HomeMy WebLinkAbout05-19-21 F&A Committee Packet 1
OTAY WATER DISTRICT
FINANCE AND ADMINISTRATION
COMMITTEE MEETING
and
SPECIAL MEETING OF THE BOARD OF DIRECTORS
BY TELECONFERENCE
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
WEDNESDAY
May 19, 2021
12:00 P.M.
This is a District Committee meeting. This meeting is being posted as a special meeting
in order to comply with the Brown Act (Government Code Section §54954.2) in the event that
a quorum of the Board is present. Items will be deliberated, however, no formal board actions
will be taken at this meeting. The committee makes recommendations
to the full board for its consideration and formal action.
AGENDA
1. ROLL CALL
2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO
SPEAK TO THE COMMITTEE ON ANY SUBJECT MATTER WITHIN THE
COMMITTEE'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
This meeting is being held via teleconference. Members of the public may submit their
comments on agendized and non-agendized items by either of the following two meth-
ods:
a) No later than a half hour before the start of the meeting, complete and submit a
Request to Speak Form. Your request to speak will be acknowledged during
the “Public Participation” portion of the meeting when the committee will hear
your public comment. When called to speak, please state your Name and the
City in which you reside. You will be provided three minutes to speak.
OR
b) No later than a half hour before the start of the meeting, email your comment to
BoardSecretary@otaywater.gov and it will be read aloud during the “Public Par-
ticipation” portion of the meeting. Please provide your Name and the City in
which you reside, with your comment. Your comment must not take more than
three minutes to read.
The District’s meeting is live streamed. Information on how to watch and listen to the
District’s meeting can be found at this link: https://otaywater.gov/board-of-
directors/agenda-and-minutes/committee-meetings/
2
DISCUSSION ITEMS
3.ADOPT RESOLUTION NO. 4398 TO CONTINUE WATER AND SEWER
AVAILABILITY CHARGES FOR DISTRICT CUSTOMERS FOR FISCAL YEAR
2021-2022 TO BE COLLECTED THROUGH PROPERTY TAX BILLS (CAREY)
[5 minutes]
4.ADOPT RESOLUTION NO. 4399 TO ESTABLISH A REDUCED TAX RATE FOR
IMPROVEMENT DISTRICT NO. 27 AT $0.0021 FOR FISCAL YEAR 2021-2022
(KOEPPEN) [5 minutes]
5.AUTHORIZE THE GENERAL MANAGER TO EXECUTE UP TO FIVE (5)
ADDITIONAL ONE-YEAR EXTENSIONS TO THE SEWER BILLING SERVICES
AGREEMENT WITH THE CITY OF CHULA VISTA PER THE TERMS OF THE
AGREEMENT (KOEPPEN) [5 minutes]
6.ADJOURNMENT
BOARD MEMBERS ATTENDING:
Mark Robak, Chair
Jose Lopez
All items appearing on this agenda, whether or not expressly listed for action, may be delib-
erated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the Dis-
trict’s website at www.otaywater.gov. Written changes to any items to be considered at the
open meeting, or to any attachments, will be posted on the District’s website. Copies of the
Agenda and all attachments are also available by contacting the District Secretary at (619)
670-2253.
If you have any disability which would require accommodation in order to enable you to par-
ticipate in this meeting, please call the District Secretary at 670-2253 at least 24 hours prior
to the meeting.
Certification of Posting
I certify that on May 14, 2021 I posted a copy of the foregoing agenda near the regular
meeting place of the Board of Directors of Otay Water District, said time being at least 24
hours in advance of the meeting of the Board of Directors (Government Code Section
§54954.2).
Executed at Spring Valley, California on May 14, 2021.
/s/ Tita Ramos-Krogman, District Secretary
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: June 2, 2021
SUBMITTED BY: Andrea Carey,
Customer Service Manager
PROJECT: DIV. NO.All
APPROVED BY: Joseph R. Beachem, Chief Financial Officer
Jose Martinez, General Manager
SUBJECT: Adopt Resolution No. 4398 to Continue Water and Sewer
Availability Charges for District Customers for Fiscal Year
2021-2022 to be Collected Through Property Tax Bills
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4398 to continue water and sewer
availability charges for District customers for fiscal year 2021-2022
to be collected through property tax bills.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
That the Board consider the adoption of Resolution No. 4398 to
continue water and sewer availability charges for District customers
for fiscal year 2021-2022 to be collected through property tax bills.
ANALYSIS:
The District levies availability charges each year on property in
both developed and undeveloped areas. State Water Code Section
71630-71637 authorizes the District to assess such availability
charges. In order to place these charges on the tax roll, the County
of San Diego (the County) requires the District to provide a
AGENDA ITEM 3
2
resolution authorizing the charges. In late July of each year, the
District provides a resolution along with the listing of charges by
parcel to the County’s property tax services department.
In order for a parcel to be assessed a sewer availability charge, it
must be annexed into the District’s sewer improvement district.
Sewer availability charges are either a fixed fee of $10 for parcels
one acre or less or $30 per acre for parcels greater than one acre.
Unlike sewer, water availability charges are assessed on all parcels
within the District’s boundaries and do not require annexation into
an improvement district. For most parcels water availability charges
are the same as those shown for sewer availability above; however,
there are some exceptions. Parcels greater than one mile from a
District pipeline, identified as an agricultural preserve, in a
floodplain, or has a 30% slope are charged $3 per acre. Parcels
identified as open space are charged 50% of the normal assessment
fees ($5 for those one acre or less or $15 per acre for those greater
than an acre).
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: Joseph R. Beachem, Chief Financial Officer
The availability charges, as budgeted, will generate approximately
$1.2 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
Attachment B – Resolution No. 4398
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4398 to Continue Water and Sewer
Availability Charges for District Customers for Fiscal Year
2021-2022 to be Collected Through Property Tax Bills
COMMITTEE ACTION:
1
RESOLUTION NO. 4398
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
OTAY WATER DISTRICT CONTINUING PREVIOUSLY
ESTABLISHED WATER AND SEWER AVAILABILITY
CHARGES FOR FISCAL YEAR 2021-2022; REQUESTING
THE COUNTY TO COLLECT SUCH AVAILABILITY
CHARGES ON THE 2021-2022 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 District No. 18 has been formed within
the Otay Water District (herein "District") and sanitary sewers
have been constructed and sewer service is available to land
within the said District; 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
specifically benefit property within the District, the District
has previously determined that water availability charges be fixed
and established under applicable provisions of law; and
Attachment B
2
WHEREAS, in consideration of the benefit which sewer
availability confers upon property within Improvement District No.
18, 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
District No. 18 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 2021-2022 at the
existing rates, as follows:
(1) In Improvement District No. 22 the charge shall be
$30.00 per acre of land and $10.00 per parcel of land
less than one acre.
(2) 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.
(3) For land located outside an improvement district and
greater than one mile from District facilities, the
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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 (3) 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;
(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
4
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;
(3) land owned by non-profit, tax-exempt conservation
organizations specializing in identifying and
protecting the natural habitat of rare species; or
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(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 2021-2022 as follows:
(1) In Improvement District No. 18 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
subdivision, lot split or planned lot split or
planned residential development.
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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.
(B) Appeal to Board of Directors If the General Manager
denies a request, the owner may file an appeal with the Board of
7
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
annually, and accruing at the legal rate from
8
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)
year penalty period. This surcharge shall also apply if a
9
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, 2021.
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, 2021, 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 2021-2022 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
10
amounts fixed by this 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.
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7. CERTIFIED COPIES The Secretary of this District shall
deliver certified copies of this Resolution to the Board of
Supervisors and 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 2nd day of
June, 2021.
Ayes:
Noes:
Abstain:
Absent:
President
ATTEST:
Secretary
12
I HEREBY CERTIFY that the foregoing Resolution No. 4398 was duly
adopted by the BOARD OF DIRECTORS of the OTAY WATER DISTRICT at a
regular meeting thereof held on the 2nd day of June, 2021 by the
following vote:
Ayes:
Noes:
Abstain:
Absent:
District Secretary
STAFF REPORT
TYPE MEETING: Regular Board MEETING
DATE:
June 2, 2021
SUBMITTED BY: Kevin Koeppen, Assistant Chief
of Finance
PROJECT: DIV. NO.All
APPROVED BY: Joseph R. Beachem, Chief Financial Officer
Jose Martinez, General Manager
SUBJECT: Adopt Resolution No. 4399 to Establish the Tax Rate for
Improvement District No. 27 (ID 27) for Fiscal Year
2021-2022
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4399 to establish the tax rate
for Improvement District No. 27 (ID 27) at $0.0021 for fiscal year
2021-2022.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
Improvement District No. 27 (ID 27) has outstanding general
obligation bonds which mature in fiscal year 2023 and is the only
improvement district with general obligation debt service. As of
July 1, 2021, the outstanding debt will be $1.4 million with an
interest rate of approximately 4%. The bonds are non-callable.
At the beginning of each fiscal year staff must provide the County of
San Diego, Property Tax Services, with the tax rate to be charged
upon all property within ID 27 to ensure the amount of tax
collections will support the annual debt service requirement. Staff
recommends that the Board adopt Resolution No. 4399 to establish
AGENDA ITEM 4
2
the tax rate for ID 27 at $0.0021 for fiscal year 2021-2022. This is
a reduction from $0.0035 in fiscal year 2020-2021 to $0.0021 in
fiscal year 2021-2022.
BACKGROUND:
In December 1992, the District sold $11,500,000 of general obligation
bonds in ID 27 for the construction of the 30-million-gallon
reservoir. The debt and levying of the tax were approved by the
voters. When the Board subsequently approved the issuance of the
debt, based on voter approval, it covenanted to levy this tax as
approved by the voters. 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.
The District refinanced the bonds in fiscal year 1998 and again in
fiscal year 2010 which resulted in a reduction in the annual debt
schedule. Property valuations peaked in fiscal year 2008 at $12.5
billion, dropped below $10 billion in fiscal year 2011, and is now
valued at more than $16 billion. The combination of the reduced debt
service requirement and the increased assessed values resulted in the
District’s ID 27 reserve levels exceeding the target.
From fiscal year 2009 to fiscal year 2015, the tax rate was $0.005
and from fiscal year 2016 to fiscal year 2019, the tax rate was
reduced to $0.004. In fiscal year 2020 the tax rate was reduced to
$0.00375 and in fiscal year 2021, the tax rate was reduced further to
$0.0035. During all these years the District has covered any tax
collection shortfalls from the ID 27 reserves.
For fiscal year 2022, staff proposes to reduce the tax rate from
$0.0035 to $0.0021 and continue to cover the tax collection shortfall
from the ID 27 reserves. Staff projects that a $0.0021 tax rate will
wind down reserve levels until the expiration of the debt on
September 1, 2022. Upon expiration of the debt, staff anticipates
that the reserve will be fully depleted.
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 is planned to
have a zero balance. The $0.0021 tax rate is projected to generate
$459,833 in revenue in fiscal year 2022. The projected revenue,
given the recommended tax rate combined with the current fund
3
balance, will meet the annual ID 27 debt service principal and
interest payment of $747,900.
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.
LEGAL IMPACT:
None.
Attachments:
A) Committee Action
B) Resolution No. 4399
C) ID 27 Tables
D) ID 27 Map
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4399 to Establish the Tax Rate for
Improvement District No. 27 (ID 27) for Fiscal Year
2021-2022
COMMITTEE ACTION:
That the Finance and Administration Committee recommend that the Board
adopt Resolution No. 4399 to establish the tax rate for Improvement
District No. 27 (ID 27) at $0.0021 for fiscal year 2021-2022.
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. 4399
A RESOLUTION OF THE BOARD OF DIRECTORS OF
OTAY WATER DISTRICT FIXING TAX RATES FOR
FISCAL YEAR 2021-2022 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 2021-2022 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 2021-2022 for the
principal and interest on the bonded debt of Improvement
District No. 27 is as follows:
Improvement District No. 27 $459,833
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
Attachment B
2
principal and interest on the bonded debt of said improvement
district for fiscal year 2021-2022 is hereby determined and
fixed as follows:
Improvement District No. 27 $0.0021
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 2nd day of June,
2021.
Ayes:
Noes:
Abstain:
Absent:
President
3
ATTEST:
Secretary
4
I HEREBY CERTIFY that the foregoing Resolution No. 4399 was duly
adopted by the BOARD OF DIRECTORS of the OTAY WATER DISTRICT at
a regular meeting thereof held on the 2nd day of June, 2021 by
the following vote:
Ayes:
Noes:
Abstain:
Absent:
District Secretary
IMPROVEMENT DISTRICT 27
History1989 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%
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 $994,501 $840,800 $153,701 $0.01200 $6,454,909,846 28%
FY06 $1,081,991 $840,385 $241,606 $0.01000 $8,579,576,581 33%
FY 07 $862,795 $837,936 $24,859 $0.00700 $10,348,663,242 21%
FY 08 $917,168 $835,017 $82,151 $0.00600 $12,518,643,676 21%
FY 09 $747,175 $830,823 ($83,648)$0.00500 $12,308,043,285 -2%
FY 10 $605,405 $934,674 ($329,269)$0.00500 $10,378,404,507 -16%
FY 11 $606,966 $781,144 ($174,178)$0.00500 $10,131,397,697 -2.4%
FY 12 $597,799 $752,976 ($155,177)$0.00500 $9,941,622,812 -1.9%
FY 13 $650,587 $773,863 ($123,276)$0.00500 $9,869,377,173 -0.7%
FY 14 $658,147 $750,088 ($91,940)$0.00500 $10,226,148,004 3.6%
FY 15 $706,025 $748,663 ($42,638)$0.00500 $11,157,255,925 9.1%
FY 16 $612,980 $751,663 ($138,683)$0.00400 $11,904,159,221 6.7%
FY 17 $640,241 $747,969 ($107,728)$0.00400 $12,738,454,702 7.0%
FY 18 $678,655 $744,633 ($65,978)$0.00400 $13,574,290,102 6.6%
FY 19 $720,975 $749,433 ($28,458)$0.00400 $14,327,195,366 5.5%
FY 20 $715,137 $747,200 ($32,063)$0.00375 $15,251,488,128 6.5%
FY 21 (1)$752,023 $750,600 1,423 $0.00350 $16,166,577,416 6.0%
(1)Due to timing of the report, taxes collected is an estimate.
TAXES DEBT TAX ASSESSEDCOLLECTEDSERVICENETRATEVALUATION INC%
Est Fund Balance 6/30/21 $442,147
FY21 459,833 747,900 ($288,067)$0.00210 $17,136,572,061 6.0%
Interest $1,816
Est Fund Balance 6/30/22 $155,896
Historical Data
Change in Fund Balance
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
Bi
l
l
i
o
n
s
ASSESSED VALUATION10 Year History
Attachment C
Water ID 27
OWD Division Boundary
Water ID 27
µ
0 52.5 Miles
MEXICO
La Mesa
LemonGrove
ChulaVista
El Cajon
San Diego
San DiegoCounty
San Diego
Lake Murray Loveland Reservoir
Lower OtayReservoir
Upper OtayReservoir
SweetwaterReservoir
Divison 1
Divison 4
Divison 2
Divison 5Divison 3
Attachment D
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: June 2, 2021
SUBMITTED BY: Kevin Koeppen
Assistant Chief of Finance
PROJECT: DIV. NO.All
APPROVED BY: Joseph R. Beachem, Chief Financial Officer
Jose Martinez, General Manager
SUBJECT: Authorize the General Manager to Execute up to Five Additional
One-year Extensions to the Sewer Billing Services Agreement
with the City of Chula Vista Per the Terms of the Agreement
GENERAL MANAGER’S RECOMMENDATION:
That the Board authorize the General Manager to execute up to five
additional one-year extensions to the Sewer Billing Services
Agreement with the City of Chula Vista per the Terms of the
Agreement.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To extend the current Sewer Billing Services Agreement with the City
of Chula Vista by granting authority to the General Manager to
execute up to five additional one-year extensions.
ANALYSIS:
Since May of 1981 the District has agreed to collect sewer service
charges from all of its water customers who receive sewer service
from the City of Chula Vista (City). Over time, several agreements
between the City and the District have been in place for sewer
billing services.
AGENDA ITEM 5
Beginning with the December of 1995 agreement, the City and the
District added numerous obligations that emphasized cooperation and
planning between the two agencies. The term of the agreement was 20
years. The City and the District chose to let the old agreement
expire on June 30, 2016, as many of the outstanding issues such as
growth and development had been resolved.
In 2016, the District entered into a new agreement with the City.
The initial term of the agreement was for five years, plus five
additional one-year extensions. Both parties agree that the terms of
the current agreement are satisfactory and are not recommending any
amendments; therefore, staff is recommending that the first of five
one-year extensions be executed. To provide a more efficient process
in the future, staff is also recommending that the Board authorize
the General Manager to execute the remaining four one-year
extensions.
The current billing rate of $1.17 per bill is automatically increased
or decreased each July 1st, based on changes in the prior December’s
San Diego CPI. The billing rate that will be effective on July 1,
2021 is $1.18 per bill.
Staff has evaluated the cost to provide billing services to the City
and there have been no significant changes to these costs. The price
in the current contract, $1.18, is therefore still an appropriate
price, and is agreeable to both parties. Staff evaluated full cost
recovery under an incremental cost method, and full cost recovery
under a proportional cost method. The current cost of $1.18 was at
the 65th percentile between the favorable incremental rate and the
aggressive proportional rate which is commensurate with the
percentile under the original agreement.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The annual revenue for sewer billing services will be approximately
$400,000.
STRATEGIC GOAL:
The District ensures its continued financial health through long-term
financial planning.
LEGAL IMPACT:
None.
Attachments:
Attachment A - Committee Action
Attachment B – Chula Vista Sewer Billing Agreement
Exhibit 1 – Sample Data
Attachment C – Chula Vista Notice of Exercise of Option to
Extend Agreement
ATTACHMENT A
SUBJECT/PROJECT:
Authorize the General Manager to Execute up to Five
Additional One-year Extensions to the Sewer Billing
Services Agreement with the City of Chula Vista Per the
Terms of the Agreement
COMMITTEE ACTION:
The Finance, Administration, and Communications Committee reviewed
this item at a meeting held on May 19, 2021 and the following comments
were made:
ACN: 16028
AGREEMENT TO PROVIDE CUSTOMER WATER CONSUMPTION DATA AND SEWER BILLING
SERVICES
This agreement ("Agreement") is made and entered into as of 201-6 by and between
Otay Water District, a Municipal Water District organized and existing pursuant to Water Code Section
71000 et seq, (hereinafter referred to as "Otay") and the City of Chula Vista, a municipal chartered
corporation ("City"). Otay and the City are collectively referred to herein as the "Parties."
WHEREAS, the City provides sewer collection services to property located within its jurisdictional
boundaries; and
WHEREAS, the rates for the City's sewer service fees are structured, in part, on the basis of a customer's
metered water use and certain assumptions regarding the volume of water returned to the sewer
system; and
WHEREAS, Otay provides water service to properties located within Otay's jurisdictional boundaries;
and
WHEREAS, the City has requested that Otay provide water consumption data for all properties served
by Otay within the jurisdictional boundaries of City and that Otay prepare the calculation of customers'
sewer service fees (based on a formula provided by the City) in order for the City to receive the sewer
service fees for its sewer customers; and
WHEREAS, the City has requested that Otay provide billing and collection services for all properties
served by Otay within the jurisdictional boundaries of City ("City Sewer Customers") in order for the City
to receive the sewer service fees for its sewer customers; and
NOW, THEREFORE, the Parties hereto agree as follows:
1.Services.
1.1-. On an annual basis Otay will provide water consumption data for all properties served by Otay
within the jurisdictional boundaries of the City ("Water Consumption Data File") using the
mutually agreed upon standard data file format. (A sample of the data file format is attached as
Exhibit 1)
1.1.1.The Water Consumption Data File will contain data for the period November through April,
and will calculate the lowest two consecutive months.
1.1.2.Otay will provide the Water Consumption Data File in an accurate manner and within one
month of receipt of the last Cíty Sewer Customer's meter reading for the month of April,
using reasonable, industry-standard methods and process.
Attachment B
1,.2. On a monthly basis Otay will perform the services of billing and collection sewer fees for the
City.
l-.2.l.The City wíll provide to Otay, no later than June l-st of each year, the rates and formulas to
be used by Otay to calculate the fees to be billed to City Sewer Customers.
t.2.2. Otay will calculate the fees to be charged to City Sewer Customers utilizing the fee rates
and formulas provided by the City ("Sewer Fees"). Otay does not warranty the accuracy of
the data or formulas provided by the City.
1.2.3.Otay will include Sewer Fees in City Sewer Customer's water bills each month.
L.2.4.The City shall be responsible for notifying Otay of any new customers or changes to
customer profiles, such as sewer strength for commercial customers. Every two months,
Otay will remit to the City billed sewer fees with the payment beíng due the last Monday
of the month subsequent to the two months of billing (ex. Sewer fees billed in July and
August will be remitted by the last Monday in September).
1.3. The City agrees that the water consumption data provided by Otay and the Sewer Fees are
confidential and may only be used for activities related to billing for sewer services or if
required by statute or government regulation. The water consumption data and Sewer Fees
provided by Otay must not be used for any other purposes.
1-.4. Otay does not warranty the accuracy of the water consumption data or the calculation of the
Sewer Fee based on the formula provided by the City.
2. Term.
The term of this Agreement shall be from the date first stated above, and will continue in effect
until June 30,202L. The Agreement may be extended by mutual agreement for five additional
one-year terms with an amendment to the Agreement to be executed by June 3Oth of the
preceding fiscal year.
3. Payment.
3.1 Otay shall deduct a per-account charge ("Service Fee") from each remittance of
collected Sewer Fees it makes to the City. The Service Fee will be based on the number
of accounts for which Otay provides water consumption data and billing services to the
City. The Service Fee represents Otay's costs to provide water consumption data to the
City and to perform billing and collection services for Sewer Fees for the City. The initial
Service Fee shall be Sf .OS per account per month.
The Service Fee shall be adjusted from a starting figure of 51.05 per account in
December 201-5 dollars, each year thereafter on July 1 of each year, in accordance with
3.2
any increase or decrease in the San Diego Consumer Price lndex. Any change shall be
memorialized by Otay sending a letter to the City which will include an updated cost per
account. Said letters shall be incorporated herein by reference and become part of this
Agreement.
4. Uncollectible Accounts
The City shall be solely responsible for risk of loss associated with uncollectible accounts, up to
the total amount of Sewer Fees billed. Otay shall apply payments to water accounts first.
5. Termination
Either party may terminate this Agreement with ninety (90) days written notice. ln the event of
termination of this Agreement, payment to Otay will be made for the above-referenced fees and
costs for the current fiscal year to the date of termination. Notice of termination shall be
provided in accordance with the provisions of Section 9 below.
6. lndemnification.
6.L Each Party shall be responsible for the willful misconduct and negligent acts or
omissions of its officers, directors, agents, employees, and subcontractors. Each Party
shall indemnify, hold harmless, and defend the other from and against all claims,
demands, and liabílities for bodily injury, property damage, or other damages caused by
the willful or negligent act or omission of the indemnifying party or its officer, directors,
agents, employees or subcontractors.
The City hereby indemnifies, holds harmless and defends Otay and Otay's officers,
directors, agents, employees, and subcontractors from and against all claims, demands,
and liabilities for bodily injury, property damage, or other damages arising out of the
City's business decisions relating to, or use ol the water consumption data provided by
Otay.
6.2
7. Integration.
This Agreement, including any and all exhibits to it, represent the entire understanding of both
Parties as to those matters contained in it, and supersedes and cancels any prior oral or written
understandings, promises or representations with respect to those matters covered in it. This
Agreement may not be modified or altered except in writing signed by both Parties, except as
provided for herein related to notice of increase of the Seruice Fee as provided for in Paragraph
3 above.
8. Laws, Venue, and Attorneys'Fees.
This Agreement shall be interpreted in accordance with the laws of the State of California. The
Parties agree that if any dispute shall arise in relation to this Agreement, they will attempt to
resolve such dispute informally, in good faith. lf such good faith informal resolution does not
resolve the issue, the Parties agree that the matter will be directed to the General Manager/City
Manager of each Party for another good faith attempt at resolution. lf that attempt does not
resolve the issue, the Parties agree to mediation under the rules of the American Arbitration
Association or any other neutral organization agreed upon before having recourse in a court of
law. Any agreements resulting from mediation shall be documented in writing by all Parties. All
mediation results shall be "non-binding" and inadmissible for any purpose in any legal
proceeding, unless all Parties otherwise agree in writing. lf mediation is not successful, and an
action is brought to interpret or enforce any term of this Agreement, the action shall be brought
in a state or federal court situated in the County of San Diego, State of California.
9. Notice.
Termination notice, proposed amendments to this Agreement, or any other notices required
herein will be delivered by United States Post Office, certified mail, and addressed to:
Otay Water District
Kevin Koeppen
2554 Sweetwater Springs Blvd.
Spring Va lley, CA 9197 8-2OO4
kevi n. koeppen @otaywater.gov
City of Chula Vista
Roberto Yano
276 Fourth Avenue
Chula Vista, CA 91910
rya no@ch ulavistaca.gov
Any notice or instrument required to be given or delivered by this Agreement may be given or
delivered by regular or electronic mail addressed to the designated representative.
10. Severability.
ln the event any one of the provisions of this Agreement shall for any reason be held invalid,
illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and
the invalid, illegal or unenforceable provision(s) shall be replaced by a mutually acceptable
provision, which being valid, legaland enforceable, comes closest to the intention of the parties
underlying the invalid, illegal or unenforceable provision.
11. Assignment.
ln no event shall this Agreement be assigned by either Party without first obtaining the prior
written consent of the other Party.
L2. Waiver.
No covenant, term or condition of this Agreement shall be deemed to be waived by any party
hereto unless such waiver is in writing and executed by the party making the waiver. No waiver
of any breach of any of the terms, covenants, or conditions of this Agreement shall be construed
or held to be a waiver of any succeeding or preceding breach of the same or any other term,
covenant or condition contained herein.
13. Execution of Agreement.
This Agreement shall not be deemed to have been accepted and shall not be binding upon
either Party until duly authorized officers of both parties have executed it. This Agreement,
including any and all exhibits to it, represents the entire understanding of both Parties as to
those matters contained in it, and supersedes and cancels any prior oral or written
understandings, promises or representations with respect to those matters covered in it. This
Agreement may not be modified or altered except in writing, signed by both Parties.
lN WITNESS WHEREOF, the Parties hereto have executed this agreement as of the date first written
above.
Otay Water District
Approved:
City of Chula Vista
Ma n, Gen I Manager Mary Ca s-Sal as, Mayor
Attest:
S nC Board Secretary Donna Norris, rk
Approved as to form
yr^{ ^Gene
Otay
nsel
\
Atto
ter District
Glen R
Exhbit 1 - Sample Data Report
C hulaVistaSewerMthSum
01t21t2016 15|',12
Fee
Code
Chufa Vista Sewer Summary Report For Month Of 12120'15
Otay Water District
s
Account
194
125
119
21
49
5
14
2
9
17
18
1
3
64
64
110
7
5
1
65
14
l5
t3
4
7
1
143
128
1
29,262
Accounts
Billed
Servrce
Location
194
125
119
21
49
5
14
2
9
17
17
1
3
64
64
110
7
5
I
64
14
15
13
4
7
1
143
128
1
29,094
Service
Location
Water
Used
Water
Used
Sewer
Charqed
16,851.69
22,787.16
47,077.63
26,808.42
131,128.95
14,075.85
668.53
3,796.26
1,844.65
8,595.86
21,664.14
180.62
430.29
5,738.28
14,398.21
36,877.87
8,468.79
3,166.48
461.02
2,384.18
1,831.75
11,580.68
11,867.18
5,499.65
430.71
22.66
3,825.49
7,283.81
32.37
1,212,821.52
Sewer
Charged
Base
Gharqe
Base
Gharged
Service
Units
Fixed
Charqe
scmrl0
scmrl5
scmr20
scmr30
scmr40
scm160
scmr75
scmr80
scvhl 0
scvhl 5
scvh20
scvh30
scvh75
scvll0
scvllS
scvl20
scvl30
scvl40
scvl60
scvl75
scvml0
scvm15
scvm20
scvm30
scvm75
scvrl 0
scvr75
swcvl0
swcv15
swcv75
4,167.00
5,892.00
12,966.00
6,456.00
32,277.00
3,982.00
165.00
844.00
2r0.00
1,007.00
2,601.00
11.00
50.00
1,256.00
3,401.00
8,686.00
1,931.00
631.00
8.00
474.00
31r.00
2,194.00
2,221.00
1,014.00
71.00
5.00
I,092.00
2,294.00
7.00
264,947.00
14,898.11
21,537.16
43,279.15
25,554.09
128,202.18
13,578.55
583.13
3,418.68
1,754.02
8,255.86
21,089.58
120.89
411.99
5,093.80
13,118.21
33,366.67
8,050.68
2,867.83
361.53
1,987.68
1,690.77
11,430.68
11,452.22
5,260.73
388.01
16.56
2,953.19
6,503.01
26.27
1,034,185.22
278.00
124.00
114.00
14.00
38.00
5.00
14.00
2.00
8.00
14.00
14.00
0.00
2.00
60.00
57.00
91.00
6.00
4.00
1.00
59.00
11.00
11.00
7.00
1.00
4.00
1.00
38.00
70.00
0.00
1,145.50
1,953.58
1,250.00
3,798.48
1,254.33
2,926.77
497.30
85.40
377.58
90.63
340.00
574.56
59.73
18.30
644.48
1,280.00
3,511.20
418.11
298.65
99.49
396.50
140.98
150.00
414.96
238.92
42.70
6.10
872.30
780.80
6.10
178,636.30
Service
Units
Fixed Svc
Charge
TOTALS
30,480 30,309 361 ,171 .00 1,622,600.70 1,421,436.45 2,193.50 201,164.25
Exhibit 1
City of Chula Vista Document No.: OBTAIN FROM CITY CLERK x5961
NOTICE OF EXERCISE OF OPTION TO EXTEND AGREEMENT
Pursuant to the terms of that certain agreement entitled AGREEMENT TO PROVIDE CUSTOMER WATER
CONSUMPTION DATA AND SEWER BILLING SERVICES (“Agreement”), entered into effective April 19,
2016 and expiring on June 30, 2021, between the City of Chula Vista (“City”) and Otay Water District, a
Municipal Water District (“District”), the parties hereby agree to exercise the option to extend the term of the
Agreement as follows:
OPTION NO. 1 OF 5
OPTION TERM: July 1, 2021
JUNE 30, 2022
MAXIMUM COMPENSATION FOR OPTION TERM
(AS AUTHORIZED BY ORIGINAL AGREEMENT):
AS PROVIDED IN SECTION 3 OF THE
AGREEMENT
For services performed during this Option Term, District shall be compensated pursuant to the same terms and
conditions as provided for in Section 3 of the Agreement. All other terms and conditions of the Agreement shall
remain in full force and effect.
CITY OF CHULA VISTA
BY: _______________________________
Mary Casillas-Salas
Mayor
APPROVED AS TO FORM
BY: _______________________________
GLEN R. GOOGINS
CITY ATTORNEY
ACKNOWLEDGED AND AGREED
OTAY WATER DISTRICT
BY: _______________________________
ENTER NAME OF SIGNATORY
ENTER TITLE OF SIGNATORY
FOR REFERENCE PURPOSES:
Original Agreement No.
Resolution No.
Attachment C