HomeMy WebLinkAbout07-03-13 Board Packet (Part 2)
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 3, 2013
SUBMITTED BY:
Alicia Mendez-Schomer,
Customer Service Manager
PROJECT: DIV. NO. ALL
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adopt Resolution No. 4211 to Continue Water and Sewer
Availability Charges for District Customers for Fiscal Year
2013-2014 to be Collected through Property Tax Bills
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4211 to continue water and sewer
availability charges for District customers for Fiscal Year 2013-2014
to be collected through property tax bills.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
That the Board consider the adoption of Resolution No. 4211 to
continue water and sewer availability charges for District customers
for Fiscal Year 2013-2014 to be collected through property tax bills.
ANALYSIS:
State Water Code Section 71630-71637 authorizes the District to
access such availability charges. The District levies availability
charges each year on property in both developed and undeveloped
AGENDA ITEM 6e
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areas. In order to place these charges on the tax roll, the County
of San Diego requires the District to provide a resolution
authorizing the charges. Each year, the District provides a
resolution along with the listing of charges by parcel. Current
legislation provides that any amount up to $10 per parcel (one acre
or less) is for general use and any amount over $10 per parcel ($30
per acre for parcels over one acre) is restricted, to be expended in
and for that Improvement District. The District uses amounts over
$10 per parcel to develop water and sewer systems within the
Improvement Districts where the funds are collected. In accordance
with legislation, the District places amounts up to $10 per parcel in
the General Fund.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The availability charges, as budgeted will generate approximately
$1.24 million in revenue.
STRATEGIC GOAL:
This revenue source will help the District meet its fiscal
responsibility to its ratepayers.
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action Form
Attachment B – Resolution No. 4211
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4211 to Continue Water and Sewer
Availability Charges for District Customers for Fiscal Year
2013-2014 to be Collected through Property Tax Bills
COMMITTEE ACTION:
The Finance, Administration, and Communications Committee reviewed
this item at a meeting held on June 24, 2013 and the following
comments were made:
Staff is requesting that the Board adopt Resolution No. 4211 to
continue water and sewer availability fees in Fiscal Year 2013-2014.
The availability fees are collected through property tax bills and
are authorized through the State Water Code.
In order to place these fees on the property tax bills, the County
of San Diego requires that the District’s Board adopt a resolution
annually authorizing the fees.
The fees collected are $10/acre for parcels one acre or less and
$30/acre for parcels larger than one acre. These fees have not
changed for many years.
There are approximately 63,000 parcels that are assessed the fee
annually and the District collects approximately $1.2 million each
year through this assessment.
Upon completion of the discussion, the committee supported staffs’
recommendation and presentation to the board as a consent item.
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RESOLUTION NO. 4211 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT CONTINUING PREVIOUSLY ESTABLISHED WATER AND SEWER AVAILABILITY CHARGES FOR FISCAL YEAR 2013-2014; REQUESTING THE COUNTY TO COLLECT SUCH AVAILABILITY CHARGES ON THE 2013-2014 SECURED TAX ROLL AND TAKING OTHER RELATED ACTIONS
WHEREAS, the Otay Water District (herein "District") is a
member of the San Diego County Water Authority and the Metropolitan
Water District of Southern California and, as a member, the
District is entitled to purchase water for distribution within the
District and water so purchased is available to property in the
District that is also within the San Diego County Water Authority
and the Metropolitan Water District of Southern California, without
further need for annexation to any agency; and
WHEREAS, Improvement Districts No. 14 and 18 and Assessment
District No. 4 (Hillsdale) have been formed within the Otay Water
District (herein "District") and sanitary sewers have been
constructed and sewer service is available to land within each of
the said districts; and
WHEREAS, in consideration of the benefit that water
availability confers upon property within the District, and in
further consideration of the need for revenue to pay the cost of
water storage and transmission facilities which directly and
specially benefit property within the District, the District has
previously determined that water availability charges be fixed and
established under applicable provisions of law; and
WHEREAS, in consideration of the benefit which sewer
availability confers upon property within Improvement Districts No.
Attachment B
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14 and 18 and within Assessment District No. 4 (Hillsdale), and in
further consideration of the need to pay the cost of sanitary
sewers which directly and specifically benefit those properties,
the District has previously determined that sewer availability
charges be fixed and established for Improvement Districts No. 14
and 18 and Assessment District No. 4 (Hillsdale), all as provided
under applicable provisions of law; and
WHEREAS, the District desires to continue the collection of
such water and sewer availability charges without increases or
revisions in methodology or application.
NOW, THEREFORE, the Board of Directors of the Otay Water
District resolves, determines and orders as follows:
1. SCHEDULE OF WATER CHARGES
(A) The water availability charges previously fixed and
established are hereby continued for Fiscal Year 2013-2014 at the
existing rates, as follows:
(1) In Improvement Districts No. 5 and La Presa No. 1 the
charge shall be $10.00 per acre of land and $10.00
per parcel of land less than one acre.
(2) In Improvement Districts No. 2, 3, 7, 9, 10, 19, 20,
22, 25 and 27 the charge shall be $30.00 per acre of
land and $10.00 per parcel of land less than one
acre.
(3) For land located outside an improvement district and
within one mile of a District water line, the charge
shall be $10.00 per acre of land and $10.00 for each
parcel less than one acre.
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(4) For land located outside an improvement district and
greater than one mile from District facilities, the
charge shall be $3.00 per acre of land and $3.00 for
each parcel less than one acre.
(B) Modifications The charges provided for in subparagraphs
(1) through (4) in (A) above shall be modified upon petition by the
property owner where the property does not receive water from the
District as follows:
(1) where a parcel of land or a portion thereof is within
an open space easement approved by San Diego County,
the charge for such parcel or portion thereof shall
be fifty percent (50%) of the charge determined
pursuant to paragraph (A), provided the owner files
with the District proof, satisfactory to the
District, that said parcel of land or portion thereof
is within such a designated permanent open space
area;
(2) where a parcel of land or portion thereof is in an
agricultural reserve under a Land Conservation
Contract with the County of San Diego, pursuant to
the Land Conservation Act of 1965 as amended, the
charge for such parcel shall be $3.00 per acre,
provided the owner files with the District proof,
satisfactory to the District, that said parcel of
land or portion thereof is within such an
agricultural preserve;
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(3) where a parcel of land or a portion thereof is within
an area designated as a floodplain by the County of
San Diego, the charge for such a parcel or portion
thereof shall be $3.00 per acre, provided the owner
files with the District proof, satisfactory to the
District, that said parcel of land or portion thereof
is within such designated floodplain; and
(4) where a parcel of land or portion thereof exceeds a
30% slope, and where such is not within a legal
subdivision, lot-split or planned residential
development, the charge for the slope portion shall
be $3.00 per acre, or if such a parcel is less than
one acre and more than one-half of the area exceeds
30% slope, $3.00 for the parcel, provided the owner
files with the District proof, satisfactory to the
District, that said parcel of land or portion thereof
meets or exceeds the slope.
(C) Exceptions The charges provided for in (A) and (B) above
shall not apply, upon petition by the property owner, to the
following:
(1) land located within an area designated as a floodway
by the County of San Diego;
(2) land designated as a vernal pool area by a govern-
mental agency authorized to make such a designation
and which designation prohibits use of such area for
any purpose;
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(3) land owned by non-profit, tax-exempt conservation
organizations specializing in identifying and
protecting the natural habitat of rare species; or
(4) land that is located within the boundaries of the
Otay Water District but not within the boundaries of
the Metropolitan Water District of Southern
California and the San Diego County Water Authority.
2. SCHEDULE OF SEWER CHARGES
(A) Sewer standby assessment or availability charges are
hereby fixed and established for Fiscal Year 2013-2014 as follows:
(1) In Improvement Districts No. 14, 18 and Assessment
District No. 4 (Hillsdale), the charges shall be
$30.00 per acre of land and $10.00 per parcel of land
less than one acre. The preceding charges shall not
apply, upon petition by the property owner, to the
following:
(a) any portion of a parcel which is undeveloped
and maintained in its natural state within an
Open Space Area as a requirement under the San
Diego County General Plan, provided the owner
of such parcel files proof, satisfactory to the
District, of such designed Open Space Area;
(b) any portion of a parcel located within an area
designated by the County of San Diego as a
floodway or floodplain; or
(c) any portion of a parcel of land which exceeds a
slope of 30% and which is not within a legal
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subdivision, lot split or planned lot split or
planned residential development.
3. DEFERRALS
(A) Deferral of Charge, Purpose Situations may arise when an
owner of a parcel of land does not use and has no present intention
of using water and/or sewer provided by the District on a parcel of
land, as defined in Section 4. The purpose of this section is to
permit an evaluation by the District, on a case-by-case basis, of
the circumstances which pertain to such situations to determine
whether a deferral of charges should be approved according to the
terms and conditions herein provided.
Any owner of a parcel of land who believes that the amount of
the water and/or sewer availability charges fixed against such
parcel should be deferred may file an application with the District
for deferral of the charge, as follows:
(a) Application The application shall include a
statement describing the circumstances and factual
elements which support the request for deferral.
(b) The General Manager shall consider the request
within sixty (60) days after the filing of a
completed application. If the application for
deferral meets the established criteria, the General
Manager may decide whether to approve the request
and order the charge deferred accordingly. If the
request is denied, the applicant shall be notified
in writing stating the reasons for the denial.
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(B) Appeal to Board of Directors If the General Manager
denies a request, the owner may file an appeal with the Board of
Directors within sixty (60) days after such denial. No new
application for deferral need be considered by the General Manager
until expiration of twelve (12) months from the date of a denial,
unless differently directed by the Board of Directors.
(C) Deferred Charges on Restricted Parcels, Criteria The
levy of the charge may be deferred annually as to any parcel of
land which meets each of the following criteria:
(a) The owner of such parcel makes a timely application
requesting deferral of the charge.
(b) The parcel, which is the subject of the request,
will become subject to enforceable restrictions
which prohibits the connection to the District sewer
system or use of water on the parcel, except by
means of natural precipitation or runoff; provided,
however, if considered appropriate by the General
Manager, local water may be used for limited
domestic stock watering and irrigation uses.
(c) The owner executed a recordable agreement which
includes provisions that:
(1) set forth the enforceable restrictions
pertinent to the subject parcel;
(2) the agreement may be terminated upon written
request by the owner and payment of all
deferred water and/or sewer availability
charges, plus interest thereon, compounded
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annually, and accruing at the legal rate from
the date such charges would have been otherwise
due and payable;
(3) no water and/or sewer service from the District
shall be provided to such parcel for a period
of ten (10) years after the total amount due
for the charges deferred, plus annually
compounded interest, is paid in full to the
District, unless a surcharge penalty as
described below is paid to the District prior
to connection of any water and/or sewer
service;
(4) if the surcharge is not paid, during the ten
(10) year period, while water and/or sewer
service is not available to the subject land,
the owner shall pay all annual water or
availability charges as fixed; and
(5) contains such other provisions considered by
the General Manager to be appropriate.
(D) Surcharge Upon termination of the deferral
agreement, an owner may elect to receive water and/or sewer
service prior to the expiration of the ten (10) year penalty
period upon payment of a surcharge. The surcharge shall be
equal to the amount of the annual water and/or sewer
availability charges fixed for the parcel(s) of land in the
year of election to receive water and/or sewer service
multiplied by the number of years remaining of the ten (10)
9
year penalty period. This surcharge shall also apply if a
property owner develops a parcel that is subject to a deferral
agreement without termination of said agreement.
(E) Enforcement Procedures In order to insure that
terms and conditions of the recordable agreement are being
met, the General Manager shall:
(1) Maintain a record of all parcels approved for
deferral of the water assessments or availability
charges.
(2) Report to the Board of Directors any instances where
the terms of the agreement are being violated.
(3) Take such other actions or procedures considered
appropriate.
4. DEFINITION OF PARCEL The term "parcel" as used herein shall
mean a parcel of land as shown on the assessment rolls of the
County Assessor of San Diego County as of March, 2013.
5. NOTICE AND REQUEST TO THE BOARD OF SUPERVISORS AND AUDITOR As
provided in Sections 71634 to 71637, on or before the third Monday
in August, 2013, the Secretary of this District shall furnish, in
writing to the Board of Supervisors of San Diego County and to the
County Auditor, a description of the land within the District upon
which availability charges are to be levied and collected for
Fiscal Year 2013-2014 together with the amount of the assessments
or charges. At the time and in the manner required by law for the
levying of taxes for county purposes, the Board of Supervisors of
San Diego County shall levy, in addition to taxes it levies, water
and/or sewer availability charges in the amounts fixed by this
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Resolution for the respective parcels of land described in Section
1 of this Resolution. All County officers charged with the duty of
collecting taxes shall collect the charges with the regular
property tax payments in the same form and manner as County taxes
are collected. Such availability charges are a lien on the property
with respect to which they are fixed. Collection of the charges
may be enforced by the same means as provided for the enforcement
of liens for state and county taxes.
6. CERTIFICATION TO COUNTY BOARD OF SUPERVISORS The District
certifies that this Resolution complies with the provisions of
Article XIIID of the California Constitution in that the
availability charges are existing charges first set by the Board of
Directors of the District prior to November 6, 1996. At the time
the availability charges were initially established, the District
followed the applicable provisions of law then in effect, and the
District has continued to comply with such provisions, including
any requirements for notices or hearings, as from time to time in
effect. Therefore, pursuant to Section 71632 and Section 71638 of
the California Water Code, as currently in effect, the District may
continue the availability charges in successive years at the same
rate. The District further certifies that the charge is not
increased hereby and the methodology for the rate is the same as in
previous years. The charge is imposed exclusively to finance the
capital costs, maintenance and operating expenses of the water or
sewer system of the District, as applicable.
7. CERTIFIED COPIES The Secretary of this District shall deliver
certified copies of this Resolution to the Board of Supervisors and
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to the Auditor of San Diego County with the list of charges
described in Section 4 above.
8. CORRECTIONS; OTHER ACTIONS The General Manager of the
District is hereby authorized to correct any clerical error made in
any assessment or charge pursuant to this Resolution and to make an
appropriate adjustment in any assessment or charge made in error.
Furthermore, the General Manager and the Secretary of this District
are hereby directed to take any further actions and deliver such
documents and certificates as necessary to carry out the purpose of
this Resolution.
PASSED, APPROVED AND ADOPTED by the Board of Directors of the
Otay Water District at a regular meeting duly held this 3rd day of
July, 2013.
___________________________ President ATTEST: ______________________________ Secretary
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I HEREBY CERTIFY that the foregoing Resolution No. 4211 was duly adopted by the BOARD OF DIRECTORS of the OTAY WATER DISTRICT at a regular meeting thereof held on the 3rd day of July, 2013 by the following vote:
Ayes:
Noes:
Abstain:
Absent:
District Secretary
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 3, 2013
SUBMITTED BY:
Jeanette Ziomek,
Senior Accountant
Rita Bell, Finance Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adopt Resolution No. 4212 to Establish the Tax Rate for
Improvement District No. 27 (ID 27) for Fiscal Year
2013-2014
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4212 to establish the tax rate
for Improvement District No. 27 (ID 27) at $0.005 for Fiscal Year
2013-2014.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
Improvement District No. 27 (ID 27) has outstanding general
obligation bonds which mature in Fiscal Year 2023. On an annual
basis, staff must evaluate the tax rate charged upon all property
within ID 27 to ensure the amount of tax collections will support the
annual debt service requirement. Currently, ID 27 is the only
improvement district with outstanding general obligation debt
service.
AGENDA ITEM 6f
2
BACKGROUND:
In December 1992, the District sold $11,500,000 of general obligation
bonds in ID 27 for the construction of the 30mg reservoir. At the
time of the formation of ID 27, the District intended to have a
maximum tax rate of $0.10 per $100 of assessed valuation. The tax
rate has remained well below the intended maximum rate.
In Fiscal Year 1998, the bonds were refinanced which reduced the
annual debt payment. In Fiscal Year 2010, the bonds were refinanced
again and reduced the annual debt payment even further. During that
time, ID 27 also experienced rapid growth in its assessed valuation.
The combination of the reduced debt service requirement and the
increased assessed values resulted in the District’s reserve level
exceeding the target level.
Beginning in 2009, property valuations began decreasing and the tax
collections dropped below the required debt payment. Rather than
increase the tax rate, the District chose to cover the tax collection
shortfall from the reserves to the extent that the reserve level
remained above the target.
Staff proposes to keep the tax rate at $.005 and to continue to draw
down the reserves until it comes closer to the target. The rate and
reserve balance will be re-evaluated again next year to determine if
the rate requires adjustment to meet the District’s reserve target
level.
FISCAL IMPACT: Joseph R. Beachem, Chief Financial Officer
The tax proceeds are legally restricted for the sole purpose of the
repayment of this debt. These proceeds will be collected until the
debt obligation is fully paid, at which time the fund will have a
zero balance. The $0.005 tax rate will generate $598,296 in revenue.
The estimated revenue, given the recommended tax rate combined with
the current fund balance, will meet the annual ID 27 debt service
payment of $755,438. This action lowers the fund balance, bringing
it closer to the target level of six months of bond payments while
maintaining a positive cash balance for the foreseeable future.
STRATEGIC GOAL:
Through well-established financial policies and wise management of
funds, the District will continue to guarantee fiscal responsibility
to its ratepayers and the community at large.
3
LEGAL IMPACT:
None.
Attachments:
A) Committee Action Form
B) Resolution No. 4212
C) ID 27 Tables
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4212 to Establish the Tax Rate for
Improvement District No. 27 (ID 27) for Fiscal Year
2013-2014
COMMITTEE ACTION:
The Finance, Administration, and Communications Committee reviewed
this item at a meeting held on June 24, 2013 and the following
comments were made:
Staff presents this item each year to formally set the tax rate for
outstanding General Obligation Bonds.
The General Obligation Bonds were issue in 1992 for the construction
of a 30 MG reservoir in Improvement District 27 (ID 27).
The bonds were refinanced in 1998 and 2009 which has lowered the
minimum payment required on the debt service. During this time the
assessed values in ID 27 were increasing. With the increased
assessed values and lower debt payments, the target reserve level
was exceeded.
To lower the fund to target level, the District has been maintaining
the tax rate at $0.005 per $100 of assessed property value and
utilizing the reserve fund to cover any differentials.
Staff analyzed the tax rate for FY 2014 to determine if it can be
maintained at $0.005. It is felt that if the assessed property
values increase and the District starts to grow again, then the tax
rate can be maintained at $0.005. This will allow the District to
maintain the fund at the target reserve level which is half the
annual debt payments.
Even with the declining debt reserve level, staff recommends to
maintain the tax rate at $0.005 per $100 of assessed property value
and utilizing the reserve fund to cover any differentials.
It was discussed that the goal is to have the tax rate and the last
payment on the bond coincide. As the fund may only be used to make
payments of the bond, if too much is collected, the excess must be
returned to the customers.
It was indicated that there is approximately $6 million left on the
debt. The committee inquired if the District collects too much, can
the excess be used to pay down the remaining debt (redeem some
bonds). Staff indicated that they would look into the possibility
of doing so. Subsequent to the meeting staff reviewed the bonds and
found that due to the short time horizon of the bonds at the time
they were refinanced in 2009, the market did not favor a call
provision. Without a call provision there is no opportunity to
redeem any portion of the Bonds. However, the District can quickly
deplete any excess funds by lowering the tax rate, so there is still
an effective option available to manage the bond reserves. Having
said this, given the recent analysis of the bond reserves the
current risk is that the rates will need to be increased, not
decreased, making a current reduction of the tax rate unadvisable.
Upon completion of the discussion, the committee supported staffs’
recommendation and presentation to the board as a consent item.
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4212 to Establish the Tax Rate for Improvement District No. 27 (ID 27) for Fiscal Year
2013-2014
COMMITTEE ACTION:
That the Finance, Administration and Communications Committee
recommend that the Board adopt Resolution No. 4212 to establish the tax rate for Improvement District No. 27 (ID 27) at $0.005
for Fiscal Year 2013-2014.
NOTE: The “Committee Action” is written in anticipation of the Committee
moving the item forward for board approval. This report will be sent to the Board as a committee approved item, or modified to reflect any
discussion or changes as directed from the committee prior to presentation to the full board.
1
RESOLUTION NO. 4212 A RESOLUTION OF THE BOARD OF DIRECTORS OF OTAY WATER DISTRICT FIXING TAX RATES FOR FISCAL YEAR 2013-2014 FOR PAYMENT OF PRINCIPAL AND INTEREST ON GENERAL OBLIGATION BONDS OF IMPROVEMENT DISTRICTS (GF 1600) WHEREAS, California Water Code Section 72091 authorizes the
Otay Water District, as a municipal water district, to levy an ad
valorem property tax which is equal to the amount required to
make annual payments for principal and interest on general
obligation bonds approved by the voters prior to July 1, 1978.
NOW, THEREFORE, the Board of Directors of the Otay Water
District resolves, determines and orders as follows:
1. Findings. It is necessary that this Board of Directors
cause taxes to be levied in Fiscal Year 2013-2014 for Improvement
District No. 27 of the Otay Water District to pay the amount of
the principal and interest on the bonded debt of such improvement
district.
2. Amounts to be Raised by Taxes. The amount required to
be raised by taxation during Fiscal Year 2013-2014 for the
principal and interest on the bonded debt of Improvement District
No. 27 is as follows:
Improvement District No. 27 $598,296
3. Tax Rates. The tax rates per one hundred dollars ($100)
of the full value of all taxable property within said improvement
district necessary to pay the aforesaid amounts of principal and
interest on the bonded debt of said improvement district for
Fiscal Year 2013-2014 is hereby determined and fixed as follows:
Improvement District No. 27 $0.005
Attachment B
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4. Certification of Tax Rates. Pursuant to Water Code
Section 72094, this Board of Directors hereby certifies to the
Board of Supervisors and the County Auditor of the County of San
Diego the tax rates hereinbefore fixed, and said County Auditor
shall, pursuant to Section 72095 of said Code, compute and enter
in the County assessment roll the respective sums to be paid as
tax on the property in Improvement District No. 27, using the
rate of levy hereinabove fixed for such improvement district and
the full value as found on the assessment roll for the property
therein, and the Secretary of this Board of Directors is hereby
authorized and directed to transmit certified copies of this
resolution, Attachment B, and made a part hereof, to said Board
of Supervisors and said Auditor.
PASSED AND ADOPTED by the Board of Directors of the Otay
Water District at a regular meeting held this 3rd day of July,
2013.
Ayes: Noes: Abstain: Absent: ____________________________ President ATTEST: ________________________________ Secretary
Attachment C
History
1989 Improvement District 27 was formed with $100,000,000 bonding authorized.
1992 District issued $11,500,000 in General Obligation Bonds primarily for the constructionof a 30 million gallon storage reservoir.
1998 District refinanced outstanding debt of $10,900,000.
2009 District refinanced again outstanding debt of $7,780,000.
TAXES DEBT TAX ASSESSED
COLLECTED SERVICE NET RATE VALUATION INC%
FY01 $1,628,500 $841,500 $787,000 $0.06000 $2,037,206,308 32%
FY02 $570,300 $842,000 ($271,700)$0.02000 $2,809,479,840 38%
FY03 $725,085 $848,600 ($123,515)$0.01500 $3,837,693,353 37%
FY04 $829,036 $848,700 ($19,664)$0.01400 $5,047,625,296 32%
FY05 $997,082 $840,800 $156,282 $0.01200 $6,454,909,846 28%
FY06 $1,081,991 $840,385 $241,606 $0.01000 $8,579,576,581 33%
FY 07 $868,624 $837,936 $30,688 $0.00700 $10,348,663,242 21%
FY 08 $917,168 $835,017 $82,151 $0.00600 $12,518,643,676 21%
FY09 $764,971 $830,823 ($65,852)$0.00500 $12,308,043,285 -2%
FY10(1)$605,405 $934,674 ($329,269)$0.00500 $10,378,404,507 -16%
FY11 $600,685 $781,144 ($180,459)$0.00500 $10,131,397,697 -2.4%
FY12 $597,799 $752,976 ($155,177)$0.00500 $9,941,622,812 -1.9%
FY13(2)$649,257 $773,863 ($124,606)$0.00500 $9,869,377,173 -0.7%
TAXES DEBT TAX ASSESSEDCOLLECTEDSERVICENETRATEVALUATION INC%
Fund Balance 6/30/13 $895,316
FY14 $595,829 $755,438 ($159,609)$0.00500 $9,918,724,059 -0.2%
Interest $3,820
Est Fund Balance 6/30/14 $739,527
(1) Due the the debt refinancing in FY2009, there was a refunding cost of $150,625 that added to the
debt service amount this year.
(2) Due to timing of the report, taxes collected is an estimate.
IMPROVEMENT DISTRICT 27
Historical Data
Change in Fund Balance
$0
$2
$4
$6
$8
$10
$12
Bi
l
l
i
o
n
s
ASSESSED VALUATION
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 3, 2013
PROJECT: Various DIV. NO. All
SUBMITTED BY: Rom Sarno Chief, Administrative Services
APPROVED BY: German Alvarez, Assistant General Manager
Mark Watton, General Manager SUBJECT: ADOPT RESOLUTION NO. 4215 TO ELECT FOUR (4) CANDIDATES FOR
SPECIAL DISTRICT RISK MANAGEMENT AUTHORITY’S BOARD OF DIRECTORS GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4215 for the election of four (4) candidates for the Special District Risk Management Authority’s (SDRMA) Board of Directors.
COMMITTEE ACTION:
Please see “Attachment A”. PURPOSE:
To present for the Board’s consideration, the ballot to elect four (4) candidates for the Special District Risk Management Authority’s
(SDRMA) Board of Directors. ANALYSIS:
SDRMA is holding an election to fill four (4) seats on its Board of
Directors. Staff has reviewed each candidate’s qualifications, background, experience and expertise, and in an effort to provide a good balance of representation (based on agencies represented) on
AGENDA ITEM 6g
2
SDRMA’s Board, staff is recommending that the following four (4) candidates be considered for election to their Board:
Muril Clift (Incumbent) Director, Cambria Community Services District Jean Bracy (Incumbent)
Director of Administrative Services, Mojave Desert Air Quality Management District David Aranda (Incumbent) General Manager, North of the River Municipal Water District
Mike Scheafer
Director/Vice President, Costa Mesa Sanitary District Attached are statements of qualifications (Attachment B) as submitted
by each candidate, along with the official election resolution (Attachment C) and ballot (Attachment D), which SDRMA requires to
ensure the integrity of the balloting process. The ballot requests that the District select four (4) candidates when placing its vote.
The ballot must be sealed and received by 5:00 pm on Tuesday, August 27, 2013.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None. STRATEGIC GOAL: Maintaining effective communications with other cities, special
districts, State and Federal governments, community organizations, and Mexico.
LEGAL IMPACT: None.
Attachments: Attachment A – Committee Action Report Attachment B – Candidates’ Statement of Qualifications Attachment C – Resolution No. 4215 Attachment D – Election Ballot
ATTACHMENT A
SUBJECT/PROJECT:
ADOPT RESOLUTION NO. 4215 TO ELECT FOUR (4) CANDIDATES FOR
SPECIAL DISTRICT RISK MANAGEMENT AUTHORITY’S BOARD OF DIRECTORS
COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed
this item at a meeting held on June 24, 2013 and the following comments were made:
• The District has received a ballot from SDRMA to elect four representatives to their Board of Directors.
• SDRMA provides the District property, liability and workers’ compensation insurance. The District has been pleased with their services. They have been very responsive and have been meeting the District’s needs for property, liability and workers’ compensation
claims.
• Staff reviewed District’s working relationship with SDRMA’s staff
and board and has been happy with their current board. There are three incumbents up for re-election who are among the four that are
being recommended by staff. After a review of the resumes of the remaining candidates, staff recommends Mr. Mike Scheafer of Costa Mesa Sanitary District as the fourth candidate. Mr. Scheafer has 40 years of insurance industry experience and is located within the Southern California region.
• Staff recommends that the District cast its votes for the following candidates:
Mr. Muril Clift (Incumbent)
Director, Cabria Community Services District Jean Bracy (Incumbent)
Director of Administrative Services, Mojave Desert Air Quality Management District
Mr. David Aranda (Incumbent)
General Manager, North of the River Municipal Water District Mr. Mike Scheafer
Director/Vice President, Costa Mesa Sanitary District
The above signatures attest that the attached document has been reviewed and to the best of their ability the signers verify that it meets the District quality standard by clearly and concisely conveying the intended information; being grammatically correct and free of formatting and typographical errors; accurately presenting calculated values and numerical references; and being internally consistent, legible and uniform in its presentation style.
Upon completion of the discussion, the committee supported staffs’ recommendation and presentation to the board as a consent item.
Page 1 of 2
RESOLUTION NO. 4215
A RESOLUTION OF THE GOVERNING BODY OF THE OTAY WATER DISTRICT FOR THE ELECTION OF DIRECTORS TO THE SPECIAL DISTRICT RISK MANAGEMENT AUTHORITY
BOARD OF DIRECTORS WHEREAS, Special District Risk Management Authority (SDRMA) is
a Joint Powers Authority formed under California Government Code
Section 6500 et seq., for the purpose of providing risk management
and risk financing for California special districts and other local
government agencies; and
WHEREAS, SDRMA’S Sixth Amended and Restated Joint Powers
Agreement specifies SDRMA shall be governed by a seven member Board
of Directors nominated and elected from the members who have
executed the current operative agreement and are participating in a
joint protection program; and
WHEREAS, SDRMA’s Sixth Amended and Restated Joint Powers
Agreement Article 7 – Board of Directors specifies that the
procedures for director elections shall be established by SDRMA’s
Board of Directors; and
WHEREAS, SDRMA’s Board of Directors approved Policy No. 2012-
05 Establishing Guidelines for Director Elections specifies
director qualifications, terms of office and election requirements;
and
Page 2 of 2
WHEREAS, Policy No. 2012-05 specifies that member agencies
desiring to participate in the balloting and election of candidates
to serve on SDRMA’s Board of Directors must be made by resolution
adopted by the member agency’s governing body.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the
Otay Water District selects the following candidates to serve as
Directors on the SDRMA Board of Directors:
(continued)
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 3, 2013
SUBMITTED BY: Adolfo Segura
Information Technology Manager
PROJECT: Various DIV. NO. ALL
APPROVED BY:
Geoff Stevens, Chief Information Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: INFORMATION TECHNOLOGY RELATED OPERATIONS & MAINTENANCE AND
CAPITAL CONTRACTS FOR FY 2014
GENERAL MANAGER’S RECOMMENDATION:
That the Board authorize the General Manager to negotiate and enter
into the following agreements:
1. One (1) year O&M service agreements with:
a. AT&T in the amount of $99,000.00 for local and long-distance
telephone and internet service.
b. Verizon Wireless in the amount of $72,000.00 for cellular phone
and wireless modem service.
c. Tyler Technologies in the amount of $127,000.00 for
ERP/Financial software maintenance costs and annual technical
support.
2. One (1) year, with two (2) one-year option renewal O&M service
agreements with:
a. Intermedia in the amount of $107,928.00 ($35,976.00 annually)
for enterprise hosted exchange email services.
AGENDA ITEM 6h
2
b. Advanced Call Processing, Inc. in the amount of $106,122.00
($35,374.00 annually) for telephone software maintenance and
technical support service.
c. GPS Insight in the amount of $110,304.00 ($36,768.00 annually)
for vehicle GPS fleet tracking system and service.
COMMITTEE ACTION:
See “Attachment A”.
PURPOSE:
To authorize the purchase of equipment and services necessary to
support Information Technology’s daily operations and services, and
enhance the District systems to meet emerging business needs as
identified in the District Strategic Plan.
ANALYSIS:
The IT department presents to the Board specific technology related
expenses that require Board approval because they exceed the General
Manager’s authorized approval limit of $50,000.00 for a specific
contract. These contracts and purchases are required to either
operate the District’s technology environment or to make planned
technology related infrastructure improvements. Each item requiring
the District to issue a purchase order or contract for greater than
$50,000.00 is described in detail in the following section. All of
the items in this staff report are specifically itemized in the FY
2014 budget as well. By presenting these items collectively, we want
to provide to the Board a more detailed view of expenses related to
the Districts’ information systems.
All purchasing guidelines have been met for the specific items in
this report. Where possible, items have been competitively bid.
Certain items, such as software licenses and vendor support, are sole
source contracts, because only one vendor can support the product.
Certain items are also purchased utilizing pricing provided in state
authorized competitive contracts, primarily CALNET and WSCA (state
and regional wide agreements which guarantees competitive pricing).
Where possible, agreements will utilize the District’s standard
contract form, which provides the ability to terminate the agreement
with or without cause upon sixty-day notice. Contracts for software
license and support are generally not open to negotiation and the
manufacturer standard one (1) year agreement will be utilized. The
3
District has attempted, wherever possible, to synchronize our
contract renewal dates with the District’s fiscal year and budget
approval process.
The following are detailed descriptions of the specific requests:
Explanation of Costs
Software and Support Agreements:
AT&T $99,000.00 - This item covers the purchase of telephone and
internet services to support all District operations. This item
utilizes CALNET pricing which has been competitively bid by the State
of California. Funds for these services are allocated in the IT O&M
budget.
Verizon Wireless $72,000.00 – This item covers cellular phone and
wireless modem service for District operations. Verizon was the
lowest bidder. The District inventory is: 78 iPhones for staff use
and 91 wireless 3G/4G devices and service for mobile air cards, hot-
spots and field connectivity for remote monitoring and alarm systems.
Funds for this item are allocated in the IT O&M budget.
Service Provider Plan Details One Year Total
Verizon
Unlimited Data & Pay-
as-you-go voice plan -
Unlimited 3G & 4G
Wireless (basic plan)
$6,000 per month
Sprint Same as above $6,500 per month
AT&T Same as above $6,900 per month
Eden Tyler Technologies $127,000 – This item covers yearly required
software maintenance for the District’s enterprise resource planning
(ERP)software suite, which includes Utility Billing, Financial, Human
Resources and Permitting Systems. The ERP software suite is
exclusively owned by Tyler Technologies. The yearly maintenance fee
includes all core licensing, software support to include required
annual service packs and technical support for all software modules.
This item is a sole source contract as only the product vendor is
authorized to provide maintenance support. Funds for this item are
allocated in the IT O&M budget.
Intermedia $107,928.00 - This item covers the purchase of one(1) year
with two (2) one-year option renewals for hosted enterprise exchange
email service. The service will provide 24/7 email service to the
District, as well as the associated operation and maintenance work
4
associated with managing an in-house email system. Additional
benefits include hardware, data storage, archiving and utility
(power/cooling) dollar savings. This item was competitively bid and
selected the low cost vendor. Funds for this item are allocated in
the IT O&M budget.
Service Provider Service Details Overall Three Year
Total
Intermedia
25 GB Mailboxes &
Unlimited storage in
archive, Outlook
support, Web-based
access, Mobility,
Shared Calendar &
Contacts, Web apps for
Outlook/SharePoint,
Anti-Spam & anti-
malware, In-place
Archive, In-Place
Hold, Lync for unified
communications & voice
messaging, 24/7
support
$107,928.00
($35,976 annually)
ABTECH WMS Same as above $111,600.00
CenterBeam Same as above $179,856.00
Advanced Call Processing (ACP) $106,122.00 - This item covers the
purchase of one(1) year with two (2) one-year option renewals for
telecommunication software maintenance, functional programming and
general technical support for the District phone system. This service
ensures that the District’s telecommunication or voice system
operates at a high-level of system up-time, performance and security.
The services includes scheduled maintenance, remote monitoring,
software and security upgrades, troubleshooting, after-hours and
weekend support and on-site engineering services if needed. Although
ATI was the lowest bidder, ACP was selected due to their wide client
base, expertise with the District i3 phone system and staffing
levels. Multiple request to NEC were made, but no pricing or service
profile was provided. Funds for this item are allocated in the IT O&M
budget.
5
Service Provider Service Details Overall Three Year
Total
ACP
I3 Telecommunication
software system,
maintenance & voice
support & functional
programming. Monday-
Friday, after-hours &
weekend on-
call/emergency support
$106,122
($35,374 annually)
ATI Same as above $98,695
NEC Non-Responsive $ -
GPS Insight Fleet Tracking System $110,304.00 - This item covers
the purchase of one(1) year with two (2) one-year option renewals
for carrier based GPS, cellular service and solution support for
the District’s vehicle fleet. The existing iDEN solution being
provided by Sprint/Airtrak, will be shut down on July 1, 2013. In
preparation for this change, the District solicited six (6) service
proposals. A cross-functional selection team reviewed the proposals
and via a structured rating system narrowed the list to two top
candidates, Sprint and GPS Insight. Solution proof of concept (POC)
based on District requirements followed. Ensuing the POC, GPS
Insight became the front-runner as they were overall able to meet
the District’s functional, reporting, ease of use and technical
integration requirements. In addition, GPS Insight was able to
solely fulfill the solution requirements. Other vendors, including
Sprint, required partnerships with at least two (2) other vendors.
Lastly, GPS Insight was the lowest cost solution and is providing a
significant functional upgrade from the previous solution. Funds
for vehicle GPS hardware will come from CIP 2469 and monthly
wireless service are allocated in the IT O&M budget.
Vendor Hardware Cost Wireless Service Overall Three
Year Total
GPS Insight $25,704 $28,200 $110,304
Sprint/GeoTab $7,500 $32,500 $113,100
EJ Ward $47,000 $26,500 $126,500
SageQuest
$0
(equip. lease
built into cost)
$47,374 $133,120
Air Trak
$0
(equip. lease
built into cost)
$47,000 $141,000
Network Fleet $47,500 $31,200 $141,100
6
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
These items are specifically included in either the adopted FY 2014
Capital Budget or the O&M Budget.
O&M Totals:
All items, excluding the GPS hardware, are budgeted in the FY 2014 O&M
Budget and total $596,650.00. These funds are budgeted and available.
Capital Totals:
The capital costs for the GPS modems ($25,704.00) will be charged to
CIP 2469 (Information Technology Network and Hardware). This account
has a FY 2014 budget of $350,000.00. After this expenditure, the
account will have a remaining balance of $324,296.00. The project
manager has verified that CIP 2469 has sufficient funding to complete
the project.
STRATEGIC GOAL:
These items are in support of the District’s Strategic Plan,
specifically improve the operating cost and efficiency of data center
and network services, which will allow us to make tactical and long
term improvements to District technology services
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action Report
ATTACHMENT A
SUBJECT/PROJECT: INFORMATION TECHNOLOGY RELATED OPERATIONS & MAINTENANCE AND
CAPITAL CONTRACTS FOR FY 2014
COMMITTEE ACTION:
The Finance, Administration and Communications Committee
discussed this item at a meeting held on June 24, 2013 and the
following comments were made:
Each year staff presents items requiring board approval for
annual expenditures that are necessary for daily
Information Technology (IT) operations. They are fairly
routine items and have been identified in the FY 2014
budget. Staff is recommending that the board approve
agreements with:
AT&T in the amount of $99,000 for local, long distance
telephone and internet services supporting all District
operations. This contract is under the CALNET agreement
through the State of California that guarantees the
pricing.
Verizon Wireless, Inc. in the amount of $72,000 for cell
phone service and for the support of wireless air cards
for mobile devices and field services equipment. The
service provides for a total of 169 combined devices at
a cost of $28.50 per device.
Eden Tyler Technologies for $127,000 for annual software
maintenance support for financial, human resources and
billing systems (EDEN Systems). The District has had
this software in place for 8 years and it continues to
function well for financial, customer service and human
resource operations. Additionally, they are the only
vendor that provides software maintenance and support.
Intermedia for $35,976 of one (1) year with two (2) one-
year option renewals for hosted exchange email software.
The service will provide 24/7 email service to the
District, as well as the associated operations and
maintenance items associated with managing an in-house
email system. Additional benefits include hardware, data
storage, archiving and power and cooling or utility
dollar savings.
Advanced Call Processing (ACP) for $35,374 of one (1)
year with two (2) one-year option renewals for phone
software maintenance, functional programming and general
technical support.
GPS Insight Fleet Tracking System for $110,304 for one
(1) year with two (2) one-year option renewals for
carrier based GPS, cellular and fleet tracking system
solution. The District currently utilizes Sprint Air
Traffic Solution. The system is at end-of-life and will
be shut down by Sprint at the end of June 2013. Staff
is proposing to replace the system with a web based
system utilizing Verizon’s carrier services. It will
allow for the tracking of 100 vehicles.
The District received six (6) bids in response to its
RFP for GPS services. A panel of team members reviewed
the proposals and, through a structured rating system,
narrowed the list to two top candidates, Sprint and GPS
Insight. It was indicated that the proposed vendor is
the lowest cost provider. The main reason for the
selection of GPS Insight is their user interface was
superior and the data from their system can be utilized
to manage driving behavior. GPS Insight’s system can
also be integrated easily with the District’s GIS
system.
The committee noted that the hardware cost for GPS Insight
was $25,704 and indicated that if the District did not
renew their contract next year, that it would be quite
costly for the hardware replacement. It was discussed that
it is very unlikely that the District would not renew the
service contract. The last service provider’s software was
utilized through the end-of-life of their system. GPS
Insight has also invested in new antennas which provide
expanded band width and staff is confident that the
District would continue with their services.
The committee further commented that without the up-front
hardware costs, Sprint is actually the lowest cost
provider. It was discussed that the Sprint system is more
difficult to use, does not integrate well with the
District’s GIS System, and GPS Insight’s system is more
intuitive with regard to use. Staff had tried to work with
Sprint to enhance their system so it would better interface
with the District’s system. However, they were unable to
provide the interface enhancements. It was noted that if
GPS Insight’s cost was higher, staff would still have
selected them as their service is superior to Sprint in
meeting the District’s needs. Additionally, to meet the
District service needs, Sprint would need to partner with
two (2) additional vendors. GPS Insight could fulfill all
the District’s needs solely.
In response to another inquiry from the committee, staff
indicated that the cost for GPS Services is below budget
and there is approximately 6 to 10% left in the budget for
possible repair, replacement, the purchase of accessories,
etc.
Upon completion of the discussion, the committee supported staffs’
recommendation and presentation to the board as a consent item.
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 3, 2013
SUBMITTED BY:
Lisa Coburn-Boyd
Environmental Compliance
Specialist
Bob Kennedy
Engineering Manager
PROJECT:
P2504-
001101
DIV. NO. 5
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adoption of a Mitigated Negative Declaration for the
Regulatory Site Access Road Improvements Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
approves the adoption of a Mitigated Negative Declaration for the
Regulatory Site Access Road Improvements Project (see Exhibit A for
Project location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board approval for the adoption of a Mitigated Negative
Declaration (MND) for the Regulatory Site Access Road Improvements
Project.
ANALYSIS:
The Project is an access road that would be used as an alternate
route for District staff to access the District’s Regulatory Site
AGENDA ITEM 7a
2
located in Rancho San Diego. Currently, District staff vehicles
utilize the existing right turn-in/-out only on State Route 94 (SR-
94) which can be hazardous, particularly for larger vehicles and
during times of heavy traffic volumes on SR-94. The access road will
also provide the Heartland Fire Training Authority with two access
routes to the Heartland Fire Regional Training Facility which is
located within the District’s Regulatory Site. Lastly, it will
provide the San Diego County Sheriff’s Department with a secondary
entrance/exit to the Rancho San Diego Sheriff Station that is
currently under construction.
The proposed access road would connect the District’s Regulatory Site
to the terminus of a road serving the under-construction Sheriff’s
Station and to a paved road that connects to SR-94 through a
signalized intersection (Jamacha Road and SR-94). The access road
would be 24 feet wide, paved with asphalt concrete, and would include
2-foot-wide shoulders on each side. The proposed alignment would
generally occur along the existing unpaved access road that extends
to the under-construction Sheriff Station site and to an existing
paved road that connects to SR-94. A temporary construction easement
would be required along each side of the new roadway to allow for
grading and construction of the new road. The construction easement
will vary in width, but will be only as wide as is needed to allow
for proper construction of the road. The construction of the road
would also include new storm drain facilities.
ICF International was issued a Task Order to prepare the Initial
Study and MND for the Project under their As-needed Environmental
Services contract with the District. Based on the findings of these
documents, and with proper mitigation measures taken, as outlined in
the draft MND, the Project will not have a significant effect on the
environment. District staff met with members of the Valle de Oro
Community Planning Group several times during the preparation of the
MND to discuss their concerns regarding the Project. These concerns
were addressed in the draft MND and the District did not receive any
additional comments from this group during the 30-day comment period.
The Initial Study and Draft MND were submitted for the 30-day review
period on May 1, 2013. Four comment letters were received from the
County of San Diego, the San Diego County Archaeological Society, the
California Dept. of Fish and Wildlife (CDFW), and the Native American
Heritage Commission. One of the mitigation measures, Mitigation
Measure BIO-4 was revised in response to a comment in the letter from
the CDFW. This mitigation measure describes the measures that will
be taken so that the breeding of California Gnatcatchers and other
migratory birds are not affected during construction. The four
letters and the responses to their comments are presented in the
Final MND (see Attachment B). The mitigation, monitoring, and
3
reporting plan (MMRP) that will be in place for the Project is
included with the Final MND.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay
Water District in a professional, effective, and efficient manner”
and the General Manager’s Vision, “A District that is at the
forefront in innovations to provide water services at affordable
rates, with a reputation for outstanding customer service.”
LEGAL IMPACT:
None.
LC-B/BK:jf
P:\WORKING\CIP P2504-Regulatory Site Access Road and Pipeline Relocation\Staff Reports\BD 07-03-13, Staff Report, Reg
Site Access Road MND
Attachments: Exhibit A – Project Location Map
Attachment A – Committee Action
Attachment B – Budget Detail
Attachment C – Final MND and MMRP
ATTACHMENT A
SUBJECT/PROJECT:
P2504-001101 Adoption of a Mitigated Negative Declaration for the
Regulatory Site Access Road Improvements Project
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee (Committee)
reviewed this item at a meeting held on June 19, 2013 and the
following comments were made:
Staff is requesting that the Board approve the adoption of a
Mitigated Negative Declaration for the Regulatory Site Access Road
Improvements Project (Project).
Staff indicated that the Project is the construction of an access
road that would be used as an alternate route for District staff to
access the District’s Regulatory Site (See Exhibit A).
It was noted that any impacts to vegetation on the sides of the road
during construction will be revegetated on site and also be
mitigated for at the District’s HMA.
Staff noted that ICF, the District’s as-needed environmental
consultant, prepared the initial study and MND. Based on the
findings of the initial study and the MND and with the proper
mitigation measures taken, the project will not have a significant
effect on the environment.
Staff stated that the MND was put out for a 30-day notice period and
indicated that four comments letters were received. It was noted
that the comment letter from the California Department of Fish and
Wildlife required a slight change in the MND to address potential
impacts on migratory birds. This change is noted in the final MND.
As an employee of the San Miguel Fire Protection District (SMFPD),
Director Croucher recused himself from this meeting item as the
SMFPD is involved with this project as well. Staff indicated that
the SMFPD is required to make improvements to the subject site in
accordance with the Major Use Permit for the Regional Training
Facility located on the Regulatory Site. However, they may be able
to receive a variance from these requirements if the access road is
built.
Upon completion of the discussion, the Committee supported
presentation to the full Board as a consent item.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
P2504-001101 Adoption of a Mitigated Negative Declaration for the
Regulatory Site Access Road Improvements Project
Date Updated: 6/10/2013
Budget
900,000
Planning
Consultant Contracts 66,360 66,360 - 66,360 JONES & STOKES ASSOCIATES INC
4,500 - 4,500 4,500 KEAGY REAL ESTATE
- 4,500 (4,500) - MICHAEL D KEAGY REAL ESTATE
6,130 6,130 - 6,130 MTGL INC
Professional Legal Fees 394 394 - 394 STUTZ ARTIANO SHINOFF
Regulatory Agency Fees 100 100 - 100 PETTY CASH CUSTODIAN
Service Contracts 313 313 - 313 SAN DIEGO DAILY TRANSCRIPT
- 750 (750) - SOUTHERN PACIFIC TITLE CO
750 - 750 750 SOUTHERN PACIFIC TITLE SVCS
158 158 - 158 EAST COUNTY CALIFORNIAN, THE
75 75 - 75 EAST COUNTY GAZETTE
1,250 1,250 - 1,250 FIRST AMERICAN TITLE CO
Standard Salaries 92,719 92,719 - 92,719
Total Planning 172,749 172,749 - 172,749
Design 001102
Consultant Contracts 7,643 7,643 - 7,643 ALTA LAND SURVEYING INC
Service Contracts 1,500 1,500 - 1,500 INLAND AERIAL SURVEYS INC
6 6 - 6 FIRST AMERICAN DATA TREE LLC
Standard Salaries 119,092 119,092 - 119,092
Total Design 128,241 128,241 - 128,241
Construction
Total Construction - - - -
Grand Total 300,989 300,989 - 300,989
Vendor/Comments
Otay Water District
p2504-Regulatory Site Access Rd & PL Relocatn
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost
AGENDA ITEM 7a
(Attachment C)
FINAL MND AND MMRP
Has been posted as Attachment 1 on the
Otay Water District Website
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 3, 2013
SUBMITTED BY: Lisa Coburn-Boyd
Environmental Specialist
Bob Kennedy
Engineering Manager
CIP./G.F. NO: D0899-
090154
DIV. NO. 2
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Approval of Water Supply Assessment and Verification Report
(May 2013) for the City of San Diego Otay Mesa Community Plan
Update
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors
(Board) approve the Water Supply Assessment and Verification
Report (WSA&V Report) dated May 2013 for the City of San Diego
Otay Mesa Community Plan Update, as required by Senate Bills 610
and 221 (see Exhibit A for Project location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board approval of the May 2013 WSA&V Report for the
City of San Diego Otay Mesa Community Plan Update, as required
by Senate Bill 610 and Senate Bill 221 (SB 610 and SB 221).
ANALYSIS:
The City of San Diego submitted a request for a WSA&V report to
the District pursuant to SB 610 and SB 221. SB 610 and SB 221
require that, upon the request of the City or County, a water
purveyor, such as the District, prepare a water supply
assessment and verification report to be included in the
California Environmental Quality Act (CEQA) environmental
AGENDA ITEM 7b
2
documentation. This request was received by the District on
May 30, 2013.
SB 610 requires a city or county to evaluate whether water
supplies will be sufficient to meet the projected water demand
for certain “projects” that are otherwise subject to the
requirement of the CEQA. SB 610 provides its own definition of
“project” in Water Code Section 10912.
SB 221 requires affirmative written verification from the water
purveyor of the public water system that sufficient water
supplies are planned to be available for certain residential
subdivisions of property. The requirements of SB 610 and SB 221
are addressed by the May 2013 WSA&V Report for this Project.
The WSA&V Report was prepared by the District in consultation
with Atkins North America, Inc. (Atkins), the San Diego County
Water Authority (Water Authority), and the City of San Diego
(City).
Prior to transmittal to the City, the WSA&V Report must be
approved by the Board. An additional explanation of the intent
of SB 610 and SB 221 is provided in Exhibit C, the City of San
Diego Otay Mesa Community Plan Update WSA&V Report is provided
as Exhibit D.
For the City of San Diego Otay Mesa Community Plan Update, the
City is the responsible land use agency that requested the
SB 610 and SB 221 water supply assessment and verification
report from the District. The request for the WSA&V Report, in
compliance with SB 610 and SB 221 requirements, was made by the
City because the Project meets or exceeds one or both of the
following SB 610 and SB 221 criteria:
A proposed residential development of more than 500
dwelling units.
A proposed commercial office building employing more than
1,000 persons or having more than 250,000 square feet of
floor space.
A mixed-use project that includes one or more of the land
uses specified in SB 610.
A project that would demand an amount of water equivalent
to, or greater than, the amount of water required by a 500
dwelling unit project.
3
The Otay Mesa Community Plan encompasses approximately 9,300
acres in the southeastern portion of the City of San Diego.
Approximately 4,900 acres are served by the City of San Diego
and the remaining 4,400 acres served by the District.
The Otay Mesa Community Plan Update will re-designate land uses
to increase the number of allowed residential units and reduce
the acreage for industrial uses. New land use designations are
proposed to allow the establishment of industrial centers, mixed
commercial and residential uses, and where appropriate,
residential uses near industrial uses. Modified industrial and
commercial land use designations also are included that are
similar to the industrial intensity found in the adopted
community plan. The International Business and Trade will be
the dominant industrial land use in the updated community plan.
Other features include:
Creating a village center in an area south of SR-905 and
west of Britannia Boulevard with up to 5,246 multi-family
units.
Designating a corridor of Business Park-themed industrial
uses along SR-905.
Seeking to enhance the image of the community along SR-905
with flex space and corporate offices users flanking the
freeway.
Encouraging outdoor storage and heavy industry users to
shift to the border area.
The expected potable water demand for the Otay Mesa Community
Plan Update is 4.7 million gallons per day or about 5,273 acre-
feet per year which is slightly less than what was projected in
the District’s 2010 Water Resources Master Plan Update (WRMP
Update). The projected recycled water demand for the Otay Mesa
Community Plan Update is 0.68 million gallons per day or 774
acre-feet per year, representing about 13% of the total Otay
Mesa Community Plan Update water demand.
The 2010 WRMP Update included the demands estimated for the Otay
Mesa Community Plan Update. SANDAG’s Series 12 Growth Forecast
also included the Otay Mesa Community Plan Update. SANDAG’s
Series 12 Growth Forecast was used to prepare the population
projections that form the basis of the Water Authority’s 2010
Urban Water Management Plan (UWMP) and the District’s 2010 UWMP.
4
The request for compliance with SB 221 requirements was made by
the City because the Project will exceed the SB 221 criteria of
a proposed residential development subdivision of more than 500
dwelling units.
Pursuant to SB 610 and SB 221, the WSA&V Report incorporates by
reference the current Urban Water Management Plans and other
water resources planning documents of the District, the Water
Authority, and the Metropolitan Water District of Southern
California (Metropolitan). The District prepared the WSA&V
Report in consultation with Atkins, The Water Authority, and the
City which demonstrates and documents that sufficient water
supplies are planned for and are intended to be made available
over a 20-year planning horizon under normal supply conditions
and in single and multiple-dry years to meet the projected
demand of the City of San Diego Otay Community Plan Update and
other planned development projects within the District.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The District has been reimbursed $8,000 for all costs associated
with the preparation of the Otay Mesa Community Plan Update
WSA&V Report. The reimbursement was accomplished via an $8,000
deposit the Project proponents placed with the District on
May 13, 2013.
STRATEGIC GOAL:
The preparation and approval of the WSA&V Report for the City of
San Diego Otay Mesa Community Plan Update supports the
District’s Mission statement, "To provide high value water and
wastewater services to the customers of the Otay Water District,
in a professional, effective, and efficient manner” and the
District’s Strategic Goal 3.1.1, “Actively manage water supply
and demand.”
LEGAL IMPACT:
Approval of a WSA&V Report for the Otay Mesa Community Plan
Update in form and content satisfactory to the Board of
Directors would allow the District to comply with the
requirements of Senate Bills 610 and 221.
5
LCB/BK/RP:jf
P:\WORKING\WO D0899-090154 City of San Diego Community Plan Update\Staff Report\BD 07-03-13, Staff Report, City SD OMCP WSA&V ,
(LCB-BK-RR).doc
Attachments: Attachment A – Committee Action
Exhibit A – Project Location Map
Exhibit B – Explanation of the Intent of SB 610 &
SB 221
Exhibit C – Otay Mesa Community Plan Update WSA&V
Report
Exhibit D – Presentation
ATTACHMENT A
SUBJECT/PROJECT:
D0899-090154
Approval of Water Supply Assessment and Verification
Report (May 2013) for the City of San Diego Otay Mesa
Community Plan Update
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee
(Committee) reviewed this item at a meeting held on June 19,
2013 and the following comments were made:
Staff requested that the Board approve the Water Supply
Assessment Report and Verification (WSA&V Report) dated May
2013 for the City of San Diego Otay Mesa Community Plan
Update, as required by Senate Bills 610 and 221.
Staff indicated that on May 30, 2013, the District received
a request from the City of San Diego to prepare the WSA and
Verification Report for the Otay Mesa Community Plan
Update. It was noted that SB 610 requires that the District
honor the City’s request, and that board approval for the
submittal of the WSA&V Report to the City of San Diego is
required. An exhibit was provided to the Committee that
showed the location of the project site.
Staff indicated that the Otay Mesa Community Plan Update
will re-designate land uses to increase the number of
allowed residential units and reduce the acreage for
industrial uses. Details of the Update are provided on
page 3 of the staff report.
The Otay Mesa Community Plan’s expected demand is
approximately 4.7 million gallons per day which is slightly
less than what was projected in the District’s 2010 Water
Resources Master Plan Update.
A PowerPoint presentation was provided to the Committee
that included the following:
o Background of Senate Bills 610 and 221, which became
effective on January 1, 2002, and its intent and how it
relates to the WSA&V Report
o Land use plan and description for the Otay Mesa Community
Plan Update
o Potable demand estimates for the Otay Mesa Community Plan
Update
o Otay Water District’s, San Diego County Water
Authority’s, and Metropolitan Water District’s Urban
Water Management Plan
It was noted that the Otay Mesa Community Plan Update WSA&V
Report includes (4) four other Otay Water District Planned
Local Water Supply Projects:
o Rancho Del Rey Groundwater Well (500 AFY)
o Rosarito Ocean Desalination Project (20,000-50,000 AFY)
o Otay Mesa Lot 7 Groundwater Well (300 AFY)
o Otay Mesa Recycled Water Supply Link Project (800 AFY)
A slide was presented that showed the Water Authority
Supplies, which included IID Water Transfer, ACC and CC
Lining, and the Carlsbad Desalination project.
Staff indicated that the status of the current water supply
situation is documented in the WSA&V Report with the intent
that the water agencies plan to develop sufficient water
supplies to meet demands. Staff believes that the Board has
met the intent of SB 610 and 221 statutes in that Land use
agencies and water suppliers have demonstrated strong
linkage. The Otay Mesa Community Plan Update WSA&V Report
clearly documents the current water supply situation. Staff
believes that based on existing documentation, the WSA&V
Report demonstrates and documents that sufficient water
supplies are planned for and are intended to be acquired
and also identifies the actions necessary to develop the
supplies for a 20-year planning horizon.
The Committee recommended that staff emphasize the
reduction in water supply demand for the Otay Mesa
Community Plan Update since the District’s 2010 Water
Resources Master Plan Update indicates a higher demand for
the Community Plan.
The Committee also recommended that staff provide actual
water demands from previous years so that a comparison can
be made to the FY 2015 projections indicated in the
PowerPoint presentation.
The Committee inquired if there was a possibility that the
City of San Diego would be able to acquire the District’s
jurisdictional boundary after the District has built its
portion of the infrastructure for the Otay Mesa Community
Plan. Staff indicated that it is possible, but this action
would have to go through LAFCO for approval and would
involve de-annexing from the District and annexing to the
City. The Committee suggested that staff look into
opportunities to help the District protect its boundaries
and assets from this action.
Following the discussion, the Committee supported staffs’
recommendation and presentation to the full board as an action
item.
EXHIBIT B
Background Information
The Otay Water District (District) prepared the May 2013 Water Supply Assessment and
Verification (WSA&V) Report for the City of San Diego Otay Mesa Community Plan
(OMCP) Update at the request of the City of San Diego. The City’s WSA&V request
letter dated May 30, 2013 was received by the District on May 30, 2013 so the 90-day
deadline for the District to provide the Board an approved WSA&V Report to the City
ends August 18, 2013. The City of San Diego proposes to update the 1981 OMCP and
the Otay Mesa Development District Ordinance zoning regulations. The Otay Mesa
community encompasses approximately 9,300 acres in the southeastern portion of the
City of San Diego. Approximately 4,900 acres are served by the City, with the
remaining 4,400 acres served by the District.
The OMCP is located within the jurisdictions of the District, the San Diego County Water
Authority (Water Authority), and the Metropolitan Water District of Southern California
(MWD). See Exhibit A for Project location. To obtain permanent imported water supply
service, land areas are required to be within the jurisdictions of the District, Water
Authority, and MWD.
The May 2013 WSA&V Report for the OMCP Update has been prepared by the District
in consultation with Atkins, the Water Authority, and the City pursuant to Public
Resources Code Section 21151.9 and California Water Code Sections 10631, 10656,
10910, 10911, 10912, and 10915 referred to as Senate Bill (SB) 610 and Government
Code Sections 65867.5, 66455.3, and 66473.7 referred to as SB 221. SB 610 and SB
221 amended state law, effective January 1, 2002, intending to improve the link
between information on water supply availability and certain land use decisions made
by cities and counties. SB 610 requires that the water purveyor of the public water
system prepare a water supply assessment to be included in the California
Environmental Quality Act (CEQA) environmental documentation and approval process
of certain proposed projects. SB 221 requires affirmative written verification from the
water purveyor of the public water system that sufficient water supplies are to be
available for certain residential subdivision of property. The requirements of SB 610
and SB 221are addressed in the May 2013 WSA&V Report for the City of San Diego
Otay Mesa Community Plan Update.
The OMCP will re-designate land uses to increase the number of allowed residential
units and reduce the acreage for industrial uses. New land use designations are
proposed to allow the establishment of industrial centers, mixed commercial and
residential uses, and, where appropriate, residential uses near industrial uses. Modified
industrial and commercial land use designations also are included that are similar to the
industrial intensity found in the adopted community plan. The International Business
and Trade will be the dominant industrial land use in the OMCP.
The expected potable water demand for the OMCP Update is 4.7 million gallons per day
(MGD) or about 5,273 acre feet per year (AFY) and is slightly less than what was
projected in the District’s 2010 Water Resources Master Plan (WRMP Update) which
estimated 4.92 MGD for the OMCP Update. The projected recycled water demand for
the OMCP Update is 0.68 MGD or 774 AFY, representing about 13% of the total Otay
Mesa Community Plan Update water demand.
The District currently depends on the Water Authority and the MWD for all of its potable
water supplies and regional water resource planning. The District’s 2010 Urban Water
Management Plan (UWMP) relies heavily on the UWMP’s and Integrated Water
Resources Plans (IRPs) of the Water Authority and MWD for documentation of supplies
available to meet projected demands. These plans are developed to manage the
uncertainties and variability of multiple supply sources and demands over the long-term
through preferred water resources strategy adoption and resource development target
approvals for implementation.
MWD in October 2010 approved the update of their Integrated Water Resources Plan
(IRP). The 2010 IRP Update describes an adaptive management approach to mitigate
against future water supply uncertainty. The new uncertainties that are significantly
affecting California’s water resources include:
The Federal Court ruling on previous operational limits on Sacramento-San
Joaquin Delta to protect the Delta species. Water agencies are still trying to
determine what effect the ruling will have on State Water Project (SWP)
deliveries. Actual supply curtailments for MWD are contingent upon fish
distribution, behavioral patterns, weather, Delta flow conditions, and how water
supply reductions are divided between state and federal projects.
Periodic extended drought conditions.
These uncertainties have rightly caused concern among Southern California water
supply agencies regarding the validity of the current water supply documentation.
MWD is currently involved in several proceedings concerning Delta operations to
evaluate and address environmental concerns. In addition, at the State level, the Delta
Vision and Bay-Delta Conservation Plan processes are defining long-term solutions for
the Delta.
The SWP represents approximately 9% of MWD’s 2025 Dry Resources Mix with the
supply buffer included. A 22% cutback in SWP supply represents an overall 2% (22%
of 9% is 2%) cutback in MWD supplies in 2025. Neither the Water Authority nor MWD
has stated that there is insufficient water for future planning in Southern California.
Each agency is in the process of reassessing and reallocating their water resources.
Under preferential rights, MWD can allocate water without regard to historic water
purchases or dependence on MWD. Therefore, the Water Authority and its member
agencies are taking measures to reduce dependence on MWD through development of
additional supplies and a water supply portfolio that would not be jeopardized by a
preferential rights allocation.
As calculated by MWD (December 11, 2012), the Water Authority’s current preferential
right is 17.22% of MWD’s supply, while the Water Authority accounted for approximately
25% of MWD’s total revenue. So MWD could theoretically cut back the Water
Authority’s supply and theoretically, the Water Authority should have alternative water
supply sources to make up for the difference. In the Water Authority’s 2010 UWMP,
they had already planned to reduce reliance on MWD supplies. This reduction is
planned to be achieved through diversification of their water supply portfolio.
The Water Authority’s Drought Management Plan (May 2006) provides the Water
Authority and its member agencies with a series of potential actions to engage when
faced with a shortage of imported water supplies due to prolonged drought conditions.
Such actions help avoid or minimize impacts of shortages and ensure an equitable
allocation of supplies throughout the San Diego County region.
The Otay Water District Board of Directors could acknowledge the ever-present
challenge of balancing water supply with demand and the inherent need to possess a
flexible and adaptable water supply implementation strategy that can be relied upon
during normal and dry weather conditions. The responsible regional water supply
agencies have and will continue to adapt their resource plans and strategies to meet
climatological, environmental, and legal challenges so that they may continue to provide
water supplies to their service areas. The regional water suppliers (i.e., the Water
Authority and MWD), along with the District, fully intend to maintain sufficient reliable
supplies through the 20-year planning horizon under normal, single, and multiple dry
year conditions to meet projected demand of the OMCP Update, along with existing and
other planned development projects within the District’s service area.
If the regional water suppliers determine additional water supplies will be required, or in
this case, that water supply portfolios need to be reassessed and redistributed with the
intent to serve the existing and future water needs throughout Southern California, the
agencies must indicate the status or stage of development of actions identified in the
plans they provide. MWD’s 2010 IRP update will then cause the Water Authority to
update its IRP, which will then provide the District with the necessary water supply
documentation. Identification of a potential future action in such plans does not by itself
indicate that a decision to approve or to proceed with the action has been made. The
District’s Board approval of the OMCP Update WSA&V Report does not in any way
guarantee water supply to the parcels that make up the OMCP.
Alternatively, if the WSA&V Report is written to state that water supply is or will be
unavailable; the District must include in the assessment a plan to acquire additional
water supplies. At this time, the District should not state there is insufficient water
supply.
So the best the District can do right now is to state the current water supply situation
clearly, indicating intent to provide supply through reassessment and reallocation by the
regional, as well as, the local water suppliers. In doing so, it is believed that the Board
has met the intent of the SB 610 statute, that the land use agencies and the water
agencies are coordinating their efforts in planning water supplies for new development.
With District Board approval of the OMCP Update WSA&V Report, the OMCP Update
proponents can proceed with the draft environmental documentation required for the
CEQA review process. The water supply issues will be addressed in these
environmental documents, consistent with the WSA&V Report.
The District, as well as others, can comment on the draft EIR with recommendations
that water conservation measures and actions be employed on the OMCP Update.
Some recent actions regarding water supply assessments and verification reports by
Otay Water District are as follows:
The Otay Water District Board approved in July 2007 the Eastern Urban Center
Water Supply and Assessment Report.
The Board approved the Judd Company Otay Crossings Commerce Park Water
Supply Assessment Report on December 5, 2007.
The Board approved the Otay Ranch L.P. Otay Ranch Preserve and Resort
Project Water Supply Assessment and Verification Report on February 4, 2009.
The Board approved Water Supply Assessment and Verification Reports for the
City of Chula Vista Village 8 West Sectional Plan Area and Village 9 Sectional
Plan Area on January 5, 2011.
The Board approved the Water Supply Assessment Report for the San Diego-
Tijuana Cross Border Facility on February 2, 2011.
The Board approved the water supply assessment for the County of San Diego
Rabago Technology Park on April 6, 2011.
The Board approved the Water Supply Assessment Report for the Pio Pico
Energy Center Project on October 5, 2011.
The Board approved the Water Supply Assessment Report for the Hawano
Project on March 7, 2012.
The Board approved the Water Supply Assessment Reports for the Sunroad
Otay Plaza and Otay Tech Center Projects on March 6, 2013.
Water supplies necessary to serve the demands of the proposed OMCP Update, along
with existing and other projected future users, as well as the actions necessary to
develop these supplies, have been identified in the water supply planning documents of
the District, the Water Authority, and MWD.
The WSA&V Report includes, among other information, an identification of existing
water supply entitlements, water rights, water service contracts, or agreements relevant
to the identified water supply needs for the proposed OMCP Update. The WSA&V
Report demonstrates and documents that sufficient water supplies are planned and are
intended to be available over a 20-year planning horizon, under normal conditions and
in single and multiple dry years, to meet the projected demand of the proposed OMCP
Update and the existing and other planned development projects within the District.
Accordingly, after approval of a WSA&V Report for the OMCP Update by the District's
Board of Directors, the WSA&V Report may be used to comply with the requirements of
the legislation enacted by Senate Bills 610 and 221 as follows:
Senate Bill (SB) 610 Water Supply Assessment: The District's Board of Directors
approved WSA&V Report may be incorporated into the California Environmental
Quality Act (CEQA) compliance process for the OMCP Update as a Water Supply
Assessment Report with the requirements of the legislation enacted by SB 610. The
City of San Diego, as lead agency under the CEQA for the OMCP Update
environmental documentation, may cite the approved WSA&V Report as evidence
that a sufficient water supply is planned and intended to be available to serve the
OMCP Update.
Senate Bill (SB) 221 Water Supply Verification: The District's Board of Directors
approved WSA&V Report may be incorporated into the City’s OMCP Update as a
Water Supply Assessment Report, consistent with the requirements of the legislation
enacted by SB 221. The City, within their process of approving the OMCP Update,
may cite the approved WSA&V Report as verification of intended sufficient water
supply to serve the Project.
OTAY WATER DISTRICT
WATER SUPPLY ASSESSMENT AND
VERIFICATION REPORT
City of San Diego
Otay Mesa Community Plan Update
D0899-090154
Prepared by:
Robert Kennedy, P.E.
Engineering Manager
Otay Water District
in consultation with
Atkins
and
San Diego County Water Authority
May 2013
Otay Water District
Water Supply Assessment and Verification Report
City of San Diego Otay Mesa Community Plan Update
Otay Water District
Water Supply Assessment and Verification Report
May 2013
City of San Diego Otay Mesa Community Plan Update
Table of Contents
Executive Summary .................................................................................................................................... 1
Section 1 - Purpose ...................................................................................................................................... 5
Section 2 - Findings ..................................................................................................................................... 6
Section 3 - Project Description .................................................................................................................. 8
Section 4 – Otay Water District ............................................................................................................... 10
4.1 Urban Water Management Plan ............................................................ 12
Section 5 – Historical and Projected Water Demands .......................................................................... 13
5.1 Demand Management (Water Conservation) ......................................... 17
Section 6 - Existing and Projected Supplies ........................................................................................... 20
6.1 Metropolitan Water District of Southern California 2005
Regional Urban Water Management Plan ............................................. 21
6.2 San Diego County Water Authority Regional Water Supplies ................. 22
6.3 Otay Water District ....................................................................................... 39
6.3.1 Availability of Sufficient Supplies and Plans for
Acquiring Additional Supplies ................................................... 40
6.3.1.1 Imported and Regional Supplies ..................................... 41
6.3.1.2 Recycled Water Supplies ................................................ 43
Section 7 – Conclusion: Availability of Sufficient Supplies .................................................................. 51
Source Documents ........................................................................................................................ 56
Appendix A: Otay Mesa Community Plan Update Regional Location Map
Appendix B: Otay Mesa Community Plan Update Proposed Development Plan
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
1
Otay Water District
Water Supply Assessment and Verification Report
May 2013
Otay Mesa Community Plan Update
Executive Summary
The Otay Water District (Otay WD) prepared this Water Supply Assessment and Verification
Report (WSA&V Report) at the request of the City of San Diego (City) for the Otay Mesa
Community Plan (OMCP) Update project (Project).
Otay Mesa Community Plan Update Project Overview and Water Use
The City of San Diego proposes to update the 1981 OMCP and the Otay Mesa Development
District Ordinance zoning regulations. The Otay Mesa community encompasses
approximately 9,300 acres in the southeastern portion of the City of San Diego.
Approximately 5,200 acres are served by the City, with the remaining 4,100 acres served by
Otay WD. The community is bordered by the San Ysidro and Otay Mesa-Nestor communities
on the west, the City of Chula Vista and the Otay Valley Regional Park on the north, the
County of San Diego on the east and the US/Mexico border and the City of Tijuana on the
south.
The Project will re-designate land uses to increase the number of allowed residential units and
reduce the acreage for industrial uses. New land use designations are proposed to allow the
establishment of industrial centers, mixed commercial and residential uses, and, where
appropriate, residential uses near industrial uses. Modified industrial and commercial land use
designations are also included that are similar to the industrial intensity found in the adopted
community plan. The International Business and Trade would be the dominant industrial land
use in this scenario. Other features of the Project include:
• Increasing housing unit yield in the southwestern residential areas
• Creating a village center in an area south of SR-905 and west of Britannia Boulevard
• Designating a corridor of Business Park-themed industrial uses along SR-905
• Seeking to enhance the image of the community along SR-905 with flex space and
corporate office users flanking the freeway
• Encouraging outdoor storage and heavy industry uses to shift to the border area
The expected potable water demands to be served by the Otay WD for the Otay Mesa
Community Plan Update is 4.70 million gallons per day (mgd) or about 5,273 acre feet per
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
2
year (AFY) which is slightly less than what was projected in the District’s 2010 Water
Resources Master Plan Update (WRMP Update). The projected recycled water demand for
the proposed project is approximately 0.68 mgd, or about 774 AFY, which represents
approximately 13% of total project water demand.
Planned Imported Water Supplies
The San Diego County Water Authority (Water Authority) and the Metropolitan Water
District (MWD) have an established process that ensures supplies are being planned to meet
future growth. Any annexations and revisions to established land use plans are captured in
the San Diego Association of Governments (SANDAG) updated forecasts for land use
planning, demographics, and economic projections. SANDAG serves as the regional,
intergovernmental planning agency that develops and provides forecast information. The
Water Authority and MWD update their demand forecasts and supply needs based on the
most recent SANDAG forecast approximately every five years to coincide with preparation of
their Urban Water Management Plans (UWMP). Prior to the next forecast update, local
jurisdictions may require water supply assessment and/or verification reports for proposed
land developments that are not within the Otay WD, Water Authority, nor MWD jurisdictions
(i.e. pending or proposed annexations) or that have revised land use plans than what is in the
existing growth forecasts. Land areas with pending or proposed annexations or revised land
use plans typically result in creating higher demand and supply requirements than anticipated.
The Otay WD, Water Authority, and MWD next demand forecast, supply requirements and
associated planning documents would then capture any increase or decrease in demands and
required supplies as a result of annexations or revised land use planning decisions.
The California Urban Water Management Planning Act (Act), which is included in the
California Water Code, requires all urban water suppliers within the state to prepare an
UWMP and update it every five years. The purpose and importance of the UWMP has
evolved since it was first required 25 years ago. State agencies and the public frequently use
the document to determine if agencies are correctly planning to reliably meet future water
demands. As such, UWMPs serve as an important element in documenting supply
availability for the purpose of compliance with state laws, Senate Bills 610 and 221, linking
water supply sufficiency to large land-use development approval. Agencies must also have a
UWMP prepared, pursuant to the Act, in order to be eligible for state funding and drought
assistance.
MWD’s Integrated Resource Plan (IRP) identifies a mix of resources (imported and local)
that, when implemented, will provide 100 percent reliability for full-service demands through
the attainment of regional targets set for conservation, local supplies, State Water Project
supplies, Colorado River supplies, groundwater banking, and water transfers. The MWD’s
2010 update to the IRP (2010 IRP Update) includes a planning buffer supply intended to
mitigate the risks associated with implementation of local and imported supply programs.
The planning buffer identifies an additional increment of water that could potentially be
developed if other supplies are not implemented as planned. As part of the implementation of
the planning buffer, MWD periodically evaluates supply development to ensure that the
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
3
region is not under or over developing supplies. Managed properly, the planning buffer will
help ensure that the southern California region, including San Diego County, will have
adequate water supplies to meet future demands.
Water supply agencies throughout California continue to face climatological, environmental,
legal, and other challenges that impact water source supply conditions, such as the court
rulings regarding the Sacramento-San Joaquin Delta issues and the recent drought impacting
the western states. It is expected that challenges such as these will always be present.
Regardless of the challenges, the regional water supply agencies, the Water Authority and
MWD, along with Otay WD fully intend to have sufficient, reliable supplies to serve
demands.
Section ES-5 of MWD’s 2010 Regional Urban Water Management Plan (2010 RUWMP)
states that MWD has supply capacities that would be sufficient to meet expected demands
from 2015 through 2035. MWD has plans for supply implementation and continued
development of a diversified resource mix including programs in the Colorado River
Aqueduct, State Water Project, Central Valley Transfers, local resource projects, and in-
region storage that enables the region to meet its water supply needs. MWD’s 2010 RUWMP
identifies potential reserve supplies in the supply capability analysis (Tables 2-9, 2-10, and 2-
11), which could be available to meet unanticipated demands such as those related to the Otay
Mesa Community Plan Update.
The County Water Authority Act, Section 5 subdivision 11, states that the Water Authority,
“as far as practicable, shall provide each of its member agencies with adequate supplies of
water to meet their expanding and increasing needs.”
As part of the preparation of a written water supply assessment report, an agency’s shortage
contingency analysis should be considered in determining sufficiency of supply. Section 11
of the Water Authority’s 2010 UWMP contains a detailed shortage contingency analysis that
addresses a regional catastrophic shortage situation and drought management. The analysis
demonstrates that the Water Authority and its member agencies, through the Emergency
Response Plan, Emergency Storage Project, and Drought Management Plan (DMP) are taking
actions to prepare for and appropriately handle an interruption of water supplies. The DMP,
adopted in May 2006, provides the Water Authority and its member agencies with a series of
potential actions to take when faced with a shortage of imported water supplies from MWD
due to prolonged drought or other supply shortfall conditions. The actions will help the
region avoid or minimize the impacts of shortages and ensure an equitable allocation of
supplies.
Otay Water District Water Supply Development Program
In evaluating the availability of sufficient water supply, the Otay Mesa Community Plan
Update proponents are required to participate in the development of alternative water supply
project(s). This can be achieved through payment of the New Water Supply Fee adopted by
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
4
the Otay WD Board in May 2010. These water supply projects are in addition to those
identified as sustainable supplies in the current Water Authority and MWD UWMP, IRP,
Master Plans, and other planning documents. The new water supply projects are in response
to regional water supply issues. These projects are not currently developed and are in various
stages of the planning process. A few examples of these alternative water supply projects are
the Middle Sweetwater River Basin Groundwater Well project, the North District Recycled
Water Supply Concept, the Rosarito Ocean Desalination Facility project, and the Rancho del
Rey Groundwater Well project. The Water Authority and MWD next forecast and supply
planning documents will capture any increase in water supplies resulting from new water
resources developed by the Otay WD.
Findings
The WSA&V Report identifies and describes the processes by which water demand
projections for the proposed Otay Mesa Community Plan Update will be fully included in the
water demand and supply forecasts of the Urban Water Management Plans and other water
resources planning documents of the Water Authority and MWD. Water supplies necessary
to serve the proposed project demands, as well as existing and other projected future users,
and the actions necessary and development status of these supplies, have been identified in the
Otay Mesa Community Plan Update WSA&V Report and will be included in the future water
supply planning documents of the Water Authority and MWD.
This WSA&V Report includes, among other information, an identification of existing water
supply entitlements, water rights, water service contracts, water supply projects, or
agreements relevant to the identified water supply needs for the proposed Otay Mesa
Community Plan Update. The WSA&V Report demonstrates and documents that sufficient
water supplies are planned for and are intended to be available over a 20-year planning
horizon, under normal conditions and in single and multiple dry years to meet the projected
demand of the proposed Otay Mesa Community Plan Update and the existing and other
planned development projects to be served by the Otay WD.
Accordingly, after approval of a WSA&V Report for the Otay Mesa Community Plan Update
by the Otay WD Board of Directors (Board), the WSA&V Report may be used to comply
with the requirements of the legislation enacted by Senate Bills 610 and 221 as follows:
1. Senate Bill 610 Water Supply Assessment: The Otay WD Board approved WSA&V
Report may be incorporated into the California Environmental Quality Act (CEQA)
Environmental Impact Report (EIR) compliance process for the Otay Mesa
Community Plan Update as a water supply assessment report consistent with the
requirements of the legislation enacted by SB 610. The City, as lead agency under
CEQA for the Otay Mesa Community Plan Update EIR amendment, may cite the
approved WSA&V Report as evidence that a sufficient water supply is planned for
and is intended to be made available to serve the Otay Mesa Community Plan Update.
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2. Senate Bill 221 Water Supply Verification: The Otay WD Board approved WSA&V
Report may be incorporated into the City’s Tentative Map approval process for the
Otay Mesa Community Plan Update as a water supply verification report, consistent
with the requirements of the legislation enacted by SB 221. The City, within their
process of approving the Otay Mesa Community Plan Update’s Tentative Map, may
cite the approved WSA&V Report as verification of intended sufficient water supply
to serve the Otay Mesa Community Plan Update.
Section 1 - Purpose
The Otay Mesa community encompasses approximately 9,300 acres in the southeastern
portion of the City of San Diego. Approximately 5,200 acres are served by the City, with the
remaining 4,100 acres served by Otay WD. The community is bordered by the San Ysidro and
Otay Mesa-Nestor communities on the west, the City of Chula Vista and the Otay Valley
Regional Park on the north, the County of San Diego on the east and the US/Mexico border
and the City of Tijuana on the south. The City requested that Otay WD prepare a WSA&V
Report for the Otay Mesa Community Plan Update. The current Otay Mesa Community Plan
Update description is provided in Section 3 of this WSA&V Report.
This WSA&V Report for the Otay Mesa Community Plan Update has been prepared by the
Otay WD in consultation with Atkins, the San Diego County Water Authority, and the City
pursuant to Public Resources Code Section 21151.9 and California Water Code Sections
10631, 10656, 10910, 10911, 10912, and 10915 referred to as Senate Bill (SB) 610 and
Business and Professions Code Section 11010 and Government Code Sections 65867.5,
66455.3, and 66473.7 referred to as SB 221. The intent of SB 610 and SB 221 amended state
law, effective January 1, 2002, is to improve the link between information on water supply
availability and certain land use decisions made by cities and counties. SB 610 requires that
the water purveyor of the public water system prepare a water supply assessment to be
included in the CEQA environmental documentation and approval process of certain proposed
projects. SB 221 requires affirmative written verification from the water purveyor of the
public water system that sufficient water supplies will be available for certain residential
subdivisions of property prior to approval of a tentative map. The requirements of SB 610
and SB 221 are being addressed by this WSA&V Report. The City requested that the water
supply assessment and verification be prepared concurrently, since the requirements of SB610
and SB 221 are substantially similar.
This WSA&V Report evaluates water supplies that are planned to be available during normal,
single dry year, and multiple dry water years during a 20-year planning horizon to meet
existing demands, expected demands of the Otay Mesa Community Plan Update, and
reasonably foreseeable planned future water demands served by Otay WD. The Otay WD
Board of Directors (Board) approved WSA&V Report is planned to be used by the City in its
evaluation of the Otay Mesa Community Plan Update under the CEQA and Tentative Map
approval processes.
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Section 2 - Findings
The Otay WD prepared this WSA&V Report at the request of the City for the Otay Mesa
Community Plan Update project.
The Otay Mesa Community Plan Update is located within the jurisdictions of the Otay WD,
the City, the Water Authority, and the MWD. To obtain permanent imported water supply
service, land areas are required to be within the jurisdictions of the Otay WD, Water
Authority, and MWD to utilize imported water supply.
The expected potable water demand for the Otay Mesa Community Plan Update is 4.7 mgd or
about 5,273 AFY which is slightly less than what was projected in the District’s 2010 WRMP
Update. The projected recycled water demand for the Otay Mesa Community Plan Update is
0.68 mgd or 774 AFY, representing about 13% of the total Otay Mesa Community Plan
Update water demand.
The Otay Mesa Community Plan Update development proponents are required to use recycled
water for irrigation and other appropriate uses. The primary benefit of using recycled water is
that it will offset the potable water demands by an estimated 774 AFY. The WRMP Update
and the Otay WD 2010 Urban Water Management Plan (2010 UWMP) anticipated that the
land area to be utilized for the Otay Mesa Community Plan Update would use both potable
and recycled water.
The Water Authority and MWD have an established process that ensures supplies are being
planned to meet future growth. Any annexations and revisions to established land use plans
are captured in the SANDAG updated forecasts for land use planning, demographics, and
economic projections. SANDAG serves as the regional, intergovernmental planning agency
that develops and provides forecast information. The Water Authority and MWD update their
demand forecasts and supply needs based on the most recent SANDAG forecast
approximately every five years to coincide with preparation of their urban water management
plans. Prior to the next forecast update, local jurisdictions may require water supply
assessment and/or verification reports for proposed land developments that are not within the
Otay WD, Water Authority, nor MWD jurisdictions (i.e. pending or proposed annexations) or
that have revised land use plans than those used in the existing growth forecasts. Proposed
land areas with pending or proposed annexations or revised land use plans typically result in
creating higher demand and supply requirements than anticipated. The Otay WD, the Water
Authority, and MWD next demand forecast and supply requirements and associated planning
documents would then capture any increase or decrease in demands and required supplies as a
result of annexations or revised land use planning decisions. The Otay Mesa Community Plan
Update was included in SANDAG’s Series 12 forecast that was accepted in 2010.
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This process is utilized by the Water Authority and MWD to document the water supplies
necessary to serve the demands of the proposed Otay Mesa Community Plan Update, along
with existing and other projected future users, as well as the actions necessary to develop
these supplies. This process ensures that the necessary demand and supply information is
identified and incorporated within the water supply planning documents of the Water
Authority and MWD.
The Otay WD 2010 UWMP included a water conservation component to comply with Senate
Bill 7 of the Seventh Extraordinary Session (SBX 7-7), which became effective February 3,
2010. This new law is the water conservation component to the Delta legislation package,
and seeks to achieve a 20 percent statewide reduction in urban per capita water use in
California by December 31, 2020. Specifically, SBX 7-7 from this Extraordinary Session
requires each urban retail water supplier to develop urban water use targets to help meet the
20 percent reduction goal by 2020 (20x2020), and an interim water reduction target by 2015.
Otay WD has adopted Method 1 to set its 2015 interim and 2020 water use targets. Method 1
requires setting the 2020 water use target to 80 percent of baseline per capita water use target
as provided in the State’s Draft 20x2020 Water Conservation Plan. The Otay WD 2015 target
is 171 gallons per capita per day (gpcd) and the 2020 gpcd target at 80 percent of baseline is
152 gpcd.
The Otay WD’s recent per capita water use has been declining to the point where current
water use already meets the 2020 target for Method 1. This recent decline in per capita water
use is largely due to drought water use restrictions, increased water costs, and economic
conditions. However, Otay WD’s effective water use awareness campaign and the enhanced
conservation mentality of its customers will likely result in some degree of long-term
carryover of these reduced consumption rates.
In evaluating the availability of sufficient water supply, the Otay Mesa Community Plan
Update proponents are required to participate in the development of alternative water supply
project(s). This can be achieved through payment of the New Water Supply Fee adopted by
the Otay Water District Board in May 2010. These water supply projects are in addition to
those identified as sustainable supplies in the current Water Authority and MWD UWMP,
IRP, Master Plans, and other planning documents. The new water supply projects are in
response to the regional water supply issues related to the Sacramento-San Joaquin Delta and
the current ongoing western states drought conditions. These additional water supply projects
are not currently developed and are in various stages of the planning process. A few
examples of these alternative water supply projects include the Middle Sweetwater River
Basin Groundwater Well project, the North District Recycled Water Supply Concept, the
Rosarito Ocean Desalination Facility project, and the Rancho del Rey Groundwater Well
project. The Water Authority and MWD next forecast and supply planning documents would
capture any increase in water supplies resulting from any new water resources developed by
the Otay WD.
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Water supplies necessary to serve the demands of the proposed Otay Mesa Community Plan
Update, along with existing and other reasonably foreseeable projected future users, as well as
the actions necessary and the development status of these supplies, will be identified and
included within the water supply planning documents of the Water Authority and MWD.
This WSA&V Report demonstrates and verifies that, with development of the resources
currently identified and those that may be additionally acquired; there are sufficient water
supplies being planned for and/or being developed over the next 20-year planning horizon.
These water supplies meet the projected demand of the proposed Otay Mesa Community Plan
Update and the existing and other reasonably foreseeable planned development projects
within the Otay WD.
This WSA&V Report includes, among other information, an identification of existing water
supply entitlements, water rights, water service contracts, proposed water supply projects, or
agreements relevant to the identified water supply needs for the proposed Otay Mesa
Community Plan Update. This WSA&V Report incorporates by reference the current Urban
Water Management Plans and other water resources planning documents of the Otay WD, the
Water Authority, and MWD. The Otay WD prepared this WSA&V to verify and document
that sufficient water supplies are being planned for and are intended to be acquired to meet
projected water demands of the Otay Mesa Community Plan Update and the existing and
other reasonably foreseeable planned development projects within the Otay WD for a 20-year
planning horizon, in normal supply years, and in single dry and multiple dry years.
Based on a normal water supply year, the five-year increments for a 20-year projection
indicate projected potable and recycled water supply is being planned for and is intended to be
acquired to meet the estimated water demand targets of the Otay WD. These water demand
targets are 44,883 AF in 2015 and increase to 56,614 AF in 2035 per the Otay WD 2010
UWMP. Based on dry year forecasts, the estimated water supply is also being planned for
and is intended to be acquired to meet the projected water demand, during single dry and
multiple dry year scenarios. On average, the dry-year demands are about 6.4 percent higher
than the normal year demands. The Otay WD recycled water supply is assumed to be
drought-proof and not subject to reduction during dry periods.
These findings demonstrate and verify that sufficient water supplies are being planned for and
are intended to be acquired to serve the proposed Otay Mesa Community Plan Update and the
existing and other reasonably foreseeable planned projects within the Otay WD in both
normal and single and multiple dry year forecasts for a 20-year planning horizon.
Section 3 - Project Description
The Otay Mesa Community Plan Update project is located within the City of San Diego,
California. Refer to Appendix A for a regional location map of the proposed project.
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The Otay Mesa community encompasses approximately 9,300 acres in the southeastern
portion of the City of San Diego. Approximately 5,200 acres are served by the City, with the
remaining 4,100 acres served by Otay WD. The community is bordered by the San Ysidro and
Otay Mesa-Nestor communities on the west, the City of Chula Vista and the Otay Valley
Regional Park on the north, the County of San Diego on the east and the US/Mexico border
and the City of Tijuana on the south.
The Project will re-designate land uses to increase the number of allowable residential units
and reduce the acreage for industrial uses. New land use designations are proposed to allow
the establishment of industrial centers, mixed commercial and residential uses, and, where
appropriate, residential uses near industrial uses. Modified industrial and commercial land use
designations also are included that are similar to the industrial intensity found in the adopted
community plan. The International Business and Trade would be the dominant industrial land
use in this scenario. Other features of the Project include:
• Increasing housing unit yield in the southwestern residential areas
• Creating a village center in an area south of SR-905 and west of Britannia Boulevard
• Designating a corridor of Business Park-themed industrial uses along SR-905
• Seeking to enhance the image of the community along SR-905 with flex space and
corporate office users flanking the freeway
• Encouraging outdoor storage and heavy industry uses to shift to the border area
Table 1 illustrates the combination of land uses in the Otay Mesa Community Plan Update.
Table 1
Otay Mesa Community Plan Update Proposed Land Uses
Total City Otay WD
Acreage 9,320 5,190 4,130
Residential 757 757
Residential w/ Village Center 726 535 191
Commercial 317 175 142
Industrial 1,115 239 876
IBT 1,310 24 1,286
Institutional 1,166 946 220
Parks & Open Space 2,910 2,062 848
Right of Way 1,019 452 567
Housing Units 18,774
SF 4,273 4,273 0
MF 14,501 9,255 5,246
Source: Otay Mesa Community Plan Update, Technical Infrastructure
Study, May 2013
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Refer to Appendix B for the proposed development plan of the Otay Mesa Community Plan
Update.
The City has identified discretionary actions and/or permit approval requirements for the Otay
Mesa Community Plan Update. The projected potable and recycled water demands and
resulting water supply requirements associated with the Otay Mesa Community Plan Update
have considered the discretionary actions and/or permit approvals and are incorporated into
and used in this WSA&V Report. The water demands for the proposed Otay Mesa
Community Plan Update are provided in Section 5 – Historical and Projected Water
Demands.
Section 4 – Otay Water District
The Otay WD is a municipal water district formed in 1956 pursuant to the Municipal Water
District Act of 1911 (Water Code §§ 71000 et seq.). The Otay WD joined the Water
Authority as a member agency in 1956 to acquire the right to purchase and distribute imported
water throughout its service area. The Water Authority is an agency responsible for the
wholesale supply of water to its 24 public agency members in San Diego County.
The Otay WD currently relies on the Water Authority for 100 percent of its treated potable
water supply. The Water Authority is the agency responsible for the supply of imported water
into San Diego County through its membership in MWD. The Water Authority currently
obtains the vast majority of its imported supply from MWD, but is in the process of
diversifying its available supplies.
The Otay WD provides water service to residential, commercial, industrial, and agricultural
customers, and for environmental and fire protection uses. In addition to providing water
throughout its service area, Otay WD also provides sewage collection and treatment services
to a portion of its service area known as the Jamacha Basin. The Otay WD also owns and
operates the Ralph W. Chapman Water Reclamation Facility (RWCWRF) to produce recycled
water. The RWCWRF has an effective treatment capacity of 1.2 mgd or about 1,300 AFY.
On May 18, 2007 an additional source of recycled water supply of at least 6 mgd
(approximately 6,720 AFY) became available to Otay WD from the City of San Diego’s
South Bay Water Reclamation Plant (SBWRP).
The Otay WD jurisdictional area is generally located within the south central portion of San
Diego County and includes approximately 125 square miles. The Otay WD serves portions of
the unincorporated communities of southern El Cajon, La Mesa, Rancho San Diego, Jamul,
Spring Valley, Bonita, and Otay Mesa, the eastern portion of the City of Chula Vista and a
portion of the City of San Diego on Otay Mesa. The Otay WD jurisdiction boundaries are
roughly bounded on the north by the Padre Dam Municipal Water District, on the northwest
by the Helix Water District, and on the west by the South Bay Irrigation District (Sweetwater
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Authority) and the City of San Diego. The southern boundary of Otay WD is the international
border with Mexico.
The planning area addressed in the Otay WD WRMP Update and the Otay WD 2010 UWMP
includes the land within the jurisdictional boundary of the Otay WD and those areas outside
of the present Otay WD boundaries considered to be in the Area of Influence of the Otay WD.
Figure 2-1 within the Otay WD WRMP Update shows the jurisdictional boundary of the Otay
WD and the Area of Influence. The planning area is approximately 143 square miles, of
which approximately 125 square miles are within the Otay WD current boundaries and
approximately 18 square miles are in the Area of Influence. The area east of Otay WD is
rural and currently not within any water purveyor jurisdiction and potentially could be served
by the Otay WD in the future if the need for imported water becomes necessary, as is the case
for the Area of Influence.
The City of Chula Vista, the City of San Diego, and the County of San Diego are the three
land use planning agencies within the Otay WD jurisdiction. Data on forecasts for land use
planning, demographics, economic projections, population, and the future rate of growth
within Otay WD were obtained from the SANDAG. SANDAG serves as the regional,
intergovernmental planning agency that develops and provides forecast information through
the year 2050. Population growth within the Otay WD service area is expected to increase
from the 2010 figure of approximately 198,616 to an estimated 284,997 by 2035. Land use
information used to develop water demand projections are based upon Specific or Sectional
Planning Areas, the Otay Ranch General Development Plan/Sub-regional Plan, East Otay
Mesa Specific Plan Area, San Diego County Community Plans, and City of San Diego Otay
Mesa Community Plan, City of Chula Vista, and County of San Diego General Plans.
The Otay WD long-term historic growth rate has been approximately 4 percent. The growth
rate has significantly slowed due to the current economic conditions and it is expected to slow
as the inventory of developable land is diminished.
Climatic conditions within the Otay WD service area are characteristically Mediterranean
near the coast, with mild temperatures year round. Inland areas are both hotter in summer and
cooler in winter, with summer temperatures often exceeding 90 degrees and winter
temperatures occasionally dipping to below freezing. Most of the region’s rainfall occurs
during the months of December through March. Average annual rainfall is approximately
12.17 inches per year.
Historic climate data were obtained from the Western Regional Climate Center for Station
042706 (El Cajon). This station was selected because its annual temperature variation is
representative of most of the Otay WD service area. While there is a station in the City of
Chula Vista, the temperature variation at the City of Chula Vista station is more typical of a
coastal environment than the conditions in most of the Otay WD service area.
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4.1 Urban Water Management Plan
In accordance with the California Urban Water Management Planning Act and recent
legislation, the Otay Water District Board adopted an UWMP in June 2011 and subsequently
submitted the plan to the California Department of Water Resources (DWR). The Otay WD
2010 UWMP is currently being reviewed by DWR. As required by law, the Otay WD 2010
UWMP includes projected water supplies required to meet future demands through 2035. In
accordance with Water Code Section 10910 (c)(2) and Government Code Section 66473.7
(c)(3), information from the Otay WD 2010 UWMP along with supplemental information
from the Otay WD WRMP Update have been utilized to prepare this WSA&V Report and are
incorporated herein by reference.
The state Legislature passed Senate Bill 7 as part of the Seventh Extraordinary Session (SBX
7-7) on November 10, 2009, which became effective February 3, 2010. This new law was the
water conservation component to the Delta legislation package and seeks to achieve a 20
percent statewide reduction in urban per capita water use in California by December 31, 2020.
Specifically, SBX 7-7 from this Extraordinary Session requires each urban retail water
supplier to develop urban water use targets to help meet the 20 percent reduction goal by 2020
(20x2020), and an interim water reduction target by 2015.
The SBX 7-7 target setting process includes the following: (1) baseline daily per capita water
use; (2) urban water use target; (3) interim water use target; (4) compliance daily per capita
water use, including technical bases and supporting data for those determinations. In order
for an agency to meet its 2020 water use target, each agency can increase its use of recycled
water to offset potable water use and also increase its water conservation measures. The
required water use targets for 2020 and an interim target for 2015 are determined using one of
four target methods – each method has numerous methodologies. The 2020 urban water use
target may be updated in a supplier’s 2015 UWMP.
In 2015, urban retail water suppliers will be required to report interim compliance followed by
actual compliance in 2020. Interim compliance is halfway between the baseline water use and
2020 target. Baseline, target, and compliance-year water use estimates are required to be
reported in gallons per capita per day (gpcd).
Failure to meet adopted targets will result in the ineligibility of a water supplier to receive
grants or loans administered by the State unless one (1) of two (2) exceptions is met.
Exception one (1) states a water supplier may be eligible if they have submitted a schedule,
financing plan, and budget to DWR for approval to achieve the per capita water use
reductions. Exception two (2) states a water supplier may be eligible if an entire water service
area qualifies as a disadvantaged community.
Otay WD has adopted Method 1 to set its 2015 interim and 2020 water use targets. Method 1
requires setting the 2020 water use target to 80 percent of baseline per capita water use target
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as provided in the State’s Draft 20x2020 Water Conservation Plan. The Otay WD 2015 target
is 171 gpcd and the 2020 gpcd target at 80 percent of baseline is 152 gpcd.
The Otay WD’s recent per capita water use has been declining to the point where current
water use already meets the 2020 target for Method 1. This recent decline in per capita water
use is largely due to drought water use restrictions, increased water costs, and poor economic
conditions. However, Otay WD’s effective water use awareness campaign and the enhanced
conservation mentality of its customers will likely result in some long-term carryover of these
reduced consumption rates.
Section 5 – Historical and Projected Water Demands
The projected demands for Otay WD are based on Specific or Sectional Planning Areas, the
Otay Ranch General Development Plan/Sub-regional Plan, the East Otay Mesa Specific Plan
Area, San Diego County Community Plans, and City of San Diego Otay Mesa Community
Plan, City of Chula Vista and County of San Diego General Plans. This land use information
is also used by SANDAG as the basis for its most recent forecast data. This land use
information is utilized in the preparation of the Otay WD WRMP Update and Otay WD 2010
UWMP to develop the forecasted demands and supply requirements.
In 1994, the Water Authority selected the Institute for Water Resources-Municipal and
Industrial Needs (MAIN) computer model to forecast municipal and industrial water use for
the San Diego region. The MAIN model uses demographic and economic data to project
sector-level water demands (i.e. residential and non-residential demands). This econometric
model has over a quarter of a century of practical application and is used by many cities and
water agencies throughout the United States. The Water Authority’s version of the MAIN
model was modified to reflect the San Diego region’s unique parameters and is known as
CWA-MAIN.
The foundation of the water demand forecast is the underlying demographic and economic
projections. In 1992, the Water Authority and SANDAG entered into a Memorandum of
Agreement (MOA), in which the Water Authority agreed to use the SANDAG current
regional growth forecast for water supply planning purposes. In addition, the MOA
recognizes that water supply reliability must be a component of San Diego County’s regional
growth management strategy required by Proposition C, as passed by the San Diego County
voters in 1988. The MOA ensures a strong linkage between local general plan land use
forecasts and water demand projections and resulting supply needs for the San Diego region.
Consistent with the previous CWA-MAIN modeling efforts, on February 26, 2010, the
SANDAG Board of Directors accepted the Series 12: 2050 Regional Growth Forecast. The
2050 Regional Growth Forecast will be used by SANDAG as the foundation for the next
Regional Comprehensive Plan update. SANDAG forecasts also are used by local
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governments for planning, including the San Diego County Water Authority 2010 Urban
Water Management Plan update. The City of San Diego Otay Mesa Community Plan Update
was included in SANDAG’s Series 12 regional growth forecast.
The municipal and industrial forecast also included an updated accounting of projected
conservation savings based on projected regional implementation of the California Urban
Water Conservation Council (CUWCC) Best Management Practices and SANDAG
demographic information for the period 2010 through 2035. These savings estimates were
then factored into the baseline municipal and industrial demand forecast.
A separate agricultural model, also used in prior modeling efforts, was used to forecast
agricultural water demands within the Water Authority service area. This model estimates
agricultural demand to be met by the Water Authority’s member agencies based on
agricultural acreage projections provided by SANDAG, crop distribution data derived from
the Department of Water Resources and the California Avocado Commission, and average
crop-type watering requirements based on California Irrigation Management Information
System data.
The Water Authority and MWD update their water demand and supply projections within
their jurisdictions utilizing the SANDAG most recent growth forecast to project future water
demands. This provides for the important strong link between demand and supply projections
to the land use plans of the cities and the county. This provides for consistency between the
retail and wholesale agencies water demand projections, thereby ensuring that adequate
supplies are and will be planned for the Otay WD existing and future water users. Existing
land use plans, any revisions to land use plans, and annexations are captured in the SANDAG
updated forecasts. The Water Authority and MWD will update their demand forecasts based
on the SANDAG most recent forecast approximately every five years to coincide with
preparation of their urban water management plans. Prior to the next forecast update, local
jurisdictions may require water supply assessment and/or verification reports consistent with
Senate Bills 610 and 221 for proposed land use developments that either have pending or
proposed annexations into the Otay WD, Water Authority, and MWD or that have revised
land use plans than originally anticipated. The Water Authority and MWD next forecast and
supply planning documents would then capture any increase or decrease in demands caused
by annexations or revised land use plans.
In evaluating the availability of sufficient water supply, the Otay Mesa Community Plan
Update proponents are required to participate in the development of alternative water supply
project(s). This can be achieved through payment of the New Water Supply Fee adopted by
the Otay Water District Board in May 2010. These water supply projects are in addition to
those identified as sustainable supplies in the current Water Authority and MWD UWMP,
IRP, Master Plans, and other planning documents. These new water supply projects are in
response to the regional water supply issues related to climatological, environmental, legal,
and other challenges that impact water source supply conditions, such as the court rulings
regarding the Sacramento-San Joaquin Delta and the current ongoing western states drought
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conditions. These new additional water supply projects are not currently developed and are in
various stages of the planning process. A few examples of these alternative water supply
projects include the Middle Sweetwater River Basin Groundwater Well project, the North
District Recycled Water Supply Concept, the Rosarito Ocean Desalination Facility project,
and the Rancho del Rey Groundwater Well project. The Water Authority and MWD next
forecast and supply planning documents would capture any increase in water supplies
resulting from any new water resources developed by the Otay WD.
In addition, MWD’s 2010 Regional Urban Water Management Plan identified potential
reserve supplies in the supply capability analysis (Tables 2-9, 2-10, and 2-11), which could be
available to meet any unanticipated demands. The Water Authority and MWD’s next forecast
and supply planning documents would capture any increase in necessary supply resources
resulting from any new water supply resources.
The Otay WD water demand projection methodology utilizes a component land use approach. This is
done by applying representative values of water use to the acreage of each land use type and then
aggregating these individual land use demand projections into an overall total demand for the Otay
WD. This is called the water duty method, and the water duty is the amount of water used in acre-
feet per acre per year. This approach is used for all the land use types except residential development where a
demand per dwelling unit was applied. In addition, commercial and industrial water use categories
are further subdivided by type including separate categories for golf courses, schools, jails,
prisons, hospitals, etc. where specific water demands are established.
To determine water duties for the various types of land use, the entire water meter database of the
Otay WD is utilized and sorted by the appropriate land use types. The metered consumption records
are then examined for each of the land uses, and water duties are determined for the various types of
residential, commercial, industrial, and institutional land uses. For example the water duty factors
for commercial and industrial land uses are estimated using 1,785 and 893 gallons per day per acre,
respectively. Residential water demand is established based on the same data but computed on a per-
dwelling unit basis. The focus is to ensure that for each of the residential land use categories (very
low, low, medium, and high densities), the demand criteria used is adequately represented
based upon actual data. This method is used because residential land uses constitute a
substantial percentage of the total developable planning area of the Otay WD.
The WRMP Update calculates potable water demand by taking the gross acreage of a site and
applying a potable water reduction factor (PWRF), which is intended to represent the
percentage of acreage to be served by potable water and that not served by recycled water for
irrigation. For industrial land use, as an example, the PWRF is 0.95 (i.e., 95% of the site is
assumed to be served by potable water, 5% of the site is assumed to be irrigated with recycled
water). The potable net acreage is then multiplied by the unit demand factor corresponding to
its respective land use. This approach is used in the WRMP Update for all the land use types
except residential development where a demand per dwelling unit is applied. In addition,
commercial and industrial water use categories are further subdivided by type including
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separate categories for golf courses, schools, jails, prisons, hospitals, etc. where specific water
demands are allocated.
By applying the established water duties to the proposed land uses, the projected water
demand for the entire Otay WD planning area at ultimate development is determined.
Projected water demands for the intervening years were determined using growth rate
projections consistent with data obtained from SANDAG and the experience of the Otay WD.
The historical and projected potable water demands for Otay WD are shown in Table 2.
Table 2
Historical and Projected Potable Water Fiscal Year Demands (AF)
Water Use Sectors 2005 2010 2015 2020 2025 2030 2035
Single Family 21,233 17,165 23,633 28,312 33,600 37,211 40,635
Multi-Family 3,095 3,605 3,444 4,126 4,897 5,423 5,922
Commercial & 1,657 2,243 1,844 2,209 2,622 2,904 3,171
Institutional & 2,262 1,867 2,518 3,017 3,580 3,965 4,330
Landscape 6,458 3,732 10,134 12,141 14,408 15,957 17,425
Other 2,426 584 2,700 3,235 3,839 4,252 4,643
Unaccounted for 547 23 608 729 865 958 1,046
Totals 37,668 29,270 44,883 53,768 63,811 70,669 77,171 Source: Otay Water District 2010 UWMP.
The historical and projected recycled water demands for Otay WD are shown in Table 3.
Table 3
Historical and Projected Recycled Water Fiscal Year Demands (AF)
Water Use Sector 2005 2010 2015 2020 2025 2030 2035
Landscape 4,090 4,000 4,400 5,000 5,800 6,800 8,000
Totals 4,090 4,000 4,400 5,000 5,800 6,800 8,000
Source: Otay Water District 2010 UWMP, Table 10.
Using the land use demand projection criteria as established in the Otay WD WRMP Update,
the current projected potable water demand for the proposed Otay Mesa Community Plan
Update is shown in Table 4, which totals approximately 4.70 mgd or about 5,273 AFY.
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Table 4
Otay Mesa Community Plan Updated Potable
Water Annual Average Demands
Location (Land Use) Quantity Unit Rate
Potable Water
Factor
Net Potable
Unit Rate
Average Demand
(gpd)
Multi-Family Residential 5,246 units 300 gpd/unit 85% 255 gpd/unit 1,337,730
Commercial/Office 142 acres 1,785 gpd/acre 90% 1,607 gpd/acre 228,123
Industrial 876 acres 893 gpd/acre 95% 848 gpd/acre 743,155
IBT 1,286 acres 1,800 gpd/acre 90% 1,620 gpd/acre 2,083,320
Institutional 220 acres 1,785 gpd/acre 80% 1,428 gpd/acre 314,160
Total 4,706,488
The current projected recycled water demand for the proposed Otay Mesa Community Plan
Update is provided in Table 5, which totals approximately 0.68 mgd or about 774 AFY,
representing about 13% of total Otay Mesa Community Plan Update demand.
Table 5
Otay Mesa Community Plan Updated Recycled Water Average Demands
Location (Land Use) Quantity
Recycled
Water
Factor
Net Recycled
Acreage Unit Rate
Average Demand
(gpd)
Multi-Family Residential 191 acres 15% 29 2,155 gpd/acre 61,741
Commercial/Office 142 acres 10% 14 2,155 gpd/acre 30,601
Industrial 876 acres 5% 44 2,155 gpd/acre 94,389
IBT
1,286
acres 10% 129 2,155 gpd/acre 277,133
Institutional 220 acres 20% 44 2,155 gpd/acre 94,820
Parks 61 acres 100% 61 2,155 gpd/acre 131,455
Total 321 690,139
5.1 Demand Management (Water Conservation)
Demand management, or water conservation is a critical part of the Otay WD 2010 UWMP
and its long term strategy for meeting water supply needs of the Otay WD customers. Water
conservation, is frequently the lowest cost resource available to any water agency. The goals
of the Otay WD water conservation programs are to:
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• Reduce the demand for more expensive, imported water.
• Demonstrate continued commitment to the Best Management Practices (BMP).
• Ensure a reliable water supply.
The Otay WD is signatory to the Memorandum of Understanding (MOU) Regarding Urban
Water Conservation in California, which created the California Urban Water Conservation
Council (CUWCC) in 1991 in an effort to reduce California’s long-term water demands.
Water conservation programs are developed and implemented on the premise that water
conservation increases the water supply by reducing the demand on available supply, which is
vital to the optimal utilization of a region’s water supply resources. The Otay WD
participates in many water conservation programs designed and typically operated on a shared
cost participation program basis among the Water Authority, MWD, and their member
agencies. The demands shown in Tables 2 and 3 take into account implementation of water
conservation measures within Otay WD.
As one of the first signatories to the MOU Regarding Urban Water Conservation in
California, the Otay WD has made BMP implementation for water conservation the
cornerstone of its conservation programs and a key element in its water resource management
strategy. As a member of the Water Authority, Otay WD also benefits from regional
programs performed on behalf of its member agencies. The BMP programs implemented by
Otay WD and regional BMP programs implemented by the Water Authority that benefit all
their member agencies are addressed in the Otay WD 2010 UWMP. In partnership with the
Water Authority, the County of San Diego, City of San Diego, City of Chula Vista, and
developers, the Otay WD water conservation efforts are expected to grow and expand. The
resulting savings directly relate to additional available water in the San Diego County region
for beneficial use within the Water Authority service area, including the Otay WD.
Additional conservation or water use efficiency measures or programs practiced by the Otay
WD include the following:
• Supervisory Control and Data Acquisition System
The Otay WD implemented and has operated for many years a Supervisory Control and
Data Acquisition (SCADA) system to control, monitor, and collect data regarding the
operation of the water system. The major facilities that have SCADA capabilities are the
water flow control supply sources, transmission network, pumping stations, and water
storage reservoirs. The SCADA system allows for many and varied useful functions.
Some of these functions provide for operating personnel to monitor the water supply
source flow rates, reservoir levels, turn on or off pumping units, etc. The SCADA system
aids in the prevention of water reservoir overflow events and increases energy efficiency.
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• Water Conservation Ordinance
California Water Code Sections 375 et seq. permit public entities which supply water at
retail to adopt and enforce a water conservation program to reduce the quantity of water
used by the people therein for the purpose of conserving water supplies of such public
entity. The Otay WD Board of Directors established a comprehensive water conservation
program pursuant to California Water Code Sections 375 et seq., based upon the need to
conserve water supplies and to avoid or minimize the effects of any future shortage. A
water shortage could exist based upon the occurrence of one or more of the following
conditions:
1. A general water supply shortage due to increased demand or limited supplies.
2. Distribution or storage facilities of the Water Authority or other agencies become
inadequate.
3. A major failure of the supply, storage, and distribution facilities of MWD, the
Water Authority, and/or Otay WD.
The Otay WD water conservation ordinance finds and determines that the conditions
prevailing in the San Diego County area require that the available water resources be put
to maximum beneficial use to the extent to which they are capable, and that the waste or
unreasonable use, or unreasonable method of use, of water be prevented and that the
conservation of such water be encouraged with a view to the maximum reasonable and
beneficial use thereof in the interests of the people of the Otay WD and for the public
welfare.
Otay WD is currently engaged in a number of conservation and water use efficiency activities.
Listed below are the current programs that are either on-going or were recently concluded:
• Residential Water Surveys: 1,349 completed since 1994
• Large Landscape Surveys: 194 completed since 1990
• Cash for Water Smart Plants Landscape Retrofit Program: over 217,600 square feet of
turf grass replaced with water wise plants since 2003
• Rotating Nozzles Rebated: 3,170
• Residential Weather-Based Irrigation Controller (WBIC) Incentive Program: 231
distributed or rebated since 2004
• Residential High Efficiency Clothes Washers: 7,187 rebates since 1994
• Residential ULFT/HET Rebate Program: 22,376 rebates provided between 1991-2010
• Outreach Efforts to Otay WD Customers - the Otay WD promotes its conservation
programs through staffing outreach events, bill inserts, articles in the Otay WD’s
quarterly customer Pipeline newsletter, direct mailings to Otay WD customers, the
Otay WD’s webpage and through the Water Authority’s marketing efforts.
• School Education Programs- the Otay WD funds school tours of the Water
Conservation Garden, co-funds Splash Labs, provides classroom water themed kits,
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maintains a library of school age appropriate water themed books, DVDs, and videos,
and runs both a school poster contest and a water themed photo contest.
• Water efficiency in new construction through Cal Green and the Model Water
Efficient Landscape Ordinance
• Focus on Commercial/Institutional/Industrial through Promoting MWD’s Save a Buck
(Commercial) Program in conjunction with the Otay WD’s own Commercial Process
Improvement Program
As a signatory to the MOU Regarding Urban Water Conservation in California, the Otay WD
is required to submit biannual reports that detail the implementation of current water
conservation practices. The Otay WD voluntarily agreed to implement the fourteen water
conservation Best Management Practices beginning in 1992. The Otay WD submits its report
to the CUWCC every two years. The Otay WD BMP Reports for 2005 to 2010, as well as the
BMP Coverage Report for 1999-2010, are included in the Otay WD 2010 UWMP.
The Otay Mesa Community Plan Update will implement the CUWCC Best Management
Practices for water conservation such as installation of ultra low flow toilets, development of
a water conservation plan, and potential beneficial use of recycled water, all of which are
typical requirements of development projects within the City of San Diego.
Section 6 - Existing and Projected Supplies
The Otay WD currently does not have an independent raw or potable water supply source.
The Otay WD is a member public agency of the Water Authority. The Water Authority is a
member public agency of MWD. The statutory relationships between the Water Authority and
its member agencies, and MWD and its member agencies, respectively, establish the scope of
the Otay WD entitlement to water from these two agencies.
The Water Authority through two delivery pipelines, referred to as Pipeline No. 4 and the La
Mesa Sweetwater Extension Pipeline, currently supply the Otay WD with 100 percent of its
potable water. The Water Authority in turn, currently purchases the majority of its water from
MWD. Due to the Otay WD reliance on these two agencies, this WSA&V Report includes
referenced documents that contain information on the existing and projected supplies, supply
programs, and related projects of the Water Authority and MWD. The Otay WD, Water
Authority, and MWD are actively pursuing programs and projects to diversify their water
supply resources.
The description of local recycled water supplies available to the Otay WD is also discussed
below.
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6.1 MWD Water District of Southern California 2005 Regional Urban
Water Management Plan
In November 2010, MWD adopted its 2010 RUWMP. The 2010 RUWMP provides MWD’s
member agencies, retail water utilities, cities, and counties within its service area with, among
other things, a detailed evaluation of the supplies necessary to meet future demands, and an
evaluation of reasonable and practical efficient water uses, recycling, and conservation
activities. During the preparation of the 2010 RUWMP, MWD also utilized the current
SANDAG regional growth forecast in calculating regional water demands for the Water
Authority service area.
6.1.1 Availability of Sufficient Supplies and Plans for Acquiring
Additional Supplies
MWD is a wholesale supplier of water to its member public agencies and obtains its supplies
from two primary sources: the Colorado River, via the Colorado River Aqueduct (CRA),
which it owns and operates, and Northern California, via the State Water Project (SWP). The
2010 RUWMP documents the availability of these existing supplies and additional supplies
necessary to meet future demands.
6.1.1.1 MWD Supplies
MWD’s Integrated Resources Plan (IRP) identifies a mix of resources (imported and local)
that, when implemented, will provide 100 percent reliability for full-service demands through
the attainment of regional targets set for conservation, local supplies, State Water Project
supplies, Colorado River supplies, groundwater banking, and water transfers. The 2010
update to the IRP (2010 IRP Update) includes a planning buffer supply intended to mitigate
against the risks associated with implementation of local and imported supply programs. The
planning buffer identifies an additional increment of water that could potentially be developed
if other supplies are not implemented as planned. As part of implementation of the planning
buffer, MWD periodically evaluates supply development to ensure that the region is not under
or over-developing supplies. Managed properly, the planning buffer will help ensure that the
southern California region, including San Diego County, will have adequate supplies to meet
future demands.
In November 2010, MWD adopted its 2010 RUWMP in accordance with state law. The
resource targets included in the preceding 2010 IRP Update serve as the foundation for the
planning assumptions used in the 2010 RUWMP. MWD’s 2010 RUWMP contains a water
supply reliability assessment that includes a detailed evaluation of the supplies necessary to
meet demands over a 25-year period in average, single dry year, and multiple dry year
periods. As part of this process, MWD also uses the current SANDAG regional growth
forecast in calculating regional water demands for the Water Authority’s service area.
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As stated in MWD’s 2010 RUWMP, that plan may be used as a source document for meeting
the requirements of SB 610 and SB 221 until the next scheduled update is completed in 2015.
The 2005 RUWMP includes a “Justifications for Supply Projections” in Appendix A.3, that
provides detailed documentation of the planning, legal, financial, and regulatory basis for
including each source of supply in the plan. A copy of MWD’s 2010 RUWMP can be found
on the World Wide Web at the following site address:
http://www.mwdh2o.com/mwdh2o/pages/yourwater/RUWMP/RUWMP_2010.pdf
Water supply agencies throughout California continue to face climatological, environmental,
legal, and other challenges that impact water source supply conditions, such as the court
rulings regarding the Sacramento-San Joaquin Delta and the current western states drought
conditions. Challenges such as these essentially always will be present. The regional water
supply agencies, the Water Authority and MWD, along with Otay WD nevertheless fully
intend to have sufficient, reliable supplies to serve demands.
6.1.2 MWD Capital Investment Plan
As part of MWD’s annual budget approval process, a Capital Investment Plan is prepared.
The cost, purpose, justification, status, progress, etc. of MWD’s infrastructure projects to
deliver existing and future supplies are documented in the Capital Investment Plan. The
financing of these projects is addressed as part of the annual budget approval process.
MWD’s Capital Investment Plan includes a series of projects identified from MWD studies of
projected water needs, which, when considered along with operational demands on aging
facilities and new water quality regulations, identify the capital projects needed to maintain
infrastructure reliability and water quality standards, improve efficiency, and provide future
cost savings. All projects within the Capital Investment Plan are evaluated against an
objective set of criteria to ensure they are aligned with the MWD’s goals of supply reliability
and quality.
6.2 San Diego County Water Authority Regional Water Supplies
The Water Authority has adopted plans and is taking specific actions to develop adequate
water supplies to help meet existing and future water demands within the San Diego region.
This section contains details on the supplies being developed by the Water Authority. A
summary of recent actions pertaining to development of these supplies includes:
• In accordance with the Urban Water Management Planning Act, the Water Authority
adopted their 2010 UWMP in June 2011. The updated Water Authority 2010 UWMP
identifies a diverse mix of local and imported water supplies to meet future demands.
A copy of the updated Water Authority 2010 UWMP can be found on the internet at
http://www.sdcwa.org/2010-urban-water-management-plan
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• Deliveries of conserved agricultural water from the Imperial Irrigation District (IID) to
San Diego County have increased annually since 2003, with 70,000 ac-ft of deliveries in
Fiscal Year (FY) 2010. These quantities will increase annually to 200,000 AFY by
2021, and then remain fixed for the duration of the transfer agreement.
• As part of the October 2003 Quantification Settlement Agreement (QSA), the Water
Authority was assigned MWD’s rights to 77,700 AFY of conserved water from the All-
American Canal (AAC) and Coachella Canal (CC) lining projects. Deliveries of this
conserved water from the CC reached the region in 2007 and deliveries from the AAC
reached the region in 2010. Expected supplies from the canal lining projects are
considered verifiable Water Authority supplies.
Through implementation of the Water Authority and member agency planned supply projects,
along with reliable imported water supplies from MWD, the region anticipates having
adequate supplies to meet existing and future water demands.
To ensure sufficient supplies to meet projected growth in the San Diego region, the Water
Authority uses the SANDAG most recent regional growth forecast in calculating regional
water demands. The SANDAG regional growth forecast is based on the plans and policies of
the land-use jurisdictions with San Diego County. The existing and future demands of the
member agencies are included in the Water Authority’s projections.
6.2.1 Availability of Sufficient Supplies and Plans for Acquiring
Additional Supplies
The Water Authority currently obtains imported supplies from MWD, conserved water from
the AAC and CC lining projects, and an increasing amount of conserved agricultural water
from IID. Of the twenty-seven member agencies that purchase water supplies from MWD,
the Water Authority is MWD’s largest customer.
Section 135 of MWD’s Act defines the preferential right to water for each of its member
agencies. As calculated by MWD, the Water Authority’s preferential right as of December
11, 2012 is 17.22 percent of MWD’s supply, while the Water Authority accounted for
approximately 25 percent of MWD’s total revenue. Under preferential rights, MWD could
allocate water without regard to historic water purchases or dependence on MWD. The Water
Authority and its member agencies are taking measures to reduce dependence on MWD
through development of additional supplies and a water supply portfolio that would not be
jeopardized by a preferential rights allocation. MWD has stated, consistent with Section 4202
of its Administrative Code that it is prepared to provide the Water Authority’s service area
with adequate supplies of water to meet expanding and increasing needs in the years ahead.
When and as additional water resources are required to meet increasing needs, MWD stated it
will be prepared to deliver such supplies. In Section ES-5 of their 2010 RUWMP, MWD
states that MWD has supply capacities that would be sufficient to meet expected demands
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from 2015 through 2035. MWD has plans for supply implementation and continued
development of a diversified resource mix including programs in the Colorado River
Aqueduct, State Water Project, Central Valley Transfers, local resource projects, and in-
region storage that enables the region to meet its water supply needs.
The Water Authority has made large investments in MWD’s facilities and will continue to
include imported supplies from MWD in the future resource mix. As discussed in the Water
Authority’s 2010 UWMP, the Water Authority and its member agencies are planning to
diversify the San Diego regions supply portfolio and reduce purchases from MWD.
As part of the Water Authority’s diversification efforts, the Water Authority is now taking
delivery of conserved agricultural water from IID and water saved from the AAC and CC
lining projects. The CC lining project is complete and the Water Authority has essentially
completed construction of the AAC lining project. Table 6 summarizes the Water Authority’s
supply sources with detailed information included in the sections to follow. Deliveries from
MWD are also included in Table 6, which is further discussed in Section 6.1 above. The
Water Authority’s member agencies provided the verifiable local supply targets for
groundwater, groundwater recovery, recycled water, and surface water, which are discussed in
more detail in Section 5 of the Water Authority’s 2010 UWMP.
Table 6
Projected Verifiable Water Supplies – Water Authority Service Area
Normal Year (AF)
Water Supply Sources 2015 2020 2025 2030 2035
Water Authority Supplies
MWD Supplies 358,189 230,601 259,694 293,239 323,838
Water Authority/IID Transfer 100,000 190,000 200,000 200,000 200,000
AAC and CC Lining Projects 80,200 80,200 80,200 80,200 80,200
Proposed Regional Seawater
Desalination (1) 0 56,000 56,000 56,000 56,000
Member Agency Supplies
Surface Water 48,206 47,940 47,878 47,542 47,289
Water Recycling 38,660 43,728 46,603 48,278 49,998
Groundwater 11,710 11,100 12,100 12,840 12,840
Groundwater Recovery 10,320 15,520 15,520 15,520 15,520
Total Projected Supplies 647,285 675,089 717,995 753,619 785,685
Source: Water Authority 2010 Urban Water Management Plan – Table 9-1.
Note 1: On November 29, 2012, the Water Authority approved a water purchase agreement with Poseidon for
48,000 AFY with the right to purchase up to 56,000 AFY
Section 5 of the Water Authority’s 2010 UWMP also includes a discussion on the local
supply target for seawater desalination. Seawater desalination supplies represent a significant
future local resource in the Water Authority’s service area.
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The Carlsbad Desalination Project (Project) is a fully-permitted seawater desalination plant
and conveyance pipeline designed to provide a highly reliable local supply of up to 56,000
AFY for the region. In 2020, the Project would account for approximately 8% of the total
projected regional supply and 30% of all locally generated water in San Diego County. If the
project becomes operational in 2016, it will more than double the amount of local supplies
developed in the region since 1991. The desalination plant itself will be fully financed, built,
and operated by Poseidon. The Water Authority will purchase water from the plant under a
water purchase agreement. The new pipeline connecting the desalination plant with the Water
Authority’s Second Aqueduct will be owned and operated by the Water Authority, but
responsibility for design and construction will reside with Poseidon through a separate
Design-Build Agreement. The Water Authority will be responsible for aqueduct
improvements, including the relining and rehabilitation of Pipeline 3 to accept desalinated
water under higher operating pressures, modifications to the San Marcos Vent that allows the
flow of water between Pipelines 3 and 4, and improvements at the Twin Oaks Valley Water
Treatment Plant necessary to integrate desalinated water into the Water Authority’s system
for optimal distribution to member agencies.
On July 22, 2010, the Board approved a Term Sheet between the Water Authority and
Poseidon Resources that outlined the key terms and conditions that would be detailed and
incorporated in a comprehensive Water Purchase Agreement (WPA). Beginning in October
2011 and under the direction of the Board’s Carlsbad Desalination Project Advisory Group,
staff began developing and negotiating with Poseidon a WPA consistent with the July 22,
2010 Board approved Term Sheet. The July 2010 Term Sheet also identified specific
conditions precedent to Board consideration of the WPA. On November 29, 2012, the Water
Authority Board adopted a resolution approving the Water Purchase Agreement (WPA).
The Water Authority’s existing and planned supplies from the IID transfer and canal lining
projects are considered “drought-proof” supplies and should be available at the yields shown
in Table 6 in normal water year supply and demand assessment. Single dry year and multiple
dry year scenarios are discussed in more detail in Section 9 of the Water Authority’s 2010
UWMP.
As part of preparation of a written water supply assessment and/or verification report, an
agency’s shortage contingency analysis should be considered in determining sufficiency of
supply. Section 11 of the Water Authority’s 2010 UWMP contains a detailed shortage
contingency analysis that addresses a regional catastrophic shortage situation and drought
management. The analysis demonstrates that the Water Authority and its member agencies,
through the Emergency Response Plan, Emergency Storage Project, and Drought
Management Plan (DMP) are taking actions to prepare for and appropriately handle an
interruption of water supplies. The DMP, adopted in May 2006, provides the Water Authority
and its member agencies with a series of potential actions to take when faced with a shortage
of imported water supplies from MWD due to prolonged drought or other supply shortfall
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conditions. The actions will help the region avoid or minimize the impacts of shortages and
ensure an equitable allocation of supplies throughout the San Diego region.
6.2.1.1 Water Authority-Imperial Irrigation District Water Conservation
and Transfer Agreement
The QSA was signed in October 2003, and resolves long-standing disputes regarding priority
and use of Colorado River water and creates a baseline for implementing water transfers. With
approval of the QSA, the Water Authority and IID were able to implement their Water
Conservation and Transfer Agreement. This agreement not only provides reliability for the San
Diego region, but also assists California in reducing its use of Colorado River water to its legal
allocation.
On April 29, 1998, the Water Authority signed a historic agreement with IID for the long-term
transfer of conserved Colorado River water to San Diego County. The Water Authority-IID
Water Conservation and Transfer Agreement (Transfer Agreement) is the largest agriculture-to-
urban water transfer in United States history. Colorado River water will be conserved by
Imperial Valley farmers who voluntarily participate in the program and then transferred to the
Water Authority for use in San Diego County.
Implementation Status
On October 10, 2003, the Water Authority and IID executed an amendment to the original 1998
Transfer Agreement. This amendment modified certain aspects of the 1998 Agreement to be
consistent with the terms and conditions of the QSA and related agreements. It also modified
other aspects of the agreement to lessen the environmental impacts of the transfer of conserved
water. The amendment was expressly contingent on the approval and implementation of the
QSA, which was also executed on October 10, 2003.
On November 5, 2003, IID filed a complaint in Imperial County Superior Court seeking
validation of 13 contracts associated with the Transfer Agreement and the QSA. Imperial
County and various private parties filed additional suits in Superior Court, alleging violations of
CEQA, the California Water Code, and other laws related to the approval of the QSA, the water
transfer, and related agreements. The lawsuits were coordinated for trial. The IID, Coachella
Valley Water District, MWD, the Water Authority, and state are defending these suits and
coordinating to seek validation of the contracts. In January 2010, a California Superior Court
judge ruled that the QSA and 11 related agreements were invalid, because one of the agreements
created an open-ended financial obligation for the state, in violation of California’s constitution.
The QSA parties appealed this decision and are continuing to seek validation of the contracts.
The appeal is currently pending in the Third District Court of Appeal. A stay of the trial court
judgment has been issued during the appeal. Implementation of the transfer provisions is
proceeding during litigation.
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Expected Supply
Deliveries into San Diego County from the transfer began in 2003 with an initial transfer of
10,000 AFY. The Water Authority received increasing amounts of transfer water each year,
according to a water delivery schedule contained in the transfer agreement. In 2012, the
Water Authority will receive 90,000 AF. The quantities will increase annually to 200,000
AFY by 2021 then remain fixed for the duration of the transfer agreement. The initial term of
the Transfer Agreement is 45 years, with a provision that either agency may extend the
agreement for an additional 30-year term.
During dry years, when water availability is low, the conserved water will be transferred under
the IID Colorado River rights, which are among the most senior in the Lower Colorado River
Basin. Without the protection of these rights, the Water Authority could suffer delivery
cutbacks. In recognition for the value of such reliability, the 1998 contract required the Water
Authority to pay a premium on transfer water under defined regional shortage circumstances.
The shortage premium period duration is the period of consecutive days during which any of the
following exist: 1) a Water Authority shortage; 2) a shortage condition for the Lower Colorado
River as declared by the Secretary; and 3) a Critical Year. Under terms of the October 2003
amendment, the shortage premium will not be included in the cost formula until Agreement Year
16.
Transportation
The Water Authority entered into a water exchange agreement with MWD on October 10, 2003,
to transport the Water Authority-IID transfer water from the Colorado River to San Diego
County. Under the exchange agreement, MWD will take delivery of the transfer water through
its Colorado River Aqueduct. In exchange, MWD will deliver to the Water Authority a like
quantity and quality of water. The Water Authority will pay MWD’s applicable wheeling rate
for each acre-foot of exchange water delivered. According to the water exchange agreement,
MWD will make delivery of the transfer water for 35 years, unless the Water Authority elects to
extend the agreement another 10 years for a total of 45 years.
Cost/Financing
The costs associated with the transfer are financed through the Water Authority’s rates and
charges. In the agreement between the Water Authority and IID, the price for the transfer water
started at $258 per acre-feet and increased by a set amount for the first seven years. In December
2009, the Water Authority and IID executed a fifth amendment to the water transfer agreement
that sets the price per acre-feet for transfer water for calendar years 2010 through 2015,
beginning at $405 per acre-feet in 2010 and increasing to $624 per acre-feet in 2015. For
calendar years 2016 through 2034, the unit price will be adjusted using an agreed-upon index.
The amendment also required the Water Authority to pay IID $6 million at the end of calendar
year 2009 and another $50 million on or before October 1, 2010, provided that a transfer
stoppage is not in effect as a result of a court order in the QSA coordinated cases. Beginning in
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2035, either the Water Authority or IID can, if certain criteria are met, elect a market rate price
through a formula described in the water transfer agreement.
The October 2003 exchange agreement between MWD and the Water Authority set the initial
cost to transport the conserved water at $253 per acre-feet. Thereafter, the price is set to be equal
to the charge or charges set by MWD’s Board of Directors pursuant to applicable laws and
regulation, and generally applicable to the conveyance of water by MWD on behalf of its
member agencies. The transportation charge in 2010 was $314 per acre-feet.
The Water Authority is providing $10 million to help offset potential socioeconomic impacts
associated with temporary land fallowing. IID will credit the Water Authority for these funds
during years 16 through 45. In 2007, the Water Authority prepaid IID an additional $10 million
for future deliveries of water. IID will credit the Water Authority for this up-front payment
during years 16 through 30.
As part of implementation of the QSA and water transfer, the Water Authority also entered into
an environmental cost sharing agreement. Under this agreement the Water Authority is
contributing a total of $64 million to fund environmental mitigation projects and the Salton Sea
Restoration Fund.
Written Contracts or Other Proof
The supply and costs associated with the transfer are based primarily on the following
documents:
Agreement for Transfer of Conserved Water by and between IID and the Water Authority
(April 29, 1998). This Agreement provides for a market-based transaction in which the Water
Authority would pay IID a unit price for agricultural water conserved by IID and transferred
to the Water Authority.
Revised Fourth Amendment to Agreement between IID and the Water Authority for Transfer of
Conserved Water (October 10, 2003). Consistent with the executed Quantification Settlement
Agreement (QSA) and related agreements, the amendments restructure the agreement and
modify it to minimize the environmental impacts of the transfer of conserved water to the Water
Authority.
Amended and Restated Agreement between MWD and Water Authority for the Exchange of
Water (October 10, 2003). This agreement was executed pursuant to the QSA and provides for
delivery of the transfer water to the Water Authority.
Environmental Cost Sharing, Funding, and Habitat Conservation Plan Development
Agreement among IID, Coachella Valley Water District (CVWD), and Water Authority
(October 10, 2003). This Agreement provides for the specified allocation of QSA-related
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environmental review, mitigation, and litigation costs for the term of the QSA, and for
development of a Habitat Conservation Plan.
Quantification Settlement Agreement Joint Powers Authority Creation and Funding
Agreement (October 10, 2003). The purpose of this agreement is to create and fund the QSA
Joint Powers Authority and to establish the limits of the funding obligation of CVWD, IID,
and Water Authority for environmental mitigation and Salton Sea restoration pursuant to SB
654 (Machado).
Fifth Amendment to Agreement Between Imperial Irrigation District and San Diego County
Water Authority for Transfer of Conserved Water (December 21, 2009). This agreement
implements a settlement between the Water Authority and IID regarding the base contract price
of transferred water.
Federal, State, and Local Permits/Approvals
Federal Endangered Species Act Permit. The U.S. Fish and Wildlife Service (USFWS) issued a
Biological Opinion on January 12, 2001, that provides incidental take authorization and certain
measures required to offset species impacts on the Colorado River regarding such actions.
State Water Resources Control Board (SWRCB) Petition. SWRCB adopted Water Rights Order
2002-0016 concerning IID and Water Authority’s amended joint petition for approval of a long-
term transfer of conserved water from IID to the Water Authority and to change the point of
diversion, place of use, and purpose of use under Permit 7643.
Environmental Impact Report (EIR) for Conservation and Transfer Agreement. As lead agency,
IID certified the Final EIR for the Conservation and Transfer Agreement on June 28, 2002.
U. S. Fish and Wildlife Service Draft Biological Opinion and Incidental Take Statement on the
Bureau of Reclamation's Voluntary Fish and Wildlife Conservation Measures and Associated
Conservation Agreements with the California Water Agencies (12/18/02). The U. S. Fish and
Wildlife Service issued the biological opinion/incidental take statement for water transfer
activities involving the Bureau of Reclamation and associated with IID/other California water
agencies' actions on listed species in the Imperial Valley and Salton Sea (per the June 28, 2002
EIR).
Addendum to EIR for Conservation and Transfer Agreement. IID as lead agency and Water
Authority as responsible agency approved addendum to EIR in October 2003.
Environmental Impact Statement (EIS) for Conservation and Transfer Agreement. Bureau of
Reclamation issued a Record of Decision on the EIS in October 2003.
CA Department of Fish and Game California Endangered Species Act Incidental Take Permit
#2081-2003-024-006). The California Department of Fish and Game issued this permit
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(10/22/04) for potential take effects on state-listed/fully protected species associated with
IID/other California water agencies' actions on listed species in the Imperial Valley and Salton
Sea (per the June 28, 2002 EIR).
California Endangered Species Act (CESA) Permit. A CESA permit was issued by California
Department of Fish and Game (CDFG) on April 4, 2005, providing incidental take authorization
for potential species impacts on the Colorado River.
6.2.1.2 All-American Canal and Coachella Canal Lining Projects
As part of the QSA and related contracts, the Water Authority was assigned MWD’s rights to
77,700 AFY of conserved water from projects that will line the All-American Canal (AAC)
and Coachella Canal (CC). The projects will reduce the loss of water that currently occurs
through seepage, and the conserved water will be delivered to the Water Authority. This
conserved water will provide the San Diego region with an additional 8.5 million AF over the
110-year life of the agreement.
Implementation Status
The CC lining project began in November 2004 and was completed in 2006. Deliveries of
conserved water to the Water Authority began in 2007. The project constructed a 37-mile
parallel canal adjacent to the CC. The AAC lining project was begun in 2005 and was
completed in 2010. The lining project constructed a concrete-lined canal parallel to 24 miles
of the existing AAC from Pilot Knob to Drop 3.
In July 2005, a lawsuit (CDEM v United States, Case No. CV-S-05-0870-KJD-PAL) was filed
in the U. S. District Court for the District of Nevada on behalf of U.S. and Mexican groups
challenging the lining of the AAC. The lawsuit, which names the Secretary of the Interior as
a defendant, claims that seepage water from the canal belongs to water users in Mexico.
California water agencies note that the seepage water is actually part of California's Colorado
River allocation and not part of Mexico's allocation. The plaintiffs also allege a failure by the
United States to comply with environmental laws. Federal officials have stated that they
intend to vigorously defend the case.
Expected Supply
The AAC lining project makes 67,700 AF of Colorado River water per year available for
allocation to the Water Authority and San Luis Rey Indian water rights settlement parties.
The CC lining project makes 26,000 AF of Colorado River water each year available for
allocation. The 2003 Allocation Agreement provides for 16,000 AFY of conserved canal
lining water to be allocated to the San Luis Rey Indian Water Rights Settlement Parties. The
remaining amount, 77,700 AFY, is to be available to the Water Authority, with up to an
additional 4,850 AFY available to the Water Authority depending on environmental
requirements from the CC lining project. For planning purposes, the Water Authority
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assumes that 2,500 AF of the 4,850 AF will be available each year for delivery, for a total of
80,200 AFY of that supply. According to the Allocation Agreement, IID has call rights to a
portion (5,000 AFY) of the conserved water upon termination of the QSA for the remainder
of the 110 years of the Allocation Agreement and upon satisfying certain conditions. The
term of the QSA is for up to 75 years.
Transportation
The October 10, 2003, Exchange Agreement between the Water Authority and MWD also
provides for the delivery of the conserved water from the canal lining projects. The Water
Authority will pay MWD’s applicable wheeling rate for each acre-foot of exchange water
delivered. In the Agreement, MWD will deliver the canal lining water for the term of the
Allocation Agreement (110 years).
Cost/Financing
Under California Water Code Section 12560 et seq., the Water Authority received $200
million in state funds for construction of the canal lining projects. In addition, $20 million
was made available from Proposition 50 and $36 million from Proposition 84. The Water
Authority was responsible for additional expenses above the funds provided by the state.
The rate to be paid to transport the canal lining water will be equal to the charge or charges set
by MWD’s Board of Directors pursuant to applicable law and regulation and generally
applicable to the conveyance of water by MWD on behalf of its member agencies.
In accordance with the Allocation Agreement, the Water Authority will also be responsible
for a portion of the net additional Operation, Maintenance, and Repair (OM&R) costs for the
lined canals. Any costs associated with the lining projects as proposed, are to be financed
through the Water Authority’s rates and charges.
Written Contracts or Other Proof
The expected supply and costs associated with the lining projects are based primarily on the
following documents:
U.S. Public Law 100-675 (1988). Authorized the Department of the Interior to reduce seepage
from the existing earthen AAC and CC. The law provides that conserved water will be made
available to specified California contracting water agencies according to established priorities.
California Department of Water Resources - MWD Funding Agreement (2001). Reimburse
MWD for project work necessary to construct the lining of the CC in an amount not to exceed
$74 million. Modified by First Amendment (2004) to replace MWD with the Authority.
Modified by Second Amendment (2004) to increase funding amount to $83.65 million, with
addition of funds from Proposition 50.
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California Department of Water Resources - IID Funding Agreement (2001). Reimburse IID for
project work necessary to construct a lined AAC in an amount not to exceed $126 million.
MWD - CVWD Assignment and Delegation of Design Obligations Agreement (2002). Assigns
design of the CC lining project to CVWD.
MWD - CVWD Financial Arrangements Agreement for Design Obligations (2002). Obligates
MWD to advance funds to CVWD to cover costs for CC lining project design and CVWD to
invoice MWD to permit the Department of Water Resources to be billed for work completed.
Allocation Agreement among the United States of America, The MWD Water District of
Southern California, Coachella Valley Water District, Imperial Irrigation District, San Diego
County Water Authority, the La Jolla, Pala, Pauma, Rincon, and San Pasqual Bands of Mission
Indians, the San Luis Rey River Indian Water Authority, the City of Escondido, and Vista
Irrigation District (October 10, 2003). This agreement includes assignment of MWD’s rights
and interest in delivery of 77,700 AF of Colorado River water previously intended to be
delivered to MWD to the Water Authority. Allocates water from the AAC and CC lining
projects for at least 110 years to the Water Authority, the San Luis Rey Indian Water Rights
Settlement Parties, and IID, if it exercises its call rights.
Amended and Restated Agreement between MWD and Water Authority for the Exchange of
Water (October 10, 2003). This agreement was executed pursuant to the QSA and provides for
delivery of the conserved canal lining water to the Water Authority.
Agreement between MWD and Water Authority regarding Assignment of Agreements related to
the AAC and CC Lining Projects. This agreement was executed in April 2004 and assigns
MWD's rights to the Water Authority for agreements that had been executed to facilitate funding
and construction of the AAC and CC lining projects.
Assignment and Delegation of Construction Obligations for the Coachella Canal Lining Project
under the Department of Water Resources Funding Agreement No. 4600001474 from the San
Diego County Water Authority to the Coachella Valley Water District, dated September 8, 2004.
Agreement Regarding the Financial Arrangements between the San Diego County Water
Authority and Coachella Valley Water District for the Construction Obligations for the
Coachella Canal Lining Project, dated September 8, 2004.
Agreement No. 04-XX-30-W0429 Among the United States Bureau of Reclamation, the
Coachella Valley Water District, and the San Diego County Water Authority for the
Construction of the Coachella Canal Lining Project Pursuant to Title II of Public Law 100-675,
dated October 19, 2004.
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California Water Code Section 12560 et seq. This Water Code Section provides for $200
million to be appropriated to the Department of Water Resources to help fund the canal lining
projects in furtherance of implementing California’s Colorado River Water Use Plan.
California Water Code Section 79567. This Water Code Section identifies $20 million as
available for appropriation by the California Legislature from the Water Security, Clean
Drinking Water, Coastal, and Beach Protection Fund of 2002 (Proposition 50) to DWR for
grants for canal lining and related projects necessary to reduce Colorado River water use.
According to the Allocation Agreement, it is the intention of the agencies that those funds will be
available for use by the Water Authority, IID, or CVWD for the AAC and CC lining projects.
California Public Resources Code Section 75050(b)(1). This section identifies up to $36 million
as available for water conservation projects that implement the Allocation Agreement as defined
in the Quantification Settlement Agreement.
Federal, State, and Local Permits/Approvals
AAC Lining Project Final EIS/EIR (March 1994). A final EIR/EIS analyzing the potential
impacts of lining the AAC was completed by the Bureau of Reclamation (Reclamation) in March
1994. A Record of Decision was signed by Reclamation in July 1994, implementing the
preferred alternative for lining the AAC. A re-examination and analysis of these environmental
compliance documents by Reclamation in November 1999 determined that these documents
continued to meet the requirements of the NEPA and the CEQA and would be valid in the future.
CC Lining Project Final EIS/EIR (April 2001). The final EIR/EIS for the CC lining project was
completed in 2001. Reclamation signed the Record of Decision in April 2002. An amended
Record of Decision has also been signed to take into account revisions to the project description.
Mitigation, Monitoring, and Reporting Program for Coachella Canal Lining Project, SCH
#1990020408; prepared by Coachella Valley Water District, May 16, 2001.
Environmental Commitment Plan for the Coachella Canal Lining Project, approved by the US
Bureau of Reclamation (Boulder City, NV) on March 4, 2003.
Environmental Commitment Plan and Addendum to the All-American Canal Lining Project
EIS/EIR California State Clearinghouse Number SCH 90010472 (June 2004, prepared by
IID).
Addendum to Final EIS/EIR and Amendment to Environmental Commitment Plan for the
All-American Canal Lining Project (approved June 27, 2006, by IID Board of Directors).
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6.2.1.3 Carlsbad Seawater Desalination Project
Development of seawater desalination in San Diego County will assist the region in
diversifying its water resources, reduce dependence on imported supplies, and provide a new
drought-proof, locally treated water supply. The Carlsbad Desalination Project is a fully-
permitted seawater desalination plant and conveyance pipeline currently being developed by
Poseidon, a private investor–owned company that develops water and wastewater
infrastructure. The project, located at the Encina Power Station in Carlsbad, has been in
development since 1998 and was incorporated into the Water Authority’s 2003 Water
Facilities Master Plan and 2010 UWMP. The Carlsbad Desalination Project has obtained all
required permits and environmental clearances and, when completed, will provide a highly
reliable local supply of 48,000 to 56,000 AFY for the region.
Implementation Status
The Project has obtained all required permits and environmental clearances, including the
following:
• National Pollutant Discharge Elimination System (NPDES) Discharge Permit
(Regional Water Quality Control Board)
• Conditional Drinking Water Permit (California Department of Health Services)
• State Lands Commission Lease (State Lands Commission)
• Coastal Development Permit (California Coastal Commission)
IDE Technologies, a worldwide leader in the design, construction, and operation of
desalination plants, was selected by Poseidon to be the desalination process contractor for the
Project.
On July 22, 2010, the Board approved a Term Sheet between the Water Authority and
Poseidon Resources that outlined the key terms and conditions that would be detailed and
incorporated in a comprehensive Water Purchase Agreement (WPA). Beginning in October
2011 and under the direction of the Board’s Carlsbad Desalination Project Advisory Group,
staff began developing and negotiating with Poseidon a WPA consistent with the July 22,
2010 Board approved Term Sheet. The July 2010 Term Sheet also identified specific
conditions precedent to Board consideration of the WPA.
On November 29, 2012, the Water Authority Board adopted a resolution approving the
Design-Build Agreement between the Water Authority and Poseidon. The Design-Build
Agreement establishes the commercial and technical terms for implementation of the
desalination product pipeline improvements. These improvements consist of an approximate
10-mile long, 54-inch diameter conveyance pipeline connecting the Desalination Plant to the
Water Authority’s Second Aqueduct. The pipeline will generally be constructed within
improved streets in commercial and industrial areas in the cities of Carlsbad, Vista, and San
Marcos. The Water Authority will own the Project Water Pipeline Improvements upon
execution of the Design-Build Agreement, and upon completion and acceptance of
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construction, the Water Authority will assume operational control of all pipeline
improvements.
Expected Supply
When completed, the Project will provide a highly reliable local supply of 48,000 to 56,000
AFY of supply for the region, available in both normal and dry hydrologic conditions. In
2020, the Project would account for approximately 8% of the total projected regional supply
and 30% of all locally generated water in San Diego County. When the project becomes
operational in 2016, it will more than double the amount of local supplies developed in the
region since 1991.
Transportation
On November 29, 2012, the Water Authority Board adopted a resolution approving the
Design-Build Agreement between the Water Authority and Poseidon. The Design-Build
Agreement establishes the commercial and technical terms for implementation of the
desalination product pipeline improvements. These improvements consist of an approximate
10-mile long, 54-inch diameter conveyance pipeline connecting the Desalination Plant to the
Water Authority’s Second Aqueduct. The pipeline will generally be constructed within
improved streets in commercial and industrial areas in the cities of Carlsbad, Vista, and San
Marcos. The Water Authority will own the Project Water Pipeline Improvements upon
execution of the Design-Build Agreement, and upon completion and acceptance of
construction, the Water Authority will assume operational control of all pipeline
improvements.
The Water Authority will be responsible for aqueduct improvements, including the relining
and rehabilitation of Pipeline 3 to accept desalinated water under higher operating pressures,
modifications to the San Marcos Vent that allows the flow of water between Pipelines 3 and
4, and improvements at the Twin Oaks Valley Water Treatment Plant necessary to integrate
desalinated water into the Water Authority’s system for optimal distribution to member
agencies.
Cost/Financing
The plant and the offsite pipeline will be financed through tax exempt government bonds
issued for the Water Authority by the California Pollution Control Financing Authority
(CPCFA). On November 29, 2012, the Water Authority Board adopted a resolution
approving agreements to accomplish tax exempt project financing through the CPCFA.
A preliminary September 2012 unit cost estimate was $2,300/AF. The Water Authority’s
water purchase costs will be financed through Water Authority rates and charges. Poseidon is
financing the capital cost of the Project with a combination of private equity and tax-exempt
Private Activity Bonds.
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Written Contracts or Other Proof
The expected supply and costs associated with the Carlsbad Desalination Project are based
primarily on the following documents:
Development Agreement between City of Carlsbad and Poseidon (October 2009). A
Development Agreement between Carlsbad and Poseidon was executed on October 5, 2009
Agreement of Term Sheet between the Water Authority and Poseidon Resources (July 2010).
The Water Authority approved the Term Sheet at its July 2010 Board Meeting. The Term
Sheet outlines the terms and conditions of a future Water Purchase Agreement with Poseidon
and allocates the resources to prepare the draft Water Purchase Agreement.
Federal, State, and Local Permits/Approvals
Carlsbad Desalination Project Final EIR
The City of Carlsbad, acting as lead agency for Carlsbad Seawater Desalination Plant and
appurtenant facilities proposed by Poseidon (the “Project”) prepared an Environmental Impact
Report for the Project in compliance with the California Environmental Quality Act
(“CEQA”), which the City of Carlsbad certified on June 13, 2006.
http://www.sdcwa.org/rwfmp-peir
The City of Carlsbad prepared an Addendum to the Carlsbad EIR (“Addendum”) which was
adopted on September 15, 2009, and reflects minor and immaterial design modifications to
the Project site plan, appurtenant facilities, and water delivery pipeline network.
The environmental documents and permits are found at the following link:
http://www.carlsbad-desal.com/EIR.asp
The Water Authority, as a Responsible Agency under CEQA, adopted a resolution on
November 29, 2012 approving a Second Addendum to the Carlsbad Precise Development
Plan and Desalination Plant Final EIR and First Addendum that evaluates the environmental
impacts of several proposed facility modifications that are necessary to allow for operational
flexibility and efficiency in receiving and delivering desalination product water. These
modifications include: a realignment of a portion of the approved desalination pipeline, the
addition of chemical injection at the approved San Marcos Aqueduct Connection site, the
relining of a portion of Pipeline 3, the addition of a pipeline and expanded flow control
facility at Twin Oaks Valley Water Treatment Plant and a replacement of the San Marcos
Vent on Pipeline 4. Impacts associated with the proposed modifications would not result in a
new significant impact or substantial increase in the severity of impacts previously evaluated
in the Carlsbad FEIR or the First Addendum. There are no substantial changes to the
circumstances under which the project will be undertaken, and no new information of
substantial importance that was not known and could not have been known when the FEIR
was certified and the First Addendum was approved, and that have since been identified.
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Therefore, the Second Addendum satisfies the CEQA requirements for the proposed project
modifications.
Regional Water Facilities Master Plan EIR
On November 20, 2003, the Water Authority Board of Directors adopted Resolution No.
2003-34 certifying the Final Program Environmental Impact Report (State Clearinghouse No.
2003021052) for the Water Authority’s Regional Water Facilities Master Plan Project (the
“Master Plan EIR”), which evaluated, among other things, potential growth inducing impacts
associated with new water supplies to the region including, but not limited to, up to 150
million gallons per day (mgd) of new supplies from seawater desalination. This certification
included a 50 mgd plant located in the City of Carlsbad.
The environmental documents and permits are found at the following link:
http://www.sdcwa.org/rwfmp-peir
Sub regional Natural Community Conservation Plan/Habitat Conservation Plan (NCCP/HCP)
On December 8, 2010, the Board adopted Resolution No. 2010-18 certifying a Final
environmental Impact Report/Environmental Impact Statement for the San Diego County
Water Authority Subregional Natural Community Conservation Plan/Habitat Conservation
Plan (State Clearinghouse No. 2003121012) (the “Habitat Conservation Plan EIR/EIS”),
which Plan was implemented on December 28, 201.
The environmental documents and permits are found at the following link:
http://www.sdcwa.org/nccp-hcp
Twin Oaks Valley Water Treatment Plant EIR
On September 8, 2005, the Board adopted Resolution No. 2005-31 certifying a Final
Environmental Impact Report for the Twin Oaks Valley Water Treatment Plant Project (State
Clearinghouse No. 20040071034) (the “Twin Oaks EIR”), which project was constructed as a
100 MGD submerged membrane water treatment facility, including treated water holding
tanks and distribution pipelines and other facilities, consistent with the conditions and
mitigation measures included in the Twin Oaks EIR.
http://www.sdcwa.org/twin-oaks-valley-treatment-plant-final-eir
2010 Urban Water Management Plan
http://www.sdcwa.org/2010-urban-water-management-plan
Drinking Water Permit (October 2006). The California Department of Health Services
approved the Conditional Drinking Water Permit on October 19, 2006.
Coastal Development Permit
The Project is fully permitted, with the California Coastal Commission issuing the following
permits: Coastal Development Permit No. E-06-013, Energy Minimization and Greenhouse
Gas Reduction Plan (December 2008), Marine Life Mitigation Plan (December 2008),
Erosion Control Plan (November 2009), Landscaping Plan (September 2009), Lighting Plan
(August 2009), Construction Plan (September 2009), and Water Pollution Control Plan
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(September 2009); the California Department of Public Health issuing Conceptual Approval
Letter dated October 19, 2006; the California Regional Water Quality Control Board issuing
NPDES Permit No. CA0109223 and Notice of Intent to Discharge for Storm Water
Associated with Construction Activities (WDID #9 37C361181); the City of Carlsbad issuing
Redevelopment Permit RP 05-12(A), Specific Plan 144 with Amendment 144(J) SP 144(J),
Habitat Management Plan Permit Amendment HMP 05-08(A), Precise Development Plan
PDP 00-02(B), Mitigation Monitoring and Reporting Program for EIR 03-05(A),
Development Agreement DA 05-01(A), Standard Urban Storm Water Mitigation Program
(September 2009), and Coastal Development Permit 04-41; the State of California State
Lands Commission issuing an Amendment of Lease PRC 8727.1 (August 2008).
The environmental documents and permits are found at the following link:
http://www.sdcwa.org/carlsbad-desalination-project-approved-permits-and-plans
State Lands Commission Lease Application (Amendment of Lease PRC 8727.1 August
2008). Amends lease of land by Cabrillo Power I LLC (Cabrillo) from the State Lands
Commission for the lands where the project will be constructed. Cabrillo and Poseidon
entered into agreement on July 1, 2003, authorizing Poseidon to use those lands to construct
the project.
6.2.2 Water Authority Capital Improvement Program and Financial
Information
The Water Authority’s Capital Improvement Program (CIP) can trace its beginnings to a
report approved by the Board in 1989 entitled, The Water Distribution Plan, and a Capital
Improvement Program through the Year 2010. The Water Distribution Plan included ten
projects designed to increase the capacity of the aqueduct system, increase the yield from
existing water treatment plants, obtain additional supplies from MWD, and increase the
reliability and flexibility of the aqueduct system. Since that time the Water Authority has
made numerous additions to the list of projects included in its CIP as the region’s
infrastructure needs and water supply outlook have changed.
The current list of projects included in the CIP is based on the results of planning studies,
including the 2005 UWMP and the 2002 Regional Water Facilities Master Plan. These CIP
projects, which are most recently described in the Water Authority’s Adopted Multi-Year
Budget, include projects valued at $3.50 billion. These CIP projects are designed to meet
projected water supply and delivery needs of the member agencies through 2035. The
projects include a mix of new facilities that will add capacity to existing conveyance, storage,
and treatment facilities, as well as repair and replace aging infrastructure:
• Asset Management – The primary components of the asset management projects
include relining and replacing existing pipelines and updating and replacing metering
facilities.
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• New Facilities – These projects will expand the capacity of the aqueduct system,
complete the projects required under the Quantification Settlement Agreement (QSA),
and evaluate new supply opportunities.
• Emergency Storage Project – Projects remaining to be completed under the ongoing
ESP include the San Vicente Dam Raise, the Lake Hodges projects, and a new pump
station to extend ESP supplies to the northern reaches of the Water Authority service
area.
• Other Projects – This category includes out-of-region groundwater storage, increased
local water treatment plant capacity, and projects that mitigate environmental impacts
of the CIP.
The Water Authority Board of Directors is provided a semi-annual and annual report on the
status of development of the CIP projects. As described in the Water Authority’s biennial
budget, a combination of long and short term debt and cash (pay-as-you-go) will provide
funding for capital improvements. Additional information is included in the Water
Authority’s biennial budget, which also contains selected financial information and
summarizes the Water Authority’s investment policy.
6.3 Otay Water District
The Otay WD 2010 Water Resources Master Plan Update and the 2010 Urban Water
Management Plan contain comparisons of projected supply and demands through the year
2035. Projected potable water resources to meet planned demands as documented were
planned to be supplied entirely with imported water received from the Water Authority.
Recycled water resources to meet projected demands are planned to be supplied from local
wastewater treatment plants. The Otay WD currently has no local supply of raw water,
potable water, or groundwater resources.
The development and/or acquisition of potential groundwater, recycled water market
expansion, and seawater desalination supplies by the Otay WD have evolved and are planned
to occur in response to the regional water supply issues. These water supply projects are in
addition to those identified as sustainable supplies in the current Water Authority and MWD
UWMP, IRP, Master Plans, and other planning documents. These new additional water
supply projects are not currently developed and are in various stages of the planning process.
These local and regional water supply projects will allow for less reliance upon imported
water and are considered a new water supply resource for the Otay WD.
The Otay WD expansion of the market areas for the use of recycled water within the
watersheds upstream of the Sweetwater Reservoir, Otay Mesa, and the Lower Otay Reservoir
will increase recycled water use and thus require less dependence on imported water for
irrigation purposes.
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The supply forecasts contained within this WSA&V Report do consider development and/or
acquisition of potential groundwater, recycled water market expansion, and seawater
desalination supplies by the Otay WD.
6.3.1 Availability of Sufficient Supplies and Plans for Acquiring
Additional Supplies
The availability of sufficient potable water supplies and plans for acquiring additional potable
water supplies to serve existing and future demands of the Otay WD is founded upon the
preceding discussions regarding MWD’s and the Water Authority’s water supply resources
and water supplies to be acquired by the Otay WD. Historic imported water deliveries from
the Water Authority to Otay WD and recycled water deliveries from the Otay WD Ralph W.
Chapman Water Reclamation Facility (RWCWRF) are shown in Table 7. Since the year 2000
through mid May 2007, recycled water demand has exceeded the recycled water supply
capability typically in the summer months. The RWCWRF is limited to a maximum
production of about 1,300 AFY. The recycled water supply shortfall had been met by
supplementing with potable water into the recycled water storage system as needed by adding
potable water supplied by the Water Authority. On May 18, 2007 an additional source of
recycled water supply from the City of San Diego’s South Bay Water Reclamation Plant
(SBWRP) became available. The supply of recycled water from the SBWRP is a result of
essentially completing construction and commencement of operations of the transmission,
storage, and pump station systems necessary to link the SBWRP recycled water supply source
to the existing Otay WD recycled water system.
Table 7
Historic Imported and Local Water Supplies
Otay Water District
Calendar
Year
Imported Water
(AF)
Recycled Water
(AF)
Total
(AF)
1980 12,558 0 12,558
1985 14,529 0 14,529
1990 23,200 0 23,200
1995 20,922 614 21,536
2000 29,901 948 30,849
2005 37,678 1,227 38,905
2010 29,270 4,090 33,270
2011 30,158 3,776 34,038
2012 31,268 4,155 35,423
Source: Otay Water District operational records.
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6.3.1.1 Imported and Regional Supplies
The availability of sufficient imported and regional potable water supplies to serve existing
and planned uses within Otay WD is demonstrated in the above discussion on MWD and the
Water Authority’s water supply reliability. The County Water Authority Act, Section 5
subdivision 11, states that the Water Authority “as far as practicable, shall provide each of its
member agencies with adequate supplies of water to meet their expanding and increasing
needs.” The Water Authority provides between 75 to 95 percent of the total supplies used by
its 24 member agencies, depending on local weather and supply conditions. In calendar year
2010 the supply to Otay WD was 29,270 AF of supply from the Water Authority. An
additional 4,090 AF of recycled water came from the City of San Diego and from the
District’s Ralph W. Chapman Water Reclamation Facility. The demand for potable water
within the Otay WD is expected to increase to about 77,177 AF by 2035 as per the Otay WD
2010 UWMP.
Potable Water System Facilities
The Otay WD continues to pursue diversification of its water supply resources to increase
reliability and flexibility. The Otay WD also continues to plan, design, and construct potable
water system facilities to obtain these supplies and to distribute potable water to meet
customer demands. The Otay WD has successfully negotiated two water supply
diversification agreements that enhance reliability and flexibility, which are briefly described
as follows.
• The Otay WD entered into an agreement with the City of San Diego, known as the Otay
Water Treatment Plant (WTP) Agreement. The Otay WTP Agreement provides for raw
water purchase from the Water Authority and treatment by the City of San Diego at their
Otay WTP for delivery to Otay WD. The supply system link to implement the Otay
WTP Agreement to access the regions raw water supply system and the local water
treatment plant became fully operational in August 2005. This supply link consists of the
typical storage, transmission, pumping, flow measurement, and appurtenances to receive
and transport the treated water to the Otay WD system. The City of San Diego
obligation to supply 10 mgd of treated water under the Otay WTP Agreement is
contingent upon there being available 10 mgd of surplus treatment capacity in the Otay
WTP until such time as Otay WD pays the City of San Diego to expand the Otay WTP to
meet the Otay WD future needs. In the event that the City of San Diego’s surplus is
projected to be less than 10 mgd the City of San Diego will consider and not
unreasonably refuse the expansion of the Otay WTP to meet the Otay WD future needs.
The Otay WTP existing rated capacity is 40 mgd with an actual effective capacity of
approximately 34 mgd. The City of San Diego’s typical demand for treated water from
the Otay WTP is approximately 20 mgd. It is at the City of San Diego’s discretion to
utilize either imported raw water delivered by the Water Authority Pipeline No. 3 or local
water stored in Lower Otay Reservoir for treatment to supply the Otay WD demand.
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• The Otay WD entered into an agreement with the Water Authority, known as the East
County Regional Treated Water Improvement Program (ECRTWIP Agreement). The
ECRTWIP Agreement provides for transmission of raw water to the Helix WD R. M.
Levy WTP for treatment and delivery to Otay WD. The supply system link to implement
the ECRTWIP Agreement is complete allowing access to the regions raw water supply
system and the local water treatment plant. This supply link consists of the typical
transmission, pumping, storage, flow control, and appurtenances to receive and transport
the potable water from the R. M. Levy WTP to Otay WD. The Otay WD is required to
take a minimum of 10,000 AFY of treated water from the R.M. Levy WTP supplied
from the regions raw water system.
Cost and Financing
The capital improvement costs associated with water supply and delivery are financed
through the Otay WD water meter capacity fee, New Water Supply Fee, and user rate
structures. The Otay WD potable water sales revenue are used to pay for the wholesale cost
of the treated water supply and the operating and maintenance expenses of the potable water
system facilities.
Written Agreements, Contracts, or Other Proof
The supply and cost associated with deliveries of treated water from the Otay WTP and the R.M.
Levy WTP is based on the following documents.
Agreement for the Purchase of Treated Water from the Otay Water Treatment Plant between the
City of San Diego and the Otay Water District. The Otay WD entered into an agreement dated
January 11, 1999 with the City of San Diego that provides for 10 mgd of surplus treated water to
the Otay WD from the existing Otay WTP capacity. The agreement allows for the purchase of
treated water on an as available basis from the Otay WTP. The Otay WD pays the Water
Authority at the prevailing raw water rate for raw water and pays the City of San Diego at a rate
equal to the actual cost of treatment to potable water standards.
Agreement between the San Diego County Water Authority and Otay Water District Regarding
Implementation of the East County Regional Treated Water Improvement Program. The
ECRTWIP Agreement requires the purchase of at least 10,000 AFY of potable water from the
Helix WD R.M. Levy WTP at the prevailing Water Authority treated water rate. The ECRTWIP
Agreement is dated April 27, 2006.
Agreement between the San Diego County Water Authority and Otay Water District for Design,
Construction, Operation, and Maintenance of the Otay 14 Flow Control Facility Modification.
The Otay WD entered into the Otay 14 Flow Control Facility Modification Agreement dated
January 24, 2007 with the Water Authority to increase the physical capacity of the Otay 14 Flow
Control Facility. The Water Authority and Otay WD to 50% share the capital cost to expand its
capacity from 8 mgd to 16 mgd.
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Federal, State, and Local Permits/Approvals
The Otay WD acquired all the permits for the construction of the pipeline and pump station
associated with the Otay WTP supply source and for the 640-1 and 640-2 water storage
reservoirs project associated with the ECRTWIP Agreement through the typical planning,
environmental approval, design, and construction processes.
The transmission main project constructed about 26,000 feet of a 36-inch diameter steel
pipeline from the Otay 14 Flow Control Facility to the 640-1 and 640-2 Reservoirs project.
The Otay 14 Flow Control Facility modification increased the capacity of the existing systems
from 8 mgd to 16 mgd. CEQA documentation is complete for both projects. Construction of
both of these projects was completed October 2010.
The City of San Diego and the Helix Water District are required to meet all applicable federal,
state, and local health and water quality requirements for the potable water produced at the
Otay WTP and the R.M. Levy WTP respectively.
6.3.1.2 Recycled Water Supplies
Wastewater collection, treatment, and disposal services provided by the Otay WD is limited to
a relatively small area within what is known as the Jamacha Basin, located within the Middle
Sweetwater River Basin watershed upstream of the Sweetwater Reservoir and downstream of
Loveland Reservoir. Water recycling is defined as the treatment and disinfection of
municipal wastewater to provide a water supply suitable for non-potable reuse. The Otay WD
owns and operates the Ralph W. Chapman Water Reclamation Facility, which produces
recycled water treated to a tertiary level for landscape irrigation purposes. The recycled water
market area of the Otay WD is located primarily within the eastern area of the City of San
Diego and on the Otay Mesa. The Otay WD distributes recycled water to a substantial market
area that includes but is not limited to the U.S. Olympic Training Center, the EastLake Golf
Course, and other development projects.
The Otay WD projects that annual average demands for recycled water will increase to 8,000
AFY by 2035. About 1,300 AFY of supply is generated by the RWCWRF, with the
remainder planned to be supplied to Otay WD by the City of San Diego’s SBWRP.
North District Recycled Water Concept
The Otay WD is a recognized leader in the use of recycled water for irrigation and other
commercial uses. The Otay WD continues the quest to investigate all viable opportunities to
expand the successful recycled water program into areas that are not currently served. One of
these areas is in the portion of the service area designated as the North District, located within
the Middle Sweetwater River Basin watershed upstream of the Sweetwater River. The close
proximity of the recycled water markets in the North District to the Otay WD’s source of
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recycled water, the RWCWRF, means that the distribution system to serve this area could be
constructed relatively cost effectively. This makes the North District a logical location for the
expansion of the Otay WD’s recycled water system and market area.
The purpose of the North District Recycled Water System Development Project, Phase I
Concept Study, is to identify the feasibility of using recycled water in the North District and
to investigate and assess any limitations or constraints to its use. The Phase I study
components of the North District Recycled Water Concept encompassed the preparation of
six technical memorandums including the project definition, a discussion of the regulatory
process, a discussion of the protection of the watershed that would be affected by recycled
water use in the North District, identification of stakeholders, public outreach, and an
implementation plan.
Several opportunities that could be realized with the implementation of the use of recycled
water in the North District were identified. These include a reduction of demand on the
potable water system and maximizing recycled water resources which in turn minimizes
treated wastewater discharges to the local ocean outfall. Other opportunities are a possible
partnership with Sweetwater Authority to monitor any benefits and impacts of increased
recycled water use in the watershed and stakeholder outreach to resolve any water quality
concerns and to retain consumer confidence. Also identified were two major constraints
associated with the North District Recycled Water System Development Project. One
constraint is the water quality objectives for the Middle Sweetwater Basin that will affect the
effluent limitations for the recycled water produced at the RWCWRF. At this time, the
effluent limit that is of concern is total nitrogen. An examination as to how the treatment
process might be modified to enhance nitrogen removal and an action plan is being
developed. The other major constraint is the cost of the infrastructure needed to convey and
store recycled water in the North District. These costs are estimated to be in the range of $14
to $15 million dollars.
There are two additional phases proposed for the North District Recycled Water System
Development Project. Phase II would include further investigation of the issues identified in
Phase I as requiring further study. These include stakeholder outreach, regulatory issues, and
facility planning. The third phase of the effort would include the facility planning, permitting,
environmental compliance, design, and construction of the improvements necessary for
delivery of recycled water to the North District markets.
The estimated amount of imported water saved at full implementation of the North District
Recycled Water System Development Project is 1,200 AFY. This saved imported water
could then be used to offset new potable water demands.
Recycled Water System Facilities
The Otay WD has and continues to construct recycled water storage, pumping, transmission,
and distribution facilities to meet projected recycled water market demands. For nearly 20
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years, millions of dollars of capital improvements have been constructed. The supply link
consisting of a transmission main, storage reservoir, and a pump station to receive and
transport the recycled water from the City of San Diego’s SBWRP are complete and recycled
water deliveries began on May 18, 2007.
Cost and Financing
The capital improvement costs associated with the recycled water supply and distribution
systems are financed through the Otay WD water meter capacity fee and user rate structures.
The Otay WD recycled water sales revenue, along with MWD and the Water Authority’s
recycled water sales incentive programs are used to help offset the costs for the wholesale
purchase and production of the recycled water supply, the operating and maintenance
expenses, and the capital costs of the recycled water system facilities.
Written Agreements, Contracts, or Other Proof
The supply and cost associated with deliveries of recycled water from the SBWRP is based on
the following document.
Agreement between the Otay Water District and the City of San Diego for Purchase of
Reclaimed Water from the South Bay Water Reclamation Plant. The agreement provides for the
purchase of at least 6,721 AFY of recycled water from the SBWRP at an initial price of $350 per
acre-foot. The Otay WD Board of Directors approved the final agreement on June 4, 2003 and
the San Diego City Council approved the final agreement on October 20, 2003.
Federal, State, and Local Permits/Approvals
The Otay WD has in place an agreement with MWD for their recycled water sales incentive
program for supplies from the RWCWRF and the SBWRP. Also, the Otay WD has in place
an agreement with the Water Authority for their recycled water sales incentive program for
supplies from the RWCWRF and the SBWRP. The Water Authority sales incentive
agreement was approved by Water Authority on July 26, 2007 and by Otay WD on August 1,
2007. All permits for the construction of the recycled water facilities to receive, store, and
pump the SBWRP supply have been acquired through the typical planning, environmental
approval, design, and construction processes.
The California Regional Water Quality Control Board San Diego Region (RWQCB) “Master
Reclamation Permit for Otay Water District Ralph W. Chapman Reclamation Facility” was
adopted on May 9, 2007 (Order No. R9-2007-0038). This order establishes master
reclamation requirements for the production, distribution, and use of recycled water in the
Otay WD service area. The order includes the use of tertiary treated water produced and
received from the City of San Diego‘s SBWRP. Recycled water received from and produced
by the SBWRP is regulated by Regional Board Order No. 2000-203 and addenda. The City
of San Diego is required to meet all applicable federal, state, and local health and water
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quality requirements for the recycled water produced at the SBWRP and delivered to Otay
WD in conformance with Order No. 2000-203.
6.3.1.3 Potential Groundwater Supplies
The Otay WD 2010 UWMP, the WRMP Update, and the Otay WD March 2007 Integrated
Water Resources Plan (2007 IRP) both contain a description of the development of potential
groundwater supplies. Over the past several years, Otay WD has studied numerous potential
groundwater supply options that have shown, through groundwater monitoring well activities,
poor quality water and/or insufficient yield from the basins at a cost effective level. The Otay
WD has a few capital improvement program projects that continue the quest to develop
potential groundwater resources. Local Otay WD groundwater supply development is
currently considered as a viable water supply resource to meet projected demands.
The development and/or acquisition of potential groundwater supply projects by the Otay WD
have evolved and been resurrected in response to the regional water supply issues related to
water source supply conditions. Local ground water supply projects will allow for less
reliance upon imported water, achieve a level of independence of the regional wholesale
water agencies, and diversify the Otay WD’s water supply portfolio consistent the Otay WD
2007 IRP.
In recognition of the need to develop sufficient alternative water supplies, the Otay WD has
taken the appropriate next steps towards development of production groundwater well
projects.
There are three groundwater well projects that the Otay WD is actively pursuing to develop as
new local water supplies. They are known as the Middle Sweetwater River Basin
Groundwater Well, the Otay Mesa Lot 7 Groundwater Well, and the Rancho del Rey
Groundwater Well.
Middle Sweetwater River Basin Groundwater Well
The Middle Sweetwater River Basin Groundwater Well is an additional water supply project
that was thoroughly studied and documented in the 1990s. The Middle Sweetwater River
Basin is located within the Sweetwater River watershed and that reach of the river extends
from Sweetwater Reservoir to the upstream Loveland Reservoir. The next step in
development of the Middle Sweetwater River Basin Groundwater Well is the implementation
of a pilot well project. The ultimate objective of the Otay WD is to develop a groundwater
well production system within the Middle Sweetwater River Basin capable of producing a
sustainable yield of potable water as a local supply.
The purpose of the Middle Sweetwater River Basin Groundwater Well Pilot project is to
identify the feasibility of developing a groundwater resource production system and then
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determine and assess any limitations or constraints that may arise. The Middle Sweetwater
River Basin Groundwater Well Pilot Project will accomplish six primary goals:
• Update project setting
• Update applicable project alternatives analysis
• Prepare groundwater well pilot project implementation plan
• Construct and test pilot monitoring and extraction wells
• Provide recommendations regarding costs and feasibility to develop a groundwater
well production system within the Middle Sweetwater River Basin capable of
producing a sustainable yield of potable water
• Prepare groundwater well production project implementation plan and scope of work
The groundwater conjunctive use concept is described as the extraction of the quantity of
water from the groundwater basin that was placed there by customers of the Otay Water
District, Helix Water District, and Padre Dam Municipal Water District by means of their use
of imported treated water that contributed to the overall volume of groundwater within the
basin. An estimated quantity was developed to be approximately 12.5 percent of the total
consumption of the Otay WD customers within that basin, as measured by water meters. In
the 1994-1995 period, the quantity of water that was returned to the groundwater basin by
Otay WD customers was estimated to be 810 AFY. Currently, that 12.5 percent quantity
could be on the order of 1,000 AFY. A future scope of work will need to addresses this
concept while considering further development of the groundwater basin as an additional
supply resource. If it is deemed that a Middle Sweetwater River Basin Groundwater Well
Production Project is viable then the consultant will develop and provide a groundwater well
production project implementation plan, cost estimate, and related scope of work.
Further development of the groundwater basin to enhance the total groundwater production
could be accomplished by the Otay WD by means of additional extraction of water from the
basin that is placed there by means of either injection and/or spreading basins using imported
untreated water as the resource supply. The existing La Mesa Sweetwater Extension Pipeline,
owned by the Water Authority, once converted to an untreated water delivery system, could
be the conveyance system to transport untreated water for groundwater recharge in support of
this conjunctive use concept. These two distinct water resource supply conjunctive use
concepts will be addressed so they may coexist and to allow for their development as separate
phases.
The scope of work to complete Middle Sweetwater River Basin Groundwater Well Pilot
Project consists of many major tasks and is to address the groundwater supply concepts
outlined above. It is anticipated that the cost for the entire scope of work, will be on the order
of $2,000,000, which includes a contingency and may take up to one and a half years to
complete.
The primary desired outcome of the Middle Sweetwater River Basin Groundwater Well Pilot
Project is for the engineering consultant to determine and make recommendations if it is
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financially prudent and physically feasible to develop a Phase I groundwater well production
system within the Middle Sweetwater River Basin capable of producing a sustainable yield of
up to 1,500 AFY of potable water for the Otay WD. If it is deemed that a Middle Sweetwater
River Basin Groundwater Well Production Project is viable then the consultant will develop
and provide a groundwater well production project implementation plan and related scope of
work.
Otay Mesa Lot 7 Groundwater Well
In early 2001 the Otay WD was approached by a landowner representative about possible
interest in purchasing an existing well or alternatively, acquiring groundwater supplied from
the well located on Otay Mesa. The landowner, National Enterprises, Inc., reportedly stated
that the well could produce 3,200 AFY with little or no treatment required prior to introducing
the water into the Otay WD potable water system or alternatively, the recycled water system.
In March 2001 authorization to proceed with testing of the Otay Mesa Lot 7 Groundwater
Well was obtained and the Otay WD proceeded with the investigation of this potential
groundwater supply opportunity.
The May 2001 Geoscience Support Services, Inc. completed for the Otay WD the preparation
of a report entitled, “Otay Mesa Lot 7 Well Investigation,” to assess the Otay Mesa Lot 7
Well. The scope of work included a geohydrologic evaluation of the well, analyses of the
water quality samples, management and review of the well video log, and documentation of
well pump testing. The primary findings, as documented in the report, formed the basis of the
following recommendations:
• For the existing well to be use as a potable water supply resource, a sanitary seal must
be installed in accordance with the CDPH guidelines.
• Drawdown in the well must be limited to avoid the possibility of collapsing the casing.
• Recover from drawdown from pumping is slow and extraction would need to be
terminated for up to 2 days to allow for groundwater level recovery.
• The well water would need to be treated and/or blended with potable water prior to
introduction into the potable water distribution system.
The existing Otay Mesa Lot 7 Well, based upon the above findings, was determined not to be
a reliable municipal supply of potable water and that better water quality and quantity perhaps
could be discovered deeper or at an alternative location within the San Diego Formation.
The Otay WD may still continue to pursue the Otay Mesa groundwater well opportunity with
due consideration of the recommendations of the existing report. Based on the
recommendations of the investigation report, a groundwater well production facility at Otay
Mesa Lot 7 could realistically extract approximately 300 AFY.
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Rancho del Rey Groundwater Well
In 1991, the McMillin Development Company drilled the Rancho del Rey Groundwater Well
to augment grading water supplies for their Rancho del Rey development projects. Although
the well was considered a “good producer,” little was known regarding its water quality and
sustainable yield because the water was used solely for earthwork (i.e. dust control and soil
compaction). The well was drilled to 865 feet, with a finished depth of 830 feet and produced
approximately 400 AFY of low quality water for four years until its use was discontinued in
April 1995 when the well was no longer needed. McMillin notified the Otay WD of its intent
to sell off the groundwater well asset.
In 1997, the Otay WD purchased an existing 7-inch well and the surrounding property on
Rancho del Rey Parkway from the McMillin Company with the intent to develop it as a
source of potable water. Treatment was required to remove salts and boron, among other
constituents, using reverse osmosis membranes and ion exchange.
In 2000, having received proposals for the design and construction of a reverse osmosis
treatment facility that far exceeded the allocated budget, the Board of Directors instructed
staff to suspend the project until such time as it became economically viable.
In January 2010, citing the rising cost of imported water and the Otay WD's interest in
securing its own water source for long-term supply reliability, the Board authorized Phase 1
for drilling and development of the Rancho del Rey Well.
On March 3, 2010, the Board adopted the Mitigated Negative Declaration for this project and
a Notice of Determination was filed with the County of San Diego on March 5, 2010. In
September 2010, a new 12-inch production well was drilled to a depth of 900 feet through the
groundwater formation and into fractured bedrock. Testing showed the long-term yield of the
new well to be 450 gpm, higher than previous studies had estimated. Separation Processes,
Inc. (SPI), a highly qualified membrane treatment firm, was hired to conduct a detailed
economic feasibility study to confirm that the annualized unit cost of the new water source
was economically competitive with other sources. The economic study estimated the unit
cost of water to be $1,500 to $2,000 per acre-feet for an alternative that utilizes a seawater
membrane for treating both salts and boron. When compared with the current imported
treated water rate from the Water Authority, and with the knowledge that this rate will
continue to increase as MWD and the Water Authority raise their rates, the Rancho del Rey
Well project appears to be economically viable.
The Otay WD is continuing to pursue the Rancho del Rey groundwater well opportunity with
due consideration of the recommendations of the existing reports and plans to develop a
groundwater well production facility to extract approximately 500 AFY. For water planning
purposes, production of groundwater from the Rancho del Rey well is considered “additional
planned” for local supplies. During preparation of this 2010 UWMP, the Otay WD has
contracted for design services for the wellhead treatment facilities.
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6.3.1.4 Otay Water District Desalination Project
The Otay WD is currently investigating the feasibility of purchasing desalinated water from a
seawater reverse osmosis plant that is planned to be located in Rosarito, Mexico, known as the
Otay Mesa Desalinated Water Conveyance System (Desalination) project. The treatment
facility is intended to be designed, constructed, and operated in Mexico by a third party. The
Otay WD’s draft Desalination Feasibility Study, prepared in 2008, discusses the likely issues
to be considered in terms of water treatment and monitoring, potential conveyance options
within the United States from the international border to potential delivery points, and
environmental, institutional, and permitting considerations for the Otay WD to import the
Desalination project product water as a new local water supply resource.
While the treatment facility for the Desalination project will likely not be designed or
operated by the Otay WD as the lead agency, it is important that the Otay WD maintain
involvement with the planning, design, and construction of the facility to ensure that the
implemented processes provide a product water of acceptable quality for distribution and use
within the Otay WD’s system as well as in other regional agencies’ systems that may use the
product water, i.e. City of San Diego, the Water Authority, etc. A seawater reverse osmosis
treatment plant removes constituents of concern from the seawater, producing a water quality
that far exceeds established United States and California drinking water regulations for most
parameters, however, a two-pass treatment system may be required to meet acceptable
concentrations of boron and chlorides, similar to the levels seen within the existing Otay WD
supply sources. The Desalination Feasibility Study addresses product water quality that is
considered acceptable for public health and distribution.
The Otay WD, or any other potential participating agencies, will be required to obtain
approval from the CDPH in order to use the desalinated seawater as a water source. Several
alternative approaches are identified for obtaining this approval. These alternatives vary in
their cost and their potential of meeting CDPH approval.
The Rosarito Desalination Facility Conveyance and Disinfection System Project report
addresses two supply targets for the desalinated water (i.e. local and regional). The local
alternative assumes that only Otay WD would participate and receive desalinated water, while
the regional alternative assumes that other regional and/or local agencies would also
participate in the Rosarito project.
On November 3, 2010, the Otay WD authorized the General Manager to enter into an
agreement with AECOM for the engineering design, environmental documentation, and the
permitting for the construction of the conveyance pipeline, pump station, and disinfection
facility to be constructed within the Otay WD. The supply target is assumed to be 50 mgd
while the ultimate capacity of the plant will be 100 mgd.
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The Otay WD is proceeding with negotiations among the parties to establish water supply
resource acquisition terms through development of a Principles of Understanding document.
6.3.2 Otay WD Capital Improvement Program
The Otay WD plans, designs, constructs, and operates water system facilities to acquire
sufficient supplies and to meet projected ultimate demands placed upon the potable and recycled
water systems. In addition, the Otay WD forecasts needs and plans for water supply
requirements to meet projected demands at ultimate build out. The necessary water facilities and
water supply projects are implemented and constructed when development activities proceed and
require service to achieve timely and adequate cost effective water service.
New water facilities that are required to accommodate the forecasted growth within the entire
Otay WD service area are defined and described within the Otay WD WRMP Update. These
facilities are incorporated into the annual Otay WD Six Year Capital Improvement Program
(CIP) for implementation when required to support development activities. As major
development plans are formulated and proceed through the land use jurisdictional agency
approval processes, Otay WD prepares water system requirements specifically for the proposed
development project consistent with the Otay WD WRMP Update. These requirements
document, define, and describe all the potable water and recycled water system facilities to be
constructed to provide an acceptable and adequate level of service to the proposed land uses, as
well as the financial responsibility of the facilities required for service. The Otay WD funds the
facilities identified as CIP projects. Established water meter capacity fees and user rates are
collected to fund the CIP project facilities. The developer funds all other required water system
facilities to provide water service to their project.
Section 7 – Conclusion: Availability of Sufficient Supplies
The Otay Mesa Community Plan Update is currently located within the jurisdictions of the
Otay WD, Water Authority, and MWD. To obtain permanent imported water supply service,
land areas are required to be within the jurisdictions of the Otay WD, Water Authority, and
MWD to utilize imported water supply.
The Water Authority and MWD have an established process that ensures supplies are being
planned to meet future growth. Any annexations and revisions to established land use plans
are captured in SANDAG updated forecasts for land use planning, demographics, and
economic projections. These forecasts include the City of San Diego Otay Mesa Community
Plan Update that was included in SANDAG’s Series 12 Regional Growth Forecast.
SANDAG serves as the regional, intergovernmental planning agency that develops and
provides forecast information. The Water Authority and MWD update their demand forecasts
and supply needs based on the most recent SANDAG forecast approximately every five years
to coincide with preparation of their urban water management plans. Prior to the next forecast
update, local jurisdictions with land use authority may require water supply assessment and/or
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verification reports for proposed land developments that are not within the Otay WD, Water
Authority, or MWD jurisdictions (i.e. pending or proposed annexations) or that have revised
land use plans with either lower or higher development intensities than reflected in the
existing growth forecasts. Proposed land areas with pending or proposed annexations, or
revised land use plans, typically result in the creation of higher demand and supply
requirements than previously anticipated. The Otay WD, Water Authority, and MWD next
demand forecast and supply requirements and associated planning documents would then
capture any increase or decrease in demands and required supplies as a result of annexations
or revised land use planning decisions.
MWD’s Integrated Resources Plan (IRP) identifies a mix of resources (imported and local)
that, when implemented, will provide 100 percent reliability for full-service demands through
the attainment of regional targets set for conservation, local supplies, State Water Project
supplies, Colorado River supplies, groundwater banking, and water transfers. The 2010
update to the IRP includes a planning buffer supply intended to mitigate against the risks
associated with implementation of local and imported supply programs and for the risk that
future demands could be higher than projected. The planning buffer identifies an additional
increment of water that could potentially be developed when needed and if other supplies are
not fully implemented as planned. As part of implementation of the planning buffer, MWD
periodically evaluates supply development, supply conditions, and projected demands to
ensure that the region is not under or over developing supplies. Managed properly, the
planning buffer will help ensure that the southern California region, including San Diego
County, will have adequate water supplies to meet long-term future demands.
In Section ES-5 of their 2010 RUWMP, MWD states that MWD has supply capacities that
would be sufficient to meet expected demands from 2015 through 2035. MWD has plans for
supply implementation and continued development of a diversified resource mix including
programs in the Colorado River Aqueduct, State Water Project, Central Valley Transfers,
local resource projects, and in-region storage that enables the region to meet its water supply
needs. MWD’s 2010 RUWMP identifies potential reserve supplies in the supply capability
analysis (Tables 2-9, 2-10, and 2-11), which could be available to meet the unanticipated
demands.
The County Water Authority Act, Section 5 subdivision 11, states that the Water Authority
“as far as practicable, shall provide each of its member agencies with adequate supplies of
water to meet their expanding and increasing needs.”
As part of preparation of a written water supply assessment report, an agency’s shortage
contingency analysis should be considered in determining sufficiency of supply. Section 11
of the Water Authority’s 2010 Updated UWMP contains a detailed shortage contingency
analysis that addresses a regional catastrophic shortage situation and drought management.
The analysis demonstrates that the Water Authority and its member agencies, through the
Emergency Response Plan, Emergency Storage Project, Carlsbad Desalination Project, and
Drought Management Plan (DMP) are taking actions to prepare for and appropriately handle
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
53
an interruption of water supplies. The DMP, adopted in May 2006, provides the Water
Authority and its member agencies with a series of potential actions to take when faced with a
shortage of imported water supplies from MWD due to prolonged drought or other supply
shortfall conditions. The actions will help the region avoid or minimize the impacts of
shortages and ensure an equitable allocation of supplies.
The WSA&V Report identifies and describes the processes by which water demand
projections for the proposed Otay Mesa Community Plan Update will be fully included in the
water demand and supply forecasts of the Urban Water Management Plans and other water
resources planning documents of the Water Authority and MWD. Water supplies necessary
to serve the demands of the proposed Otay Mesa Community Plan Update, along with
existing and other projected future users, as well as the actions necessary and status to
develop these supplies, have been identified in the Otay Mesa Community Plan Update
WSA&V Report and will be included in the future water supply planning documents of the
Water Authority and MWD.
This WSA&V Report includes, among other information, an identification of existing water
supply entitlements, water rights, water service contracts, water supply projects, or
agreements relevant to the identified water supply needs for the proposed Otay Mesa
Community Plan Update. This WSA&V Report assesses, demonstrates, and documents that
sufficient water supplies are planned for and are intended to be available over a 20-year
planning horizon, under normal conditions and in single and multiple dry years to meet the
projected demand of the proposed Otay Mesa Community Plan Update and the existing and
other planned development projects to be served by the Otay WD.
Table 8 presents the forecasted balance of water demands and required supplies for the Otay
WD service area under average or normal year conditions. The total actual demand for FY
2010 was 33,270 AF. The demand for FY 2010 is 5,635 AF lower than the demand in FY
2005 of 38,905 AF. The drop in demand is a result of the unit price of water, the conservation
efforts of users as a result of the prolonged drought, and the economy.
Table 9 presents the forecasted balance of water demands and supplies for the Otay WD
service area under single dry year conditions. Table 9 presents the forecasted balance of
water demands and supplies for the Otay WD service area under multiple dry year conditions
for the three year period ending in 2018. The multiple dry year conditions for periods ending
in 2023, 2028, and 2033 are provided in the Otay Water District 2010 UWMP. The projected
potable demand and supply requirements shown the Tables 8 and 9 are from the Otay Water
District 2010 UWMP. Hot, dry weather may generate urban water demands that are about 6.4
percent greater than normal. This percentage was utilized to generate the dry year demands
shown in Table 9. The recycled water supplies are assumed to experience no reduction in a
dry year.
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
54
Table 8
Projected Balance of Water Demands and Supplies Normal Year Conditions (AF)
Description FY 2015 FY 2020 FY 2025 FY 2030 FY 2035
Demands
Otay WD Demands 44,883 53,768 63,811 70,669 77,171
Additional Conservation Target 0 (7,447) (13,996) (17,895) (20,557)
Total Demand 44,883 46,321 49,815 52,774 56,614
Supplies
Water Authority Supply 40,483 41,321 44,015 45,974 48,614
Recycled Water Supply 4,400 5,000 5,800 6,800 8,000
Total Supply 44,883 46,321 49,815 52,774 56,614
Supply Surplus/(Deficit) 0 0 0 0 0
Table 9 presents the forecasted balance of water demands and supplies for the Otay WD
service area under single dry year and multiple dry year conditions as from the Otay Water
District 2010 UWMP.
Table 9
Projected Balance of Water Demands and Supplies
Single Dry and Multiple Dry Year Conditions (AF)
Normal
Year
Single
Dry Year Multiple Dry Years
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Demands
Otay WD Demands 37,176 41,566 43,614 46,385 50,291
Total Demand 37,176 41,566 43,614 46,385 50,291
Supplies
Water Authority Supply 33,268 37,535 39,460 42,108 45,891
Recycled Water Supply 3,908 4,031 4,154 4,277 4,400
Total Supply 37,176 41,566 43,614 46,385 50,291
Supply Surplus/(Deficit) 0 0 0 0 0
District Demand totals with SBX7-7 conservation target achievement plus single dry year increase as shown.
The Water Authority could implement its DMP. In this instances, the Water Authority may have to allocate supply
shortages based on it equitable allocation methodology in its DMP.
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
55
Dry year demands assumed to generate a 6.4% increase in demand over normal conditions for
each year in addition to new demand growth.
Table 9 also presents the forecasted balance of water demands and supplies for the Otay WD
service area under multiple dry year conditions for the three year period ending in 2015.
In evaluating the availability of sufficient water supply, the Otay Mesa Community Plan
Update development proponents will be required to participate in the development of
alternative water supply project(s). This can be achieved through payment of the New Water
Supply Fee adopted by the Otay WD Board in May 2010. These water supply projects are in
addition to those identified as sustainable supplies in the current Water Authority and MWD
UWMP, IRP, Master Plans, and other planning documents. These new water supply projects
are in response to the regional water supply issues related to climatological, environmental,
legal, and other challenges that impact water source supply conditions, such as the court
rulings regarding the Sacramento-San Joaquin Delta and the current ongoing western states
drought conditions. These new additional water supply projects are not currently developed
and are in various stages of the planning process. The Otay WD water supply development
program includes but is not limited to projects such as the Middle Sweetwater River Basin
Groundwater Well project, the North District Recycled Water Supply Concept, the Otay WD
Desalination project, and the Rancho del Rey Groundwater Well project. The Water
Authority and MWD’s next forecasts and supply planning documents would capture any
increase in water supplies resulting from any new water resources developed by the Otay WD.
The Otay WD acknowledges the ever-present challenge of balancing water supply with
demand and the inherent need to possess a flexible and adaptable water supply
implementation strategy that can be relied upon during normal and dry weather conditions.
The responsible regional water supply agencies have and will continue to adapt their resource
plans and strategies to meet climate, environmental, and legal challenges so that they may
continue to provide water supplies to their service areas. The regional water suppliers, along
with Otay WD, fully intend to maintain sufficient reliable supplies through the 20-year
planning horizon under normal, single, and multiple dry year conditions to meet projected
demand of the Otay Mesa Community Plan Update, along with existing and other planned
development projects within the Otay WD service area.
This WSA&V Report assesses, demonstrates, and documents that sufficient water supplies are
planned for and are intended to be acquired, as well as the actions necessary and status to
develop these supplies, to meet projected water demands of the Otay Mesa Community Plan
Update as well as existing and other reasonably foreseeable planned development projects
within the Otay WD for a 20-year planning horizon, in normal and in single and multiple dry
years.
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
56
Source Documents
Atkins, “Otay Mesa Community Plan Update - Technical Infrastructure Study, May 2013
City of San Diego, Otay Mesa Community Plan Update SB 610 and SB 221 Compliance
request letter received May 30, 2013.
City of Chula Vista, “Otay Ranch General Development Plan/Sub-regional Plan, The Otay Ranch
Joint Planning Project,” October 1993 amended June 1996.
County of San Diego, “East Otay Mesa Specific Plan Area,” adopted July 27, 1994.
Otay Water District, “2010 Water Resources Master Plan Update,” revised May 2013.
Atkins and Otay Water District, “Otay Water District 2010 Urban Water Management Plan,”
June 2011.
Camp Dresser & McKee, Inc., “Otay Water District Integrated Water Resources Plan,” March
2007
San Diego County Water Authority, “Urban Water Management Plan 2005 Update,”
November 2005 amended May 2007.
MWD Water District of Southern California, “Regional Urban Water Management Plan,”
November 2005.
Camp Dresser & McKee, Inc., “Rosarito Desalination Facility Conveyance and Disinfection
System Project,” June 21, 2010.
PBS&J, “Draft Otay Water District North District Recycled Water System Development
Project, Phase I Concept Study,” December 2008.
NBS Lowry, “Middle Sweetwater River System Study Water Resources Audit,” June 1991.
Michael R. Welch, “Middle Sweetwater River System Study Alternatives Evaluation,” May
1993.
Michael R. Welch, “Middle Sweetwater River Basin Conjunctive Use Alternatives,”
September 1994.
Geoscience Support Services, Inc., “Otay Mesa Lot 7 Well Investigation,” May 2001.
Boyle Engineering Corporation, “Groundwater Treatment Feasibility Study Ranch del Ray
Well Site,” September 1996.
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
57
Agreement for the Purchase of Treated Water from the Otay Water Treatment Plant between
the City of San Diego and the Otay Water District.
Agreement between the San Diego County Water Authority and Otay Water District regarding
Implementation of the East County Regional Treated Water Improvement Program.
Agreement between the San Diego County Water Authority and Otay Water District for
Design, Construction, Operation, and Maintenance of the Otay 14 Flow Control Facility
Modification.
Agreement between the Otay Water District and the City of San Diego for Purchase of
Reclaimed Water from the South Bay Water Reclamation Plant.
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
1
Appendix A
Otay Mesa Community Plan Update Regional Location Map
M E X I C O
S.D. COUNTY
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CITY OF SAN DIEGO
OTAY
WATER DISTRICT
SAN DIEGO COUNTY
OTAY MESA RD
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BEYER BL
PALM (SB) AV
EAST BEYER BL
SMYTHE AV
PICADOR BL
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ORANGE AV
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3/13/2013 LA SD Z:\Projects\IS\OMCPU\mxd\LocationMap.mxd
Otay Mesa Community Plan Update
Water Supply Assessment & Verification Report
March 2013
Project Location
Appendix A
±
6,000
Feet
Otay Mesa Community Plan Area
Otay WD Boundary
Municipal Boundary
Drainage Basin
City East
City West
Valley City
Otay Water District
Water Supply Assessment and Verification Report
Otay Mesa Community Plan Update
2
Appendix B
Otay Mesa Community Plan Update Proposed Development Plan
AÛ
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Portions of this map contain information from theSan Diego Association of Governments (SANDAG)
Regional Information System. This product cannotbe reproduced without the written permission
of SANDAG.¯
Portions of this product may contain geographicinformation copyrighted by SanGIS.All Rights Reserved.
Map created by:
*This land use plan scenario is one of
three that has been prepared by the
City for further analysis and public input.
THE CITY OF SAN DIEGO
CITY PLANNING & COMMUNITY INVESTMENT
Otay Mesa Community Plan Update Modified Scenario 3B
General Land Use Categories
Village Centers
Neighborhood Village
15 - 29 du/ac
Community Village
30 - 45 du/ac
Parks
Parks, Open Space, and Institutional
Open Space
Institutional
Overlays
Industrial - Residential ProhibitedResidential
Residential - Very Low
0-4 du/ac
Residential - Low
5-9 du/ac
Residential - Low Medium
10-14 du/ac
Residential - Medium
15-29 du/ac
Residential - Medium High
30-44 du/ac
Commercial - Residential Prohibited
Regional Commercial
Heavy Commercial
Neighborhood Commercial
Community Commercial
DRAFT
Visitor Commercial
Office Commercial - Residential Permitted
0 - 44 du/ac
Heavy Industrial
Business Park - Office Permitted
Light Industrial
International Business and Trade
U.S. Government Facility
Brown Field Boundary
Community Plan Boundary
Potential School Area
Potential Park Area
Potential Drainage Facility
Brown Field
(ProposedAirport Master Plan Study)
OTAY
M
ESARD
HARVES
T
SIEMPREVIVA ENR
ICO
FERMI
OtayMesa
Port of Entry
LA
M
EDI
ABRITANNIACACTUS
BEYER
OCEANVIE
W
HI
L
L
S
P
KWY
SOUTHWEST PRECISE
PLANNING AREA
AIRWAY
Area Scale(In Acres)
40
10 0 500 1,000 1,500 2,000
Feet
Business Park - Residential Permitted
15 - 60 du/ac
Otay Water District Board of Directors Meeting July 3, 2013
Water Supply Assessment & Verification Report for
City of San Diego Otay Mesa Community Plan Update
SB 610 & SB 221 Compliance
EXHIBIT D
BACKGROUND
Senate Bills 610 and 221 became effective on
January 1, 2002, with the primary intent to improve
the link between water supply availability and land
use decisions.
SB 610 Water Supply Assessment (WSA): Requires water purveyor to prepare a Water
Supply Assessment report for inclusion in
agency CEQA documentation.
SB 221 Water Supply Verification (WSA&V): Requires water purveyor to prepare a Water
Supply Assessment & Verification report for
inclusion in agency CEQA documentation.
Board approval required for submittal of the
WSA&V report to City of San Diego.
2
CITY OF SAN DIEGO
OTAY MESA COMMUNITY UPDATE
3
Otay WD Boundary
4
Otay WD Boundary
City of San Diego Otay Mesa
Community Plan Update
Water Supply Assessment & Verification Report
City of San Diego Otay Mesa Community Plan
Update
Location (Land Use) Quantity
Average Demand
(gpd)
Multi-Family Residential 5,246 units 1,337,730
Commercial/Office 142 acres 228,123
Industrial 876 acres 743,155
IBT 1,286 acres 2,083,320
Institutional 220 acres 314,160
Total: 4,706,488
5
Description FY
2015
FY
2020
FY
2025
FY
2030
FY
2035
Demands
Otay WD Demands 44,883 53,768 63,811 70,669 77,171
Additional Conservation
Target 0 (7,447) (13,996) (17,895) (20,557)
Total Demand 44,883 46,321 49,815 52,774 56,614
Supplies
Water Authority Supply 40,483 41,321 44,015 45,974 48,614
Recycled Water Supply 4,400 5,000 5,800 6,800 8,000
Total Supply 44,883 46,321 49,815 52,774 56,614
Supply Surplus/(Deficit) 0 0 0 0 0
PROJECTED BALANCE OF WATER
DEMANDS AND SUPPLIES
Normal Year Conditions (AF)
Source: Table 8 of the City of San Diego Otay Mesa Community Plan Update WSA&V report. 6
WATER SUPPLY ASSESSMENT &
VERIFICATION REPORT
The regional and local water supply
agencies acknowledge the challenges and
fully intend to develop sufficient, reliable
supplies to meet demands.
Water suppliers recognize additional water
supplies are necessary and portfolios need
to be reassessed and redistributed with
intent to serve existing and future needs.
7
WATER SUPPLY ASSESSMENT &
VERIFICATION REPORT
The Report documents the planned water
supply projects and the actions necessary to
develop the supplies.
Water supply for the Projects and for existing
and future developments within the District
for a 20-year planning horizon, under normal
and in single and multiple dry years, are
planned for and are intended to be made
available.
8
OTAY WATER DISTRICT
9
Planned Local Water Supply Projects Supply (AF)
Rancho Del Rey Groundwater Well 500
Rosarito Ocean Desalination Project 20,000-
50,000
Otay Mesa Lot 7 Groundwater Well 300
Otay Mesa Recycled Water Supply
Link Project 800
WATER AUTHORITY SUPPLIES
WATER AUTHORITY
SUPPLIES (AFY) 2015 2020 2025 2030 /
2035
IID Water Transfer 100,000 190,000 200,000 200,000
ACC and CC Lining 80,200 80,200 80,200 80,200
Carlsbad Desalination 0 56,000 56,000 56,000
Sub-Total: 180,200 326,200 336,200 336,200
Source: Table 9-1 Water Authority 2010 UWMP
10
CONCLUSION
•Water demand and supply forecasts are
included in the planning documents of
MWD, Water Authority, and the Otay Water
District.
•Actions necessary to develop the identified
water supplies are documented.
•The City of San Diego Otay Mesa
Community Plan Update SB 610 & SB 221
WSA&V Report demonstrates and
documents that sufficient water supplies
are planned for and are intended to be
available over the next 20 years.
11
•It is believed that the Board has met the
intent of SB 610 & SB 221 statute in that:
1)Land use agencies and water
suppliers have demonstrated strong
linkage.
2)The City of San Diego Otay Mesa
Community Plan Update Water
Supply Assessment & Verification
Report clearly documents the
current water supply situation.
CONCLUSION
(continued)
12
STAFF RECOMMENDATION
That the Board of Directors approve Senate
Bills 610 & 221 Water Supply Assessment &
Verification Report dated May 2013 for the
City of San Diego Otay Mesa Community Plan
Update.
13
QUESTIONS?
14
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 3, 2013
SUBMITTED BY:
Lisa Coburn-Boyd
Environmental Compliance
Specialist
Bob Kennedy
Engineering Manager
PROJECT: S1210-
026000
DIV. NO. All
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Certification of the 2013 Supplemental Program Environmental
Impact Report for the 2013 Wastewater Management Plan and
Approval of the 2013 Wastewater Management Plan as a Final
Plan and Document
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District's (District) Board of Directors (Board)
certify that the Final Supplemental Program Environmental Impact
Report (SPEIR) of the 2009 Water Resources Master Plan Program
Environmental Impact Report(WRMP PEIR) for the District’s 2013
Wastewater Management Plan (WWMP) has been completed in compliance
with the California Environmental Quality Act, the current State
Guidelines, and the District’s local guidelines and that it reflects
the independent judgment of the District. In addition, that the
Board finds that the potentially significant effects of the
District’s 2013 WWMP will be avoided through the adoption of feasible
mitigation measures shown in the SPEIR and the Mitigation,
Monitoring, and Reporting Program for the SPEIR. Lastly, that the
Board approve the 2013 Wastewater Management Plan as the final
document.
COMMITTEE ACTION:
Please see Attachment A.
AGENDA ITEM 7c
2
PURPOSE:
To obtain Board certification of the Final SPEIR (see Attachment C)
for the Otay Water District’s WWMP and approval of the 2013 WWMP (see
Attachment G) as the final document.
ANALYSIS:
In August 2011, the Board awarded a professional engineering planning
services agreement to Arcadis for the preparation of the 2013
Wastewater Management Plan and Supplemental Program Environmental
Impact Report. The 2013 WWMP is a study of the District’s wastewater
collection and treatment system. The purpose of this study was to
prepare a comprehensive plan that considers the required improvements
to the wastewater collection system and to identify a preferred
strategy for future wastewater management and recycled water
generation and purchase. The WWMP will ensure a systematic and
planned approach to a wastewater system commensurate with growth
within the District’s planning area and adjacent areas of influence,
consistent with the San Diego Association of Governments’ (SANDAG)
forecasts through 2030.
Arcadis identified six (6) primary goals and objectives for the WWMP
Update. These included:
Update the wastewater flow projections.
Assess capacity of the wastewater collection system to meet
existing and future demand.
Develop a list of sewer CIP projects needed to meet demand.
Prepare recycled water supply and demand analysis.
Look at future wastewater and recycled water management
options.
Prepare a SPEIR.
Part of the process to finalize the WRMP requires addressing the
project’s environmental impacts through the preparation of a
Supplemental Program Environmental Impact Report (SPEIR). A
supplement to the WRMP PEIR was used as the environmental document
because the environmental impacts of the projects in the WWMP are not
substantially different from those identified in the WRMP PEIR.
Therefore, the analyses and mitigation efforts in the WRMP PEIR are
incorporated in the WWMP SPEIR. Although the SPEIR does not
eliminate the need for project-specific technical studies and
environmental documents, it can reduce the amount of work required
for each project in the future because it identifies expected impacts
and their mitigation requirements.
3
The draft PEIR was submitted for a 45-day public review period on
April 10, 2013 and three comment letters were received from the
following agencies:
California Dept. of Fish & Wildlife
California Dept. of Transportation
San Diego County Archaeological Society
Arcadis responded to these letters and has incorporated their
comments into the final SPEIR. The letters and responses to comments
can be found in Chapter 2 of the Final SPEIR.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay
Water District in a professional, effective, and efficient manner”
and the District’s Strategic Goal 3.1.1, “Actively manage water
supply and demand.”
LEGAL IMPACT:
No legal impact is anticipated. However, in compliance with the
California Environmental Quality Act process, the SPEIR will have the
normal 30-day legal challenge period once recorded with the County of
San Diego. The SPEIR will be recorded immediately following Board
approval.
LC-B/BK:jf
P:\WORKING\CIP S1210 (SSMP & WWMP)\Subproject 026000 - WWMP\Staff Reports\BD 07-03-13, Staff Report, WWMP SPEIR, (LCB-
BK).docx
Attachments: Attachment A – Committee Action
Attachment B - PowerPoint Presentation
Attachment C – Final SPEIR
Attachment D - CEQA Findings of Facts
Attachment E – Draft SPEIR
Attachment F – Mitigation Monitoring and Reporting
Program
Attachment G – Wastewater Management Plan (on disc)
ATTACHMENT A
SUBJECT/PROJECT:
S1210-026000
Certification of the 2013 Supplemental Program
Environmental Impact Report for the 2013 Wastewater
Management Plan Update and Approval of the 2013 Wastewater
Management Plan Update as a Final Plan and Document
COMMITTEE ACTION:
The Engineering, Operations, and Water Resources Committee
(Committee) reviewed this item at a meeting held on June 19, 2013 and
the following comments were made:
Staff requested that the Board certify that the Final
Supplemental Program Environmental Impact Report (SPEIR) of the
2009 Water Resources Master Plan Program Environmental Impact
Report(WRMP PEIR) for the District’s 2013 Wastewater Management
Plan (WWMP) has been completed in compliance with the California
Environmental Quality Act, the current State Guidelines, and the
District’s local guidelines and that it reflects the independent
judgment of the District. In addition, that the Board finds
that the potentially significant effects of the District’s 2013
WWMP will be avoided through the adoption of feasible mitigation
measures shown in the SPEIR and the Mitigation, Monitoring, and
Reporting Program for the SPEIR. Lastly, that the Board approve
the 2013 Wastewater Management Plan as the final document.
Staff indicated that Malcolm Pirnie/Arcadis started working with
the District in 2011 to prepare the WWMP and its corresponding
SPEIR.
Staff provided a PowerPoint presentation to discuss the WWMP.
Please see Attachment B for details, which included the
following:
o WWMP Goal and Scope
o Wastewater Service Area
o 2010 SANDAG Land Use Updates
o Existing System Deficiencies
o 2030 System Deficiencies
o Wastewater Flow Projections for Residential and Commercial
o Recycled Water Analysis, which the District has reservoirs
to help mitigate demands
5
o Potential Additional Recycled Water Supply Options
o Wastewater Management Options
o WWMP Supplemental PEIR
o SPEIR Process that included a Notice of Preparation
published, Public Scoping meeting, Draft SPEIR 45-day
public review period, and Public Hearing (OWD Board
meeting) to certify final SPEIR
Staff noted that the District decided to perform a supplemental
PEIR to the 2009 WRMP because the planning area for the WWMP was
covered in that previous plan and the environmental impacts
analyzed have not changed. Staff indicated that most of the
PEIR is incorporated by reference in the SPEIR, and only one
letter from the California Department of Fish and Wildlife
necessitated a minor edit to the SPEIR.
Upon completion of the discussion, the Committee supported
presentation to the full Board as an action item.
July 3, 2013
1
ATTACHMENT B
Land Use Database Model Update
Wastewater Flow Projections
Hydraulic Model Update
Recycled Water Analysis
Wastewater Management Options
Identify System Improvements
SPEIR Task Update
WWMP Goal & Scope
2
3
Wastewater Service Area
3
4
2010 SANDAG Land Use Updates
5
Existing System Deficiencies
5
6
2030 System Deficiencies
6
7
WWMP Table 2-3.
Updated Wastewater Flow Projections for the Jamacha
Basin
Wastewater Flow Projections
Year
District County Basin
Total Permitted
/
Connected
Unconnected Sycuan District
Total
Permitted/
Connected
Unconnected County
Total Vacant Septic Vacant Septic
2010 1.35 0.18 0.32 0 1.84 0.64 0 0 0.64 2.48
2015 1.41 0.18 0.32 0 1.92 0.78 0 0 0.78 2.70
2020 1.42 0.20 0.32 0.02 1.97 0.78 0.03 0 0.81 2.78
2025 1.44 0.23 0.40 0.02 2.09 0.79 0.02 0 0.81 2.91
2030 1.47 0.25 0.41 0.02 2.15 0.79 0.02 0 0.81 2.96
8
Demand/Supply
Projected Recycled Water Demand
2010 2015 2020 2025 2030 2035
Ann. Ave. Demand (AFY)1 4,074 4,400 5,000 5,800 6,800 8,000
Ann. Ave. Demand (MGD) 3.64 3.93 4.46 5.18 6.07 7.14
Peak Day Demand (MGD)2 7.3 7.9 8.9 10.4 12.1 14.3
RCWRF Supply (MGD)3 1.0 1.0 1.0 1.0 1.0 1.0
SBWRP Maximum Supply
(MGD) 5.3 6.0 6.0 6.0 6.0 6.0
Total Existing Supply (MGD) 6.3 7.0 7.0 7.0 7.0 7.0
Surplus/(Deficit) (MGD) (1.0) (0.9) (1.9) (3.4) (5.1) (7.3)
WWMP Table 4-3.
Projected Peak Day Recycled Water Demands vs. Existing
Supply
Recycled Water Analysis
9
Potential Additional Recycled Water Supply
Options
Expansion of the RWCWRF from 1.3 MGD to 2.6 MGD
Additional purchases from the SBWRP
Partnership with the City of Chula Vista on a regional
WRF
A new joint WRF with the County of San Diego
Partnership with IBWC to produce recycled water
Recycled Water Analysis
10
Wastewater Management Options
Alternatives for wastewater management within
the District
A.Maintain wastewater treatment, do not expand
RWCWRF
B.Expand RWCWRF to 2.6 MGD
C.Expand RWCWRF to 3.9 MGD
D.Abandon RWCWRF and utilize County/Metro
E.Abandon RWCWRF and utilize new joint County
WRF
Given the uncertainties of the waiver for the Pt. Loma
wastewater treatment plant, the recommendation is to
maintain the RWCWRF at the current 1.3 MGD.
Add solids handling facilities on the RWCWRF site
for 1.3 MGD, expandable to 2.6 MGD
11
WWMP Supplemental PEIR
Supplemental PEIR to the 2009 WRMP prepared
because the planning area for the WWMP was covered
in the WRMP PEIR and environmental impacts
analyzed have not changed
Wastewater System Projects Analyzed in the SPEIR
Includes CIP projects to improve existing and
future collection system
12
SPEIR Process
Notice of Preparation published
Public Scoping Meeting held
Draft SPEIR 45-day public review period
o Three comment letters received (CDFW, Caltrans, SD County Archaeological Society)
o Comments addressed in Final SPEIR
Public Hearing (OWD Board meeting) to certify final SPEIR
Questions
13
AGENDA ITEM 7c
(Attachments C-G)
Final SPEIR
CEQA Findings of Facts
Draft SPEIR
Mitigation Monitoring and Reporting Program
Wastewater Management Plan
Have been posted as Attachment 2 on the
Otay Water District Website
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: July 3, 2013
SUBMITTED BY: Kevin Koeppen,
Finance Manager
PROJECT: DIV. NO. All
APPROVED BY: Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Annual Review of the District’s Investment Policy (Policy No. 27) and Adoption of Resolution No. 4213 Amending the Policy and Re-Delegating 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) for review, and adopts Resolution No. 4213 amending the policy
and re-delegating authority for all investment related activities to the Chief Financial Officer (CFO), 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 rendered to the Board on an annual basis for
review. In addition, Government Code Section 53607 requires that for the CFO’s delegation of authority 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:
1. Protect the principal of the funds.
AGENDA ITEM 8a
2. Remain sufficiently liquid to enable the District to meet
all operating requirements which might be reasonably anticipated. 3. Attain 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. LAIF is the benchmark rate of return that is currently used to evaluate investments.
Consistent with the first of the primary goals, the code provides a
range of investment options that are low risk. These include Federal Treasuries, Federal Agencies, Callable Federal Agencies, the State
Pool, the County Pool, high-grade corporate debt, and others. Because of the District’s adherence to a conservative range of authorized investments, we have been able to maintain a healthy and diversified portfolio with no investment losses despite an extended
period of turmoil and instability in the national financial markets. The District’s policy complies with the current law and the overall
objectives of the policy are being met. Over the recent years, the size of the District’s portfolio has decreased from $110 million to the current $82 million. This reduction is primarily due to planned outlays for construction
projects and the drawdown of debt proceeds. FISCAL IMPACT: None.
STRATEGIC GOAL:
Demonstrate financial health through formalized policies, prudent investing, and efficient operations.
LEGAL IMPACT:
None.
General Manager
Attachments:
A) Committee Action Form Four Slides
Alternative A: Strike-through Investment Policy No. 27 Alternative B: Strike-through Investment Policy No. 27 B) Resolution No. 4213
Exhibit 1: Strike-through Investment Policy No. 27 C) Presentation
ATTACHMENT A
SUBJECT/PROJECT:
Annual Review of Investment Policy (Policy No. 27) and Adoption of Resolution No. 4213 Amending the Policy and Re-delegating Authority for all Investment Related Activities to the Chief Financial Officer (CFO)
COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on June 24, 2013 and the following comments were made:
• Staff is requesting that the Board receive the District’s Investment Policy (Policy No. 27) for review and adopt Resolution
No. 4213 amending the policy and re-delegating authority for all investment related activities to the Chief Financial Officer in
accordance with Government Code Section 53607.
• It was indicated that the investment policy guidelines are governed
by California Government Code Sections 53600 to 53692. The District’s current investment policy has been certified by the
Association of Public Treasurers of the United States and Canada.
• Staff reviewed the proposed changes to the policy:
− Added debt reserves as an exception to the pooling of funds (Section 2.0: Scope) as normally the allowable investments in pooling funds is guided by the debt documents which could conflict with the Investment Policy.
− Removed Sallie Mae from the list of government agency issuers (Section 8.0: Authorized and Suitable Investments, 8.03) as Sallie Mae is no longer an agency issue.
− Added the Federal Agricultural Mortgage Corporation (Section 8.0: Authorized and Suitable Investments, 8.03) as it is now
an allowable investment.
− Increased the FDIC insured deposit amount from $100,000 to $250,000 (Section 8.0: Authorized and Suitable Investments,
8.04) which is the current insured deposit amount.
− Added to the commercial paper limitation that the District may
not purchase more than 10% of the outstanding commercial paper
of any single issuer (Section 8.0: Authorized and Suitable
Investments, 8.04). The District, while it has held commercial paper in the past, as part of its investment strategy, generally does not invest in commercial paper.
Staff, however, wished to assure that the limitation was included in the policy.
• Staff indicated that the objectives of the District’s investment performance are (in order of priority):
− Safety: Safeguarding the monies to assure no losses.
− Liquidity: Maintaining adequate liquidity to cover the District’s working capital requirements.
− Return on Investment: Strategies used include buy-and-hold an
investment until maturity or it is called and laddering purchases (that an equal amount is being purchased and coming due at the same time). This assures the District is not
overly invested.
− Buy & Hold – Staff purchases investments with the intent of
holding them until maturity and does not actively trade debt investments.
− Laddering – Staff invests based on laddering the timing of
both maturities and investments.
• The District’s YTD Performance: The District is still out-
performing LAIF and the County Pool which are the investments used as a benchmark to evaluate the District’s investment performance.
FY-13 (April) FY-12
− Otay 0.42% 0.62%
− LAIF 0.30% 0.40%
− County Pool 0.41% 0.46%
• Staff presented a slide showing the amounts and the percentage of the District’s funds invested in various investment vehicles
(please reference the attached copy of the presentation). The total invested by the District is approximately $82.9 million, where $50,7735,908 or 61.22% is invested in agency issues,
$30,802,240 or 37.17% in pools (LAIF & County), and $1,337,139 or 1.61% in banks (passbook/checking/cd).
• In response to an inquiry from the committee,it was indicated that the Government Code contains a stipulation that the District may
not hold more than 10% of the commercial paper of any single issuer. Staff is reflecting this change in the District’s
Investment Policy.
• The committee also further discussed that they felt 15% allowable
investment in commercial paper was too high. The committee suggested that the District’s Investment Policy should be more restrictive than the Government Code and suggested that the policy
should be amended to reduce such investments to 10% of the District’s total investable funds.
• The committee suggested that staff review if language should be added to the District’s Investment Policy with additional standards
on how government issued investments will be handled if they are downgraded. Staff indicated that the State indicates in their
policy that if commercial paper drops below an “A” rating, it is not required that the investment be sold, however, the State may no longer invest in that particular investment while the rate is below
an “A” rating. It was indicated that this type of language can be added to the District’s policy. It was noted that staff does diversify its investments in agency issues.
• Staff indicated that in Government Code 53601(h), it lists
investment restrictions with regard to different investment vehicles. The committee indicated that they felt the District
should be more restrictive than the Government Code.
• The committee inquired with regard to the Chief Financial Officer
establishing an independent review of internal controls by an external auditor, if it should not be forwarded to the board for review as well. Staff indicated that the review is forwarded to
the board as part of the audit procedures.
• As the committee has proposed a change to the Policy regarding amending commercial paper investment to 10% there was discussion if the committee wished to propose a more general change, such as, matching the District’s Investment Policy to actual practice. Staff will put together a comparative analysis of the Government
Code, current policy versus the District’s actual practice and present it at the board meeting.
Upon completion of the discussion, the committee supported presentation to the board as an action item to consider the
committee’s discussion to reduce the District’s allowable investment in commercial paper to 10% and discuss the comparative analysis (please see attached documents).
Finance Committee Discussion:
Should the District implement a restriction for government
agencies (section 8.03) whose government implied
guarantee has been reduced or eliminated?
STAFF RECOMMENDATION:
Add the following statement related to government agencies (section 8.03):
“Government agencies whose implied guarantee has been reduced
or eliminated shall require an “A” rating or higher by a nationally
recognized statistical rating organization.”(1)
(1) The condition requiring an “A” rating or higher is consistent with the limitations governing commercial paper
and medium-term notes set forth in California Government Code Section 53601.
Allowable Investments
California Government Code vs. OWD
Investments
allowed under
the current
District Policy
Investments
not allowed
under District
Policy
Treasury Securities
Local Agency Investment Fund
Federal Agency Issues
Certificates of Deposit
Money Market Mutual Funds
San Diego County Pool
Short-Term Commercial Notes
Medium-Term Commercial Debt
Bankers Acceptances
Repurchase Agreements
Reverse Repurchase Agreements
Beneficial Interests
Mortgage Pass-through Securities
California Warrants
State Debt (Other States)
California Agency Debt
Finance Committee Discussion:
Should the District reduce the short-term commercial debt limit to
10% and review the limitations alignment with Management’s
current practice?
BOARD DISCUSSION:
Alternative Option A - Reduces the allowable commercial
notes & debt categories to 10%.
Alternative Option B – Removes commercial notes & debt
instruments as allowable investments.
Staff Report Committee Current
Policy Policy Limit Recommendation Practice(1)Otay Actual(2)
Section Investment State Limit Attachment C Alternative A Alternative B Investments
8.01:Treasury Securities 100%100%100%100%0
8.02:Local Agency Investment Fund (Operations)$50 Million $50 Million $50 Million $50 Million $12.7 Million
8.02:Local Agency Investment Fund (Bonds)100%100%100%100%4.99%
8.03:Federal Agency Issues 100%100%100%100%53.43%
8.04:Certificates of Deposit 30%15%15%15%0.10%
8.05:Short-Term Commercial Notes 25%15%10%0%0%
8.06:Medium-Term Commercial Debt 30%15%10%0%0%
8.07:Money Market Mutual Funds 10%10%10%10%0%
8.08:San Diego County Pool 100%100%100%100%24.66%
(1) The District does not currently hold any commercial notes or debt and does not plan to invest in these instruments in Fiscal Year 2014. Based on this current practice,
staff is presenting an Alternative B option, which removes commercial notes and debt as available investments.
(2) Otay Actual Investments represents balances and percentages as of April 30, 2013.
REQUESTED BOARD ACTION
Select one of the Investment Policy No. 27 options listed below:
1. Staff Report Recommendation (Attachment C)
2. Alternative Option A
3. Alternative Option B
Adopt Resolution No. 4213 to amend Investment Policy No. 27 using the selected option.
Re-delegate authority for all investment related activities to the Chief Financial Officer (CFO).
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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. 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
Alternative A
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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 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
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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 financial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker/dealers who are authorized to provide investment services in the State of California. 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:
• Audited Financial Statements.
• Proof of National Association of Security Dealers (NASD) 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
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financial statement is required to be on file for each financial institution and broker/dealer in 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 $50 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:
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• 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’’)
• Student Loan Marketing Association (SLMA or "Sallie 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 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 and Certificates of Deposit (CD) will be made only in Federal Deposit Insurance Corporation (FDIC) insured accounts. For deposits in excess of the insured maximum of $100,000$250,000, approved collateral shall be required in accordance with California Government Code, Section 53652. 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 10 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(hg). Purchases of commercial paper may not exceed
15 10 percent of the District’s portfolio and no more than 10 percent of the outstanding commercial paper of any single issuer. .
8.06) Medium-term notes defined as all corporate debt securities with a maximum remaining maturity of five years or
less, and that meet the further requirements of California Government Code, Section 53601(jk). Investments in medium-term notes are limited to 15 10 percent of the District’s portfolio.
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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(kl). Investments in money market mutual funds are limited to 15 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?
• 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?
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10.0 COLLATERALIZATION
Collateralization will be required on certificates of deposit. 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 date of purchase. However, for time deposits with banks or savings and loan associations, investment maturities will not exceed two years. Investments in commercial paper will be restricted to 270 days.
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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. 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.
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18.0: GLOSSARY
See Appendix A.
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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.
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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. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to
supply credit to various classes of institutions and individuals, e.g.,
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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, currently up to $100,000 per deposit. 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). 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
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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. 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 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.
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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 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. NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD): A self-regulatory
organization of the securities industry responsible for the operation and regulation of the NASDAQ stock market and over-the-counter markets. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities. 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.
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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. 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
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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, FAMCASLMA, 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. STUDENT LOAN MARKETING ASSOCIATION (SLMA or Sallie Mae): A federally
established, publicly traded corporation which buys student loans from colleges and other lenders, pools them, and sells them to investors. 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.
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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.
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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. 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
Alternative B
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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 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
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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 financial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker/dealers who are authorized to provide investment services in the State of California. 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:
• Audited Financial Statements.
• Proof of National Association of Security Dealers (NASD) 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
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financial statement is required to be on file for each financial institution and broker/dealer in 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 $50 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:
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• 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’’)
• Student Loan Marketing Association (SLMA or "Sallie 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 limitation is applicable. Government agencies whose implied guaranty 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 and Certificates of Deposit (CD) will be made only in Federal Deposit Insurance Corporation (FDIC) insured accounts. For deposits in excess of the insured maximum of $100,000$250,000, approved collateral shall be required in accordance with California Government Code, Section 53652. 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 10 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(g). Purchases of commercial paper may not exceed 15
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 or less, and that meet the further requirements of California
Government Code, Section 53601(j). Investments in medium-term notes are limited to 15 percent of the District’s portfolio. 8.0705) Money market mutual funds that invest only in Treasury securities and repurchase agreements collateralized with Treasury
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securities, and that meet the further requirements of California Government Code, Section 53601(kl). Investments in money market mutual funds are limited to 15 10 percent of the District's portfolio. 8.0806) 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. 8.0907) 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?
• 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?
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10.0 COLLATERALIZATION
Collateralization will be required on certificates of deposit. 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 date of purchase. However, for time deposits with banks or savings and loan associations, investment maturities will not exceed two years. Investments in commercial paper will be restricted to 270 days.
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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. 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.
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18.0: GLOSSARY
See Appendix A.
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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.
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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. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to
supply credit to various classes of institutions and individuals, e.g.,
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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, currently up to $100,000 per deposit. 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). 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
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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. 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 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.
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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 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. NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD): A self-regulatory
organization of the securities industry responsible for the operation and regulation of the NASDAQ stock market and over-the-counter markets. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities. 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.
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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. 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
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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, FAMCASLMA, 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. STUDENT LOAN MARKETING ASSOCIATION (SLMA or Sallie Mae): A federally
established, publicly traded corporation which buys student loans from colleges and other lenders, pools them, and sells them to investors. 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.
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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.
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RESOLUTION NO.4213
WHEREAS, the Otay Water District Board of Directors has been
presented with an amended Investment Policy No. 27 of the
District’s Code of Ordinances for the financial management of the
Otay Water District; and
WHEREAS, the amended Investment Policy has been revised for,
among other reasons, consistency with changes in the law, changes
to FDIC insurance limits, and changes to government agency
issues; and
WHEREAS, the amended Investment Policy has been reviewed and
considered by the Board, and it is in the interest of the
District to adopt the amended Investment Policy; and
WHEREAS, the strike-through copy of the proposed policy is
attached as Exhibit 1 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 Investment Policy, incorporated herein as Attachment C,
is hereby adopted.
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING INVESTMENT POLICY NO.27 OF THE DISTRICT’S CODE OF ORDINANCES
Attachment B
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PASSED, APPROVED AND ADOPTED by the Board of Directors of Otay
Water District at a board meeting held this 3rd day of July 2013,
by the following vote:
Ayes: Noes: Abstain: Absent: ________________________ President ATTEST: ____________________________ District Secretary
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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. 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
Exhibit 1
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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 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
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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 financial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker/dealers who are authorized to provide investment services in the State of California. 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:
• Audited Financial Statements.
• Proof of National Association of Security Dealers (NASD) 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
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financial statement is required to be on file for each financial institution and broker/dealer in 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 $50 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:
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• 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’’)
• Student Loan Marketing Association (SLMA or "Sallie 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 limitation is applicable. 8.04) Interest-bearing demand deposit accounts and Certificates of Deposit (CD) will be made only in Federal Deposit Insurance Corporation (FDIC) insured accounts. For deposits in excess of the insured maximum of $100,000$250,000, approved collateral shall be required in accordance with California Government Code, Section 53652. 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 10 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(hg). Purchases of commercial paper may not exceed
15 percent of the District’s portfolio and no more than 10 percent of the outstanding commercial paper of any single issuer. .
8.06) Medium-term notes defined as all corporate debt securities with a maximum remaining maturity of five years or
less, and that meet the further requirements of California Government Code, Section 53601(jk). Investments in medium-term notes are limited to 15 percent of the District’s portfolio.
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
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Government Code, Section 53601(kl). Investments in money market mutual funds are limited to 15 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?
• 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?
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10.0 COLLATERALIZATION
Collateralization will be required on certificates of deposit. 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 date of purchase. However, for time deposits with banks or savings and loan associations, investment maturities will not exceed two years. Investments in commercial paper will be restricted to 270 days.
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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. 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.
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18.0: GLOSSARY
See Appendix A.
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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.
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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. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to
supply credit to various classes of institutions and individuals, e.g.,
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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, currently up to $100,000 per deposit. 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). 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
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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. 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 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.
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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 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. NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD): A self-regulatory
organization of the securities industry responsible for the operation and regulation of the NASDAQ stock market and over-the-counter markets. Its regulatory mandate includes authority over firms that distribute mutual fund shares as well as other securities. 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.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DISTRICT INVESTMENT POLICY 27 9/15/93 8/10/11 7/3/13
Page 15 of 17
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. 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
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DISTRICT INVESTMENT POLICY 27 9/15/93 8/10/11 7/3/13
Page 16 of 17
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, FAMCASLMA, 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. STUDENT LOAN MARKETING ASSOCIATION (SLMA or Sallie Mae): A federally
established, publicly traded corporation which buys student loans from colleges and other lenders, pools them, and sells them to investors. 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.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised DISTRICT INVESTMENT POLICY 27 9/15/93 8/10/11 7/3/13
Page 17 of 17
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
No. 27 & PERFORMANCE
REVIEW
July 3, 2013
Attachment C
POLICY REVIEW
Purpose:
Annual Policy Review
Investment Performance Review
Delegation of Investment Authority
INVESTMENT POLICY GUIDELINES
A. California Government Code:
Sections 53600 through 53692
B. Investment Policy Certification:
Association of Public Treasurers of the United
States & Canada (APT US&C)
POLICY REVIEW
Review of Proposed Changes
Added debt reserves as an exception to the
pooling of funds (Section 2.0: Scope).
Removed Sallie Mae from the list of government
agency issuers and related definition (Section
8.0: Authorized and Suitable Investments, 8.03)
Added Federal Agricultural Mortgage
Corporation and related definition (Section 8.0:
Authorized and Suitable Investments, 8.03)
POLICY REVIEW (cont.)
Increased the FDIC insured deposit amount from
$100,000 to $250,000 (Section 8.0: Authorized
and Suitable Investments, 8.04)
Added to the commercial paper limitation that the
District may not purchase more than 10 percent of
the outstanding commercial paper of any single
issuer. (Section 8.0: Authorized and Suitable
Investments, 8.04)
Reduced the limit of allowable money market
mutual funds from 15 percent of the District’s
portfolio to 10 percent of the District’s portfolio
(Section 8:0: Authorized and Suitable
Investments, 8.06)
INVESTMENT PERFORMANCE
Fund Objectives (in order of priority)
Safety
Liquidity
Return on Investment
YTD Performance:
FY-13 FY-12
OTAY 0.42% 0.62%
LAIF 0.30% 0.40%
County Pool 0.41% 0.46%
INVESTMENT PORTFOLIO: 4/30/13
Authorized
$(‘000s) $ / % Actual %
LAIF (Operating) $6,534 $50 Mil 7.89%
LAIF (Bonds) $4,081 100% 4.92%
Govt. Agency Bonds $50,736 100% 61.22%
Bank Deposits & CDs $1,337 15% 1.61%
San Diego County Pool $20,187 50% 24.36%
TOTAL: $82,875
INVESTMENT PORTFOLIO: 4/30/13
$1,337,189
1.61%
$30,802,240
37.17%
$50,735,908
61.22%
Otay Water District
Investment Portfolio: 4/30/2013
Banks (Passbook/Checking/CD) Pools (LAIF & County) Agencies & Corporate Notes
Total Cash and Investments: $82,875,337
Finance Committee
The following slides are in response to
the discussions held during the Finance
Committee meeting.
Finance Committee Discussion:
Should the District implement a restriction for government
agencies (section 8.03) whose government implied
guarantee has been reduced or eliminated?
STAFF RECOMMENDATION:
Add the following statement related to government agencies (section 8.03):
“Government agencies whose implied guarantee has been reduced
or eliminated shall require an “A” rating or higher by a nationally
recognized statistical rating organization.”(1)
(1) The condition requiring an “A” rating or higher is consistent with the limitations governing commercial paper
and medium-term notes set forth in California Government Code Section 53601.
Allowable Investments
California Government Code vs. OWD
Investments
allowed under
the current
District Policy
Investments
not allowed
under District
Policy
Treasury Securities
Local Agency Investment Fund
Federal Agency Issues
Certificates of Deposit
Money Market Mutual Funds
San Diego County Pool
Short-Term Commercial Notes
Medium-Term Commercial Debt
Bankers Acceptances
Repurchase Agreements
Reverse Repurchase Agreements
Beneficial Interests
Mortgage Pass-through Securities
California Warrants
State Debt (Other States)
California Agency Debt
Finance Committee Discussion:
Should the District reduce the short-term commercial debt limit to
10% and review the limitations alignment with Management’s
current practice?
BOARD DISCUSSION:
Alternative Option A - Reduces the allowable commercial
notes & debt categories to 10%.
Alternative Option B – Removes commercial notes & debt
instruments as allowable investments.
Staff Report Committee Current
Policy Policy Limit Recommendation Practice(1)Otay Actual(2)
Section Investment State Limit Attachment C Alternative A Alternative B Investments
8.01:Treasury Securities 100%100%100%100%0
8.02:Local Agency Investment Fund (Operations)$50 Million $50 Million $50 Million $50 Million $12.7 Million
8.02:Local Agency Investment Fund (Bonds)100%100%100%100%4.99%
8.03:Federal Agency Issues 100%100%100%100%53.43%
8.04:Certificates of Deposit 30%15%15%15%0.10%
8.05:Short-Term Commercial Notes 25%15%10%0%0%
8.06:Medium-Term Commercial Debt 30%15%10%0%0%
8.07:Money Market Mutual Funds 10%10%10%10%0%
8.08:San Diego County Pool 100%100%100%100%24.66%
(1) The District does not currently hold any commercial notes or debt and does not plan to invest in these instruments in Fiscal Year 2014. Based on this current practice,
staff is presenting an Alternative B option, which removes commercial notes and debt as available investments.
(2) Otay Actual Investments represents balances and percentages as of April 30, 2013.
Questions?
REQUESTED BOARD ACTION
Select one of the Investment Policy No. 27 options listed below:
1. Staff Report Recommendation Exhibit 1
2. Alternative Option A
3. Alternative Option B
Adopt Resolution No. 4213 to amend Investment Policy No. 27 using the selected option.
Re-delegate authority for all investment related activities to the Chief Financial Officer (CFO).
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: July 3, 2013
SUBMITTED BY:
Mark Watton,
General Manager
PROJECT: Various DIV. NO. ALL
APPROVED BY: Mark Watton, General Manager
SUBJECT: California Special Districts Association (CSDA) Region 6 Board Election
GENERAL MANAGER’S RECOMMENDATION:
That the Board consider casting a vote to elect a representative to the California Special Districts Association (CSDA) Board of
Directors, Region 6, Seat B. PURPOSE: To present for the board’s consideration the ballot to elect a
representative to Region 6, Seat B, on CSDA’s Board of Directors. COMMITTEE ACTION: N/A
ANALYSIS:
CSDA is holding an election to fill Seat B of Region 6 on its Board of Directors. Mr. William Nelson, Orange County Cemetery District, is the current incumbent of Seat B and is seeking re-election. The individual elected will serve a three (3) year term. There are a
total of six [6] regions with each region having three seats on the Board.
Attached is a copy of the mail-in ballot and the candidates’ Statement of Qualifications. The ballot must be mailed and received
by CSDA by 5:00 p.m. on Friday, August 2, 2013. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None.
AGENDA ITEM 9a
STRATEGIC GOAL: Participating would support the strategic goal of maintaining effective communications with other cities, special districts, State and Federal governments, community organizations and Mexico.
LEGAL IMPACT:
None.
Attachment A: Committee Action Attachment B: Ballot
Attachment C: Candidates’ Statements (2)
ATTACHMENT A
SUBJECT/PROJECT:
California Special Districts Association (CSDA) Region 6 Board Election COMMITTEE ACTION:
The Finance, Administration and Communications Committee
reviewed this item at a meeting held on June 24, 2013 and recommended that the District’s vote be cast for Mr. George McManigle, Rainbow Municipal Water District, and that it be
presented to the full board as an action item.
STAFF REPORT
TYPE MEETING: Regular Board Meeting MEETING DATE: July 3, 2013
SUBMITTED BY: Mark Watton,
General Manager
W.O./G.F. NO: DIV. NO.
APPROVED BY:
Susan Cruz, District Secretary
Mark Watton, General Manager
SUBJECT: Board of Directors 2013 Calendar of Meetings
GENERAL MANAGER’S RECOMMENDATION:
At the request of the Board, the attached Board of Director’s meeting
calendar for 2013 is being presented for discussion.
PURPOSE:
This staff report is being presented to provide the Board the
opportunity to review the 2013 Board of Director’s meeting calendars
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.
Attachments: Calendar of Meetings for 2013
G:\UserData\DistSec\WINWORD\STAFRPTS\Board Meeting Calendar 7-3-13.doc
AGENDA ITEM 9b
Board of Directors, Workshops
and Committee Meetings
2013
Regular Board Meetings:
Special Board or Committee Meetings (3rd
Wednesday of Each Month or as Noted)
January 8, 2013
February 6, 2013
March 6, 2013
April 3, 2013
May 1, 2013
June 5, 2013
July 3, 2013
August 7, 2013
September 4, 2013
October 2, 2013
November 6, 2013
December 4, 2013
January 16, 2013
February 20, 2013
March 20, 2013
April 17, 2013
May 15, 2013
June 19, 2013
July 17, 2013
August 21, 2013
September 18, 2013
October 16, 2013
November 20, 2013
SPECIAL BOARD MEETINGS:
BOARD WORKSHOPS:
STAFF REPORT
TYPE
MEETING:
Regular Board
MEETING
DATE:
July 3, 2013
SUBMITTED
BY:
Mark Watton
General Manager
W.O./G.F.
NO:
N/A DIV.
NO.
N/A
APPROVED BY:
Mark Watton, General Manager
SUBJECT: General Manager’s Report
GENERAL MANAGER:
Low Pressure Incident: On Friday, June 21, 2013, the 944-1 pump
station inadvertently dewatered the 832 tank between 3:30 a.m.
and 6:00 a.m. after we lost SCADA communication in some
facilities of the Regulatory System.
At approximately 6:00 a.m. service was restored and though
there were no indications of water contamination, a
“precautionary boil water alert” was issued under the direction
of the California Department of Public Health (CDPH). CDPH did
not recommend press releases for boil water advisories for this
case because it was a very limited area and affected a limited
population.
Consequently, staff hand delivered the precautionary notice to
the affected 447 customers that morning. These customers were
along Campo Road in the Jamul area of San Diego’s East County,
with the majority of customers in 91935 (Jamul) and some in
91978 (Spring Valley) as well. As a precaution, residents were
advised that they could use tap water for all purposes except
for drinking. Tap water must be boiled first or they should
use bottled water for drinking until bacteriological tests
confirm that the water is safe and the precautionary notice is
no longer required.
Eight water samples were collected on Friday morning with a 24-
hour test result and it was re-tested once again on Saturday
for verification purposes.
AGENDA ITEM 10
2
On Sunday, June 23, at about 11:30 a.m., the CDPH lifted the
advisory based on receiving acceptable water quality results.
The CDPH also thanked the Otay Water District staff for all of
our efforts.
During this period we received over 30 phone calls inquiring
about additional information, however, we missed three calls
early in the process. The next day our System Operations
Manager called them all and apologized and answered their
questions. The customers were very understanding.
Overall, there were four restaurants and a meat packaging
business that might have lost revenues. Staff will be
assisting business owners with any claims they may have.
It is also important to recognize that under this unfortunate
circumstance staff responded effectively and professionally;
the overwhelming majority of the customers were appreciative of
our person-to-person approach.
City of San Diego Recycled Water Cost of Service Study: In
2009, the City of San Diego (city) produced a Recycled Water
Cost of Service Study performed by Raftelis Financial
Consultants (Raftelis). After reviewing the Study, we came to
the conclusion that it was severely flawed and was not
conducted to industry standards. The District submitted over
20 pages of questions and comments that went to the heart of
the lack of application of true cost of service and substantial
errors, in addition to a lack of understanding of the recycled
water system. At that time the city pulled back the study and
assured Otay staff and the Metro JPA that future work or
studies of this nature, dealing with recycled water, would be
released in a manner to allow full disclosure, time for review
and comments, and full vetting by the affected parties and
public. Since the retraction of the Study, Otay and Metro JPA
has repeatedly asked city staff when this matter will be taken
up again and when can we expect to see a revised study.
To Otay staff’s surprise, on June 20, 2013, a Recycled Water
Cost of Service Study by Raftelis was popped out by city staff
with the first review by the city IROC committee on June 24th
and a plan to take the Study to the City Council committee on
July 10th. Otay staff views this as a bad faith action at a
minimum. Otay staff has had a limited review of the Study
which appears to be essentially the same document released in
2009. Otay staff will have a handout listing our preliminary
comments for our July 3rd Board meeting.
3
ADMINISTRATIVE SERVICES:
Purchasing, Facilities, and Water Conservation:
Purchase Orders – There were 53 purchase orders processed in
June 2013 for a total of $176,097.60.
New CWA Water Conservation Website – WaterSmartsd.org is CWA’s
new website replacing the 20-Gallon Challenge website. The new
site is a user-friendly online guide for topics related to
water conservation in the San Diego region. CWA sponsored
educational and incentive program information is available to
residential, commercial and institutional sites striving to
conserve water.
District’s Landscape Contest Winner – The Water Conservation
Garden’s summer newsletter, Bloom, featured John and Geralyn
Orcutt, the District’s 2013 California Friendly Landscape
Contest Winner. Removing all the grass in their yard through
the District’s turf removal program, the Orcutts reported a 69%
decrease in their water usage from 2012 compared to 2013.
California Friendly Residential Landscape Class – The District
will be partnering with Sweetwater Authority to offer a free
residential landscape class on Saturday, August 10, 2013, at
the Bonita County Library. The class is designed for
homeowners interested in lowering their water bills and will
cover turf removal, high-efficiency sprinkler components,
drought-tolerant plants, and cost-reducing rebates.
Human Resources:
Employee Recognition Program Scheduled – Please mark your
calendars to attend the Employee Recognition Luncheon that will
be held at the Operations Center on Wednesday, September 25th
from 12:00 pm – 1:30 pm.
Performance Evaluations – Management is working to complete
annual performance evaluations on most District employees. June
30th marks the end of the rating period and meetings will occur
with employees in July.
Benefits Programs – The District’s Benefits Consultant is
reviewing our ancillary lines of coverage for our renewal in
January 2014 to ensure that the District is receiving the best
possible rates for the benefits provided.
Recruitment Video – HR is working with Communications staff to
develop a recruitment video to place on our website for
prospective applicants. The video will include information
about careers at Otay and describe the working environment.
4
Recruitments – HR is in the process of recruiting for Safety
and Security Specialist, Construction Inspector, and Equipment
Mechanic II.
New Hires – There were no new hires in the month of June.
INFORMATION TECHNOLOGY AND STRATEGIC PLANNING:
Special Assessments - The Special Assessments process develops
the District portion of the County Tax Bill associated with
water and sewer availability. Each year, staff refines the
process to be more accurate and efficient. This year, staff is
making further strides to ensure that each parcel that is being
billed is also accurately identified in our GIS systems and
database. Staff has successfully identified 100% of parcels
that receive this assessment, and in the process have corrected
minor data inconsistencies and errors. This cross checking
between systems on a routine basis helps assure that our data
is accurate and reliable. The entire effort of Special
Assessments should be complete in July.
Red Line Processes - Staff routinely identifies areas where the
“real world” encountered in the field is not completely
accurate as represented in our maps and databases. When this
occurs, staff creates an electronic correction and sends this
“red line drawing” electronically to GIS staff. Over the last
year, staff has made over 250 red line adjustments and the
queue for changes is quite small.
Elimination of Copper Phone Lines - Staff has installed an
additional 20 wireless modems in locations where we used to
have a hard wired phone line primarily to support SCADA data
transmission requirements. The copper wires are becoming
increasingly unreliable in remote areas, and electronic
integration with planned redundancy makes our overall systems
more reliable.
SharePoint -- Process Improvements - In line with the
District’s Strategic Plan, staff is working with Finance and
Customer Service to identify ways to better use “SharePoint” as
an efficiency tool. By simplifying work processes and
centralizing documentation and support in one place, IT in
conjunction with these departments, continues to refine where
information is organized and how we use it on a routine basis.
This organized approach is fundamental to continuous
improvement efforts.
2013 CityWorks Conference – Two staff members attended the
Cityworks User Conference in Salt Lake City last month. Otay
5
will be implementing the new work order system software in the
next 12 months, and this training is helpful in preparation for
this significant effort.
FINANCE:
Proposition 218 Notices - Attached to the General Managers
Report are copies of the Proposition 218 notices for your
review. They will be printed and mailed 45 days prior to the
September 4, 2013 Public Hearing.
2012 CAFR Award - For the ninth consecutive year, the
Government Finance Officers Association (GFOA) awarded the
“Certificate of Achievement for Excellence in Financial
Reporting” to the Finance Department for the Comprehensive
Annual Financial Report (CAFR) for fiscal year ending June 30,
2012. This is the highest form of recognition in the area of
governmental accounting and financial reporting and clearly
demonstrates how the District takes great care in maintaining
high financial standards. Staff is proud to have received this
award and appreciates the Board's ongoing support of financial
excellence.
Escheatment Process – Pursuant to California Government Code
Section 50050-50056, the District updated its process for
reporting unclaimed monies in the District’s possession and
processing the related reimbursement claims, known as
“escheatment”. Unclaimed monies result from the District being
unable to locate customers who have made overpayments or
vendors that do not have a valid address. The inability to
locate these customers and vendors may result from them moving
or closing and not providing the District with a forwarding
address. The updated process includes posting a listing of
unclaimed funds on the District’s website for a period of three
years and annually publishing a list of unclaimed funds greater
than three years old in a local publication. Unclaimed funds
that are not claimed within 60 days of the local publication
are to be transferred to the General Fund.
Additional Collection Procedure - Staff has developed an email
and phone message to notify customers prior to their accounts
being sent to an outside collections agency. This is the
District’s final attempt to contact the customer after all
other previous attempts have failed. Approximately seven days
prior to the account being sent to collections, an email and/or
phone message will go out advising the customer of their
outstanding balance and the potential of having their account
sent to collections if payment is not received immediately.
This additional step in the procedure will begin on July 8th and
6
is expected to reduce the number of accounts being sent to the
collections agency every month.
Request for Proposal (RFP) - Staff is preparing an RFP for a
Water and Sewer Capacity and Annexation Fee Study to be issued
in July, with a consultant to be selected in August. On the
water side, the main goal is to ensure the way the District
assigns EDUs to single-family vs. multi-dwelling units is fair
and equitable. On the sewer side, the emphasis will be on
making the fee methodology consistent with the water side.
Financial Reporting:
For the eleven months ended May 31, 2013, there are total
revenues of $75,904,821 and total expenses of $74,700,284. The
revenues exceeded expenses by $1,204,537.
The market value shown in the Portfolio Summary and in the
Investment Portfolio Details as of May 31, 2013 total
$81,747,356.44 with an average yield to maturity of 0.350%. The
total earnings year-to-date are $316,190.42.
ENGINEERING AND WATER OPERATIONS:
Engineering:
California Water Environment Association – San Diego Section:
The California Water Environment Association – San Diego
Section (CWEA-SD) hosted a meeting with approximately 35
members in attendance on June 20, 2013 in the Otay Water
District Training Room. A presentation on the Rosarito
Desalination Project and a presentation on the improvements
made to the Ralph W. Chapman Water Reclamation Facility
(Chapman Facility) to reduce nitrogen were provided along with
a tour of the Chapman Facility.
Regulatory Site Access Road: This project will improve the
existing access road from the Sheriff substation to the
reservoir site. The San Miguel Fire Department is negotiating
with the County to accept this access road as a substitute for
the Campo Road deceleration lane requirement in their Major Use
Permit. Staff continues working with the County to develop the
easement documents. After acceptance of the MND by the Board
in July, staff will be applying for a grading permit with the
County and a Joint Use Agreement with the Water Authority for
the road encroachment within their easement. (P2504)
North District – South District Interconnection System: This
project consists of installing approximately 5.2 miles of 30-
inch diameter pipe from H Street in Chula Vista to Paradise
7
Valley Road in Spring Valley. With the support of Supervisor
Cox, staff has resumed work on the Corral Canyon alignment.
Staff presented to three community groups in early June (Bonita
Highlands HOA, Sweetwater Community Planning Group, and
Sweetwater Valley Civic Association on June 4th, 5th, and 11th,
respectively). As a follow-up to the Notice of Preparation
Public Scoping Meeting held on August 29, 2011, the Draft
Environmental Impact Report was issued for public comment on
June 12, 2013. The 45-day public comment period will end July
26, 2013. (P2511)
30-Inch, 980 Zone, Hunte Parkway – Proctor Valley/Use Area:
This project consists of the installation of approximately
2,240 linear-feet of 30-inch steel pipe and appurtenances on
Hunte Parkway at Proctor Valley Road, at the entrance to the
Salt Creek Golf Course, in the City of Chula Vista. The
Contractor, Sepulveda Construction (Sepulveda), completed
installation of the 30-inch water line and placed the line into
service on March 19, 2013. The contract has been accepted and
the Notice of Completion has been filed with the County of San
Diego. Sepulveda submitted additional change requests for
extended overhead and traffic control delays on the project.
Staff has evaluated these requests and has provided an initial
determination of no merit on these requests based on the
information submitted. Project is within budget and
construction is completed. (P2514)
944‐1R Recycled Water Pump Station Upgrades and System
Enhancement: This project consists of the installation of a new
pump, reconfiguration of the suction header piping, upgrades to
the instrumentation, SCADA system, and equipment at the 944-1R
pump station. The project also includes the installation of
three (3) Pressure Reducing Stations (PRS) on Olympic Parkway,
Eastlake Parkway, and Otay Lakes Road. Notice of Substantial
Completion was issued for the project as of August 3, 2012. The
Contractor, Sepulveda Construction (Sepulveda), submitted
several Change Order requests subsequent to the Notice of
Substantial Completion. Staff met with Sepulveda on March 19,
2013 and has finalized the evaluation of these requests to
determine the amount of entitlement for the submitted requests.
Staff will be bringing a Change Order to the Board for
consideration as part of the closing out this project. Project
is within budget and construction is anticipated to be completed
in July 2014. (R2091)
Avocado, Louisa, Calavo, Challenge, Hidden Mesa Sanitary Sewer
Replacement: This project consists of replacing approximately
4,500 linear-feet of sewer pipeline in Avocado Boulevard and
neighboring residential streets. The contractor, Garcia Juarez
Construction, Inc., has completed the installation of the sewer
8
pipeline, construction of the diversion vault, and the tie-in to
the Calavo Lift Station. Substantial completion was granted on
May 20, 2013. Remaining work consists of completion of final
punch list items prior to contract acceptance. Project is
within budget and staff anticipates the contract will be
accepted in July 2013. (S2019, S2020, S2022, S2026)
624-1 Reservoir Cover Replacement: This project consists of
replacing the floating cover on the 624-1 Reservoir. The
existing cover is at the end of its useful life and in need of
replacement. Work to install the new liner and new cover is
complete. The reservoir was placed back into service on June 11,
2013. Punch list work including contract deliverables is nearing
completion. The project is within budget and contract acceptance
is anticipated in July 2013. (P2477)
12-Inch Potable Water Pipeline, East Orange Avenue, I-805
Crossing: This project consists of the installation of
approximately 1,915 linear-feet of 12-inch steel and PVC pipe
along with the associated appurtenances from the intersection
of Melrose Avenue and Orange Avenue, east across the I-805
overpass, to the intersection of Olympic Parkway and Oleander
Avenue in Chula Vista. This new pipeline is needed to meet
fire flow requirements while Caltrans reconstructs the Palomar
Bridge overpass, which contains a 10-inch pipeline that will be
temporarily out of service. The Contractor, Basile
Construction, has completed testing and the tie-ins for the
water line. The water line was put into service on July 1,
2013. The remaining work of the project consists of final
paving and punch list items. The project is within budget, and
anticipated to be complete in August 2013. (P2513)
803-3 & 832-2 Reservoirs Interior/Exterior Coatings and
Upgrades: This project consists of removing and replacing the
interior and exterior coatings of the 803-3 Reservoir 2.0 MG and
the 832-2 MG Reservoir 2.0 MG, along with providing structural
upgrades to ensure the tanks comply with both State and Federal
OSHA standards as well as American Water Works Association and
County Health Department standards. The Contractor, Advanced
Industrial Services (AIS), is nearing completion on the 803-3
Reservoir. The remaining work at this location consists of
disinfection, filling the reservoir, and testing to put the 803-
3 reservoir in service. Work continues at the 832-2 Reservoir.
The current work consists of blasting and coating the floor and
exterior of the reservoir. The project is within budget and
anticipated to be complete in August 2013. (P2518 & P2519)
624-2 Reservoir Interior/Exterior Coatings and Upgrades and 458-
2 Reservoir Interior Coating and Upgrades: This project
consists of removing and replacing the interior and exterior
9
coating of the 8.0 MG 624-2 Reservoir and the interior coating
of the 1.8 MG 458-2 MG Reservoir, along with providing
structural upgrades to ensure the tanks comply with both State
and Federal OSHA standards as well as the American Water Works
Association and County Health Department standards. As part of
the design process, a steel tank evaluation was performed by
Coating Specialists and Inspection Services, Inc. (CSI
Services), and their recommendations will be incorporated in the
contract documents. Project is anticipated to be advertised for
bid in mid-July 2013. (P2493 & P2535)
For the month of May 2013, the District sold 33 meters (57.5
EDUs) generating $513,183 in revenue. Projection for this
period was 27.6 meters (36.6 EDUs) with budgeted revenue of
$331,005. Total revenue for Fiscal Year 2013 through May 2013
is $3,187,910 against the annual budget of $3,972,064.
Water Operations:
Total number of potable water meters is 49,054.
The May potable water purchases were 2,969.3 acre-feet which is
24.6% above the budget of 2,383.4 acre-feet. The cumulative
purchases through May is 28,838.6, acre-feet which is 4.0%
above the cumulative budget of 27,727.4 acre-feet.
10
The May recycled water purchases and production was 436.7 acre-
feet which is 20.9% above the budget of 361.3 acre-feet. The
cumulative production and purchases through May is 3,867.4
acre-feet which is 12.2% above the cumulative budget of 3,446.1
acre-feet.
Recycled water consumption for the month of May is as follows:
Total consumption was 361.0 acre-feet or 117,587,844 gallons
and the average daily consumption was 3,793,156 gallons per
day.
Total recycled water consumption as of May for FY 2013 is
4033.6 acre-feet.
Total number of recycled water meters is 708.
Wastewater flows for the month of May were as follows:
Total basin flow, gallons per day: 1,730,897.
Spring Valley Sanitation District Flow to Metro, gallons per
day: 573,272.
Total Otay flow, gallons per day: 1,157,005.
Flow Processed at the Ralph W. Chapman Water Recycling
Facility, gallons per day: 1,082,520.
Flow to Metro from Otay Water District, gallons per day:
75,105.
By the end of May there were 6,084 wastewater EDUs.
Check Total
20,936.09
5,623.82
20,118.84
595.87
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2037118 05/29/13 00179 ACRO INSTRUMENT CO 14447 05/02/13 KUNKLE VALVE RECERT 55.00 55.00
2037202 06/05/13 13072 ADAM OLIVER Ref002428499 06/03/13 UB Refund Cst #0000127061 17.60 17.60
2037246 06/12/13 13901 ADVANCED INDUSTRIAL SVCS INC 1A 05/21/13 UPGRADES FOR RES 803-3/832-2 (ENDING 4/26/13)100,106.25 100,106.25
2037247 06/12/13 11462 AEGIS ENGINEERING MGMT INC 1129 05/13/13 DEVELOPER PLANCHECKS (4/1/13-5/3/13)18,046.09
1201 05/16/13 AS NEEDED DESIGN SVCS FY13 & FY14 (5/1/13-5/3/13)2,890.00
2037119 05/29/13 11462 AEGIS ENGINEERING MGMT INC 1041 05/08/13 PLAN CHECKING (4/1/13-5/3/13)7,452.00 7,452.00
2037325 06/19/13 03089 AGT INC 919178LA52013 05/24/13 ANNUAL SUBSCRIPTION LEGAL AID 2014 214.00 214.00
2037120 05/29/13 12083 AHERN RENTALS 120561381 05/06/13 OAC200 COMPACTOR 6,199.20 6,199.20
2037121 05/29/13 07732 AIRGAS SPECIALTY PRODUCTS INC 131287721 04/30/13 AQUA AMMONIA 3,442.07
131287720 04/30/13 AQUA AMMONIA 2,181.75
2037122 05/29/13 13753 AIRGAS USA LLC 9909340858 04/30/13 BREATHING AIR 39.25 39.25
2037248 06/12/13 14811 ALARMS UNLIMITED INC 150664 05/24/13 SECURITY UPGRADES 9,989.40
150547 05/13/13 SECURITY UPGRADES 8,151.49
150665 05/24/13 SECURITY UPGRADES 1,977.95
2037123 05/29/13 06261 ALCANTARA, CYNTHIA 004295 05/28/13 TRAVEL EXPENSES (5/19/13-5/24/13)1,332.15 1,332.15
2037203 06/05/13 14921 ALEGRIA REAL ESTATE FUND II Ref002428509 06/03/13 UB Refund Cst #0000194033 284.99 284.99
2037204 06/05/13 14926 ALEGRIA REAL ESTATE FUND II LL Ref002428514 06/03/13 UB Refund Cst #0000197108 80.64 80.64
2037205 06/05/13 13085 ALEXANDRA VINSON 004303 05/30/13 CUSTOMER REFUND 43.18 43.18
2037249 06/12/13 01463 ALLIED ELECTRONICS INC 9001751469 05/14/13 MISC ELECTRICAL 1,894.26 1,894.26
2037250 06/12/13 02362 ALLIED WASTE SERVICES # 509 0509005208871 05/25/13 TRASH SERVICES (JUNE 2013)530.33
0509005210547 05/25/13 TRASH SERVICES (JUNE 2013)65.54
2037251 06/12/13 12911 ALTA LAND SURVEYING INC 26 05/28/13 SURVEY SERVICES (2/20/13-4/28/13)16,385.00 16,385.00
2037326 06/19/13 14940 AMERICAN EAGLE REAL ESTATE Ref002428744 06/17/13 UB Refund Cst #0000197518 43.72 43.72
2037252 06/12/13 06166 AMERICAN MESSAGING L1109570NF 06/01/13 PAGER SERVICES (MAY 2013)173.01 173.01
2037327 06/19/13 14943 AMY JEFFERIS Ref002428747 06/17/13 UB Refund Cst #0000197906 123.31 123.31
2037124 05/29/13 00002 ANSWER INC 8355 05/22/13 ANSWERING SERVICES (MONTHLY)1,100.00 1,100.00
2037206 06/05/13 08967 ANTHEM BLUE CROSS EAP 41139 05/24/13 EMPLOYEE ASSISTANCE PROGRAM (JUNE 2013)316.66 316.66
Page 1 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2,337.06
5,690.30
12,954.26
8,251.28
2037207 06/05/13 14927 ARCHITECTURAL TRUST AND REALTY 004305 06/03/13 CUSTOMER REFUND 30.02 30.02
2037208 06/05/13 05758 AT&T 0821645728052513 05/25/13 PHONE SERVICES (5/25/13-6/24/13)2,275.35
61942256050513 05/20/13 PHONE SERVICES (5/20/13-6/19/13)61.71
2037125 05/29/13 05758 AT&T 33784130450513 05/07/13 PHONE SERVICES (5/7/13-6/6/13)31.71 31.71
2037253 06/12/13 05758 AT&T 61969851400513 05/24/13 PHONE SERVICES (MONTHLY)32.12 32.12
2037126 05/29/13 07785 AT&T 000004324121 05/02/13 PHONE SERVICES (4/2/13-5/1/13)5,674.70
000004326339 05/02/13 PHONE SERVICES (4/2/13-5/1/13)15.60
2037127 05/29/13 08330 AT&T INTERNET SERVICES 8547826250413 05/08/13 INTERNET BANDWIDTH (4/21/13-5/20/13)2,028.00 2,028.00
2037328 06/19/13 03407 ATKINS, SUSAN 004357 06/17/13 COMPUTER LOAN 1,160.48 1,160.48
2037254 06/12/13 11285 AZTEC FIRE & SAFETY INC 48948 05/13/13 LOCKER MAINTENANCE 322.63 322.63
2037209 06/05/13 14916 BARBARA HOWARD Ref002428504 06/03/13 UB Refund Cst #0000185624 44.72 44.72
2037128 05/29/13 14577 BASILE CONSTRUCTION INC 4 05/03/13 ORANGE AVE / 805 12-INCH PIPELINE (ENDING 4/30/13)302,111.67 302,111.67
2037255 06/12/13 06834 BAUDVILLE INC 2559526 05/21/13 VISITOR BADGES 409.84 409.84
2037210 06/05/13 14908 BERNARD THOMAS Ref002428495 06/03/13 UB Refund Cst #0000025544 41.17 41.17
2037256 06/12/13 10970 BRENNTAG PACIFIC INC BPI308720 05/24/13 SODIUM HYPOCHLORITE 3,406.98
BPI305960 05/16/13 SODIUM HYPOCHLORITE 2,012.43
BPI307432 05/21/13 SODIUM HYPOCHLORITE 1,397.85
BPI304411 05/13/13 SODIUM HYPOCHLORITE 1,285.03
BPI307090 05/20/13 SODIUM HYPOCHLORITE 1,254.35
BPI308721 05/24/13 SODIUM HYPOCHLORITE 1,177.66
BPI304635 05/13/13 SODIUM HYPOCHLORITE 1,012.24
BPI305682 05/16/13 SODIUM HYPOCHLORITE 796.43
BPI307089 05/20/13 SODIUM HYPOCHLORITE 611.29
2037129 05/29/13 10970 BRENNTAG PACIFIC INC BPI300819 04/30/13 SODIUM HYPOCHLORITE 2,302.73
BPI302255 05/03/13 SODIUM HYPOCHLORITE 1,585.20
BPI303994 05/09/13 SODIUM HYPOCHLORITE 1,449.33
BPI302257 05/06/13 SODIUM HYPOCHLORITE 847.91
BPI301854 05/02/13 SODIUM HYPOCHLORITE 717.56
BPI302256 05/06/13 SODIUM HYPOCHLORITE 678.11
BPI303995 05/09/13 SODIUM HYPOCHLORITE 670.44
2037211 06/05/13 14909 BRIAN GABRYELSKI Ref002428496 06/03/13 UB Refund Cst #0000071002 41.96 41.96
Page 2 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
1,601.21
221.02
2,823.80
2,406.25
2037130 05/29/13 08156 BROWNSTEIN HYATT FARBER 531047 04/15/13 ADVOCACY SERVICES (THROUGH 3/31/13)585.00 585.00
2037131 05/29/13 13824 BUSINESS MANAGEMENT DAILY REN1R04 05/06/13 SUBSCRIPTION 131.32 131.32
2037257 06/12/13 02920 CALIFORNIA COMMERCIAL 127856 05/17/13 ASPHALT 1,130.98
128068 05/22/13 ASPHALT 470.23
2037132 05/29/13 02920 CALIFORNIA COMMERCIAL 127562 05/09/13 ASPHALT 194.83
127561 05/09/13 ASPHALT 26.19
2037258 06/12/13 01004 CALOLYMPIC SAFETY 316189 05/16/13 GT BATTERY/ WINDSOCK 32.05 32.05
2037133 05/29/13 01004 CALOLYMPIC SAFETY 313245 03/11/13 SENSOR 185.79 185.79
2037259 06/12/13 04071 CAPITOL WEBWORKS LLC 25530 04/30/13 ELECTRONIC FILING FEE (QUARTERLY)45.00 45.00
2037260 06/12/13 14781 CARDIAC SCIENCE CORPORATION 1572288 05/22/13 SAFETY EQUIPMENT 2,211.00 2,211.00
2037134 05/29/13 02758 CARMEL BUSINESS SYSTEMS INC 7663 05/01/13 DOCUMENT SERVICES (APR 2013)2,518.35
7662 05/01/13 RECORDS MGMT SVCS (4/2/13-4/10/13)193.25
7661 05/01/13 DOCUMENT SERVICES (4/19/13)112.20
2037135 05/29/13 03232 CDW GOVERNMENT INC BX95864 04/30/13 SUBSCRIPTION LICENSE 9,750.00 9,750.00
2037261 06/12/13 09801 CENTERBEAM INC 17835 03/30/13 NETWORK MAINTENANCE 2,143.75
18197 05/30/13 NETWORK MAINTENANCE 262.50
2037212 06/05/13 04349 CHAMBERS, JONATHAN 004308 06/04/13 TUITION REIMBURSEMENT 105.00 105.00
2037329 06/19/13 14933 CHARLES BOEING Ref002428737 06/17/13 UB Refund Cst #0000187580 144.02 144.02
2037262 06/12/13 13900 COMMUNITY BANK 12 05/13/13 RETENTION / GARCIA JUAREZ (ENDING 4/30/13)4,009.25 4,009.25
2037263 06/12/13 14929 CONSTRUCTION MANAGER 004347 06/11/13 CERTIFICATION RENEWAL 200.00 200.00
2037264 06/12/13 02643 CORE-ROSION PRODUCTS C2013226 05/22/13 405GAL TANK & ACCESSORIES 4,721.80 4,721.80
2037330 06/19/13 02643 CORE-ROSION PRODUCTS C2013212 05/14/13 1000GAL TANK 6,750.00 6,750.00
2037136 05/29/13 12334 CORODATA MEDIA STORAGE INC DS1257151 04/30/13 TAPE STORAGE 336.26 336.26
2037331 06/19/13 02612 COUNCIL OF WATER UTILITIES 004354 06/17/13 MEETING REGISTRATION 25.00 25.00
2037265 06/12/13 00099 COUNTY OF SAN DIEGO DPWAROTAYMWD031305/02/13 EXCAVATION PERMITS (MAR 2013)3,011.78
DPWAROTAYMWD011305/02/13 EXCAVATION PERMITS (JAN 2013)2,538.44
DPWAROTAYMWD021305/02/13 EXCAVATION PERMITS (FEB 2013)1,445.22
DPWAROTAYMWD111205/02/13 EXCAVATION PERMITS (11/15/13-12/31/12)1,404.58
Page 3 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
9,736.71
3,000.00
935.00
30.88
DPWAROTAYMWD041305/02/13 EXCAVATION PERMITS (APR 2013)1,336.69
2037137 05/29/13 00184 COUNTY OF SAN DIEGO DEH130382D11 05/09/13 SHUT DOWN TEST (4/2/13)284.00 284.00
2037266 06/12/13 08479 COUNTY OF SAN DIEGO CA719620513 05/21/13 O & M AND CAPITAL REPLACEMENT (FY 2011-2012)285,112.00 285,112.00
2037267 06/12/13 02756 COX COMMUNICATIONS SAN DIEGO 27170513 05/29/13 INTERNET SERVICES (5/29/13-6/28/13)1,500.00
28810513 05/29/13 INTERNET SERVICES (5/29/13-6/28/13)1,500.00
2037268 06/12/13 00693 CSDA, SAN DIEGO CHAPTER 004349 06/03/13 QUARTERLY MEETING (5/16/13)117.00 117.00
2037213 06/05/13 14919 DANIEL PLAZA Ref002428507 06/03/13 UB Refund Cst #0000188158 12.85 12.85
2037214 06/05/13 14915 DEBBIE EKHAML Ref002428503 06/03/13 UB Refund Cst #0000181853 31.05 31.05
2037269 06/12/13 00319 DEPARTMENT OF PUBLIC HEALTH 004345 06/04/13 APPLICATION FEE 105.00 105.00
2037215 06/05/13 00319 DEPARTMENT OF PUBLIC HEALTH 004304 05/31/13 CERTIFICATE EXAMINATION FEE 65.00 65.00
2037332 06/19/13 14675 DEPENDABLE MARINE INC 20153 06/14/13 REPAIR PART 2,801.52 2,801.52
2037333 06/19/13 14935 DIANE PEPLE Ref002428739 06/17/13 UB Refund Cst #0000194721 122.34 122.34
2037334 06/19/13 03417 DIRECTV 20622586505 06/05/13 SATELLITE TV (6/4/13-7/3/13)18.90 18.90
2037216 06/05/13 03417 DIRECTV 20504845808 05/19/13 SATELLITE TV (5/18/13-6/17/13)6.00 6.00
2037138 05/29/13 03417 DIRECTV 20401123115 05/05/13 SATELLITE TV (5/4/13-6/3/13)18.00 18.00
2037139 05/29/13 00993 DIVE/CORR INC 1359 05/10/13 DIVE INSPECTION 5,250.00 5,250.00
2037270 06/12/13 02447 EDCO DISPOSAL CORPORATION 1554580513 05/31/13 RECYCLING SERVICES (MAY 2013)95.00 95.00
2037335 06/19/13 06525 ELECTRIC MOTOR SPECIALISTS INC 4962 05/22/13 PUMP AND MOTOR REBUILD 18,732.80 18,732.80
2037336 06/19/13 08023 EMPLOYEE BENEFIT SPECIALISTS 0060879IN 05/31/13 EMPLOYEE BENEFITS (MAY 2013)687.50 687.50
2037271 06/12/13 14602 ENVIRO-CARE CO EC212037 05/31/13 GRIT WASHER / COMPACTOR 60,076.40 60,076.40
2037272 06/12/13 03227 ENVIROMATRIX ANALYTICAL INC 3050748 05/20/13 RECYCLED WATER ANALYSIS (5/4/13-5/9/13)555.00
3050531 05/13/13 RECYCLED WATER ANALYSIS (4/29/13-5/3/13)380.00
2037140 05/29/13 03227 ENVIROMATRIX ANALYTICAL INC 3050363 05/06/13 RECYCLED WATER ANALYSIS (4/19/13-4/28/13)915.00 915.00
2037337 06/19/13 14931 ERIC BLANKENBECLER Ref002428735 06/17/13 UB Refund Cst #0000184361 112.52 112.52
2037273 06/12/13 14320 EUROFINS EATON ANALYTICAL INC L0123759 05/23/13 OUTSIDE LAB SERVICES (5/8/13)255.00 255.00
2037274 06/12/13 00645 FEDEX 229745307 06/07/13 MAIL SERVICES (5/31/13-6/3/13)24.64
228346299 05/24/13 MAIL SERVICES (5/16/13)6.24
Page 4 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
7,537.82
5,774.54
445.79
286.89
186.15
1,293.93
434.67
2037141 05/29/13 03546 FERGUSON WATERWORKS # 1083 0436077 04/30/13 INVENTORY 2,157.67
0436076 04/30/13 WAREHOUSE SUPPLIES 2,034.25
04351371 05/06/13 INVENTORY 1,946.74
0435402 05/06/13 REDI CLAMP 1,399.16
2037275 06/12/13 03546 FERGUSON WATERWORKS # 1083 0438426 05/24/13 INVENTORY 4,868.42
0438422 05/24/13 INVENTORY 906.12
2037142 05/29/13 12187 FIRST AMERICAN DATA TREE LLC 9003400413 04/30/13 ONLINE DOCUMENTS (4/1/13-4/30/13)99.00 99.00
2037276 06/12/13 04066 FIRST CHOICE SERVICES - SD 000105 05/14/13 COFFEE SUPPLIES 337.90
000645 05/15/13 WATER FILTERS 107.89
2037143 05/29/13 04066 FIRST CHOICE SERVICES - SD 229916 04/30/13 COFFEE SUPPLIES 365.53 365.53
2037144 05/29/13 11962 FLEETWASH INC x121615 05/03/13 VEHICLE/FLEET WASHING SERVICE 186.15
x124708 05/10/13 VEHICLE/FLEET WASHING SERVICE 100.74
2037338 06/19/13 11962 FLEETWASH INC X127000 05/17/13 VEHICLE/FLEET WASHING SERVICE 137.97
X129753 05/24/13 VEHICLE/FLEET WASHING SERVICE 48.18
2037217 06/05/13 14814 FLUID COMPONENTS INTL LLC 1080114 05/10/13 ELECTRONICS PCB 3,112.08 3,112.08
2037339 06/19/13 01612 FRANCHISE TAX BOARD Ben2428831 06/20/13 BI-WEEKLY PAYROLL DEDUCTION 90.00 90.00
2037218 06/05/13 01612 FRANCHISE TAX BOARD Ben2428593 06/06/13 BI-WEEKLY PAYROLL DEDUCTION 90.00 90.00
2037219 06/05/13 02344 FRANCHISE TAX BOARD Ben2428599 06/06/13 BI-WEEKLY PAYROLL DEDUCTION 81.00 81.00
2037340 06/19/13 02344 FRANCHISE TAX BOARD Ben2428837 06/20/13 BI-WEEKLY PAYROLL DEDUCTION 81.00 81.00
2037277 06/12/13 05981 FROME, TERRY 004348 06/05/13 SAFETY BOOTS 88.27 88.27
2037278 06/12/13 13716 GARCIA JUAREZ CONSTRUCTION INC 12 05/13/13 CALAVO GARDENS (ENDING 4/30/13)76,175.75 76,175.75
2037145 05/29/13 10817 GEXPRO 580214392 05/02/13 VERSAMAX PLC 595.30 595.30
2037279 06/12/13 10817 GEXPRO 580336907 05/20/13 SOFTWARE SUPPORT 1,462.95 1,462.95
2037280 06/12/13 00101 GRAINGER INC 9141597006 05/14/13 WIRE PVC CONDUIT 1,206.67
9141597014 05/14/13 WIRE PVC CONDUIT 87.26
2037146 05/29/13 00101 GRAINGER INC 9134339028 05/06/13 WAREHOUSE SUPPLIES 280.46
9133708819 05/03/13 OFFICE SUPPLIES 143.59
9136205128 05/07/13 WAREHOUSE SUPPLIES 10.62
2037147 05/29/13 12907 GREENRIDGE LANDSCAPE INC 10775 04/30/13 LANDSCAPING SERVICES (APR 2013)8,650.00 8,650.00
2037341 06/19/13 14938 GREGG PHILLIPSON Ref002428742 06/17/13 UB Refund Cst #0000196361 39.06 39.06Page 5 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2,651.15
994.03
23,004.35
9,972.81
2037341 06/19/13 14938 GREGG PHILLIPSON Ref002428742 06/17/13 UB Refund Cst #0000196361 39.06 39.06
2037342 06/19/13 14934 GREGORY ARMENDARIZ Ref002428738 06/17/13 UB Refund Cst #0000188408 38.57 38.57
2037148 05/29/13 03773 GTC SYSTEMS INC 35405 05/01/13 NETWORK SERVICES (MAY 2013)3,173.00 3,173.00
2037220 06/05/13 14911 GUADALUPE ROMERO Ref002428498 06/03/13 UB Refund Cst #0000086537 61.81 61.81
2037221 06/05/13 14917 GUSTAVO VEGA Ref002428505 06/03/13 UB Refund Cst #0000187059 78.80 78.80
2037149 05/29/13 00174 HACH COMPANY 8275078 04/30/13 HACH ANALYZERS 2,562.81 2,562.81
2037281 06/12/13 00174 HACH COMPANY 8312202 05/23/13 PH SYSTEM 1,610.28
8296847 05/14/13 PH SYSTEM 1,040.87
2037343 06/19/13 00174 HACH COMPANY 8303978 05/17/13 MISC PARTS INF PH ANALYZER 498.96
8301868 05/16/13 MISC PARTS INF PH ANALYZER 495.07
2037282 06/12/13 00201 HARRINGTON INDL PLASTICS LLC 004D5339 05/20/13 SLUICINGS WATER PIPE 857.18 857.18
2037222 06/05/13 04472 HECTOR I MARES-COSSIO 98 05/28/13 BI-NATIONAL CONSULTANT SERVICES (APR 2013)3,600.00 3,600.00
2037150 05/29/13 09710 HOMESTEAD TREE SERVICE INC 1584 05/10/13 TREE REMOVAL 975.00 975.00
2037283 06/12/13 12335 HP ENTERPRISE SERVICES LLC U3069185 05/13/13 IVR PAYMENT SERVICES (APR 2013)1,863.90 1,863.90
2037151 05/29/13 06511 HUDSON SAFE-T-LITE RENTALS 00015955 05/02/13 ARROW BOARD 4,536.00 4,536.00
2037223 06/05/13 09348 INDUSTRIAL MAINTENANCE SERVICE 13930 03/18/13 REPAIR PART 486.25 486.25
2037152 05/29/13 08969 INFOSEND INC 68351 04/30/13 POSTAGE (APR 2013)12,926.21
68469 05/02/13 BILL PRINTING SERVICES (APR 2013)5,166.80
68350 04/30/13 BILL PRINTING SERVICES (APR 2013)4,911.34
2037284 06/12/13 03380 INSIGHT PUBLIC SECTOR INC 1100314439 05/13/13 HARDWARE SUPPORT 33,031.52 33,031.52
2037153 05/29/13 02372 INTERIOR PLANT SERVICE INC 4384 04/30/13 PLANT SERVICES (ENDING 4/30/13)205.00 205.00
2037154 05/29/13 13899 INTERMEDIA.NET INC 2013050107 05/01/13 EXCHANGE OUTSOURCING (4/2/13-5/1/13)3,480.44 3,480.44
2037155 05/29/13 03077 JANI-KING OF CALIFORNIA INC SDO04130166 04/01/13 JANITORIAL SERVICES (APR 2013)1,119.82 1,119.82
2037156 05/29/13 10563 JCI JONES CHEMICALS INC 580381 05/01/13 CHLORINE 4,837.80 4,837.80
2037285 06/12/13 03172 JONES & STOKES ASSOCIATES INC 0094140 05/16/13 ENVIRONMENTAL CONSULTING (4/1/13-4/26/13)3,897.81
0094139 05/16/13 ENVIRONMENTAL CONSULTING (4/1/13-4/26/13)2,400.00
0094138 05/16/13 ENVIRONMENTAL CONSULTING (4/1/13-4/26/13)2,255.00
0094137 05/16/13 ENVIRONMENTAL CONSULTING (4/1/13-4/26/13)1,420.00
2037224 06/05/13 14918 KARLYN BARRETT Ref002428506 06/03/13 UB Refund Cst #0000187902 208.28 208.28
Page 6 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
300.00
2037224 06/05/13 14918 KARLYN BARRETT Ref002428506 06/03/13 UB Refund Cst #0000187902 208.28 208.28
2037286 06/12/13 05840 KIRK PAVING INC 5351 05/14/13 PAVING SERVICES 7,000.40 7,000.40
2037157 05/29/13 04996 KNOX ATTORNEY SERVICE INC 136261 04/30/13 DELIVERY SERVICES (3/29/13-4/12/13)193.50 193.50
2037287 06/12/13 12276 KONECRANES INC SDG00779343 05/16/13 HOIST CERTIFICATION 800.00 800.00
2037158 05/29/13 14036 KRATOS / HBE SM41684 04/19/13 ALARM MONITORING (APR 2013)55.00
SM41685 04/19/13 ALARM MONITORING (APR 2013)55.00
SM42039 05/10/13 ALARM MONITORING (MAY 2013)55.00
SM42038 05/10/13 ALARM MONITORING (MAY 2013)55.00
SM41686 04/19/13 ALARM MONITORING (APR 2013)40.00
SM42037 05/10/13 ALARM MONITORING (MAY 2013)40.00
2037288 06/12/13 01859 LA PRENSA SAN DIEGO 24125 05/18/13 JOB POSTING 42.00 42.00
2037289 06/12/13 06497 LAKESIDE LAND COMPANY 270887 05/22/13 LANDFILL 33.20 33.20
2037344 06/19/13 05632 LARSON, BRAD 004355 06/13/13 TUITION REIMBURSEMENT 220.00 220.00
2037345 06/19/13 14936 LAS PALMAS 56 DEV LLC Ref002428740 06/17/13 UB Refund Cst #0000194935 26.78 26.78
2037346 06/19/13 14932 LAS PALMAS 56 DEVELOPMENT LLC Ref002428736 06/17/13 UB Refund Cst #0000184702 844.33 844.33
2037159 05/29/13 09511 LAYFIELD ENVIRONMENTAL SYSTEMS 2 05/08/13 FLOATING COVER REPLACEMENT (ENDING 4/30/13)187,165.20 187,165.20
2037347 06/19/13 14942 LEI NI Ref002428746 06/17/13 UB Refund Cst #0000197751 102.48 102.48
2037348 06/19/13 07784 LICON, HECTOR 004358 06/14/13 SAFETY BOOTS 150.00 150.00
2037290 06/12/13 01464 MAG SYSTEMS INC 194395518 05/15/13 AGM MODULES 1,231.17 1,231.17
2037225 06/05/13 14923 MARIELEX VILORIA Ref002428511 06/03/13 UB Refund Cst #0000194792 156.77 156.77
2037291 06/12/13 02902 MARSTON+MARSTON INC 201361 06/01/13 COMMUNITY OUTREACH (MAY 2013)5,000.00 5,000.00
2037349 06/19/13 14944 MARY WINROW 004353 06/13/13 CUSTOMER REFUND 1,020.48 1,020.48
2037160 05/29/13 01183 MCMASTER-CARR SUPPLY CO 50952228 04/30/13 PIPE CLAMPS 485.33 485.33
2037292 06/12/13 01183 MCMASTER-CARR SUPPLY CO 51916663 05/15/13 SLUICINGS PIPING 148.26 148.26
2037226 06/05/13 14920 MCMILLIN ROLLING HILLS RANCH Ref002428508 06/03/13 UB Refund Cst #0000193974 32.02 32.02
2037227 06/05/13 14922 MELISSA BATHAN Ref002428510 06/03/13 UB Refund Cst #0000194790 29.90 29.90
2037293 06/12/13 01824 MERKEL & ASSOCIATES INC 13052101 05/21/13 ENVIRONMENTAL SERVICES (4/1/13-4/30/13)34,995.78 34,995.78
2037228 06/05/13 14912 MICHELLE LOIBL Ref002428500 06/03/13 UB Refund Cst #0000154086 65.64 65.64
Page 7 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
216.91
255.29
98.05
504.37
2037294 06/12/13 09227 MOORE INDUSTRIES-INTRNTL INC 588341 05/23/13 PID CONTROLLERS 2,135.20 2,135.20
2037161 05/29/13 12908 NARASIMHAN CONSULTING SERVICES 039010 03/23/13 HYDRAULIC MODELING SERVICES (12/30/12-2/22/13)981.25 981.25
2037229 06/05/13 03523 NATIONAL DEFERRED COMPENSATION Ben2428591 06/06/13 BI-WEEKLY DEFERRED COMP PLAN 8,557.61 8,557.61
2037350 06/19/13 03523 NATIONAL DEFERRED COMPENSATION Ben2428829 06/20/13 BI-WEEKLY DEFERRED COMP PLAN 8,557.61 8,557.61
2037295 06/12/13 01559 NATIONAL PUBLIC EMPLOYER LABOR OWD6713ARB 06/07/13 ARBITRATOR SEARCH 280.00 280.00
2037162 05/29/13 14856 NEXUS IS INC JC629773 04/30/13 NETWORK HARDWARE 3,846.90 3,846.90
2037230 06/05/13 03467 NIAGARA CONSERVATION CORP INV00058407 04/25/13 OUTREACH MATERIALS 1,489.64 1,489.64
2037231 06/05/13 14914 NORBERTO DOMENICK Ref002428502 06/03/13 UB Refund Cst #0000162000 15.76 15.76
2037351 06/19/13 08656 NORTH STATE ENVIRONMENTAL 203827 05/15/13 ASBESTOS DISPOSAL 302.60 302.60
2037352 06/19/13 14118 NORTHSTAR COURIER INC 2435 06/12/13 COURIER SERVICE 69.28 69.28
2037163 05/29/13 00510 OFFICE DEPOT INC 656338177001 05/06/13 OFFICE SUPPLIES 131.20
656378932001 05/06/13 OFFICE SUPPLIES 58.58
656378997001 05/06/13 OFFICE SUPPLIES 27.13
2037296 06/12/13 00510 OFFICE DEPOT INC 657807739001 05/16/13 OFFICE SUPPLIES 127.34
657803353001 05/16/13 OFFICE SUPPLIES 119.85
655211634002 05/20/13 OFFICE SUPPLIES 8.10
2037232 06/05/13 00510 OFFICE DEPOT INC 654287831001 04/25/13 MICROWAVE 188.56 188.56
2037353 06/19/13 00510 OFFICE DEPOT INC 658699274001 05/22/13 OFFICE SUPPLIES 75.15
658699519001 05/22/13 OFFICE SUPPLIES 22.90
2037297 06/12/13 03149 ON SITE LASER LLC 47666 05/21/13 PRINTER SERVICES 258.00 258.00
2037298 06/12/13 07496 ORTEGA-CARRILLO, ALMA PATRICIA 004310 06/07/13 TUITION REIMBURSEMENT 384.58
004346 06/04/13 SAFETY BOOTS 119.79
2037164 05/29/13 01002 PACIFIC PIPELINE SUPPLY 159431 05/01/13 METER UPGRADE 233.28 233.28
2037299 06/12/13 01002 PACIFIC PIPELINE SUPPLY 160111 05/13/13 INVENTORY 3,455.65 3,455.65
2037233 06/05/13 14924 PATTI MCKELVEY Ref002428512 06/03/13 UB Refund Cst #0000196159 102.08 102.08
2037234 06/05/13 14925 PAUL PISTEY Ref002428513 06/03/13 UB Refund Cst #0000196647 96.91 96.91
2037165 05/29/13 05497 PAYPAL INC 23686764 04/30/13 PHONE PAYMENT SERVICES (APR 2013)54.10 54.10
2037300 06/12/13 03790 PENHALL COMPANY 33511 05/21/13 SAW CUTTING SERVICES 267.50 267.50
Page 8 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2,012.23
2,120.14
2037300 06/12/13 03790 PENHALL COMPANY 33511 05/21/13 SAW CUTTING SERVICES 267.50 267.50
2037301 06/12/13 00053 PITNEY BOWES INC 674117 05/24/13 E-Z SEAL 54.15 54.15
2037354 06/19/13 03351 POSADA, ROD 004359 06/18/13 TUITION REIMBURSEMENT 200.00 200.00
2037166 05/29/13 07346 PRIME ELECTRICAL SERVICES INC 11276 03/29/13 CONDUIT / WIRING SERVICES 35,782.00 35,782.00
2037167 05/29/13 13059 PRIORITY BUILDING SERVICES 34626 04/01/13 JANITORIAL SERVICES (APR 2013)3,504.00 3,504.00
2037355 06/19/13 02476 PROGRESSIVE BUS PUBLICATIONS 05888478 06/06/13 SUBSCRIPTION RENEWAL 475.20 475.20
2037168 05/29/13 06641 PRUDENTIAL OVERALL SUPPLY 30339345 05/09/13 UNIFORMS, TOWELS & MATS 426.60
30337859 05/02/13 UNIFORMS, TOWELS & MATS 373.27
30337858 05/02/13 UNIFORMS, TOWELS & MATS 213.12
30339344 05/09/13 UNIFORMS, TOWELS & MATS 213.12
30337860 05/02/13 UNIFORMS, TOWELS & MATS 182.50
30339346 05/09/13 UNIFORMS, TOWELS & MATS 182.50
30337219 04/30/13 UNIFORMS, TOWELS & MATS 114.12
30338730 05/07/13 UNIFORMS, TOWELS & MATS 114.12
30337861 05/02/13 UNIFORMS, TOWELS & MATS 50.36
30339347 05/09/13 UNIFORMS, TOWELS & MATS 50.36
30337218 04/30/13 UNIFORMS, TOWELS & MATS 46.08
30338729 05/07/13 UNIFORMS, TOWELS & MATS 46.08
2037302 06/12/13 06641 PRUDENTIAL OVERALL SUPPLY 30340849 05/16/13 UNIFORMS, TOWELS & MATS 404.11
30342274 05/23/13 UNIFORMS, TOWELS & MATS 377.70
30340848 05/16/13 UNIFORMS, TOWELS & MATS 213.12
30342273 05/23/13 UNIFORMS, TOWELS & MATS 213.12
30340850 05/16/13 UNIFORMS, TOWELS & MATS 182.50
30342275 05/23/13 UNIFORMS, TOWELS & MATS 182.50
30340851 05/16/13 UNIFORMS, TOWELS & MATS 137.83
30340223 05/14/13 UNIFORMS, TOWELS & MATS 114.12
30341608 05/21/13 UNIFORMS, TOWELS & MATS 114.12
30342276 05/23/13 UNIFORMS, TOWELS & MATS 84.86
30341607 05/21/13 UNIFORMS, TOWELS & MATS 50.08
30340222 05/14/13 UNIFORMS, TOWELS & MATS 46.08
2037303 06/12/13 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2428583 06/06/13 BI-WEEKLY PERS CONTRIBUTION 150,911.28 150,911.28
2037169 05/29/13 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2428357 05/23/13 BI-WEEKLY PERS CONTRIBUTION 151,140.82 151,140.82
2037304 06/12/13 01342 R J SAFETY SUPPLY CO INC 31332500 05/22/13 SAFETY SUPPLIES 828.86 828.86
Page 9 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
10,875.00
6,260.45
276.10
2037170 05/29/13 01342 R J SAFETY SUPPLY CO INC 31287300 04/30/13 AIR MASK CERTIFICATION 201.00 201.00
2037356 06/19/13 04552 REA & PARKER RESEARCH 004351 06/14/13 CONSULTANT SERVICES 3,625.00 3,625.00
2037171 05/29/13 04552 REA & PARKER RESEARCH 004276 05/09/13 CONSULTANT SERVICES 7,250.00
004293 05/21/13 CONSULTANT SERVICES 3,625.00
2037357 06/19/13 14941 REEM DROGAN Ref002428745 06/17/13 UB Refund Cst #0000197702 41.91 41.91
2037172 05/29/13 09993 REPROHAUS CORP 0000171763 05/01/13 FRAMING SERVICES 114.08 114.08
2037305 06/12/13 00521 RICK POST WELDING &9487 05/23/13 WELDING AND WET TAPPING 420.00 420.00
2037358 06/19/13 14930 ROBERT DEPHILIPPIS Ref002428734 06/17/13 UB Refund Cst #0000088356 119.58 119.58
2037359 06/19/13 06412 ROMERO, TANYA 004356 06/13/13 TUITION REIMBURSEMENT 136.45 136.45
2037235 06/05/13 14910 RONALDO SILVA Ref002428497 06/03/13 UB Refund Cst #0000076223 41.96 41.96
2037173 05/29/13 10203 ROSEMOUNT INC 70407654 05/03/13 MAGMETER ELECTRONICS 2,141.59 2,141.59
2037174 05/29/13 02620 ROTORK CONTROLS INC CI06463 05/02/13 AIR SCOUR ROTORK 1,163.70 1,163.70
2037360 06/19/13 14939 SACRAMENTO TRUST Ref002428743 06/17/13 UB Refund Cst #0000196648 153.72 153.72
2037175 05/29/13 05130 SAFARI MICRO INC 230260 05/10/13 HP COMPAQ ELITE 8300 9,458.53 9,458.53
2037306 06/12/13 05130 SAFARI MICRO INC 230683 05/15/13 HP 9470m LAPTOP 2,500.99
230950 05/21/13 HP LED MONITOR E231 2,165.72
230713 05/16/13 HP 9470m LAPTOP 1,363.64
230625 05/15/13 HP 9470m LAPTOP 230.10
2037307 06/12/13 11596 SAN DIEGO CONSTRUCTION WELDING 8909 05/24/13 WELDING SERVICES 1,200.00 1,200.00
2037176 05/29/13 11596 SAN DIEGO CONSTRUCTION WELDING 8876 04/30/13 WELDING SERVICES 340.00 340.00
2037177 05/29/13 02586 SAN DIEGO COUNTY ASSESSOR 2012215 05/06/13 ASSESSOR DATA (MONTHLY)125.00 125.00
2037178 05/29/13 00003 SAN DIEGO COUNTY WATER AUTH 0000000738 05/01/13 RESIDENTIAL SURVEY PROGRAM 756.50 756.50
2037308 06/12/13 00003 SAN DIEGO COUNTY WATER AUTH 0000000748 05/14/13 SOCAL WATERSMART (MAR 2013)2,940.00 2,940.00
2037309 06/12/13 00247 SAN DIEGO DAILY TRANSCRIPT 370209 05/13/13 BID ADVERTISEMENT 93.10 93.10
2037179 05/29/13 00247 SAN DIEGO DAILY TRANSCRIPT 368115 05/01/13 NOTICE OF INTENT 158.20
369024 05/06/13 BID ADVERTISEMENT 117.90
2037310 06/12/13 00121 SAN DIEGO GAS & ELECTRIC 004309 06/05/13 UTILITY EXPENSES (MONTHLY)78,634.99
Page 10 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
167,168.17
27,640.60
38,222.49
1,273.00
319.92
004301 05/24/13 UTILITY EXPENSES (MONTHLY)45,103.99
004302 05/29/13 UTILITY EXPENSES (MONTHLY)42,607.00
004300 05/23/13 UTILITY EXPENSES (MONTHLY)822.19
2037236 06/05/13 00121 SAN DIEGO GAS & ELECTRIC 004299 05/20/13 UTILITY EXPENSES (MONTHLY)27,606.77
004298 05/06/13 UTILITY EXPENSES (MONTHLY)33.83
2037180 05/29/13 07676 SAN MIGUEL FIRE PROTECTION 004264 05/08/13 TEMPORARY LABOR (APR 2013)6,735.22 6,735.22
2037181 05/29/13 06262 SARIPALLI, SHAMALA 004296 05/21/13 TRAVEL EXPENSES (5/18/13)193.69 193.69
2037311 06/12/13 14708 SC FUELS 4929737 05/21/13 UNLEADED FUEL 24,847.46
4929715 05/21/13 DIESEL FUEL 13,375.03
2037182 05/29/13 14708 SC FUELS 4921829 04/30/13 RED DYED DIESEL FUEL 10,797.98 10,797.98
2037183 05/29/13 12333 SCHINDLER ELEVATOR CORPORATION 8103427323 04/01/13 ELEVATOR MAINTENANCE (APR 2013)416.00 416.00
2037184 05/29/13 12904 SEPULVEDA CONSTRUCTION INC 14A 05/03/13 30 INCH POTABLE PIPELINE (ENDING 4/30/13)71,168.49 71,168.49
2037237 06/05/13 14913 SHEILA MORRISSEY Ref002428501 06/03/13 UB Refund Cst #0000156264 20.64 20.64
2037185 05/29/13 11516 SIEMENS INDUSTRY INC 901230059 05/07/13 PM KIT CL-2 PLASTIC REGULATORS 591.71 591.71
2037312 06/12/13 11516 SIEMENS INDUSTRY INC 901239337 05/15/13 MICRO 2000 / SFC CONTROLLER 9,376.56 9,376.56
2037361 06/19/13 13327 SILVA-SILVA INTERNATIONAL 1306 06/10/13 PROJECT CONSULTANT (MAY 2013)4,000.00 4,000.00
2037186 05/29/13 13327 SILVA-SILVA INTERNATIONAL 1305 05/10/13 PROJECT CONSULTANT (APR 2013)4,000.00 4,000.00
2037313 06/12/13 12281 SIR SPEEDY PRINTING 4612 05/14/13 BUSINESS CARDS 61.72 61.72
2037187 05/29/13 11618 SOUTH COAST COPY SYSTEMS AR127298 04/30/13 COPIER MAINTENANCE (MAY 2013)1,682.59 1,682.59
2037188 05/29/13 03103 SOUTHCOAST HEATING &C50884 04/18/13 AC MAINTENANCE (APR 2013)1,068.00
C50895 04/18/13 AC MAINTENANCE (APR 2013)205.00
2037189 05/29/13 14483 SOUTHWEST PRODUCTS CORPORATION 104417600 04/02/13 202E-20 BOOM LIFT 18,471.73 18,471.73
2037314 06/12/13 03760 SPANKY'S PORTABLE SERVICES INC 949050 05/15/13 PORTABLE TOILET RENTAL (5/15/13-6/11/13)79.98 79.98
2037190 05/29/13 03760 SPANKY'S PORTABLE SERVICES INC 948117 05/03/13 PORTABLE TOILET RENTAL (5/3/13-5/30/13)79.98
948385 05/06/13 PORTABLE TOILET RENTAL (5/4/13-5/31/13)79.98
948115 05/03/13 PORTABLE TOILET RENTAL (5/3/13-5/30/13)79.98
948116 05/03/13 PORTABLE TOILET RENTAL (5/3/13-5/30/13)79.98
2037362 06/19/13 03760 SPANKY'S PORTABLE SERVICES INC 950989 05/24/13 PORTABLE TOILET RENTAL (5/23/13-6/19/13)98.17 98.17
2037315 06/12/13 02354 STANDARD ELECTRONICS 568961 05/24/13 SECURITY MONITORING (MAY 2013)1,352.50 1,352.50
Page 11 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
277.88
540.05
356.40
2037315 06/12/13 02354 STANDARD ELECTRONICS 568961 05/24/13 SECURITY MONITORING (MAY 2013)1,352.50 1,352.50
2037191 05/29/13 02354 STANDARD ELECTRONICS 18331 04/10/13 SECURITY MAINTENANCE (APR 2013)1,352.50 1,352.50
2037238 06/05/13 06281 STATE DISBURSEMENT UNIT Ben2428597 06/06/13 BI-WEEKLY PAYROLL DEDUCTION 919.03 919.03
2037363 06/19/13 06281 STATE DISBURSEMENT UNIT Ben2428835 06/20/13 BI-WEEKLY PAYROLL DEDUCTION 919.03 919.03
2037364 06/19/13 06299 STATE DISBURSEMENT UNIT Ben2428827 06/20/13 BI-WEEKLY PAYROLL DEDUCTION 237.69 237.69
2037239 06/05/13 06299 STATE DISBURSEMENT UNIT Ben2428589 06/06/13 BI-WEEKLY PAYROLL DEDUCTION 237.69 237.69
2037240 06/05/13 06303 STATE DISBURSEMENT UNIT Ben2428595 06/06/13 BI-WEEKLY PAYROLL DEDUCTION 831.23 831.23
2037365 06/19/13 06303 STATE DISBURSEMENT UNIT Ben2428833 06/20/13 BI-WEEKLY PAYROLL DEDUCTION 831.23 831.23
2037366 06/19/13 08533 STATE DISBURSEMENT UNIT Ben2428839 06/20/13 BI-WEEKLY PAYROLL DEDUCTION 258.00 258.00
2037241 06/05/13 08533 STATE DISBURSEMENT UNIT Ben2428601 06/06/13 BI-WEEKLY PAYROLL DEDUCTION 258.00 258.00
2037242 06/05/13 02656 STEVENS, GEOFFREY 004307 05/30/13 TRAVEL EXPENSES (5/22/13-5/24/13)180.00 180.00
2037367 06/19/13 12809 STUTZ ARTIANO SHINOFF 43442 06/04/13 LEGAL SERVICES (APR 2013)20,328.11 20,328.11
2037316 06/12/13 02750 SUPERIOR READY MIX LP 567399 05/17/13 CRUSHED ROCK 171.13
568961 05/24/13 CRUSHED ROCK 106.75
2037192 05/29/13 02750 SUPERIOR READY MIX LP 565090 05/03/13 CRUSHED ROCK 338.35
564358 05/01/13 CRUSHED ROCK 201.70
2037193 05/29/13 00408 SWEETWATER AUTHORITY 5113406 05/23/13 O&M COSTS (11/15/12-5/22/13)28,750.00 28,750.00
2037317 06/12/13 01905 SYMPRO INC 07477 05/13/13 SYMPRO SOFTWARE SUPPORT 7,518.00 7,518.00
2037368 06/19/13 09221 TACKETT, ZACHARY 004360 06/13/13 SAFETY BOOTS 117.70 117.70
2037194 05/29/13 02376 TECHKNOWSION INC 2454 05/01/13 TECHKNOWSION SERVICE (DEC 2013-FEB 2013)4,960.00 4,960.00
2037318 06/12/13 13564 THE STAR-NEWS PUBLISHING CO 00017923 05/17/13 JOB POSTING 126.50 126.50
2037319 06/12/13 14177 THOMPSON, MITCHELL 18070513 06/11/13 MILEAGE REIMBURSEMENT (MAY 2013)75.71 75.71
2037369 06/19/13 14937 TINA BALCH Ref002428741 06/17/13 UB Refund Cst #0000195647 54.99 54.99
2037195 05/29/13 00427 UNDERGROUND SERVICE ALERT OF 420130469 05/01/13 UNDERGROUND ALERTS (APRIL 2013)381.00 381.00
2037320 06/12/13 14181 UNITED RENTALS (NORTH AMERICA)111066187001 05/14/13 CONCRETE 139.32 139.32
2037196 05/29/13 14181 UNITED RENTALS (NORTH AMERICA)110754024002 05/01/13 CONCRETE 178.20
110750935001 05/01/13 CONCRETE 178.20
2037370 06/19/13 07662 UNITEDHEALTHCARE SPECIALTY 131700000050 06/19/13 AD&D & SUPP LIFE INS (JULY 2013)5,597.81 5,597.81Page 12 of 13
Check Total
CHECK REGISTER
Otay Water District
Date Range: 5/23/2013 - 6/19/2013
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2,772.97
2037370 06/19/13 07662 UNITEDHEALTHCARE SPECIALTY 131700000050 06/19/13 AD&D & SUPP LIFE INS (JULY 2013)5,597.81 5,597.81
2037371 06/19/13 07674 US BANK A000044 06/17/13 CAL CARD EXPENSES (MONTHLY)15,627.09 15,627.09
2037197 05/29/13 07674 US BANK 004294 04/22/13 CAL CARD EXPENSES (MONTHLY)1,182.75 1,182.75
2037321 06/12/13 08402 US POSTMASTER 004328 05/31/13 POSTAGE FOR 2013 CCR 7,257.83 7,257.83
2037198 05/29/13 11606 USA BLUE BOOK 954531 05/08/13 SKIMMINGS DISCHARGE PIPE 1,713.20
949695 05/01/13 MISC MATERIALS 1,059.77
2037322 06/12/13 11606 USA BLUE BOOK 962167 05/16/13 MISC MATERIALS 75.52 75.52
2037199 05/29/13 13048 V & A CONSULTING ENGINEERS 14043 04/30/13 CORROSION SERVICES (3/30/13-4/30/13)26,205.17 26,205.17
2037200 05/29/13 08028 VALLEY CONSTRUCTION MANAGEMENT SD100134 04/30/13 CONSTRUCTION MANAGEMENT (4/1/13-4/30/13)23,050.00 23,050.00
2037372 06/19/13 01095 VANTAGEPOINT TRANSFER AGENTS Ben2428819 06/20/13 BI-WEEKLY DEFERRED COMP PLAN 12,516.69 12,516.69
2037243 06/05/13 01095 VANTAGEPOINT TRANSFER AGENTS Ben2428581 06/06/13 BI-WEEKLY DEFERRED COMP PLAN 12,481.16 12,481.16
2037373 06/19/13 06414 VANTAGEPOINT TRANSFER AGENTS Ben2428825 06/20/13 BI-WEEKLY 401A PLAN 2,403.28 2,403.28
2037244 06/05/13 06414 VANTAGEPOINT TRANSFER AGENTS Ben2428587 06/06/13 BI-WEEKLY 401A PLAN 2,453.28 2,453.28
2037245 06/05/13 03329 VERIZON WIRELESS 9705286267 05/21/13 WIRELESS SERVICES (4/22/13-5/21/13)6,003.37 6,003.37
2037323 06/12/13 03781 WATTON, MARK 004350 06/11/13 TRAVEL EXPENSES (MAY 2013)164.99 164.99
2037374 06/19/13 01343 WE GOT YA PEST CONTROL 82342 05/16/13 BEE REMOVAL 460.00 460.00
2037201 05/29/13 00125 WESTERN PUMP INC W17993 04/30/13 DUSTO INSPECTIONS (APR 2013)400.00 400.00
2037324 06/12/13 02849 WHITAKER BROTHERS BUSINESS INV0219819 05/23/13 STAMP MACHINE RIBBON 36.92 36.92
Amount Pd Total:2,359,586.74
Check Grand Total:2,359,586.74257 Checks
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