board hereby adopts the exhaustion of administrative remedies procedure contained in 25-12 Government Code section 53759.1(c), as further described below. 2. In connection with the District’s consideration of water or sewer rate increases, the District Board hereby directs the staff to take the following actions: (a) Public Hearing Date. Establish a date certain for a public hearing on any proposed water or sewer rates, at which hearing the staff shall present a summary of any written legal objections from the public during the objection period and responses from staff to those objections. The Board may consider any protests to the proposed fee increases on the same or a different date, but only after considering all objections and responses. The Board may continue the hearing from time-to-time in order to provide additional time for consideration of, and responses to, any timely-submitted legal objections and/or protests. (b) Cost of Service Report. Make available to the public the written basis for the proposed fee or assessment (the “Cost of Service Report”) by: (i) posting it on the District’s website, (ii) making it available at the headquarters of the District, and (iii) mailing it to any property owner upon request. (c) Objection Period. Establish a time frame for an “objection period” of not less than 45 days between mailing of the notice described below and the public hearing, during which period the public may submit a written legal objection to any aspect of the Cost of Service Report. (d) Public Notice. Notify the public in writing of the availability of the Cost of Service Report in the notice sent pursuant to subdivision (c) of Section 4 or paragraph (1) of subdivision (a) of Section 6 of Article XIII D of the California Constitution, and include in that notice: (i) a prominently displayed statement that all written legal objections must be submitted within the written objection period and that a failure to timely 25-13 object in writing bars any right to challenge that fee or assessment through a legal proceeding; and (ii) a prominently displayed description of all substantive and procedural requirements for submitting an objection to the proposed fee or assessment; and (iii) the process for submitting protests. 3. In connection with the District’s consideration of water or sewer rate increases, the District Board will determine at the hearing: (a) Whether the written legal objections and the District’s response warrant clarifications to the proposed fee or assessment or the Cost of Service Report. (b) Whether to reduce the proposed fee or assessment. (c) Whether to further review the Cost of Service Report and proposed fee or assessment before making a determination on whether clarification or reduction is needed. (d) Whether to proceed with the protest hearing or ballot tabulation hearing required under Section 4 or 6 of Article XIII D of the California Constitution. 4. This exhaustion procedure will apply to any proposed water or sewer fees for which notice is provided pursuant to Proposition 218. 5. Pursuant to Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding that alleges non-compliance with Proposition 218 for any new, increased, or extended fee adopted by the District, unless that person or entity has timely submitted to the District a written legal objection to that fee that specifies the grounds for the alleged non- compliance. STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: May 7, 2025 SUBMITTED BY: Tita Ramos-Krogman, District Secretary W.O./G.F. NO: DIV. NO. APPROVED BY: Tita Ramos-Krogman, District Secretary Jose Martinez, General Manager SUBJECT: Board of Directors 2025 Calendar of Meetings GENERAL MANAGER’S RECOMMENDATION: At the request of the Board, the attached Board of Director’s meeting calendar for 2025 is being presented for discussion. PURPOSE: This staff report is being presented to provide the Board the opportunity to review the 2025 Board of Director’s meeting calendar and amend the schedule as needed. COMMITTEE ACTION: N/A ANALYSIS: The Board requested that this item be presented at each meeting so they may have an opportunity to review the Board meeting calendar schedule and amend it as needed. STRATEGIC GOAL: N/A FISCAL IMPACT: None. LEGAL IMPACT: None. Attachment: Calendar of Meetings for 2025 AGENDA ITEM 8e Board of Directors, Workshops and Committee Meetings 2025 Regular Board Meetings: Special Board or Committee Meetings (3rd Wednesday of Each Month or as Noted) January 8, 2025 February 5, 2025 March 5, 2025 April 2, 2025 May 7, 2025 June 4, 2025 July 2, 2025 August 6, 2025 September 3, 2025 October 1, 2025 November 5, 2025 December 3, 2025 January 15, 2025 February 19, 2025 March 19, 2025 April 16, 2025 May 21, 2025 June 18, 2025 July 16, 2025 August 20, 2025 September 17, 2025 October 15, 2025 November 19, 2025 December 17, 2025 1 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: May 7, 2025 SUBMITTED BY: Jose Martinez General Manager W.O./G.F. NO: N/A DIV. NO. N/A APPROVED BY: Jose Martinez, General Manager SUBJECT: General Manager’s Report GENERAL MANAGER: •Student Art Contest – In April, the District launched its annual “Being Water Wise is…” Student Poster Contest. The District encourages K-12 students attending schools within the District’s service area to create a poster illustrating what being water- wise means to them. More than 60 schools, including public, charter, private, and home school programs, were invited to submit their entry by the deadline of Friday, June 6, 2025. The District will recognize the winners at a District board meeting this summer. Those winners could advance to the Metropolitan Water District of Southern California’s art contest to have their artwork featured in MWD’s 2026 student calendar. Contest rules and prize details are available here: otaywater.gov/poster-contest. •Community Outreach Events – On April 11, the District hosted an outreach booth at the Water Conservation Garden’s Free Day Friday, which is held every second Friday of the month. There were nearly 300 attendees at the Garden that day. The day offers a Garden tour, nature crafts, plant sales, community partner booths, a scavenger hunt, and free admission to the Heritage of the Americas Museum. On April 12, the District sponsored and hosted a booth at the annual South Bay Earth Day at Chula Vista’s Bayfront Park. With about 4,000 attendees, the event celebrated sustainable living with over 50 green vendors, organic food trucks, a fix-it clinic, live entertainment, and a conservation-related kid zone. On April 26, the District also sponsored and hosted a booth at the annual Spring Valley Day on Bancroft Drive. This event brought in about 3,000 attendees and AGENDA ITEM 9 2 supports local community groups, vendors, and residents of Spring Valley. District staff provided information about water- use efficiency programs and contests at all events and distributed promotional items, including garden tool bags, emphasizing the importance of making every drop count. Staff highlighted its outreach participation on social media, including a video reel. The posts have received 1,507 impressions and 67 engagements. • South County Economic Development Council Economic Summit – On April 29, 2025, the SCEDC hosted its annual Economic Summit at Liberty Station Conference Center, bringing together more than 300 regional leaders, industry experts, and community stakeholders to explore the future of South County. The District sponsored and hosted a booth at the sold-out summit. The event featured a keynote speaker from Visit California, President & CEO Caroline Beteta, who highlighted the growing role of the hospitality industry in the region’s economic development. In addition, the summit included a mayoral panel discussing priorities such as infrastructure, housing, homelessness, and public safety; a conversation on artificial intelligence’s impact across education, healthcare, and infrastructure; economic forecasts for housing, workforce, and finance; and an address from Consul General Thomas Teal emphasizing binational collaboration. The event underscored the region’s momentum and the importance of cross-sector partnerships in shaping South County’s future. District staff and board members attended the summit. • Joint Public Information Council (JPIC) – Communications staff participated in the San Diego County Water Authority’s monthly JPIC meeting. Water Authority staff provided updates on water supply conditions, water-use efficiency, legislation, rates and budget setting, and the Value of Water campaign. • Water-Use Efficiency Meeting – On April 8, communications staff attended the Water Authority’s Water-Use Efficiency Workshop to discuss some of the State Water Resources Control Board’s water- use efficiency compliance tasks and timelines. The workshop focused on commercial, industrial, and institutional (CII) classifications, identifying top water users, CII best management practices, nonfunctional turf, dedicated irrigated meters, mixed-use meters, and more. • Legislation and Funding Letters – The District issued a letter of support for Senate Bill (SB) 496, related to the Advanced Clean Fleets (ACF) mandates. SB 496 will enable the District to better meet the state’s climate and emission goals and effectively navigate the current ACF mandates and associated ambitious compliance deadlines. SB 496 will also provide some relief to local agencies by establishing an Appeals Advisory 3 Committee through which local agencies may request a review of exemption request denials. This ensures transparency while protecting due process for those seeking further review. Additionally, SB 496 would update the emergency vehicle exemption, allowing those vehicles that respond to and support critical operations related to emergencies and disasters, often under austere conditions, to continue to protect our communities. SB 496 also promotes affordability amid rapidly rising cost pressures on essential local services by averting the costly acquisition of ZEVs before it is possible to install the infrastructure required to use them. The District also submitted a letter of support to Congressman Issa for fiscal year 2026 community project funding for the Helix Water District’s R.M. Levy Water Treatment Plant filter underdrain replacement project. The R.M. Levy Water Treatment Plant, located in Lakeside, California, treats water for 500,000 East County San Diego residents. The District purchases some of its treated water from Helix. As part of the water treatment process, water passes through a filter underdrain system, which removes small particles in the water before the final stage of treatment. Built in 2001, the filter underdrain system is a crucial component of the treatment and disinfection process and is now nearing the end of its useful life. Staff distributed both letters to the board of directors. ADMINISTRATIVE SERVICES: GIS: • Mobile Updates and Refresher Training: o Staff conducted InfraMap refresher training for Utility Maintenance staff, prompted by the onboarding of several new team members and continued efforts to enhance user proficiency. A representative from iWater, the InfraMap vendor, was onsite to lead the session. During the training, several software enhancements were identified and will be incorporated into the development agenda. o To support a new workflow aligned with the District’s Asset Management Program, GIS staff added new fields to both the fire hydrant feature class and the hydrant activity table. In addition, new Dead-End Flushing and Hydrant Maintenance tasks were created within InfraMap to streamline routine operations and ensure consistent data collection. These enhancements improve the District’s ability to manage hydrant assets by supporting more effective lifecycle tracking, risk assessment, and capital planning throughout the hydrant network. 4 Human Resources: • ERP/Tyler Conversion - Staff began participating in the meetings on 10/8/24; ongoing. • Employee Service Milestones – April/May/June 2025 o Michael Long, Chief of Engineering, achieved 5 years of service on 4/13/25. o Bernardo Separa, Asset Management Specialist, achieved 20 years of service on 4/18/25. o Sonia Gomez, Executive Assistant, will achieve 15 years of service on 5/10/25. o David Rocha, Utility Crew Leader, will achieve 10 years of service on 5/11/25. o Isaac Perez, Systems Support Analyst, will achieve 10 years of service on 6/2/25. o Brandon Perry, Senior Utility Worker/Equipment Operator, will achieve 10 years of service on 6/8/25. o Kim Chavez, Meter Maintenance Worker I, will achieve 25 years of service on 6/30/25. • New Hires/Recruitments - The District is or will be recruiting for the following positions: o Senior Meter Maintenance Worker - New classification and two (2) new vacancies. Job posted 4/22/25. Application review scheduled for 5/9/25. o Senior Utility Worker/Equipment Operator - Posted 1/24/25; three (3) rotating temporary assignments to backfill position. Testing was completed on 3/12, 3/19 & 3/20/25. Interviews were completed on 4/10/25. Pursuing candidate for internal promotion effective 5/5/25. o Utility Crew Leader - New vacancy created by internal promotion effective 3/10/25. Job description revision in progress. o Utility Worker I/II: A new vacancy was created on 4/8/25. Skills testing held 4/26/25. IT Operations: • Utility Billing System - Staff completed the first round of demonstrations for the Utility Billing (UB) project, with proposals from 13 vendors. After a successful initial round, five (5) vendors were selected to proceed to the next phase of 5 in-depth and online demos. Two (2) finalists were identified from that group, and staff will begin conducting reference checks for both. A final selection of the new UB system is anticipated by the end of May or sooner. • District Training Rooms: Audio & Visual Upgrades - Staff completed work with the consultant, Absolute AV Design, to enhance training capabilities and streamline presentations in both the Training Room and Operations Crew Room through upgraded audio and visual components. The upgrade provides greater flexibility in content sharing, improved audio clarity, and modern connectivity options. Purchasing & Facilities: • CAL-Card Program: Update & Strategic Value – Since 2014, the District has actively leveraged the State of California’s CAL- Card Purchase Program to improve procurement efficiency for low- dollar purchases. Administered under a cooperative agreement with U.S. Bank and NASPO ValuePoint, the program enables authorized staff to make direct purchases using District-issued purchase cards—significantly streamlining the procurement cycle compared to the traditional requisition, purchase order (PO), and invoice processing route. This shift has yielded substantial operational and financial benefits. Historically, the District processed more than 1,900 PO’s annually. By contrast, in FY 2024, that number dropped to just 451, representing a reduction of 1,449 PO’s. Based on an imputed administrative cost of $75 per PO, a figure supported by guidance from the National Institute of Governmental Purchasing (NIGP) and reflective of the District’s historically multi-layered workflow, this efficiency translates into over $108,000 in annual savings. In addition to these process efficiencies, the District receives quarterly rebates through the CAL-Card program, reported here as annual totals: $46,317 in FY2023, $46,175 in FY2024, and a projected $48,711 for FY2025. More importantly, the CAL-Card program is offered at no cost to the District -- there are no administrative, monthly, or renewal fees -- making the rebate revenue fully net positive. Combined with administrative savings, the program 6 generates more than $150,000 in annual financial benefit, reinforcing its value as a cost-effective and fiscally responsible procurement strategy. Beyond financial benefits, the program also improves operational efficiency and accountability. Cardholders submit itemized receipts and assign appropriate coding to each transaction, which are routed to supervisors for review and approval. In the early years of the program, this was a fully paper-based process that often took weeks to complete, requiring manual routing, approvals, and follow-up. While not easily quantified, the transition to an online workflow has clearly resulted in additional time savings and process efficiency. Today, the entire review and reconciliation process is managed through an integrated workflow within the District’s new Tyler ERP system, enabling timely approvals, accurate expense tracking, and a transparent and auditable record of all purchasing activity. Further reinforcing oversight, 100% of CAL-Card transactions are subject to automated, rules-based review through Program Monitor, a compliance engine integrated with U.S. Bank’s Access Online platform. Program Monitor evaluates each transaction against defined policy parameters, such as merchant category, dollar limits, and purchase types. If an exception is detected, an alert is issued to program administrators for follow-up. This real-time compliance monitoring adds another layer of assurance, strengthens internal controls, and supports audit readiness. From a governance perspective, the CAL-Card program exemplifies strong financial stewardship. It aligns with the District’s commitment to operational efficiency, accountability, and transparency—delivering measurable value to ratepayers while maintaining robust oversight and internal controls. Safety & Security: • San Diego County Public Health/Healthcare Disaster Coalition - The San Diego County Public Health department requested the San Diego County Water Authority (CWA) Water Agency Emergency Collaborative group to teach a Water Utility 101 course for the San Diego Healthcare Disaster Coalition at Sharp Hospital on March 26, 2025. The session was designed to provide a foundational overview of the water utility’s operations, challenges, and emergency response strategies. This session also served as critical preparation for their Medical Response Surge Exercise, held on April 17th. CWA’s Risk and Safety Manager, Tom Marcoux, presented. CWA’s & OWD Systems Operations Supervisors and the District’s Safety & Security Specialist, were invited to serve on the panel to answer technical questions from the retailer and utility operations perspective. There were about 86 attendees from various affiliations within the San Diego Healthcare Disaster Coalition. 7 FINANCE: • FY 2026 Budget – Staff is preparing the FY 2026 budget, which will be presented to the Board in two sessions. The first session, a Budget Workshop, was held on April 16 to review key items impacting the FY 2026 budget. The second presentation, scheduled for June 4, will include the consolidated budget and staff’s request for the Board to adopt the FY 2026 budget, incorporating proposed changes to water rates and a presentation of proposed wastewater rates. The wastewater rates will be brought to the Board for adoption at a Proposition 218 Hearing in October. • COVID-19 Claims – California Governor’s Office of Emergency Services (Cal OES) has reviewed the final federal claims submitted by the District and determined that an audit of the District’s claimed expenditures was not warranted. The District received $122,384 in COVID-related reimbursements, which were thoroughly reviewed by both FEMA and Cal OES representatives. This concludes the final review of the District’s COVID-related claims. Neither FEMA nor Cal OES identified any findings, which is a testament to the District’s accuracy and documentation practices. • GFOA Certificate of Achievement for Excellence in Financial Reporting – For the 21st consecutive year, the GFOA awarded the District with the prestigious Certificate of Achievement for Excellence in Financial Reporting for the District’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024. 8 To be awarded a Certificate of Achievement, the District had to publish an easily readable and comprehensive report. This report must satisfy both Generally Accepted Accounting Principles (GAAP) and applicable legal requirements. • Utility Billing Request for Proposal – Customer Service staff participated in shortlist demonstrations of utility billing solutions during the week of April 1. The evaluation team will further narrow the list and invite two firms to conduct a second round of demonstrations in early May. A request to proceed with the selected candidate will be presented to the Board in July. Financial Reporting: • The financial reporting as of March 31, 2025, is as follows: o As of the nineth month ending March 31, 2025, there are total revenues of $101,090,311 and total expenses of $100,919,153. The revenues exceeded expenses by $171,158. • The financial reporting for investments as of March 31, 2025, is as follows: o The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of March 31, 2025, total $94,930,432 with an average yield to maturity of 4.124%. The total earnings year to date are $3,521,983. ENGINEERING AND WATER SYSTEM OPERATIONS: Engineering: • Vista Diego Hydropneumatic Pump Station Pump, Hydropneumatic Tank, and Backup Power Replacement, 1530 Zone, Vista Diego Road: The project includes the replacement of the existing pumps, the hydropneumatic tank, and backup power. The project is within budget and on schedule. (P2639 and P2688) • RWCWRF Disinfection System Improvements: The project involves the replacement of the chlorine gas disinfection system with an ultraviolet (UV) process at the Ralph W. Chapman Water Reclamation Facility. A construction contract has been awarded to GSE Construction Co., Inc. On February 21, 2024, staff presented the Disinfection Improvement project at the Board Workshop as an informational item. A Notice to Proceed was issued for April 8, 2024, and the contractor, GSE, has mobilized and begun construction. The contractor ordered the Trojan UV system, which arrived on August 22, 2024. The first and second planned shutdowns were combined to minimize downtime at the plant and were successfully completed on December 2, 2024. Work completed during the shutdown included new backwash pumps and 9 the installation of a new flow meter. On February 6, 2025, the state granted a conditional acceptance of the Engineering Report. In the month of March 2025, the contractor installed the Trojan UV system. The testing and commissioning of the Trojan UV system is scheduled through May 2025. The State Water Resources Control Board Department issued the Conditional Title 22 Acceptance Permit in April. The project is on schedule and on budget. (R2117 and R2157) • 450-1 Recycled Water Reservoir Stormwater Improvements: Stormwater runoff from the 450-1 Recycled Water Reservoir site has been eroding the downstream area and exposed the District's 30-inch recycled water line. Staff is working with NV5 on potential design and permitting solutions. Helix Environmental is currently working on the regulatory permit considerations for the work within the tributary. The project is within budget and on schedule. (R2164) • Zero Emission Vehicles and Charging Infrastructure: The project is for the capital purchase and installation of various electric vehicle support equipment, such as charging infrastructure needed to power Zero Emission Vehicles (ZEVs) for light, medium, and heavy-duty electric vehicles. The project is in preparation for compliance with the State of California's Executive Order N- 79-20 and the Advanced Clean Fleet Regulation to require ZEV purchases when adding to the District's fleet of vehicles. In December, the District was awarded $128,093.00 in grant funding for the installation of five electric vehicle battery charging stations from the Clean Air for All Grant from the San Diego Air Pollution Control District (APCD). The final design of the five charging stations was completed in March 2025. The District is currently in the process of soliciting for the new equipment. The project is on schedule and within budget. (P2684) • Potable Pipeline Replacement Projects: The following set of pipelines is being replaced as a result of past failures, age, lack of redundancy, and/or improved fire flow. The 60% design plans were reviewed by staff and returned to NV5 in March 2025. o PL - 8-inch, 850 Zone, Coronado Avenue, Chestnut/Apple (P2608) o PL - 8-inch, 1004 Zone, Eucalyptus Street, Coronado/Date/La Mesa (P2609) o PL - 12-inch Pipeline Replacement, 803 PZ, Vista Grande (P2615) o PL - 20-inch, 1296 Zone, Proctor Valley Road from Pioneer Way to Melody Road, “South Proctor Road” (P2171) o PL - 20-inch, 1296 Zone, Proctor Valley Road from Melody Road to Schlee “North Proctor Road” (P2058) – Easement offer letters were sent to property owners on November 19, 2024. A meeting was held on December 10, 2024, with three of the six property owners. Separately, five property owners submitted a 10 letter of interest in the offer. Escrow will be initiated with the owners who have accepted the letter of interest. The best and final offer will be sent to the remaining property owner. Eminent Domain will be initiated if the property owner does not accept this offer. The project is within budget and on schedule. • Steele Canyon Road Bridge 20-inch Water Main and 6-inch Force Main Renovations: Several portions of the existing pipelines were noted to have corrosion pitting, primarily located at pipe supports for the 20-inch steel potable water main and at pipe joints for the 6-inch steel sewer force main. The first phase, to assess the extent of the corrosion, has been completed, and staff is now working on preparing recommendations for the repairs of the pipelines. The project is within budget and on schedule. (P2687 & S2079) • Olympic Parkway Recycled Water Line Replacement: Several main breaks within the past few years on the 20-inch recycled water line in Olympic Parkway between Heritage Road and La Media Road resulted in the establishment of this Capital Improvement Program project at the May 2021 Board Meeting. The project was awarded to Burtech in January 2023. The City of Chula Vista permits have been obtained. Consideration was given to potentially using trenchless installation, but several drawbacks and limitations eliminated it from selection. The contractor started procuring materials, and a Pre-Construction Meeting was held on June 8, 2023. A Notice to Proceed was issued for March 25, 2024, and most of the work will be night work to minimize traffic delays. The valves were delivered and tested at the end of May 2024. The contractor mobilized on July 15, 2024. Burtech completed the final pipeline tie-in on January 14, 2025, and pavement restoration on February 24, 2025. Burtech is working on completing punch-list items and some minor curb repairs at their storage yard entrance. Staff is working with Burtech on the final amount of liquidated damages for late project delivery. The project is within budget. (R2159) • Olympic Parkway Transmission Main Assessment and Repair: Several main breaks within the past few years on the 16-inch potable water line in Olympic Parkway between East Palomar Street and State Highway 125 resulted in the establishment of this Capital Improvement Program project through the annual budget process. This project is for the condition assessment and, if needed, repair of interior joints within approximately 3,500 feet of the 16-inch cement mortar-lined and coated steel transmission main along Olympic Parkway east of East Palomar Street. The first phase of this project is an assessment to determine the condition of the interior pipeline joints. The District received permits from the City of Chula Vista and Caltrans. 11 The interior video inspection contractor, Houston Harris, will perform the inspection this fiscal year. The project is within budget and on schedule. (P2706) • Cottonwood Sewer Pump Station Replacement: The project involves the replacement of the existing sewer pump station originally constructed in 1986 as a temporary facility due to operational and accessibility deficiencies. The station serves both the District and County of San Diego customers on the south side of the Sweetwater River. Improvements will incorporate increased station capacity and the addition of emergency storage to avoid a sewage spill. The design is being prepared by Wood Rodgers, Inc. Alternatives to reduce costs were reviewed with District Operations staff and Wood Rodgers on March 20, 2025, and the County on March 27, 2025. The Mitigated Negative Declaration was prepared in September 2021 and will be reviewed and updated prior to finalizing the design. Construction of the project is currently estimated for completion in FY 2031. The project is within budget. (S2069) • 870-2 Reservoir and 870-1 Reservoir Floating Cover/Liner Replacement: This project consists of constructing a new 3.4 MG prestressed concrete potable water tank adjacent to the existing 870-1 Reservoir. The project also includes lowering the existing 870-1 Reservoir 30-inch inlet pipe and replacing the existing floating cover and liner within the existing 870-1 Reservoir. The construction contract was awarded to Pacific Hydrotech at the September 2024 Board Meeting. Pacific Hydrotech mobilized to the site on October 28, 2024. The work in March and April 2025 consisted of the over-excavation and re-compaction for the new tank foundation. Both projects are within budget and on schedule. (P2228 & P2563) • Potable Water Pressure Vessel Program - Rolling Hills: The 2004- era Rolling Hills Hydropneumatic Pump Station hydropneumatic pressure vessel was inspected on June 6, 2017, and February 27, 2023. Both inspection reports noted interior corrosion due to internal coating wear. The February 2023 inspection report suggested that the life expectancy of the vessel may be near the end of its life. With the limited availability of the trailer- mounted variable frequency drive pump station, the tank is scheduled for replacement. Delivery and installation of the new vessel is anticipated on May 7, 2025. The project is within budget and on schedule. (P2663) • Telegraph Rd – Hydrant Repair: In late April 2024, a vehicle accident damaged a dual-purpose blow-off valve and fire hydrant appurtenance located at 1052 Telegraph Canyon Road, Chula Vista, approximately 800 feet east of Heritage Road/Paseo Ranchero. The fire hydrant has been struck three (3) times by vehicles in the past seven (7) years. Notably, in the most recent incident, 12 not only was there damage to the above-ground appurtenance, but when operating the 6-inch valve to isolate the fire hydrant, a break was identified near the 20-inch ACP water main. This water main is a major arterial water line and provides potable water to nearby critical infrastructure including a hospital. Repairs to the pipeline are complicated due to the pipeline’s depth, requiring outside contractors with equipment to repair it at that elevation. The water main is approximately 16 feet deep near the fire hydrant. There are nearby utility crossings, which include a triple 6-foot by 10-foot box culvert, an 8-inch-high pressure gas line, a 36-inch storm drain, and a 30-inch steel casing on the 20-inch water main. Design was completed by staff and advertised for construction on December 10, 2024. Five bids were submitted. The District opened bids on January 7, 2025. The lowest bid was M-Rae Engineering, Inc., for $171,600, marginally lower than the Engineer’s Estimate of $180,000. The EO&WR Committee reviewed the staff report on January 21, 2025, and put the item on consent for the February 5, 2025 Board meeting. The project was awarded on February 5, 2025. Staff executed the construction contract and is working on scheduling a Pre-Construction Meeting. The project expenditures will come from the operating budget, which is sufficient to cover the cost of the repair. (P1000) • 1004-2 & 1485-2 Reservoir Interior/Exterior Coating & Upgrades: This project is for the interior and exterior coatings of the 1485-2 Reservoir, located at 15010 Lyons Valley Road, Jamul. This welded steel Reservoir has a 1.6-million-gallon capacity. Based upon the current inspection report, the interior and exterior coatings on the 1485-2 Reservoir are nearing the end of their useful lives and need replacement. The Reservoir was constructed in 2006 and has never been recoated. In addition to removing the existing interior and exterior coating and recoating the Reservoir, the project includes rafter replacement, seismic rod replacement, cathodic protection equipment replacement, and structural modifications. Additionally, the project includes door modifications to the 1004-2 Reservoir, located at 1711 Buena Vista Avenue, Spring Valley. This welded steel Reservoir has a 1.26-million-gallon capacity. The project was approved for award to Unified Field Services Corp. at the November 2024 Board Meeting with a budget adjustment. A Pre-Construction Meeting was held on January 9, 2025. A Notice to Proceed was issued for January 13, 2025, and the contractor mobilized on January 14, 2025. The majority of submittals have been processed, inspection blast is complete, structural recommendations have been made, and materials are currently being procured. The project is within budget and on schedule. (P2631 & P2657) 13 • 711 Pump Station Replacement and Expansion and Potable Water Pressure Vessel Program (711 Pump Station Surge Tank): The 2015 Water Facilities Master Plan envisioned total replacement of the 711 Pump Station with a budget of $16M; however, the CIP P2578 concept was re-evaluated with a new concept to restore the original pump capacity while utilizing the pump station structure to reduce cost. The initial project will remove one (1) of the existing five (5) nominal 2,500 GPM pumps and replace it with a nominal 4,000 GPM pump and reconfigured discharge and suction piping as a pilot project. The 1990-era 711 Pump Station surge tank pressure vessel was inspected on August 30, 2021. The inspection report noted interior corrosion due to internal coating wear. The February 2021 inspection report also recommended reinspection the following year; however, District staff determined it was better to be proactive and replace rather than continue to spend on the reinspection of the surge tank vessel. Approval to pre-purchase a nominal 4,000 GPM pump to be included in the pilot project was authorized at the February 5, 2025, Board Meeting. The Phase I pilot project was publicly advertised for bid on April 1, 2025. Award of the construction contract for the pilot pump configuration and surge tank replacement is anticipated for the May 2025 EO&WR Committee and June Board Meeting. (P2578 & P2663) • City of San Diego – Otay 2nd Pipeline Phase 4 Interconnections Relocation: The City of San Diego (City) is working on Phase 4 of the replacement and realignment of the 40-inch potable water line between Telegraph Canyon Road and Bonita Road with a 48- inch pipeline. The District has two interconnections to this line located at East H Street and Telegraph Canyon Road that will need to be replaced to conform to the new construction. The City recently completed the 60% design stage for the new pipeline. The District’s staff has reviewed the City’s 60% design and identified potential utility conflicts that are being coordinated with the City. The two potential interconnection relocations have been identified and are being considered. Additionally, new interconnection agreements with the City are being evaluated and will be finalized concurrently with the City finalizing their pipeline design. The City design is expected to be finalized at the end of FY 2027/beginning of FY 2028. The design is currently in the environmental permitting stage. (P2691) • City of Chula Vista – Heritage Road Replacement: The City of Chula Vista is constructing a new bridge crossing the Otay River at Heritage Road, which provides an opportunity for the District to relocate an existing pipeline out of the river into a more secure location. The City of Chula Vista opened bids in September and awarded the contract at their October 8, 2024, Council meeting. The District Board approved the reimbursement 14 agreement on March 1, 2023. The City of Chula Vista Council approved the agreement at their January 7, 2025, Council meeting. The reimbursement deposit has been wired to the City of Chula Vista. Staff is processing submittals and RFI’s. The project is within budget. (P2553, P2405) • Elmdale Drive Water Main Replacement: This project includes relocating an existing 6-inch AC waterline located at Elmdale Drive northeast of Highridge Road. The County of San Diego (County) is replacing an existing storm drain culvert, which creates a conflict with the District’s waterline. The project will replace the 6-inch AC pipe with new 8-inch PVC pipe at a lower elevation. The lowering is required to accommodate the County’s replacement of the existing storm drain culvert. The County has prior rights; therefore, the District will be responsible for the waterline relocation cost. Staff is currently preparing recommendations for the relocation of the waterline. The project is within budget and on schedule. (P2707) • Sycuan Treatment Plant: The Sycuan Tribal Nation is working with the District to evaluate the feasibility of accepting processed solids from their proposed Recycled Water Treatment Plant. The District initiated a Task Order for NV5 to provide engineering services in the technical evaluation of accepting the solids stream, especially as it will combine with the municipal sewer flows into the Ralph W. Chapman Water Recycled Water Facility. Additionally, the consultant will assist the District with regulatory and contractual considerations for accepting the Sycuan discharge. In coordination with the engineering consultants, staff will consider cost impacts and ensure proper cost recovery. As the project progresses, it is anticipated that other agencies’ reviews and/or approvals will be necessary, along with associated agreements established or updated. Consultant and staff time costs are being recovered through a deposit account funded by Sycuan. Progress is dependent on Sycuan providing the requested information. District review turnaround times are six to eight weeks due to the complexity of the project. These timelines were relayed and agreeable to Sycuan. Sycuan provided the requested influent quality data on April 11, 2025 for technical evaluation. • Recycled/Reuse Feasibility: The Sweetwater Authority (SWA) and the District are working collaboratively through a Memorandum of Understanding (MOU) to evaluate the feasibility of extending water reuse into the SWA area. On February 7, 2024, a Professional Services Agreement (PSA) for a feasibility study was awarded by the Board to Carollo Engineers (Carollo). On June 20, 2024, the District was approved for grant funding from the Water Recycling Funding Program for the SWA and OWD Intertie 15 Project for $300,000. The District, SWA, and Carollo are conducting biweekly progress meetings and collecting data for the Planning and Feasibility Report. Carollo is in the process of reviewing and assessing data from both agencies and coordinating additional data as needed. (R1254) • Otay Water District Climate Adaptation and Resilience Planning Project: On November 21, 2023, FEMA approved and issued Hazard Mitigation Grant Program (HMGP) funds for the preparation of a Climate Adaptation and Resilience Plan for the District. FEMA authorized a total of $244,939.70. The CARP will include a risk and resilience assessment focusing on climate change. The CARP will also include the development of resilience and adaptation strategies to allow the District to prioritize risks. Strategies may include updated policies, built infrastructure- based measures, green infrastructure-based measures, operational approaches, staff training and tools, and communication and education for customers. The consultant was on site in January 2025 to conduct site visits and staff interviews. The second phase of data collection is currently ongoing. The final Plan will be incorporated into the District’s Local Hazard Mitigation Plan Annex. (P1253) • Water Facilities Master Plan, Urban Water Management Plan, and Integrated Water Resources Plan: The next update for the WFMP with Program Environmental Impact Report (PEIR) will be done in parallel with two other District planning documents, the Urban Water Management Plan (UWMP), and the Integrated Water Resources Plan. The UWMP update is required for compliance with the State Water Boards. Combining the three planning documents is anticipated to provide efficiency and cost savings. In accordance with the District’s purchasing requirements, the project was approved for award to Woodard and Curran at the April 2025 Board meeting. Staff is currently working with the consultant on the execution of the awarded contract agreement. • Sewage Flows to Metro vs Planned Capacity: The Metropolitan Water District Amended and Restated Regional Wastewater Disposal Agreement became fully effective at the start of FY 2023. The District’s annual capacity of 0.38 MGD (139 MG) is now in effect, though the District would need to exceed this capacity for three (3) consecutive years before additional capacity must be acquired. The Metropolitan Water District (Metro) capacity was set based upon the District’s sewer system requirements through planning year 2050. The plant experienced a plant upset from September 20, 2024, through September 22, 2024. A planned shutdown in November 2024 was required to accommodate the construction of the new backwash system. The shutdowns result in increased sewer discharge into the Metro system. The current 16 discharge total for FY 2025 is 62.25 MG, below the 104.31 MG planned capacity. • Summary of Budgeted and Sold Meters and EDUs for Fiscal Year 2025 through March 2025: OPERATIONS: • On Tuesday, March 25th through Friday, March 28th, inflows on the Otay #14 connection dropped to zero at the request of Helix Water District so they could perform planned maintenance in their system. During this time, flow needs for the north District were met by using the Otay #11 connection on San Diego County Water Authority’s Pipeline #4 in Spring Valley. • The following events occurred on Thursday, March 27th: o Water Systems staff, with assistance from Utility Maintenance staff, performed a planned shutdown on Osage Street in Spring Valley. This shutdown was performed to replace three fire hydrant valves that were found with excessive leak by during Date Meters (Budgete d) Meters Sold (Actua l) EDUs (Budgete d) EDUs Sold (Actua l) Total $ (Budgeted) Total $ Collected (Actual) March 2025 20.2 9 58.8 21.5 $955,391 $458,650 Totals FY 2025 181.5 138 529.5 406.5 $8,598,516 $6,289,742 17 routine valve maintenance. Water isolation valves are critical components of a water distribution system for isolating pipe segments for repair and maintenance purposes. The shutdown lasted six hours and affected 38 meters, with two water trailers available for the affected customers. o Pump/Electrical staff replaced pump #2 at Russell Square Lift Station, after receiving a report of a malfunction on the pump. Staff performed troubleshooting, and a major failure was detected, and it was determined that a replacement was needed. • On Friday, March 28th, Water Systems staff, with assistance from Utility Maintenance staff, performed a planned shutdown on Maya Street in Spring Valley. This shutdown was performed to replace one fire hydrant valve that was found with excessive leak by during routine valve maintenance. Water isolation valves are critical components of a water distribution system for isolating pipe segments for repair and maintenance purposes. The shutdown lasted three and a half hours and affected 26 meters, with two water trailers available for the affected customers. • The following events occurred on Tuesday, April 1st: o A District vendor completed the CCTV for the eight-inch asbestos concrete pipe easement at 314 Vecino Court in Spring Valley, to determine the exact location of the leak. A cut and cap of the main and backfill was completed the following day. The video results of the inspection were inconclusive and were not able to find the location of the leak. o There was a six-inch ACP main failure at 3245 Loma Vista Drive in Jamul. Utility Maintenance staff made the repair, replaced the poly service for this address and completed all the clean- up by 9:00 p.m. the same day. Staff received a complimentary phone call from one of the residents on Loma Vista detailing how efficient and professional Utility Maintenance staff was while performing the work. o Operations staff provided a tour of the 870-2 Pump Station and 570-1 Reservoir sites to Director Rivera. The tour gave an overview of the 870-2 Pump Station and how the District distributes water to the Otay Mesa area. • On Monday, April 7th, a District vendor began the biannual potable floating cover reservoir cleaning and maintenance. This maintenance includes the cleaning of the entire cover, repairing of minor holes and tears, adjusting cover tensioning devices, and maintaining the rainwater removal system as needed. This maintenance is required by the State Water Resources Control Board for the District’s four potable floating cover reservoirs. 18 • On Friday, April 11th, the FY25 leak detection campaign was completed. A total of 49 District-side leaks were found by the District vendor and repairs were made by District staff. In addition, there were 39 potential customer-side leaks identified, and staff have contacted those customers. This is the 13th consecutive year of the District’s leak detection campaign and the combined surveys have now covered the District’s service area approximately two and a half times. Having a proactive leak detection program that finds leaks when they are smaller allows the District to schedule the repairs during normal working hours before they become larger and require immediate attention. • On Monday, April 14th, in cooperation with San Diego Power, a site test was performed at the 980-2 Pump Station. A defective generator protection relay was found, and a replacement part was ordered. Staff will retest once the relay is replaced. • On Friday, April 18th through Wednesday, April 23rd, the annual floating cover reservoir dive inspections were performed by a District vendor. These inspections are required by the State Water Resources Control Board for potable floating cover reservoirs and include a liner and cover condition assessment. No major issues were reported. The District’s four floating cover reservoirs remain in good working condition. • On Tuesday, April 22nd, Senior Utility Worker, Brandon Perry, presented to the Cuyamaca College AWWA Student Chapter, on the Repair and Maintenance of a water distribution system. His presentation, along with a question-and-answer period, was well received by the chapter. The District has received several written kudos from those who attended his presentation. Brandon exemplified the District’s commitment to professional development and industry outreach. 19 • During this period, process instrument calibrations for all billable and regulatory-compliant flowmeters within the District, were performed by a District vendor. Due to the potential inter-agency or regulatory interest in these calibrations, a third party was contracted to perform the maintenance to eliminate potential biases. Calibrations were performed at five Potable, eight Recycled, and seven Sewage main flow meters. Purchases and Change Orders: • The following table summarizes purchases and change orders issued during the period from March 17, 2025, through April 21, 2025, that were within staff signatory authority: Date Action Amount Project Contractor/ Consultant/Vendor 3/17/2025 P.O. $1,331.02 TEMPORARY METER STANDS WELDING L&N MOBILE WELDING SERVICES 3/19/2025 P.O. $17,160.00 ADA Upgrade Design Services Miscellaneous, Inc. 3/19/2025 P.O. $10,000.00 Fire Sprinkler Inspection and Service The Hiller Companies 3/19/2025 P.O. $24,851.46 SCBA Replacements Mallory Safety Supply, LLC 3/24/2025 P.O. $1,191.50 Safety Equipment/ Hazmat Supplies Mallory Safety Supply, LLC 4/3/2025 P.O. $3,560.00 FY25 On-Demand Security Response Securitas Security Svc USA, Inc. 4/3/2025 P.O. $5,760.00 Data Center & IT Office - Bidding and CA Services Miscellaneous, Inc. 4/7/2025 P.O. $5,545.89 3/4" 3G REGISTER PRO- RATE COST MASTER METER INC 4-7-2025 AMENDMENT NO. 2 $18,850.00 P2058 – NORTH PROCTOR VALLEY RD PIPELINE REPLACEMENT BENDER ROSENTHAL, INC. 4/9/2025 C.O. $88.97 CUSTOMER WATER CONSUMPTION DATA HELIX WATER DISTRICT 20 4/10/2025 P.O. $6,130.00 Elevator Door Safety Edge Replacement 24 Hour Elevator, Inc. 4/15/2025 P.O. $39,294.96 Microsoft 365 Licenses GIGAKOM 4/15/2025 C.O. $5,700.00 AS-NEEDED COMMUNICATIONS CONSULTING SVCS FY24-25 SVPR COMMUNICATIONS LLC 4/21/2025 C.O. $1,140.00 RMA METER TEST FEE MASTER METER INC Water Conservation and Sales: • Water Conservation – March 2025 usage was 17% lower than March 2013 usage. Since March 2024, customers have saved an average of 9% over 2013 levels. 21 • Potable Water Purchases – The March potable water purchases were 1,872 acre-feet which is 11.0% above the budget of 1,687 acre- feet. Cumulative purchases for the year are 22,113 acre-feet, 3.0% above the year-to-date budget of 21,476 acre-feet. • Recycled Water Purchases – The recycled water purchases from the City of San Diego and production at the District’s treatment facility for the month of March were 133 acre-feet which is 23.5% above the budget of 108 acre-feet. Cumulative purchases and production for the year are 2,978 acre-feet, 9.5% above the year-to-date budget of 2,719 acre-feet. 22 • The table below displays the year-to-date and monthly rainfall data for February. Rainfall March Y-T-D Actual 2.82 4.21 3-year Historical Average 2.69 11.86 Variance (0.13) (4.7%) (7.65) (64.5%) Potable, Recycled, and Sewer (Reporting up to the month of March): • Total number of potable water meters: 52,080. • Total number of sewer connections: 4,756. • Recycled water consumption for the month of March: o Total consumption: 123.06 acre-feet or 40,099,532 gallons. o Average daily consumption: 1,293,533 gallons per day. o Total cumulative recycled water consumption since March 2024: 3,050.87 acre-feet. o Total number of recycled water meters: 807. • Wastewater flows for the month of March: o Total basin flow: 1,701,161 gallons per day. ▪ This is a decrease of 10.3 percent from March 2024. o Spring Valley Sanitation District flows to Metro: 568,784 gallons per day. o Total Otay flow: 1,132,387 gallons per day. o Flow processed at the Ralph W. Chapman Water Recycling Facility: 1,068,194 gallons per day. o Flow to Metro from Otay Water District: 64,194 gallons per day. o By the end of March there were 6,761 wastewater EDUs. Exhibit A FOR THE NINE MONTHS ENDED MARCH 31, 2025 Annual YTD REVENUES: Budget Actual Budget Variance Var % Potable Water Sales 74,767,000$ 55,185,201 55,685,000$ (499,799) (0.9%) Recycled Water Sales 11,014,000 8,766,318 7,966,400 799,918 10.0% Potable Energy Charges 3,578,000 2,599,088 2,670,600 (71,512) (2.7%) Potable System Charges 14,131,000 10,289,104 10,450,000 (160,896) (1.5%) Potable MWD & CWA Fixed Charges 16,555,000 11,063,971 11,826,000 (762,029) (6.4%) Potable Penalties and Other Fees 1,067,000 847,440 806,300 41,140 5.1% Total Water Sales 121,112,000 88,751,122 89,404,300$ (653,178) (0.7%) Sewer Charges 3,482,000 2,614,319 2,617,900 (3,581) (0.1%) Meter Fees 158,000 106,074 118,600 (12,526) (10.6%) Capacity Fee Revenues 2,833,000 2,461,968 2,124,900 337,068 15.9% Non-Operating Revenues 2,566,000 2,139,450 1,880,000 259,450 13.8% Tax Revenues 6,840,000 4,260,982 4,282,800 (21,818) (0.5%) Interest 1,102,000 756,396 826,500 (70,104) (8.5%) Total Revenues 138,093,000$ 101,090,311 101,255,000$ (164,689) (0.2%) EXPENSES: Potable Water Purchases 54,323,000$ 40,876,399 39,933,200$ (943,199) (2.4%) Recycled Water Purchases 6,123,000 4,227,000 4,227,000 - 0.0% CWA-Fixed Transportation Charge 1,125,000 549,089 562,500 13,411 2.4% CWA-Infrastructure Access Charge 3,258,000 2,382,302 2,427,000 44,699 1.8% CWA-Customer Service Charge 2,166,000 1,604,183 1,611,000 6,817 0.4% CWA-Reliability Charge 3,768,000 2,627,427 2,730,000 102,573 3.8% CWA-Emergency Storage Charge 5,178,000 3,736,939 3,831,000 94,061 2.5% MWD-Capacity Res Charge 840,000 638,773 615,000 (23,773) (3.9%) MWD-Readiness to Serve Charge 684,000 526,105 513,000 (13,105) (2.6%) Subtotal Water Purchases 77,465,000 57,168,217 56,449,700$ (718,516) (1.3%) Power Charges 5,058,000 3,504,106 3,799,900 295,794 7.8% Payroll & Related Costs 27,724,800 20,221,104 21,391,300 1,170,196 5.5% Materials & Maintenance 5,224,400 3,495,163 3,919,300 424,137 10.8% Administrative Expenses 9,526,800 6,544,801 7,179,100 634,299 8.8% Legal Fees 402,000 466,762 301,500 (165,262) (54.8%) Expansion Reserve 5,720,000 4,290,000 4,290,000 - 0.0% Betterment Reserve 2,643,300 1,982,500 1,982,500 - 0.0% OPEB Trust 350,000 262,500 262,500 - 0.0% General Fund Reserve 3,978,700 2,984,000 2,984,000 - 0.0% Total Expenses 138,093,000$ 100,919,153 102,559,800$ 1,640,647 1.6% EXCESS REVENUES(EXPENSES) -$ 171,158$ (1,304,800)$ 1,475,958$ OTAY WATER DISTRICT COMPARATIVE BUDGET SUMMARY F:/MORPT/FS2025-P9 Mar25 - EERP.xlsx 4/23/2025 4:30 PM The year-to-date excess revenue of $171,158 is $1,475,958 more than the budgeted deficit of $1,304,800. COMPARATIVE BUDGET SUMMARY NET REVENUE AND EXPENSES FOR THE NINE MONTHS ENDED MARCH 31, 2025 -$1,600,000 -$1,400,000 -$1,200,000 -$1,000,000 -$800,000 -$600,000 -$400,000 -$200,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 $2,200,000 $2,400,000 $2,600,000 $2,800,000 $3,000,000 $3,200,000 $3,400,000 JUL AUG OCT NOV DEC JAN FEB MAR APR MAY JUN YTD Actual Net Revenues YTD Budget Net Revenues YTD Variance in Net Revenues OTAY WATER DISTRICT INVESTMENT PORTFOLIO REVIEW March 31, 2025 INVESTMENT OVERVIEW & MARKET STATUS: At the Federal Reserve Board's regular meeting on December 18, 2024, the Committee decided to lower the target range for the federal funds rate from 4.50-4.75% to 4.25%-4.50%, considering the progress on inflation and the balance of risks. There have been no further changes made to the federal funds rate at the most recent meeting which was held on March 19, 2025. At that meeting, the Committee felt economic activity was continuing to expand at a solid pace. The Committee will evaluate the risk balance, outlook, and incoming data prior to making any modifications to the federal funds target range. It is intended to support employment and restore inflation to its 2% objective by decreasing Treasury securities and agency debt. The Committee will continue to observe the effects of incoming information on the economic outlook. In determining the timing and size of future adjustments to the target range for the federal funds rate, they went on to say: "The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments." The District's effective rate of return for March 2025 was 4.11%, which was 26 basis points lower than the previous month. LAIF's return was two basis points lower than last month with an average effective yield of 4.31% for March 2025. The District has maintained a competitive long-term rate of return on the portfolio. The current investment strategy includes an increased level of liquidity above historical levels to meet anticipated higher liquidity requirements. As part of the District’s continued strategy, staff continuously monitors investment options and liquidity needs. Currently no changes in investment strategy are being considered based on a competitive rate of return and increased liquidity requirements Under the District's Investment Policy, all District funds continue to be managed based on the objectives, in priority order, of safety, liquidity, and return on investment. PORTFOLIO COMPLIANCE: March 31, 2025 Investment State Limit Otay Limit Otay Actual 8.01: Treasury Securities 100% 100% 13.13% 8.02: Local Agency Investment Fund (Operations) $75 Million $75 Million $48.83 Million 8.03: Federal Agency Issues 100% 100% 30.84% 8.04: Certificates of Deposit 30% 15% 0 8.05: Short-Term Commercial Notes 25% 10% 0 8.06: Medium-Term Commercial Debt 30% 10% 0 8.07: Money Market Mutual Funds 20% 10% 3.65% 8.08: San Diego County Pool 100% 100% 0.08% 12.0: Maximum Single Financial Institution 100% 50% 0.87% $823,690 0.87% $48,907,772 51.51% $45,212,552 47.62% Otay Water District Investment Portfolio: 03/31/2025 Banks (Passbook/Checking/CD)Pools (LAIF & County)Agencies,Treasury Securities & Money Market Mutual Funds Total Cash and Investments: $94,944,014 (Book Value) Jul FY24 Aug FY24 Sep FY24 1st Qtr FY24 Oct FY24 Nov FY24 Dec FY24 2nd Qtr FY24 Jan FY24 Feb FY24 Mar FY24 3rd Qtr FY24 Apr FY24 May FY24 Jun FY24 4th Qtr FY24 Jul FY25 Aug FY25 Sep FY25 1st Qtr FY25 Oct FY25 Nov FY25 Dec FY25 2nd Qtr FY25 Jan FY25 Feb FY25 Mar FY25 3rd Qtr FY25 Otay 3.71 3.74 3.83 3.76 3.76 3.86 3.90 3.84 3.86 4.01 3.90 3.92 4.04 4.02 4.12 4.06 4.13 4.21 4.23 4.19 4.16 4.16 4.08 4.13 4.10 4.37 4.11 4.19 LAIF 3.31 3.43 3.53 3.42 3.67 3.84 3.93 3.81 4.01 4.12 4.23 4.12 4.27 4.33 4.48 4.36 4.52 4.58 4.58 4.56 4.52 4.48 4.43 4.48 4.37 4.33 4.31 4.34 Difference 0.40 0.31 0.30 0.34 0.09 0.02 -0.03 0.03 -0.15 -0.11 -0.33 -0.20 -0.23 -0.31 -0.36 -0.30 -0.39 -0.37 -0.35 -0.37 -0.36 -0.32 -0.35 -0.34 -0.27 0.04 -0.20 -0.14 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 Re t u r n o n I n v e s t m e n t s Month Performance Measure FY-25 Return on Investment Otay LAIF Difference Target: Meet or Exceed 100% of LAIF Month End Portfolio Management March 31, 2025 Portfolio Summary % of Portfolio Book ValueInvestmentsMarket Value Par Value Days to MaturityTerm YTM 360 Equiv. YTM 365 Equiv. Federal Agency Issues- Callable 11,500,000.00 79312.22 4.47348911,505,960.0011,500,000.00 4.535 Treasury Securities - Coupon 12,464,821.61 43213.24 4.32025112,475,335.0012,500,000.00 4.380 Federal Agency Issues - Bullet 17,779,465.09 1,06518.89 3.11524717,708,074.4017,796,000.00 3.158 Money Market 3,468,265.31 13.68 4.07513,468,265.313,468,265.31 4.132 Local Agency Investment Fund (LAIF)48,831,640.59 151.88 4.254148,873,107.9848,831,640.59 4.313 San Diego County Pool 76,132.11 10.08 3.699176,000.0076,132.11 3.750 94,120,324.71 100.00%Investments 94,106,742.6994,172,038.01 356 140 4.067 4.124 Cash (not included in yield calculations) Passbook/Checking 823,689.70 1 2.1491823,689.70823,689.70 2.179 94,944,014.41Total Cash and Investments 94,930,432.3994,995,727.71 356 140 4.067 4.124 Current Year March 31 345,345.16 Fiscal Year To Date 3,521,983.12 Average Daily Balance Effective Rate of Return 99,039,459.59 111,609,695.33 4.20%4.11% Total Earnings Month Ending I hereby certify that the investments contained in this report are made in accordance with the District Investment Policy Number 27 adopted by the Board of Directors on May 01, 2024. The investments provide sufficient liquidity to meet the cash flow requirements of the District for the next six months of expenditures. __________________________________________________ ____________________ Joseph Beachem, Chief Financial Officer Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Reporting period 03/01/2025-03/31/2025 Run Date: 04/22/2025 - 15:01 PM (PRF_PM1) 7.3.11 Report Ver. 7.3.11 04/23/2025 YTM 360 Page 1 Par Value Book Value Maturity Date Stated RateMarket Value March 31, 2025 Portfolio Details - Investments Average BalanceIssuer Portfolio Management Month End Days to MaturityMoody'sCUSIP Investment # Purchase Date Federal Agency Issues- Callable 4.468Federal Home Loan Bank2422 1,000,000.00 1,000,000.00 05/10/20274.53011/15/2024 998,640.00 Aaa3130B3R54 769 4.290Federal Home Loan Bank2425 7,500,000.00 7,500,000.00 12/30/20264.35012/30/2024 7,506,150.00 Aaa3130B4DY4 638 4.932Federal Home Loan Mortgage2406 3,000,000.00 3,000,000.00 04/25/20255.00010/25/2022 3,001,170.00 Aaa3134GX6A7 24 11,500,000.0011,505,960.0011,500,000.0011,500,000.00Subtotal and Average 4.473 489 Treasury Securities - Coupon 4.998US TREASURY2418 3,000,000.00 2,996,977.37 07/31/20254.75011/01/2023 3,004,230.00 Aaa91282CHN4 121 4.110US TREASURY2426 7,500,000.00 7,504,472.06 12/31/20254.25001/06/2025 7,506,225.00 Aaa91282CJS1 274 4.143US TREASURY2427 1,000,000.00 981,174.51 03/31/20262.25002/05/2025 982,440.00 Aaa9128286L9 364 4.034US TREASURY2428 1,000,000.00 982,197.67 03/31/20262.25003/27/2025 982,440.00 Aaa9128286L9 364 12,464,821.6112,475,335.0012,500,000.0014,541,974.80Subtotal and Average 4.320 251 Federal Agency Issues - Bullet 2.855Federal Farm Credit Bank2397 2,000,000.00 1,999,816.05 04/25/20252.75004/26/2022 1,997,840.00 Aaa3133ENVC1 24 4.261Federal Farm Credit Bank2402 3,000,000.00 2,999,030.42 09/30/20254.25009/30/2022 2,999,160.00 Aaa3133ENP95 182 4.932Federal Farm Credit Bank2420 1,000,000.00 996,693.01 03/05/20264.62504/17/2024 1,004,820.00 Aaa3133EP4K8 338 4.679Federal Farm Credit Bank2421 1,000,000.00 1,000,099.91 05/06/20274.75005/28/2024 1,015,870.00 Aaa3133ERDS7 765 4.060Federal Farm Credit Bank2423 2,000,000.00 2,000,290.42 12/16/20264.12512/16/2024 2,005,300.00 Aaa3133ERK42 624 4.864Federal Farm Credit Bank2424 3,000,000.00 2,999,540.43 07/28/20254.87511/17/2023 3,005,070.00 Aaa3133EPRS6 118 0.612Federal Home Loan Mortgage2391 1,045,000.00 1,043,788.90 09/23/20250.37509/16/2021 1,025,563.00 Aaa3137EAEX3 175 0.618Federal Home Loan Mortgage2392 2,751,000.00 2,747,745.92 09/23/20250.37509/22/2021 2,699,831.40 Aaa3137EAEX3 175 1.129Federal National Mortage Assoc2394 2,000,000.00 1,992,460.03 11/07/20250.50012/15/2021 1,954,620.00 Aaa3135G06G3 220 17,779,465.0917,708,074.4017,796,000.0017,778,241.65Subtotal and Average 3.115 247 Money Market 4.162Blackrock T - Fund Inst9010 19,517.46 19,517.46 4.22019,517.46RESERVE-10A WRB 1 4.172Blackrock T - Fund Inst9011 45,013.31 45,013.31 4.23045,013.31RESERVE 10 BABS 1 4.073FIRST AMERICAN US TREASURY9016 3,403,734.54 3,403,734.54 4.1303,403,734.54OWD TRUST & CUS 1 3,468,265.313,468,265.313,468,265.31444,683.90Subtotal and Average 4.075 1 Local Agency Investment Fund (LAIF) 4.254STATE OF CALIFORNIA9001 48,831,640.59 48,831,640.59 4.31348,873,107.98LAIF 1 48,831,640.5948,873,107.9848,831,640.5952,821,963.17Subtotal and Average 4.254 1 Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 PM (PRF_PM2) 7.3.11 Report Ver. 7.3.11 YTM 360 Page 2 Par Value Book Value Maturity Date Stated RateMarket Value March 31, 2025 Portfolio Details - Investments Average BalanceIssuer Portfolio Management Month End Days to MaturityMoody'sCUSIP Investment # Purchase Date San Diego County Pool 3.699San Diego County9007 76,132.11 76,132.11 3.75076,000.00SD COUNTY POOL 1 76,132.1176,000.0076,132.1176,132.11Subtotal and Average 3.699 1 99,039,459.59 94,172,038.01 4.067 14094,106,742.69 94,120,324.71Total and Average Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 PM (PRF_PM2) 7.3.11 YTM 360 Page 3 Par Value Book Value Stated RateMarket Value March 31, 2025 Portfolio Details - Cash Average BalanceIssuer Portfolio Management Month End Days to MaturityMoody'sCUSIP Investment # Purchase Date US Bank 0.000STATE OF CALIFORNIA9003 3,100.00 3,100.003,100.00PETTY CASH 1 2.219STATE OF CALIFORNIA9004 797,558.21 797,558.21 2.250797,558.21OPERATING 1 0.000STATE OF CALIFORNIA9005 4,554.82 4,554.8207/01/2024 4,554.82PAYROLL 1 0.000STATE OF CALIFORNIA9014 18,476.67 18,476.6707/01/2024 18,476.67FLEX ACCT 1 0.00 99,039,459.59 94,995,727.71 4.067 140 1Average Balance 94,930,432.39 94,944,014.41Total Cash and Investments Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 PM (PRF_PM2) 7.3.11 Month End Activity Report Sorted By Issuer March 1, 2025 - March 31, 2025 Current Rate Transaction Date BalanceBeginning Balance Ending Par Value Percent of Portfolio Par Value CUSIP Investment #Issuer Purchases or Deposits Redemptions or Withdrawals Issuer: Blackrock T - Fund Inst Money Market Blackrock T - Fund Inst9010 2,016.334.220 0.00RESERVE-10A WRB Blackrock T - Fund Inst9011 5,287.404.220 0.00RESERVE 10 BABS 0.0057,227.04 64,530.77Subtotal and Balance 7,303.73 7,303.73 0.0057,227.04 64,530.770.068%Issuer Subtotal Issuer: STATE OF CALIFORNIA US Bank STATE OF CALIFORNIA9004 1,449,656.452.250 1,077,142.97OPERATING STATE OF CALIFORNIA9005 3,349.04 0.00PAYROLL STATE OF CALIFORNIA9014 369.99 17,635.94FLEX ACCT 1,094,778.91465,093.13 823,689.70Subtotal and Balance 1,453,375.48 Local Agency Investment Fund (LAIF) STATE OF CALIFORNIA9001 2,900,000.004.313 9,800,000.00LAIF 9,800,000.0055,731,640.59 48,831,640.59Subtotal and Balance 2,900,000.00 4,353,375.48 10,894,778.9156,196,733.72 49,655,330.2952.271%Issuer Subtotal Issuer: FIRST AMERICAN US TREASURY Money Market FIRST AMERICAN US TREASURY9016 4,168,099.114.130 992,955.87OWD TRUST & CUS 992,955.87228,591.30 3,403,734.54Subtotal and Balance 4,168,099.11 4,168,099.11 992,955.87228,591.30 3,403,734.543.583%Issuer Subtotal Issuer: Federal Farm Credit Bank Federal Agency Issues - Bullet 12,000,000.00 12,000,000.00Subtotal and Balance Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 DA (PRF_DA) 7.3.11 Report Ver. 7.3.11 Current Rate Transaction Date BalanceBeginning Balance Ending Par Value Page 2 Percent of Portfolio Par Value March 1, 2025 - March 31, 2025 Activity Report Month End CUSIP Investment #Issuer Purchases or Deposits Redemptions or Withdrawals 0.00 0.0012,000,000.00 12,000,000.0012.632%Issuer Subtotal Issuer: Federal Home Loan Bank Federal Agency Issues- Callable 8,500,000.00 8,500,000.00Subtotal and Balance 0.00 0.008,500,000.00 8,500,000.008.948%Issuer Subtotal Issuer: Federal Home Loan Mortgage Federal Agency Issues- Callable 3,000,000.00 3,000,000.00Subtotal and Balance Federal Agency Issues - Bullet 3,796,000.00 3,796,000.00Subtotal and Balance 0.00 0.006,796,000.00 6,796,000.007.154%Issuer Subtotal Issuer: Federal National Mortage Assoc Federal Agency Issues - Bullet 2,000,000.00 2,000,000.00Subtotal and Balance 0.00 0.002,000,000.00 2,000,000.002.105%Issuer Subtotal Issuer: San Diego County San Diego County Pool 76,132.11 76,132.11Subtotal and Balance 0.00 0.0076,132.11 76,132.110.080%Issuer Subtotal Issuer: US TREASURY Treasury Securities - Coupon US TREASURY2419 0.003.875 03/31/2025 3,000,000.0091282CGU9 US TREASURY2428 1,000,000.002.250 03/27/2025 0.009128286L9 3,000,000.0014,500,000.00 12,500,000.00Subtotal and Balance 1,000,000.00 Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 DA (PRF_DA) 7.3.11 Report Ver. 7.3.11 Current Rate Transaction Date BalanceBeginning Balance Ending Par Value Page 3 Percent of Portfolio Par Value March 1, 2025 - March 31, 2025 Activity Report Month End CUSIP Investment #Issuer Purchases or Deposits Redemptions or Withdrawals 1,000,000.00 3,000,000.0014,500,000.00 12,500,000.0013.158%Issuer Subtotal 100,354,684.17 94,995,727.71Total14,887,734.789,528,778.32100.000% Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 DA (PRF_DA) 7.3.11 Report Ver. 7.3.11 Month End Duration Report Sorted by Investment Type - Investment Type Through 03/31/2025 Investment #Security ID Issuer Investment Class Book Value Par Value Market Value Current Rate YTM Current Yield Maturity/ Call Date DurationModified360Fund Federal Home Loan Mortgage240699 3,000,000.00 3,001,170.003134GX6A7 4.343 04/25/2025 0.0653,000,000.00 4.932Fair5.0000000 Federal Home Loan Bank242299 1,000,000.00 998,640.003130B3R54 4.600 05/10/2027 1.9561,000,000.00 4.468Fair4.5300000 Federal Home Loan Bank242599 7,500,000.00 7,506,150.003130B4DY4 4.304 12/30/2026 1.6497,500,000.00 4.290Fair4.3500000 US TREASURY241899 3,000,000.00 3,004,230.0091282CHN4 4.344 07/31/2025 0.3312,996,977.37 4.998Fair4.7500000 US TREASURY242699 7,500,000.00 7,506,225.0091282CJS1 4.144 12/31/2025 0.7237,504,472.06 4.110Fair4.2500000 US TREASURY242799 1,000,000.00 982,440.009128286L9 4.060 03/31/2026 0.971981,174.51 4.143Fair2.2500000 US TREASURY242899 1,000,000.00 982,440.009128286L9 4.060 03/31/2026 0.971982,197.67 4.034Fair2.2500000 Federal Home Loan Mortgage239199 1,045,000.00 1,025,563.003137EAEX3 4.326 09/23/2025 0.4791,043,788.90 0.612Fair.37500000 Federal Home Loan Mortgage239299 2,751,000.00 2,699,831.403137EAEX3 4.326 09/23/2025 0.4792,747,745.92 0.618Fair.37500000 Federal National Mortage Assoc239499 2,000,000.00 1,954,620.003135G06G3 4.373 11/07/2025 0.5851,992,460.03 1.129Fair.50000000 Federal Farm Credit Bank239799 2,000,000.00 1,997,840.003133ENVC1 4.259 04/25/2025 0.0651,999,816.05 2.855Fair2.7500000 Federal Farm Credit Bank240299 3,000,000.00 2,999,160.003133ENP95 4.307 09/30/2025 0.4982,999,030.42 4.261Fair4.2500000 Federal Farm Credit Bank242099 1,000,000.00 1,004,820.003133EP4K8 4.093 03/05/2026 0.898996,693.01 4.932Fair4.6250000 Federal Farm Credit Bank242199 1,000,000.00 1,015,870.003133ERDS7 3.956 05/06/2027 1.9471,000,099.91 4.679Fair4.7500000 Federal Farm Credit Bank242399 2,000,000.00 2,005,300.003133ERK42 3.966 12/16/2026 1.6162,000,290.42 4.060Fair4.1250000 Federal Farm Credit Bank242499 3,000,000.00 3,005,070.003133EPRS6 4.316 07/28/2025 0.3232,999,540.43 4.864Fair4.8750000 Blackrock T - Fund Inst901099 19,517.46 19,517.46RESERVE-10A 4.220 0.00019,517.46 4.162Amort4.2200000 Blackrock T - Fund Inst901199 45,013.31 45,013.31RESERVE 10 4.230 0.00045,013.31 4.172Amort4.2300000 FIRST AMERICAN US TREASURY901699 3,403,734.54 3,403,734.54OWD TRUST &4.130 0.0003,403,734.54 4.073Amort4.1300000 STATE OF CALIFORNIA900199 48,831,640.59 48,873,107.98LAIF 4.313 0.00048,831,640.59 4.254Fair4.3130000 San Diego County900799 76,132.11 76,000.00SD COUNTY 3.750 0.00076,132.11 3.699Fair3.7500000 4.278 0.36694,120,324.71 94,172,038.01 94,106,742.69Report Total † = Duration can not be calculated on these investments due to incomplete Market price data. Portfolio OTAY NL! APPage 1Data Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 DU (PRF_DU) 7.3.11 Report Ver. 7.3.11 Month End GASB 31 Compliance Detail Sorted by Fund - Fund March 1, 2025 - March 31, 2025 Investment #Maturity Date Beginning Invested Value Purchase of Principal InvestmentClassFundCUSIP Adjustment in Value Ending Invested Value Addition to Principal Redemption of Principal Amortization Adjustment Change in Market Value Fund: Treasury Fund 2392 2,691,743.46Fair Value 09/23/2025 8,087.9499 2,699,831.403137EAEX30.00 0.00 0.00 0.00 2406 3,002,190.00Fair Value 04/25/2025 -1,020.0099 3,001,170.003134GX6A70.00 0.00 0.00 0.00 2391 1,022,490.70Fair Value 09/23/2025 3,072.3099 1,025,563.003137EAEX30.00 0.00 0.00 0.00 2394 1,950,580.00Fair Value 11/07/2025 4,040.0099 1,954,620.003135G06G30.00 0.00 0.00 0.00 2422 998,590.00Fair Value 05/10/2027 50.0099 998,640.003130B3R540.00 0.00 0.00 0.00 2425 7,508,400.00Fair Value 12/30/2026 -2,250.0099 7,506,150.003130B4DY40.00 0.00 0.00 0.00 9003 3,100.00Amortized 0.0099 3,100.00PETTY CASH 0.00 0.00 0.00 0.00 9004 425,044.73Amortized 0.0099 797,558.21OPERATING0.00 1,449,656.45 1,077,142.97 0.00 9014 35,742.62Amortized 0.0099 18,476.67FLEX ACCT 0.00 369.99 17,635.94 0.00 9005 1,205.78Amortized 0.0099 4,554.82PAYROLL0.00 3,349.04 0.00 0.00 9001 55,710,573.19Fair Value 62,534.7999 48,873,107.98LAIF0.00 2,900,000.00 9,800,000.00 0.00 2424 3,006,300.00Fair Value 07/28/2025 -1,230.0099 3,005,070.003133EPRS60.00 0.00 0.00 0.00 2423 2,003,120.00Fair Value 12/16/2026 2,180.0099 2,005,300.003133ERK420.00 0.00 0.00 0.00 2421 1,014,590.00Fair Value 05/06/2027 1,280.0099 1,015,870.003133ERDS70.00 0.00 0.00 0.00 2420 1,004,560.00Fair Value 03/05/2026 260.0099 1,004,820.003133EP4K80.00 0.00 0.00 0.00 2402 2,999,340.00Fair Value 09/30/2025 -180.0099 2,999,160.003133ENP950.00 0.00 0.00 0.00 2397 1,995,080.00Fair Value 04/25/2025 2,760.0099 1,997,840.003133ENVC10.00 0.00 0.00 0.00 2428 0.00Fair Value 03/31/2026 486.8799 982,440.009128286L9981,953.13 0.00 0.00 0.00 2418 3,005,520.00Fair Value 07/31/2025 -1,290.0099 3,004,230.0091282CHN40.00 0.00 0.00 0.00 2427 980,550.00Fair Value 03/31/2026 1,890.0099 982,440.009128286L90.00 0.00 0.00 0.00 2419 2,998,590.00Fair Value 03/31/2025 1,410.0099 0.0091282CGU90.00 0.00 3,000,000.00 0.00 2426 7,505,025.00Fair Value 12/31/2025 1,200.0099 7,506,225.0091282CJS10.00 0.00 0.00 0.00 9007 76,000.00Fair Value 0.0099 76,000.00SD COUNTY POOL 0.00 0.00 0.00 0.00 9016 228,591.30Amortized 0.0099 3,403,734.54OWD TRUST & CUS 0.00 4,168,099.11 992,955.87 0.00 9011 39,725.91Amortized 0.0099 45,013.31RESERVE 10 BABS 0.00 5,287.40 0.00 0.00 9010 17,501.13Amortized 0.0099 19,517.46RESERVE-10A WRB 0.00 2,016.33 0.00 0.00 100,224,153.82Subtotal 83,281.90 94,930,432.39981,953.13 8,528,778.32 14,887,734.78 0.00 100,224,153.82Total 94,930,432.3983,281.90981,953.13 8,528,778.32 14,887,734.78 0.00 Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 GD (PRF_GD) 7.3.11 Report Ver. 7.3.11 Month End Interest Earnings Sorted by Fund - Fund March 1, 2025 - March 31, 2025 Yield on Beginning Book Value Maturity Date Current Rate Ending Par Value EndingSecurityTypeFundBook ValueBeginningBook Value Adjusted Interest Earnings Accretion Amortization/ Earnings Adjusted InterestAnnualized YieldCUSIPInvestment #Interest Earned Fund: Treasury Fund 2,747,745.9223922,751,000.00 0.375FAC09/23/2025 859.69 567.58 1,427.270.612992,747,178.343137EAEX3 3,000,000.0024063,000,000.00 5.000MC104/25/2025 12,500.00 0.00 12,500.004.906993,000,000.003134GX6A7 1,043,788.9023911,045,000.00 0.375FAC09/23/2025 326.56 211.24 537.800.607991,043,577.663137EAEX3 1,992,460.0323942,000,000.00 0.500FAC11/07/2025 833.33 1,047.22 1,880.551.112991,991,412.813135G06G3 1,000,000.0024221,000,000.00 4.530MC105/10/2027 3,775.00 0.00 3,775.004.445991,000,000.003130B3R54 7,500,000.0024257,500,000.00 4.350MC112/30/2026 27,187.50 0.00 27,187.504.268997,500,000.003130B4DY4 3,100.0090033,100.00PA1 0.00 0.00 0.00993,100.00PETTY CASH 797,558.219004797,558.21 2.250PA1 3,509.85 0.00 3,509.859.72399425,044.73OPERATING 18,476.67901418,476.67PA1 0.00 0.00 0.009935,742.62FLEX ACCT 4,554.8290054,554.82PA1 0.00 0.00 0.00991,205.78PAYROLL 48,831,640.59900148,831,640.59 4.313LA1 193,491.92 0.00 193,491.924.0889955,731,640.59LAIF 2,999,540.4324243,000,000.00 4.875FAC07/28/2025 12,187.50 117.84 12,305.344.830992,999,422.593133EPRS6 2,000,290.4224232,000,000.00 4.125FAC12/16/2026 6,875.00 -14.16 6,860.844.038992,000,304.583133ERK42 1,000,099.9124211,000,000.00 4.750FAC05/06/2027 3,958.33 -3.97 3,954.364.655991,000,103.883133ERDS7 996,693.0124201,000,000.00 4.625FAC03/05/2026 3,854.17 297.04 4,151.214.90599996,395.973133EP4K8 2,999,030.4224023,000,000.00 4.250FAC09/30/2025 10,625.00 162.50 10,787.504.235992,998,867.923133ENP95 1,999,816.0523972,000,000.00 2.750FAC04/25/2025 4,583.33 229.93 4,813.262.834991,999,586.123133ENVC1 982,197.6724281,000,000.00 2.250TRC03/31/2026 308.73 244.54 553.274.113990.009128286L9 2,996,977.3724183,000,000.00 4.750TRC07/31/2025 12,203.03 774.39 12,977.425.100992,996,202.9891282CHN4 981,174.5124271,000,000.00 2.250TRC03/31/2026 1,915.88 1,603.27 3,519.154.23099979,571.249128286L9 0.0024190.00 3.875TRC03/31/2025 9,581.04 2,934.30 12,515.345.081992,997,065.7091282CGU9 7,504,472.0624267,500,000.00 4.250TRC12/31/2025 27,296.27 -505.96 26,790.314.203997,504,978.0291282CJS1 76,132.11900776,132.11 3.750LA3 242.48 0.00 242.483.7509976,132.11SD COUNTY POOL 3,403,734.5490163,403,734.54 4.130PA2 1,347.36 0.00 1,347.366.94099228,591.30OWD TRUST & CUS 45,013.31901145,013.31 4.230PA2 147.94 0.00 147.944.3859939,725.91RESERVE 10 BABS 19,517.46901019,517.46 4.220PA2 69.49 0.00 69.494.6759917,501.13RESERVE-10A WRB 94,995,727.71Subtotal 94,944,014.41 4.283 345,345.167,665.76337,679.40100,313,351.98 94,995,727.71Total 94,944,014.41 4.283 345,345.167,665.76337,679.40100,313,351.98 Portfolio OTAY NL! APData Updated: SET_PM1: 04/22/2025 15:01 Run Date: 04/22/2025 - 15:01 IE (PRF_IE) 7.3.11 Report Ver. 7.3.11 Check Num Check Amt Invoice Description Invoice Total Check Dt Vendor Num Invoice Num 2063511 638.69 ELEVATOR GENERAL MAINT 638.69 4/2/2025 15416 182621 ELEVATOR GENERAL MAINT 638.69 4/16/2025 15416 188986 ELEVATOR GENERAL MAINT 2,758.50 4/16/2025 15416 189507 CLIMATE ADAPTATION PLAN 121.40 4/2/2025 22463 20256000 CLIMATE ADAPTATION PLAN 348.48 4/2/2025 22463 20255999 CLIMATE ADAPTATION PLAN 2,366.55 4/2/2025 22463 20256001 2063544 8,925.00 NEW A/V EQUIPMENT FOR TRAINING 8,925.00 4/9/2025 30042 6508 2063581 33,764.65 RETENTION/PACIFIC HYDROTECH 33,764.65 4/16/2025 22643 403302025 BILLING ADMINISTRATION 80.00 4/16/2025 22138 861702 BILLING ADMINISTRATION 206.70 4/16/2025 22138 863747 2063583 3,921.42 OMNI 3" MMP 3,643.01 4/16/2025 3492 0107245 2063622 67,893.42 PROF SERV - (MAR 2025)67,893.42 4/23/2025 17264 309753 2063623 5,500.00 LEGAL SERVICES 5,500.00 4/23/2025 17264 04222025 2063624 93,229.24 FY25 WORKERS' COMP PROG (QTR 3)93,229.24 4/23/2025 20199 ACCT Z010 - WC QTR 3 2063513 3,912.97 TELEPHONE SERVICES (2/12/25-3/11/25)3,912.97 4/2/2025 7785 0000023162204 2063584 8,924.60 JANITORIAL SERV - (MAR 2025)8,924.60 4/16/2025 20125 J2028 2063631 135.00 EXPENSE REIMBURSEMENT 135.00 4/23/2025 2965 042125 2063567 58.84 UB REFUND 0000293837 58.84 4/9/2025 99999 ubRef040825007 ARMORED TRANSPORTATION SERVICE 4.06 4/2/2025 21775 7324458 ARMORED TRANSPORTATION SERVICE 323.66 4/2/2025 21775 12856179 2063515 1,811.18 LEGISLATIVE ADVOCACY CONSULTING 1,811.18 4/2/2025 8156 1027809 2063625 4,670.93 LEGISLATIVE ADVOCACY CONSULTING 4,670.93 4/23/2025 8156 1032235 2063516 1,794.00 LEGAL CONSULTING SERVICES 1,794.00 4/2/2025 3005 338728 2063568 2,685.00 UB REFUND 0000297729 2,685.00 4/9/2025 99999 ubRef040825008 2063569 2,685.00 UB REFUND 0000297929 2,685.00 4/9/2025 99999 ubRef040825009 2063585 852.60 ACA REPORTING SERV (MAR 2025)852.60 4/16/2025 18154 127688 2063517 7,856.25 RFWCWRF DISINFECT SYS (FEB 2025)7,856.25 4/2/2025 15177 FB63640 2063626 3,807.50 RFWCWRF DISINFECT SYS (MAR 2025)3,807.50 4/23/2025 15177 FB64288 2063570 50.04 UB REFUND 0000290655 50.04 4/9/2025 99999 ubRef040825006 AARC CONSULTANTS LLC 2063512 2,836.43 Check Register Check Dates: 3/20/2025 thru 4/23/2025 payee 24 HOUR ELEVATOR INC 2063580 3,397.19 ABSOLUTE AV DESIGN AMERICAN BUSINESS BANK AMERIFLEX 2063582 286.70 ASSOC OF CA WATER AGENCIES AT&T AZTEC LANDSCAPING INC AQUA-METRIC SALES COMPANY ARTIANO SHINOFF ABED BROWNSTEIN HYATT FARBER BURKE WILLIAMS & SORENSEN LLP BRANDON DIPIETRO BRANDY NAGY BRINKS INC 2063514 327.72 CAROLLO ENGINEERS INC CASEY BRUNO BURTECH PIPELINE BUSINESSOLVER.COM INC 4/24/2025 7:17:27 PM Page 1 Check Register Check Dates: 3/20/2025 thru 4/23/2025 2063518 3,825.00 ENVIRONMENTAL SERV (DEC 2024)3,825.00 4/2/2025 21705 37631 2063497 83.84 UB REFUND 0000293423 83.84 3/26/2025 99999 ubRef032725013 PM SERVICES ON SWITCHGEARS 7,500.00 4/2/2025 6418 19640 PM SERVICES ON SWITCHGEARS 14,973.00 4/2/2025 6418 19641 2063520 10,683.17 DEPOSIT FEES FOR INSPECTION 10,683.17 4/2/2025 446 UP240198022525 BACTERIOLOGICAL TESTING (2/28/25)250.00 4/23/2025 4119 39856 BACTERIOLOGICAL TESTING (2/28/25)270.00 4/23/2025 4119 39855 BACTERIOLOGICAL TESTING (2/28/25)1,020.00 4/23/2025 4119 39854 2063652 42.53 UB REFUND 0000299834 42.53 4/23/2025 99999 ubRef042225003 2063587 540.75 FY25 DATA SERVICES - REALQUEST 540.75 4/16/2025 15049 82244425 2063628 5,594.55 405 GALLON TANK 5,190.00 4/23/2025 2643 C2025089 2063521 113.50 COUNTY EXCAVATION PERMITS (DEC 2024)113.50 4/2/2025 99 DPWAROTAYMWD- 1224 UPFPPERMIT RENEWAL (APR 2025-APR 2026)708.00 4/2/2025 184 2818021425 UPFPPERMIT RENEWAL (APR 2025-APR 2026)1,142.00 4/2/2025 184 5731021425 COUNTY EXCAVATION PERMITS (JAN 2025)729.00 4/16/2025 99 DPWAROTAYMWD- 0125 COUNTY EXCAVATION PERMITS (JAN 2025)1,024.10 4/16/2025 99 DPWAROTAYMWD- 0225 PERMIT FEES #04745 (MAY 2025-MAY 2026)687.00 4/16/2025 2122 045442002RI2025 PERMIT FEES #04745 (MAY 2025-MAY 2026)687.00 4/16/2025 2122 047452002RI2025 2063629 708.00 UPFP PERMIT RENEWAL (MAY 2025-MAY 2026)708.00 4/23/2025 184 2139031725 SHUT DOWN TEST (MAR 2025)210.90 4/23/2025 184 2003193E632820325 SHUT DOWN TEST (MAR 2025)233.00 4/23/2025 184 2003193E640610325 SHUT DOWN TEST (MAR 2025)233.00 4/23/2025 184 2003193E642340325 SHUT DOWN TEST (MAR 2025)233.00 4/23/2025 184 20034193E634530325 SHUT DOWN TEST (MAR 2025)349.50 4/23/2025 184 2003193E642330325 SHUT DOWN TEST (MAR 2025)466.00 4/23/2025 184 2003193E642260325 SHUT DOWN TEST (MAR 2025)466.00 4/23/2025 184 2003193E642290325 SHUT DOWN TEST (MAR 2025)932.00 4/23/2025 184 2003193E642400325 2063653 25.79 UB REFUND 0000293848 25.79 4/23/2025 99999 ubRef042225002 2063498 150.00 UB REFUND 0000291678 150.00 3/26/2025 99999 ubRef032725010 CHAMBERS GROUP INC CHOUCRI MANSOUR CHULA VISTA ELECTRIC CO 2063519 22,473.00 CLAYTON TAYLOR CORELOGIC SOLUTIONS LLC CORE-ROSION PRODUCTS CITY OF CHULA VISTA CLARKSON LAB & SUPPLY INC 2063627 1,540.00 2063630 3,123.40 COURTNEY AVILES DAVID LEYVA COUNTY OF SAN DIEGO 2063522 1,850.00 2063589 1,753.10 2063590 1,374.00 4/24/2025 7:17:27 PM Page 2 Check Register Check Dates: 3/20/2025 thru 4/23/2025 MILEAGE REIMBURSEMENT - (JAN 2025)6.30 4/2/2025 30035 010125013125 MILEAGE REIMBURSEMENT - (FEB 2025)36.40 4/2/2025 30035 020125022825 2063632 207.36 EMP QTR ENDING 033125 TAX 207.36 4/23/2025 21100 0870440 033125 2063606 1,392.60 EXPENSE REIMBURSEMENT 1,392.60 4/16/2025 7591 041125 2063524 4,798.57 OTAY LOGISTICS INDUSTRIAL PARK 4,798.57 4/2/2025 30072 032825 2063591 8,500.00 BIO-AUGMENTATION 8,500.00 4/16/2025 18983 3447 2063633 40,652.42 REASSEMBLY OF ANGLE GEAR 39,450.84 4/23/2025 19675 55040254 2063545 7,690.00 METER CHANGEOUT CONSULTING SERV 7,690.00 4/9/2025 21597 24635 2063592 7,690.00 METER CHANGEOUT CONSULTING SERV 7,690.00 4/16/2025 21597 24742 2063593 267.88 FY25 RECYCLED WASTE SERVICE 267.88 4/16/2025 2447 5458 033125 2063499 23.50 UB REFUND 0000251230 23.50 3/26/2025 99999 ubRef032725005 2063634 14,365.00 ELECTRICAL ENGINEERING SERVICE 14,365.00 4/23/2025 3765 14120A61355 2063525 793.13 WATER EFFICIENCY EVAL CONSULTING 793.13 4/2/2025 21206 OTAY CP-08 2063526 20,752.15 ENVIRONMENTAL SERVICES - (FEB 2025)20,752.15 4/2/2025 22412 205951 2063546 1,470.99 VISION BENEFITS ADMIN - (APR 2025)1,470.99 4/9/2025 20511 166727569 980-1 CLAVAL PUMP CONTROL VALVE 2,501.00 4/9/2025 3546 0875927-1 980-1 CLAVAL PUMP CONTROL VALVE 3,950.70 4/9/2025 3546 0877108 980-1 CLAVAL PUMP CONTROL VALVE 6,307.50 4/9/2025 3546 0877107 980-1 CLAVAL PUMP CONTROL VALVE 37,897.50 4/9/2025 3546 0869683 INVENTORY 682.95 4/16/2025 3546 0877727 INVENTORY 973.00 4/16/2025 3546 0875930 INVENTORY 2,217.90 4/16/2025 3546 0877882 INVENTORY 5,183.98 4/16/2025 3546 0874882 INVENTORY 16,250.00 4/16/2025 3546 0875928 2063635 99.00 DOCUMENT SERVICE FY 25 99.00 4/23/2025 17888 9003400325 2063636 150.00 FY25 GYM EQUIPMENT MAINTENANCE 150.00 4/23/2025 2591 12935 2063548 43.40 MILEAGE REIMBURSEMENT - (MAR 2025)43.40 4/9/2025 22628 030125033125 2063637 25.00 EXPENSE REIMBURSEMENT - (MAR 2025)25.00 4/23/2025 22628 030125033125 EXP 2063549 467.88 CAMPO RD SELF STORAGE 467.88 4/9/2025 30178 032825 2063550 5,278.93 GENESIS AT MILLENIA LOT 7&8 5,278.93 4/9/2025 21886 032825 2063571 27.53 UB REFUND 0000285458 27.53 4/9/2025 99999 ubRef040825005 DELFINA GONZALEZ 2063523 42.70 DRYLET INC DXP ENTERPRISES INC E SOURCE COMPANIES LLC DIVISION OF EMPLOYMENT DONGXING MA DORCEY B. ABSHIER ENVIRONMENTAL INCENTIVES INC ENVIRONMENTAL SCIENCE ASSOC EYEMED (FIDELITY) EDCO DISPOSAL CORPORATION EFRAIN ACOSTA ENGINEERING PARTNERS INC FERGUSON WATERWORKS # 1083 2063547 54,582.61 2063594 27,269.20 FRONTERA REAL ESTATE GENESIS NEW HOMES LLC GERARDO CERVANTES AGUILAR FIRST AMERICAN DATA TREE LLC FITNESS TECH FRANCISCO RIVERA 4/24/2025 7:17:27 PM Page 3 Check Register Check Dates: 3/20/2025 thru 4/23/2025 2063595 9,629.28 CRADLEPOINT NETCLOUD SBSC 9,629.28 4/16/2025 3537 11470229 AS-NEEDED SODIUM HYPOCHLORITE 331.61 4/16/2025 19978 1026103 AS-NEEDED SODIUM HYPOCHLORITE 378.98 4/16/2025 19978 1024449 AS-NEEDED SODIUM HYPOCHLORITE 509.26 4/16/2025 19978 1023174 AS-NEEDED SODIUM HYPOCHLORITE 710.59 4/16/2025 19978 1023172 AS-NEEDED SODIUM HYPOCHLORITE 1,347.17 4/16/2025 19978 1024450 AS-NEEDED SODIUM HYPOCHLORITE 1,391.58 4/16/2025 19978 1026100 AS-NEEDED SODIUM HYPOCHLORITE 2,368.64 4/16/2025 19978 1026102 AS-NEEDED SODIUM HYPOCHLORITE 2,398.25 4/16/2025 19978 1023173 AS-NEEDED SODIUM HYPOCHLORITE 2,960.81 4/16/2025 19978 1026105 2063638 1,442.50 TEMP LABOR SERV (12/1/24-3/26/25)1,442.50 4/23/2025 19825 1200708196 2063597 204.40 AETNA EMPLOYEE ASSISTANCE PROG 204.40 4/16/2025 22165 E0343567 2063639 205.86 AETNA EMPLOYEE ASSISTANCE PROG 205.86 4/23/2025 22165 E0341319 2063500 88.18 UB REFUND 0000276291 88.18 3/26/2025 99999 ubRef032725007 ENVIRONMENTAL SERV (MAR 2025)1,295.00 4/16/2025 2008 127264 ENVIRONMENTAL SERV (MAR 2025)3,630.76 4/16/2025 2008 127252 2063599 1,331.01 3G XTR ENCODER INPUT W/2' 1,238.88 4/16/2025 21322 0003687 2063527 2,029.46 LAND SURVEYING (FEB 2025)2,029.46 4/2/2025 13349 2025020025 BILL PROCESSING SERVICES FY25 4,029.58 4/23/2025 8969 283000 BILL PROCESSING SERVICES FY25 7,525.42 4/23/2025 8969 284131 BILL PROCESSING SERVICES FY25 15,139.15 4/23/2025 8969 283001 BILL PROCESSING SERVICES FY25 16,079.50 4/23/2025 8969 284132 2063600 2,855.00 ANNUAL TREATMENT PLANT CHLORINE 2,855.00 4/16/2025 15368 13686 2063528 2,355.00 FY25 ANTENNA SUBLEASE 2,355.00 4/2/2025 20752 413180687 2063501 74.25 UB REFUND 0000290712 74.25 3/26/2025 99999 ubRef032725009 2063529 22,155.55 CORROSION SERVICES (1/6/25-3/8/25)22,155.55 4/2/2025 21642 11477 2063502 246.51 UB REFUND 0000293200 246.51 3/26/2025 99999 ubRef032725012 2063588 165.50 CERTIFICATION REIMBURSEMENT 165.50 4/16/2025 21268 JC041125 SKYLAR MILLENIA FM LOT 14 651.88 4/9/2025 22029 032825-D0958 SKYLAR MILLENIA FM LOT 14 10,631.71 4/9/2025 22029 032825 149.60 4/16/2025 22129 K11870 GHA TECHNOLOGIES INC HASA INC.2063596 12,396.89 HECTOR LIZARAGA HELIX ENVIRONMENTAL 2063598 4,925.76 HDR ENGINEERING INC HEALTH AND HUMAN RESOURCE HPS WEST INC. HUNSAKER & ASSOCIATES INFOSEND INC 2063640 43,123.39 JDH CORROSION CONSULTANTS INC JEZELLE BOLES JOHN CORRAO INTEGRITY MUNICIPAL SYSTEMS IWG TOWERS ASSETS II LLC JAMYE SHELTON KEPT COMPANIES INC 2063601 299.20 AS-NEEDED FLEET WASHING SVCS KB HOME COASTAL INC 2063551 11,283.59 4/24/2025 7:17:27 PM Page 4 Check Register Check Dates: 3/20/2025 thru 4/23/2025 149.60 4/16/2025 22129 K6633 2063572 1,120.42 UB REFUND 0000300212 1,120.42 4/9/2025 99999 ubRef040825010 AS-NEEDED ASPHALTIC PAVING SERV (52.34)4/9/2025 5840 24-119-4 CM AS-NEEDED ASPHALTIC PAVING SERV 4,077.20 4/9/2025 5840 24-119-4 2063602 203.86 RETAINAGE RELEASE 203.86 4/16/2025 5840 24-119-4R AS-NEEDED ASPHALTIC PAVING SERV 50,606.70 4/23/2025 5840 24-172-8 AS-NEEDED ASPHALTIC PAVING SERV 60,750.80 4/23/2025 5840 24-172-2 2063603 3,230.00 CONSULTING SERVICES FOR TYLER 3,230.00 4/16/2025 22411 11165 2063604 3,809.10 TEMP METER STAND WELDING 3,809.10 4/16/2025 22569 1012 2063503 36.96 UB REFUND 0000265596 36.96 3/26/2025 99999 ubRef032725006 2063554 349.99 TUITION REIMBURSEMENT 349.99 4/9/2025 20947 LL040725 2063605 1,732.50 GEN HEALTH & SAFETY CONSULTING 1,732.50 4/16/2025 21524 4020 2063530 17,396.02 SCBA REPLACEMENTS 16,144.80 4/2/2025 17325 6108908 2063531 2,904.00 ADMIN LANDSCAPE UPGRADE 2,904.00 4/2/2025 21723 11589 2063607 945.00 ADMIN LANDSCAPE UPGRADE 945.00 4/16/2025 21723 11592 2063504 54.42 UB REFUND 0000282515 54.42 3/26/2025 99999 ubRef032725008 2063555 176.31 MILLENIA RAPID STATION 176.31 4/9/2025 22566 032825 2063505 67.75 UB REFUND 0000292976 67.75 3/26/2025 99999 ubRef032725011 ADA UPGRADE DESIGN SERV 720.00 4/23/2025 22375 2025.010 ADA UPGRADE DESIGN SERV 4,218.00 4/23/2025 22375 2025.009 2063556 2,397.74 1025 CORONADO AVE 2,397.74 4/9/2025 30179 032825 2063506 17.47 UB REFUND 0000062862 17.47 3/26/2025 99999 ubRef032725003 2063608 10,750.00 LANDSCAPE MAINTENANCE SERV 10,750.00 4/16/2025 17261 9747 2063643 845.25 WITHHOLDING TAX 033125 845.25 4/23/2025 20996 601397030 033125 ENGINEERING DESIGN SERV (AUG 2024)450.00 4/2/2025 18332 410925 ENGINEERING DESIGN SERV (JAN 2025)1,335.00 4/2/2025 18332 434801 ENGINEERING DESIGN SERV (JAN 2025)12,437.50 4/2/2025 18332 436328 2063507 30.20 UB REFUND 0000143195 30.20 3/26/2025 99999 ubRef032725004 2063557 1,900.71 1IN WET TAP 1,900.71 4/9/2025 30180 032825 2063558 12,443.83 OTAY RANCH TOSARA 12,443.83 4/9/2025 21200 032825 2063609 641,528.40 870-2 RES 3.4 MG & 870-1 RES 641,528.40 4/16/2025 6646 403302025 KEPT COMPANIES INC 2063601 299.20 AS-NEEDED FLEET WASHING SVCS KOA HILLS CONSULTING LLC L&N MOBILE WELDING SERV LAWRENCE YOUNAN KIARA THOMAS KIRK PAVING INC 2063552 3,821.00 2063641 105,789.62 MERINO LANDSCAPE INC MICHAEL PITTENGER LEO LOPEZ LINDSAY POLIC CONSULTING INC MALLORY SAFETY & SUPPLY LLC MK DEVELOPERS N JACONETTE NATURESCAPE SERVICES MILLENIA 2022 LLC MINHTHY CHU MISCELLANEOUS INC 2063642 4,938.00 OLUWATOYIN DADA OSSAMA ELASSAAD PACIFIC COAST COMMUNITIES NORTH CAROLINA DEPT OF REVENUE NV5 INC 2063532 14,222.50 PACIFIC HYDROTECH CORPORATION 4/24/2025 7:17:27 PM Page 5 Check Register Check Dates: 3/20/2025 thru 4/23/2025 INVENTORY 1,536.00 4/16/2025 1002 S100474406.001 INVENTORY 2,740.00 4/16/2025 1002 S100474507.001 INVENTORY 4,441.20 4/16/2025 1002 S100472410.005 INVENTORY 6,283.00 4/16/2025 1002 S100472410.003 INVENTORY 18,434.30 4/16/2025 1002 S100472410.001 INVENTORY 30,031.00 4/16/2025 1002 S100473770.001 2063644 1,158.61 PETTY CASH REIMBURSEMENT 1,158.61 4/23/2025 137 042125 2063559 152.00 MEAL/TRAVEL ADVANCEMENT 152.00 4/9/2025 30184 041525PK 2063645 124.32 MILEAGE REIMBURSEMENT 124.32 4/23/2025 30184 041825 2063654 1,839.68 UB REFUND 0000300430 1,839.68 4/23/2025 99999 ubRef042225004 2063560 65.03 0 HARVEST RD 65.03 4/9/2025 30181 032825 2063561 3,757.57 14382 LYONS VALLEY RD 3,757.57 4/9/2025 30182 032825 2063646 5,562.50 WATER & SEWER COST OF SERVICE 5,562.50 4/23/2025 20861 38736 2063655 104.64 UB REFUND 0000212249 104.64 4/23/2025 99999 ubRef042225001 2063533 2,250.00 IN-PLANT INSPECT SERV (DEC 2024)2,250.00 4/2/2025 22507 98995 2063534 3,300.00 FY25 STRAT PLAN SOFTWARE REPORT 3,300.00 4/2/2025 21706 RB-03050 2063535 8,760.00 INVESTMENT ADVISOR 8,760.00 4/2/2025 19377 2025-14422 2063562 125.00 FY25 MONTHLY ASSESSOR DATA 125.00 4/9/2025 2586 202500275 2063536 270.00 SOCAL WATERSMART HEW HET WBIC 270.00 4/2/2025 3 2854 2063611 605.99 SOCAL WATERSMART HEW HET WBIC 605.99 4/16/2025 3 2864 UTILITY EXPENSES - MONTHLY 125.19 4/9/2025 121 031925 UTILITY EXPENSES - MONTHLY 948.98 4/9/2025 121 032725 UTILITY EXPENSES - MONTHLY 34,098.11 4/9/2025 121 040125 UTILITY EXPENSES - MONTHLY 55,409.77 4/9/2025 121 032625 UTILITY EXPENSES - MONTHLY 101,181.26 4/9/2025 121 033125 UTILITY EXPENSES - MONTHLY 72.52 4/16/2025 121 040325 UTILITY EXPENSES - MONTHLY 24,880.61 4/16/2025 121 040725 UTILITY EXPENSES - MONTHLY 105,025.96 4/16/2025 121 040825 2063508 359.30 UB REFUND 0000300265 359.30 3/26/2025 99999 ubRef032725014 2063564 670.00 ON-DEMAND SECURITY RESPONSE 670.00 4/9/2025 19603 12111839 2063573 626.04 UB REFUND 0000284567 626.04 4/9/2025 99999 ubRef040825003 PACIFIC PIPELINE SUPPLY INC 2063610 68,384.09 PORSCHE CLUB OF SAN DIEGO R FAMILY PROPERTIES II LLC RAFAEL SANTIAGO PETTY CASH CUSTODIAN PHILIP KUSSLER ROOIBAARD GROUP LLC SAGEVIEW ADVISORY GROUP LLC SAN DIEGO COUNTY ASSESSOR RAFTELIS RAYMOND HESSER RMA GROUP SDE1 LLC SECURITAS SECURITY SVC USA INC SHEA HOMES SAN DIEGO COUNTY WATER AUTH SAN DIEGO GAS & ELECTRIC 2063563 191,763.31 2063612 129,979.09 4/24/2025 7:17:27 PM Page 6 Check Register Check Dates: 3/20/2025 thru 4/23/2025 2063647 340.00 EXPENSE REIMBURSEMENT 340.00 4/23/2025 20598 041525 2063574 876.72 UB REFUND 0000257255 876.72 4/9/2025 99999 ubRef040825002 2063509 235.60 UB REFUND 0000048190 235.60 3/26/2025 99999 ubRef032725002 2063537 60.00 CERTIFICATE RENEWAL 60.00 4/2/2025 1460 45664032725 2063538 80.00 CERTIFICATE RENEWAL 80.00 4/2/2025 1460 56135032725 2063648 1,701.00 ANNUAL PERMIT FEE - TREATMENT PLANT 1,701.00 4/23/2025 1460 SW0321485 2063649 943.00 ANNUAL PERMIT FEE (4/1/25-3/31/26)943.00 4/23/2025 1460 SW0321843 2063586 1,191.22 EXPENSE REIMBURSEMENT 1,191.22 4/16/2025 17487 041425 2063565 11,744.75 LIFE & STD/LTD INSURANCE 11,744.75 4/9/2025 15974 38166030125 UNLEADED & DIESEL FUEL 8,598.06 4/16/2025 10339 443782 UNLEADED & DIESEL FUEL 13,409.88 4/16/2025 10339 443733 2063650 1,200.00 COMMUNICATIONS CONSULTING 1,200.00 4/23/2025 18376 1785 2063575 1,118.81 UB REFUND 0000284748 1,118.81 4/9/2025 99999 ubRef040825004 2063566 2,204.20 PUBLIC RECOGNITION AND AWARDS 2,204.20 4/9/2025 408 OTAY 081424 2063651 2,410.00 UNMANNED AIRCRAFT SYSTEMS 2,410.00 4/23/2025 21394 Otay 17 2063614 105.00 PUBLIC HEARING NOTICE AD #0015 105.00 4/16/2025 13714 00151037 2063539 465.00 FIRE SPRINKLER INSPECTION 465.00 4/2/2025 22498 609323 2063615 912.68 FIRE SPRINKLER INSPECTION 912.68 4/16/2025 22498 611528 2063616 76.88 PUBLIC HEARING NOTICE AD #0015 76.88 4/16/2025 13564 00151038 2063553 235.00 MEAL/TRAVEL ADVANCEMENT 235.00 4/9/2025 3336 TK040825 2063576 93.25 UB REFUND 0000205454 93.25 4/9/2025 99999 ubRef040825001 2063540 5,000.00 ACTUARIAL SERVICES 5,000.00 4/2/2025 20755 14242 MUNIS ERP UPGRADE IMPLEMENTATION 1,600.00 4/2/2025 3261 045-509925 MUNIS ERP UPGRADE IMPLEMENTATION 3,200.00 4/2/2025 3261 045-511943 MUNIS ERP UPGRADE IMPLEMENTATION 2,400.00 4/16/2025 3261 045-513010 MUNIS ERP UPGRADE IMPLEMENTATION 4,800.00 4/16/2025 3261 045-513971 2063618 2,785.00 ADM FEES 2019 WW REV BOND (12/1/24-11/30/25)2,785.00 4/16/2025 20891 7579443 UNDERGROUND ALERTS FY25 307.36 4/23/2025 427 24253262 UNDERGROUND ALERTS FY25 631.60 4/23/2025 427 320250522 FY25 PORT. TOILET RENTAL 152.45 4/16/2025 15675 5231036 FY25 PORT. TOILET RENTAL 749.20 4/16/2025 15675 5228804 STATE WATER RESOURCES SHIELA DILAYRE SIGNATURE SR V2 R20 LLC SOUTH BAY AUTO WRECKERS SVPR COMMUNICATIONS LLC SWCS INC SWEETWATER AUTHORITY STEPHANIE CHEN SUN LIFE FINANCIAL SUPREME OIL COMPANY 2063613 22,007.94 THE STAR NEWS PUBLISHING CO THERESA KREINBRING TONYA WILMORE TEEDEEUAS LLC THE EAST COUNTY CALIFORNIAN THE HILLER COMPANIES TOTAL COMPENSATION SYSTEMS INC TYLER TECHNOLOGIES INC 2063541 4,800.00 2063617 7,200.00 UNITED SITE SERVICES INC 2063619 921.42 U.S. BANK NATIONAL ASSOCIATION UNDERGROUND SERVICE ALERT 2063656 938.96 4/24/2025 7:17:27 PM Page 7 Check Register Check Dates: 3/20/2025 thru 4/23/2025 2063620 25,973.48 FY25 LEAK DETECTION SURVEY SERV 25,973.48 4/16/2025 18517 126747 2063577 5,952.24 BEST FIT MOVERS 5,952.24 4/9/2025 30183 032825 WATER INTERNS FY25 596.40 4/2/2025 20909 46922096 WATER INTERNS FY25 596.40 4/2/2025 20909 46928104 WATER INTERNS FY25 1,789.20 4/2/2025 20909 46929483 WATER INTERNS FY25 29.82 4/9/2025 20909 46933902 WATER INTERNS FY25 596.40 4/9/2025 20909 46929079 WATER INTERNS FY25 596.40 4/9/2025 20909 46934759 WATER INTERNS FY25 1,148.07 4/9/2025 20909 46933903 2063657 596.40 WATER INTERNS FY25 596.40 4/23/2025 20909 46949033 2063658 46,552.50 WATER CONSERVATION GARDEN OPS 46,552.50 4/23/2025 14879 002-FY 2024-25-OTAY 2063621 125.00 FY25 AS-NEEDED BEE REMOVAL SERV 125.00 4/16/2025 1343 83736 HYDRAULIC MODELING (FEB 2025)2,000.00 4/2/2025 19866 190495 HYDRAULIC MODELING (FEB 2025)7,625.00 4/2/2025 19866 190522 HYDRAULIC MODELING (FEB 2025)12,775.00 4/2/2025 19866 190509 2063579 1,025.00 ENGINEERING DESIGN (FEB 2025)1,025.00 4/9/2025 19866 190510 2063510 80.25 UB REFUND 0000009333 80.25 3/26/2025 99999 ubRef032725001 Total 2,053,518.39 2,044,886.86 WATER CONSERVATION GARDEN UTILITY SERVICES ASSOC LLC VCH NO 1 LP VOLT WORKFORCE SOLUTIONS 2063542 2,982.00 2063578 2,370.69 YELLOW FREIGHT /YRC ENT MS#5 WE GOT YA PEST CONTROL INC WOOD RODGERS INC 2063543 22,400.00 4/24/2025 7:17:27 PM Page 8 3/5/2025 3/5/2025 3/5/2025 Check Dates: 3/20/2025 thru 4/23/2025 Invoice Date 1/31/2025 4/1/2025 4/10/2025 3/31/2025 3/24/2025 4/2/2025 4/2/2025 3/31/2025 3/12/2025 3/31/2025 3/26/2025 4/18/2025 4/22/2025 3/18/2025 4/21/2025 3/17/2025 4/16/2025 4/8/2025 2/28/2025 3/1/2025 3/10/2025 4/2/2025 4/8/2025 4/8/2025 4/8/2025 3/26/2025 4/24/2025 7:17:27 PM Page 9 Check Dates: 3/20/2025 thru 4/23/2025 1/17/2025 3/20/2025 3/14/2025 3/14/2025 4/22/2025 3/31/2025 3/10/2025 2/25/2025 3/31/2025 3/31/2025 3/31/2025 3/17/2025 4/1/2025 4/1/2025 4/1/2025 4/1/2025 4/1/2025 4/1/2025 4/1/2025 4/1/2025 4/22/2025 3/20/2025 1/31/2025 2/14/2025 2/14/2025 2/28/2025 3/27/2025 3/27/2025 3/27/2025 4/24/2025 7:17:27 PM Page 10 Check Dates: 3/20/2025 thru 4/23/2025 1/31/2025 2/28/2025 3/21/2025 3/31/2025 2/28/2025 3/31/2025 3/31/2025 4/11/2025 3/28/2025 3/14/2025 3/18/2025 3/20/2025 3/31/2025 3/20/2025 3/31/2025 3/20/2025 3/20/2025 3/17/2025 3/19/2025 3/27/2025 3/24/2025 3/31/2025 4/3/2025 3/24/2025 3/28/2025 3/28/2025 4/8/2025 3/31/2025 4/1/2025 3/31/2025 3/31/2025 4/24/2025 7:17:27 PM Page 11 Check Dates: 3/20/2025 thru 4/23/2025 3/27/2025 4/3/2025 3/27/2025 3/20/2025 3/20/2025 3/27/2025 4/3/2025 4/3/2025 3/20/2025 4/3/2025 3/20/2025 3/28/2025 3/28/2025 4/2/2025 4/9/2025 3/7/2025 3/27/2025 3/12/2025 2/28/2025 3/31/2025 2/28/2025 3/31/2025 3/14/2025 3/20/2025 4/7/2025 3/21/2025 4/1/2025 3/20/2025 3/28/2025 3/28/2025 3/28/2025 4/24/2025 7:17:27 PM Page 12 Check Dates: 3/20/2025 thru 4/23/2025 3/21/2025 3/31/2025 3/26/2025 3/20/2025 4/8/2025 1/25/2025 1/24/2025 1/24/2025 1/31/2025 12/5/2024 3/19/2025 3/31/2025 3/20/2025 4/7/2025 3/31/2025 3/5/2025 3/28/2025 3/20/2025 3/31/2025 3/28/2025 3/20/2025 4/3/2025 4/3/2025 3/20/2025 3/28/2025 3/28/2025 3/31/2025 10/15/2024 3/14/2025 3/5/2025 3/24/2025 4/24/2025 7:17:27 PM Page 13 Check Dates: 3/20/2025 thru 4/23/2025 3/27/2025 4/3/2025 3/24/2025 3/24/2025 3/17/2025 3/25/2025 4/22/2025 3/28/2025 3/28/2025 4/21/2025 4/9/2025 4/18/2025 3/18/2025 3/31/2025 4/2/2025 4/9/2025 4/22/2025 1/24/2025 3/20/2025 3/31/2025 4/8/2025 2/28/2025 3/24/2025 3/19/2025 3/27/2025 3/27/2025 3/26/2025 3/27/2025 4/3/2025 4/7/2025 4/8/2025 4/24/2025 7:17:27 PM Page 14 Check Dates: 3/20/2025 thru 4/23/2025 3/27/2025 3/27/2025 4/2/2025 4/2/2025 4/15/2025 4/8/2025 3/20/2025 3/31/2025 4/8/2025 10/2/2024 4/14/2025 3/1/2025 3/14/2025 3/14/2025 3/21/2025 4/8/2025 4/8/2025 4/15/2025 3/21/2025 3/14/2025 3/21/2025 3/20/2025 3/12/2025 3/19/2025 3/26/2025 3/31/2025 4/1/2025 4/1/2025 12/20/2024 4/1/2025 4/1/2025 4/24/2025 7:17:27 PM Page 15 Check Dates: 3/20/2025 thru 4/23/2025 3/30/2025 3/30/2025 4/13/2025 12/2/2024 4/1/2025 3/28/2025 3/16/2025 3/23/2025 3/23/2025 3/30/2025 3/31/2025 3/20/2025 3/21/2025 2/28/2025 2/28/2025 2/28/2025 2/28/2025 4/24/2025 7:17:27 PM Page 16