HomeMy WebLinkAbout04-20-16 FA&C Committee Packet 1
OTAY WATER DISTRICT
FINANCE, ADMINISTRATION AND COMMUNICATIONS
COMMITTEE MEETING
and
SPECIAL MEETING OF THE BOARD OF DIRECTORS
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
BOARDROOM
WEDNESDAY
April 20, 2016
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 BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU-
RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
DISCUSSION ITEMS
3. ADOPT RESOLUTION NO. 4300 AMENDING POLICY NO. 6, THE ANNUAL
CAPITAL IMPROVEMENT PROGRAM DEVELOPMENT, OF THE DISTRICT’S CODE
OF ORDINANCES TO INCREASE THE EFFICIENCY OF THE CIP PROCESS FOR
BOARD APPROVED PROJECTS (KOEPPEN) [5 minutes]
4. ADOPT RESOLUTION NO. 4301 AMENDING POLICY NO. 27, THE INVESTMENT
POLICY, OF THE DISTRICT’S CODE OF ORDINANCE AND RE-DELEGATING
AUTHORITY FOR ALL INVESTMENT RELATED ACTIVITIES TO THE CHIEF
FINANCIAL OFFICER, IN ACCORDANCE WITH GOVERNMENT CODE SECTION
53607 (BELL) [5 minutes]
5. APPROVE LIFTING THE TWO-DAY PER WEEK LIMIT ON OUTDOOR IRRIGATION
EFFECTIVE IMMEDIATELY; ALL OTHER MANDATORY WATER CONSERVATION
MEASURES UNDER THE LEVEL 2 DROUGHT ALERT WOULD REMAIN IN EFFECT
(BUELNA) [10 minutes]
2
6. ADOPT RESOLUTION NO. 4299 REVISING BOARD POLICY #05-A, RECORDS
POLICY AND PROCEDURES – RECORDS RETENTION AND DESTRUCTION,
INCLUDING MODIFYING THE POLICY TITLE TO, “#05-A RECORDS RETENTION
AND DESTRUCTION” (KERR) [5 minutes]
7. ADJOURNMENT
BOARD MEMBERS ATTENDING:
Jose Lopez, Chair
Mitch Thompson
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 through the District Secretary by contacting
her at (619) 670-2280.
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 670-2280 at least 24 hours prior
to the meeting.
Certification of Posting
I certify that on April 15, 2016 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 April 15, 2016.
______/s/_ Susan Cruz, District Secretary _____
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: May 4, 2016
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: Adopt Resolution No. 4300 Amending Policy No. 6, the Annual
Capital Improvement Program Development, of the District’s
Code of Ordinances
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4300 amending Policy No. 6, the
Annual Capital Improvement Program Development, of the District’s
Code of Ordinances.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To request that the Board adopt Resolution No. 4300 amending Policy
No. 6, the District’s Annual Capital Improvement Program Development,
which will increase the efficiency of the CIP process for Board
approved projects.
ANALYSIS:
As a normal course of business, the District reviews its policies to
ensure they are effective and efficient. During a recent review of
the District’s Annual Capital Improvement Program Development Policy
No. 6, staff noted that the General Manager’s authority to
redistribute CIP funds across projects was limited in that the annual
CIP budget was not exceeded. This limitation could result in undue
delays in the natural progression of these projects.
External circumstances such as environmental constraints, the economy
or developer plans can significantly impact the timing of CIP
projects. These circumstances can result in projects being
accelerated or delayed by months or even several years.
The District has set a strategic planning goal to spend 95% of the
annual CIP budget. As the District strives to attain the 95% goal,
it is more likely that the total fiscal year budget will be exceeded.
Circumstances may arise and could prevent the efficient progression
of CIP projects due to the need to obtain Board approval of projects
that are ready to move forward within their individual approved
budgets. This amendment is being recommended to prevent potential
delays in the prudent progression of CIP projects.
Staff is recommending that the General Manager be allowed to
redistribute CIP funds across projects as long as the expenditures do
not exceed the total individual Board approved project budgets and
the District has adequate reserves to fund the accelerated projects.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
Demonstrate financial health through formalized policies, prudent
investing, and efficient operations.
LEGAL IMPACT:
None.
General Manager
Attachments:
A) Committee Action Form
B) Resolution No. 4300
Exhibit 1 – Policy No. 6 (Strike-through)
C) Proposed Policy No. 6
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4300 Amending Policy No. 6, the Annual
Capital Improvement Program Development, of the District’s
Code of Ordinances
COMMITTEE ACTION:
That the Board adopt Resolution No. 4300 amending Policy No. 6,
the Annual Capital Improvement Program Development, of the
District’s Code of Ordinances.
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.
RESOLUTION NO. 4300
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE OTAY WATER DISTRICT AMENDING POLICY 6
THE ANNUAL CAPITAL IMPROVEMENT PROGRAM
DEVELOPMENT OF THE DISTRICT’S CODE OF
ORDINANCES
WHEREAS, the Otay Water District Board of Directors has been
presented with an amended Policy No. 6 of the District’s Code of
Ordinances for the management of the Otay Water District; and
WHEREAS, the amended Policy No. 6 has been reviewed and
considered by the Board, and it is in the interest of the
District to adopt the amended 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 Policy No. 6, incorporated herein as Attachment C, is
hereby adopted.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
Otay Water District at a board meeting held this 4th day of May
2016, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attachment B
Page 1 of 2
________________________
President
ATTEST:
____________________________
District Secretary
Page 2 of 2
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANNUAL CAPITAL IMPROVEMENT PROGRAM
DEVELOPMENT
06 10/15/84 6/4/145
/4/16
Page 1 of 2
PURPOSE
To define the policy on the preparation and approval of the
annual Capital Improvement Program.
BACKGROUND
District staff develops and maintains a Water Resources Master
Plan (WRMP), an Integrated Water Resources Plan (IRP), and
Strategic Plan that collectively are used to prepare the annual
Capital Improvement Program (CIP) and to identify the CIP
projects required for ultimate build out. The WRMP is revised
every five years and adopted by the Board. Annually, staff
prepares a six-year moving window CIP that provides information
on budget assumptions, source of funds, allocation of funds,
project costs, project location, description, justification,
scheduling, etc. The six-year CIP is submitted and presented to
the Board of Directors to obtain approval for staff to proceed
with implementation to plan, design, and construct facilities and
programs necessary to meet the needs of the District.
POLICY
The General Manager, or his designee, shall prepare a proposed
six-year CIP for submission to the Board of Directors for their
review prior to and approval by June 30 of each fiscal year.
The CIP projects shall be reviewed and updated annually to
consider appropriate revisions based on the most recent WRMP,
IRP, Strategic Plan, and market condition information. The
timing of projects shall be based on necessity and availability
of financing. The intent is that new CIP projects will be
installed as development requires the facilities. With regard to
all CIP projects, it is acknowledged that compliance with the
California Environmental Quality Act adds a measure of unpre-
dictability with regard to the timing of CIP projects.
The WRMP, IRP, and the CIP projects shall be divided into two
phases: Phase I - one to six years; and Phase II - seven to
ultimate buildout. CIP project sheets for projects in Phase I
shall be prepared and identify estimated total cost, cash
expenditure timing, location, description, justification, funding
allocation, and schedule. For the Phase II CIP projects, the CIP
shall identify the need for the projects, along with their
estimated total cost and funding allocation.
Upon approval by the Board of Directors of the annual six-year
CIP, staff is authorized to proceed with planning, design,
construction, etc. of those projects that have budgets within the
current fiscal year. The General Manager is authorized to
Exhibit 1
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANNUAL CAPITAL IMPROVEMENT PROGRAM
DEVELOPMENT
06 10/15/84 6/4/145
/4/16
Page 2 of 2
redistribute funds between approved CIP projects as long as the
total fiscal yearproject budget is not exceeded and the District
has adequate reserves to fund the project. In addition, the
General Manager is authorized to exceed the budget for specific
CIP projects under the following conditions:
a. For CIP projects less than or equal to $50,000, the
cumulative amount of the specific CIP project
expenditures does not exceed that authorized under Code
of Ordinances Section 2.01, Authority of the General
Manager.
b. For CIP projects more than $50,000, the amount being
authorized does not exceed the lessor of 25% of the
specific CIP project budget amount or that authorized
under Code of Ordinances Section 2.01, Authority of the
General Manager.
c. The total fiscal year CIP budget is not exceeded.
Formatted: Font: Not Italic, No underline
Formatted: Font: Not Italic, No underline
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANNUAL CAPITAL IMPROVEMENT PROGRAM
DEVELOPMENT
06 10/15/84 5/4/16
Page 1 of 2
PURPOSE
To define the policy on the preparation and approval of the
annual Capital Improvement Program.
BACKGROUND
District staff develops and maintains a Water Resources Master
Plan (WRMP), an Integrated Water Resources Plan (IRP), and
Strategic Plan that collectively are used to prepare the annual
Capital Improvement Program (CIP) and to identify the CIP
projects required for ultimate build out. The WRMP is revised
every five years and adopted by the Board. Annually, staff
prepares a six-year moving window CIP that provides information
on budget assumptions, source of funds, allocation of funds,
project costs, project location, description, justification,
scheduling, etc. The six-year CIP is submitted and presented to
the Board of Directors to obtain approval for staff to proceed
with implementation to plan, design, and construct facilities and
programs necessary to meet the needs of the District.
POLICY
The General Manager, or his designee, shall prepare a proposed
six-year CIP for submission to the Board of Directors for their
review prior to and approval by June 30 of each fiscal year.
The CIP projects shall be reviewed and updated annually to
consider appropriate revisions based on the most recent WRMP,
IRP, Strategic Plan, and market condition information. The
timing of projects shall be based on necessity and availability
of financing. The intent is that new CIP projects will be
installed as development requires the facilities. With regard to
all CIP projects, it is acknowledged that compliance with the
California Environmental Quality Act adds a measure of unpre-
dictability with regard to the timing of CIP projects.
The WRMP, IRP, and the CIP projects shall be divided into two
phases: Phase I - one to six years; and Phase II - seven to
ultimate buildout. CIP project sheets for projects in Phase I
shall be prepared and identify estimated total cost, cash
expenditure timing, location, description, justification, funding
allocation, and schedule. For the Phase II CIP projects, the CIP
shall identify the need for the projects, along with their
estimated total cost and funding allocation.
Upon approval by the Board of Directors of the annual six-year
CIP, staff is authorized to proceed with planning, design,
construction, etc. of those projects that have budgets within the
current fiscal year. The General Manager is authorized to
Attachment C
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANNUAL CAPITAL IMPROVEMENT PROGRAM
DEVELOPMENT
06 10/15/84 5/4/16
Page 2 of 2
redistribute funds between approved CIP projects as long as the
total project budget is not exceeded and the District has
adequate reserves to fund the project. In addition, the General
Manager is authorized to exceed the budget for specific CIP
projects under the following conditions:
a. For CIP projects less than or equal to $50,000, the
cumulative amount of the specific CIP project
expenditures does not exceed that authorized under Code
of Ordinances Section 2.01, Authority of the General
Manager.
b. For CIP projects more than $50,000, the amount being
authorized does not exceed the lessor of 25% of the
specific CIP project budget amount or that authorized
under Code of Ordinances Section 2.01, Authority of the
General Manager.
c. The total fiscal year CIP budget is not exceeded.
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: May 4, 2016
SUBMITTED BY: 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. 4301 Amending Policy No. 27, the
Investment Policy, of the District’s Code of Ordinances and
Re-Delegating Authority for All Investment Related Activities
to the Chief Financial Officer
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4301 amending Policy No. 27, the
Investment Policy, of the District’s Code of Ordinances and re-
delegating authority for all investment related activities to the
Chief Financial Officer, in accordance with Government Code Section
53607.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
Government Code Section 53646 recommends that the District’s
Investment Policy be rendered to the Board on an annual basis for
review. In addition, Government Code Section 53607 requires that for
the Chief Financial Officer’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. 2. Remain sufficiently liquid to enable the District to meet
all operating requirements which might be reasonably anticipated. 3. The District’s return is a market rate of return that is commensurate with the conservative investments approach to meet the first two objectives of safety and liquidity.
The code provides a broad range of investment options for local agencies, including Federal Treasuries, Federal Agencies, Callable Federal Agencies, the State Pool, the County Pool, high-grade corporate debt, and others. Over recent years, the size of the
District’s portfolio has declined from $110 million in 2010 to $83 million as of February 29, 2016. The reduction is primarily due to
planned outlays for construction projects. 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 policy is consistent with the current law and the overall objectives of the policy are being met.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
Demonstrate financial health through formalized policies, prudent investing, and efficient operations.
LEGAL IMPACT:
None.
Attachments:
A) Committee Action Form B) Resolution No. 4301
Exhibit 1 - Policy No. 27 (Strike-through) C) Policy No. 27 Proposed
D) Presentation
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4301 Amending Policy No. 27, the Investment Policy, of the District’s Code of Ordinances and Re-Delegating Authority for All Investment Related
Activities to the Chief Financial Officer
COMMITTEE ACTION: The Finance, Administration, and Communications Committee
recommend that the Board adopt Resolution No. 4301 amending Policy No. 27, the Investment Policy, of the District’s Code of
Ordinances and re-delegating authority for all investment related activities to the Chief Financial Officer.
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.
RESOLUTION NO. 4301
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING POLICY 27 THE INVESTMENT POLICY OF THE DISTRICT’S CODE OF ORDINANCES
WHEREAS, the Otay Water District Board of Directors has been
presented with an amended Policy No. 27 of the District’s Code of
Ordinances for the management of the Otay Water District; and
WHEREAS, the amended Policy No. 27 has been reviewed and
considered by the Board, and it is in the interest of the
District to adopt the amended 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 Policy No. 27, incorporated herein as Attachment C, is
hereby adopted.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
Otay Water District at a board meeting held this 4th day of May
2016, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attachment B
Page 1 of 2
________________________
President
ATTEST:
____________________________
District Secretary
Page 2 of 2
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
4/16
Page 1 of 19
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.
Exhibit 1
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
4/16
Page 2 of 19
The standard of prudence to be used by investment officials shall be the “Prudent Person” and/or "Prudent Investor" standard (California Government Code 53600.3) and shall be applied in the context of managing an overall portfolio. Investment officers acting in
accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
4.0: OBJECTIVE
As specified in the California Government Code 53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and
managing public funds, the primary objectives, in priority order, of the investment activities shall be:
4.1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the Otay Water
District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
To attain this objective, the District will diversify its investments by investing funds among a variety of securities offering independent returns and financial institutions.
4.2) Liquidity: The Otay Water District’s investment portfolio
will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated.
4.3) Return on Investment: The Otay Water District’s investment
portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio.
5.0 DELEGATION OF AUTHORITY
Authority to manage the Otay Water District’s investment program is derived from the California Government Code, Sections 53600 through
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
4/16
Page 3 of 19
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 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:
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
4/16
Page 4 of 19
Audited Financial Statements.
Proof of National Association of Security Dealers (NASD) Financial Industry Regulatory Authority (FINRA)
certification.
Proof of state registration.
Completed broker/dealer questionnaire.
Certification of having read the District’s Investment Policy.
Evidence of adequate insurance coverage.
An annual review of the financial condition and registrations of qualified bidders will be conducted by the CFO. A current audited financial statement is required to be on file for each financial institution and broker/dealer 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 $5065 million). The
District may also invest bond proceeds in LAIF with the same but independent maximum limitation.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
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Page 5 of 19
8.03) Bonds, debentures, notes and other evidence of indebtedness issued by any of the following government agency issuers:
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
4/16
Page 6 of 19
Federal Home Loan Bank (FHLB)
Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac")
Federal National Mortgage Association (FNMA or "Fannie Mae")
Government National Mortgage Association (GNMA or “Ginnie Mae”)
Federal Farm Credit Bank (FFCB)
Federal Agricultural Mortgage Corporation ( FAMCA or “Farmer Mac”)
There is no percentage limitation of the portfolio which can be invested in this category, although a five-year maturity 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 $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(h). Purchases of commercial paper may not exceed 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
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
INVESTMENT POLICY 27 9/15/93
5/6/155/
4/16
Page 7 of 19
Government Code, Section 53601(k). Investments in medium-term notes are limited to 10 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 Government Code, Section 53601(l). Investments in money market mutual funds are limited to 10 percent of the District's portfolio.
8.08) The San Diego County Treasurer’s Pooled Money Fund, which is a County managed investment pool, may be used by the Otay Water District to invest excess funds. There is no percentage limitation of the portfolio which can be invested in this category.
8.09) Under the provisions of California Government Code
53601.6, the Otay Water District shall not invest any funds covered by this Investment Policy in inverse floaters, range notes, interest-only strips derived from mortgage pools, or any
investment that may result in a zero interest accrual if held to maturity. Also, the borrowing of funds for investment purposes,
known as leveraging, is prohibited.
9.0: INVESTMENT POOLS/MUTUAL FUNDS
A thorough investigation of the pool/fund is required prior to
investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions:
A description of eligible investment securities, and a written statement of investment policy and objectives.
A description of interest calculations and how it is distributed, and how gains and losses are treated.
A description of how the securities are safeguarded
(including the settlement processes), and how often the securities are priced and the program audited.
A description of who may invest in the program, how often,
and what size deposits and withdrawals are allowed.
A schedule for receiving statements and portfolio listings.
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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?
10.0 COLLATERALIZATION
Collateralization will be required on certificates of deposit exceeding the $250,000 FDIC insured maximum. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and
accrued interest. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted.
11.0: SAFEKEEPING AND CUSTODY
All security transactions entered into by the Otay Water District shall be conducted on a delivery-versus-payment (DVP) basis.
Securities will be held by a third party custodian designated by the District and evidenced by safekeeping receipts.
12.0: DIVERSIFICATION
The Otay Water District will diversify its investments by security type and institution, with limitations on the total amounts invested
in each security type as detailed in Paragraph 8.0, above, so as to reduce overall portfolio risks while attaining benchmark average rate of return. With the exception of U.S. Treasury securities, government
agencies, and authorized pools, no more than 50% of the District’s total investment portfolio will be invested with a single financial
institution.
13.0: MAXIMUM MATURITIES
To the extent possible, the Otay Water District will attempt to match
its investments with anticipated cash flow requirements. Unless
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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.
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.
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Percentage of the portfolio represented by each investment category.
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17.0: INVESTMENT POLICY ADOPTION
The Otay Water District’s investment policy shall be adopted by resolution of the District’s Board of Directors. The policy shall be
reviewed annually by the Board and any modifications made thereto must be approved by the Board.
18.0: GLOSSARY
See Appendix A.
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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.
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COMMERCIAL PAPER: An unsecured short-term promissory note, issued by
corporations, with maturities ranging from 2 to 270 days.
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.
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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., 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
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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 largest single provider of residential mortgage funds in the United States. Fannie Mae is a private stockholder-owned corporation. The
corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.
FEDERAL RESERVE SYSTEM: The central bank of the United States created
by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.
FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA): An independent,
not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. It is dedicated to investor protection and
market integrity through effective and efficient regulation of the securities industry. FINRA is the successor to the National
Association of Securities Dealers, Inc. (NASD).
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): A
government owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors.
Because the payments to investors are guaranteed by the full faith and credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities.
INTEREST-ONLY STRIPS: A mortgage backed instrument where the investor
receives only the interest, no principal, from a pool of mortgages. Issues are highly interest rate sensitive, and cash flows vary between interest periods. Also, the maturity date may occur earlier than that stated if all loans within the pool are pre-paid. High prepayments on
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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.
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.
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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.
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.
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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 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.
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SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises
(FHLB, FNMA, FAMCA, etc.), and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the
yield curve.
TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities
issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial
maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission
requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital
of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues
are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as
a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any
premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.
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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.
Attachment C
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The standard of prudence to be used by investment officials shall be the “Prudent Person” and/or "Prudent Investor" standard (California Government Code 53600.3) and shall be applied in the context of managing an overall portfolio. Investment officers acting in
accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
4.0: OBJECTIVE
As specified in the California Government Code 53600.5, when investing, reinvesting, purchasing, acquiring, exchanging, selling and
managing public funds, the primary objectives, in priority order, of the investment activities shall be:
4.1) Safety: Safety of principal is the foremost objective of the investment program. Investments of the Otay Water
District shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
To attain this objective, the District will diversify its investments by investing funds among a variety of securities offering independent returns and financial institutions.
4.2) Liquidity: The Otay Water District’s investment portfolio
will remain sufficiently liquid to enable the District to meet all operating requirements which might be reasonably anticipated.
4.3) Return on Investment: The Otay Water District’s investment
portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the District’s investment risk constraints and the cash flow characteristics of the portfolio.
5.0 DELEGATION OF AUTHORITY
Authority to manage the Otay Water District’s investment program is derived from the California Government Code, Sections 53600 through
53692. Management responsibility for the investment program is hereby
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delegated to the Chief Financial Officer (CFO), who shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials and their procedures in the absence of the CFO.
The CFO shall establish written investment policy procedures for the operation of the investment program consistent with this policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an
investment transaction except as provided under the terms of this policy and the procedures established by the CFO.
6.0: ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the
proper execution and management of the investment program, or that could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General
Manager any material financial interests in financial institutions with which they conduct business. They shall further disclose any
personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the
same individual with whom business is conducted on behalf of the District.
7.0: AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The Chief Financial Officer shall maintain a list of 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:
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Audited Financial Statements.
Proof of Financial Industry Regulatory Authority (FINRA) certification.
Proof of state registration.
Completed broker/dealer questionnaire.
Certification of having read the District’s Investment Policy.
Evidence of adequate insurance coverage.
An annual review of the financial condition and registrations of qualified bidders will be conducted by the CFO. A current audited financial statement is required to be on file for each financial institution and broker/dealer 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 $65 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”)
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 $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(h). Purchases of commercial paper may not exceed 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(k). Investments in medium-term
notes are limited to 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(l). Investments in money market
mutual funds are limited to 10 percent of the District's portfolio. 8.08) The San Diego County Treasurer’s Pooled Money Fund, which is a County managed investment pool, may be used by the
Otay Water District to invest excess funds. There is no percentage limitation of the portfolio which can be invested in this category. 8.09) Under the provisions of California Government Code
53601.6, the Otay Water District shall not invest any funds covered by this Investment Policy in inverse floaters, range
notes, interest-only strips derived from mortgage pools, or any investment that may result in a zero interest accrual if held to maturity. Also, the borrowing of funds for investment purposes,
known as leveraging, is prohibited.
9.0: INVESTMENT POOLS/MUTUAL FUNDS A thorough investigation of the pool/fund is required prior to
investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions:
A description of eligible investment securities, and a written statement of investment policy and objectives.
A description of interest calculations and how it is distributed, and how gains and losses are treated.
A description of how the securities are safeguarded
(including the settlement processes), and how often the securities are priced and the program audited.
A description of who may invest in the program, how often, and what size deposits and withdrawals are allowed.
A schedule for receiving statements and portfolio listings.
Are reserves, retained earnings, etc., utilized by the pool/fund?
A fee schedule, and when and how is it assessed.
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Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?
10.0 COLLATERALIZATION
Collateralization will be required on certificates of deposit exceeding the $250,000 FDIC insured maximum. In order to anticipate
market changes and provide a level of security for all funds, the collateralization level will be 102% of market value of principal and
accrued interest. Collateral will always be held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted.
11.0: SAFEKEEPING AND CUSTODY
All security transactions entered into by the Otay Water District shall be conducted on a delivery-versus-payment (DVP) basis.
Securities will be held by a third party custodian designated by the District and evidenced by safekeeping receipts.
12.0: DIVERSIFICATION
The Otay Water District will diversify its investments by security type and institution, with limitations on the total amounts invested in each security type as detailed in Paragraph 8.0, above, so as to reduce overall portfolio risks while attaining benchmark average rate of return. With the exception of U.S. Treasury securities, government
agencies, and authorized pools, no more than 50% of the District’s total investment portfolio will be invested with a single financial
institution.
13.0: MAXIMUM MATURITIES
To the extent possible, the Otay Water District will attempt to match
its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the District will not directly invest in securities maturing more than five years from the 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.
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17.0: INVESTMENT POLICY ADOPTION
The Otay Water District’s investment policy shall be adopted by resolution of the District’s Board of Directors. The policy shall be
reviewed annually by the Board and any modifications made thereto must be approved by the Board.
18.0: GLOSSARY
See Appendix A.
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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.
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FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to
supply credit to various classes of institutions and individuals, e.g., S&L’s, small business firms, students, farmers, farm cooperatives, and exporters.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that
insures deposits in member banks and thrifts, 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).
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FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like
GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the
largest single provider of residential mortgage funds in the United States. Fannie Mae is a private stockholder-owned corporation. The corporation’s purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid and are widely accepted. FNMA assumes and
guarantees that all security holders will receive timely payment of principal and interest.
FEDERAL RESERVE SYSTEM: The central bank of the United States created
by Congress and consisting of a seven member Board of Governors in
Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.
FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA): An independent,
not-for-profit organization authorized by Congress to protect
America’s investors by making sure the securities industry operates fairly and honestly. It is dedicated to investor protection and
market integrity through effective and efficient regulation of the securities industry. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD).
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): A
government owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because the payments to investors are guaranteed by the full faith and
credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities.
INTEREST-ONLY STRIPS: A mortgage backed instrument where the investor
receives only the interest, no principal, from a pool of mortgages. Issues are highly interest rate sensitive, and cash flows vary between interest periods. Also, the maturity date may occur earlier than that
stated if all loans within the pool are pre-paid. High prepayments on underlying mortgages can return less to the holder than the dollar amount invested.
INVERSE FLOATER: A bond or note that does not earn a fixed rate of
interest. Rather, the interest rate is tied to a specific interest
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rate index identified in the bond/note structure. The interest rate earned by the bond/note will move in the opposite direction of the index. An inverse floater increases the market rate risk and modified duration of the investment.
LEVERAGE: Investing with borrowed money with the expectation that the
interest earned on the investment will exceed the interest paid on the borrowed money.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.
LOCAL AGENCY INVESTMENT FUND (LAIF): The aggregate of all funds from
political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.
MASTER REPURCHASE AGREEMENT: A written contract covering all future
transactions between the parties to repurchase/reverse repurchase
agreements that establish each party’s rights in the transactions. A master agreement will often specify, among other things, the right of
the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower.
MATURITY: The date upon which the principal or stated value of an
investment becomes due and payable.
MONEY MARKET: The market in which short-term debt instruments (bills,
commercial paper, bankers’ acceptances, etc.) are issued and traded.
MUTUAL FUNDS: An open-ended fund operated by an investment company
which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase
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various investment vehicles, such as stocks, bonds, and money market instruments.
MONEY MARKET MUTUAL FUNDS: An open-end mutual fund which invests only
in money markets. These funds invest in short term (one day to one year) debt obligations such as Treasury bills, certificates of deposit, and commercial paper.
PASSIVE INVESTING: An investment strategy involving limited ongoing
buying and selling actions. Passive investors will purchase investments with the intention of long term appreciation and limited maintenance, and typically don’t actively attempt to profit from short term price fluctuations. Also known as a buy-and-hold strategy.
PRIMARY DEALER: A designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria,
including capital requirements and participation in Treasury auctions. These dealers submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New
York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission registered securities
broker/dealers, banks, and a few unregulated firms.
PRUDENT PERSON RULE: An investment standard. In some states the law
requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state—the so-called legal
list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of
capital.
PUBLIC SECURITIES ASSOCIATION (PSA): A trade organization of dealers, brokers, and bankers who underwrite and trade securities offerings.
QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not
claim exemption from the payment of any sales or compensating use or
ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits.
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RANGE NOTE: An investment whose coupon payment varies and is dependent
on whether the current benchmark falls within a pre-determined range.
RATE OF RETURN: The yield obtainable on a security based on its
purchase price or its current market price. This may be the amortized yield to maturity on a bond the current income return.
REGIONAL DEALER: A securities broker/dealer, registered with the
Securities & Exchange Commission (SEC), who meets all of the licensing
requirements for buying and selling securities.
REPURCHASE AGREEMENT (RP OR REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the
“seller” money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP
extensively to finance their positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing bank reserves.
SAFEKEEPING: A service to customers rendered by banks for a fee
whereby securities and valuables of all types and descriptions are held in the bank’s vaults for protection.
SECONDARY MARKET: A market made for the purchase and sale of
outstanding securities issues following their initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to
protect investors in securities transactions by administering
securities legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, FAMCA, etc.), and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons,
derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.
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TREASURY BILLS: A non-interest bearing discount security issued by the
U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities
issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission
requirement that member firms as well as nonmember broker-dealers in
securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital
includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET
YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price,
with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.
INVESTMENT POLICY
No. 27 & PERFORMANCE
REVIEW
May 4, 2016
Attachment D
POLICY REVIEW
Purpose:
Annual Policy 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).
Benefits of Certification:
•Trust and confidence that the District’s Investment
Policy is a professionally accepted policy.
•Assurance that the District is abiding by professional
standards to ensure prudent management of public
funds.
Policy Changes
Changes have been made in the past
when they are needed. There are two
recommended changes to the Investment
Policy dated May 6, 2015.
•Qualified brokers must prove certification with
the Financial Industry Regulatory Agency
(FINRA).
•LAIF increased the deposit limit from $50
million to $65 million.
INVESTMENT OBJECTIVE
To safeguard principal, maintain
liquidity, and to achieve a market
investment return.
Fund Objectives (in order of priority)
Safety
Liquidity
Yield
Safety
Category Safety
Bank Deposits Amounts in excess of $250,000 FDIC limit are required by
California Government Code to be 110% collateralized by the
bank.
LAIF Mandated by applicable State Statutes* and State law, invested
in a conservative manner and limits the investments to fixed-
income securities.
County Pool Mandated by State law, invested in a conservative manner and
limits the investments to fixed-income securities.
S&P Rating of AAAf/S1, indicates extremely strong protection
against losses and low sensitivity to changing market
conditions.
GSE’s Guaranteed by the Federal Government.
*Applicable State Statutes
•No. California Government Code 16429.3 states that monies placed with the Treasurer for deposit in the LAIF by cities, counties, special districts, nonprofit corporations, or qualified quasi-governmental agencies shall not be subject to either of the following:(a) Transfer or loan pursuant to Sections 16310, 16312, or 16313.
(b) Impoundment or seizure by any state official or state agency.
•California Government Code 16429.4 states that the right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi-governmental
agency, to withdraw its deposited money from the LAIF upon demand may not be altered, impaired, or denied in any way by any state official or state agency based upon the States failure to adopt a State Budget by July 1 of each new fiscal year.
Liquidity
Category Availability
Bank Deposits Immediately
LAIF Same day
County Pool 2-3 days
GSE’s Can be converted to cash in
2-3 days
Maintain highly liquid investments
with a hold strategy.
Annual Yield Performance
YTD as of February 29, 2016
FY16 FY15
Otay 0.78% 0.64%
LAIF 0.47% 0.27%
County Pool 0.68% 0.48%
Cash Management
The District reconciles cash and performs a rolling
7-day forecast on a daily basis.
Levels by Investment Type
Category Target Levels
Bank Deposits Outstanding checks and current
days electronic payments
LAIF Short-term (30-60 days)
obligations
County Pool Amounts in excess of bank
deposit and LAIF targets that are
to be invested using the laddering
approach or fund short-term
obligations such as current year
debt payments
GSE’s Target 2-3 year issuances with a
laddering approach
INVESTMENT PORTFOLIO
Authorized
$(‘000s) $ / % Actual %
LAIF (Operating) $11,814 $65 mil 14.53%
Govt. Agency Bonds $52,933 100% 65.11%
Bank Deposits & CDs $82 15% 0.10%
San Diego County Pool $16,465 50% 20.25%
TOTAL $84,294
As of February 29, 2016
REQUESTED BOARD ACTION
Re-delegate authority for all investment
related activities to the Chief Financial
Officer (CFO), in accordance with
Government Code Section 53607).
Questions?
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: May 4, 2016
SUBMITTED BY: Armando Buelna
Communications Officer
PROJECT: Various DIV. NO. ALL
APPROVED BY:
Mark Watton, General Manager
SUBJECT: Revising the Emergency Drought Action Plan
GENERAL MANAGER’S RECOMMENDATION:
That the Board of Directors authorize the General Manager to lift the
two-day per week limit on outdoor irrigation effective immediately.
Irrigation would be set at no more than three days per week, and up
to 15 minutes per irrigation station. All other mandatory water
conservation measures under the Level 2 – Drought Alert would remain
in effect.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To give customers more flexibility to deep-water trees to maintain
the urban forest, establish water-wise landscaping, protect
investments in residential and commercial landscaping, and
maintaining fire-safe buffers in wildland-urban interface areas.
BACKGROUND:
Because of extreme drought across the state of California, on August
6, 2014, the Board of Directors declared a Water Shortage Response
Level 2- Supply Alert condition. Under the Level 2 – Supply Alert,
many voluntary water conservation measures become mandatory and the
District increased its conservation messaging to all customers.
As emergency drought conditions persisted into 2015, on April 1,
2015, Governor Jerry Brown issued an executive order requiring
2
mandatory water conservation for all urban residential and commercial
customers. The Governor also directed the State Water Resources
Control Board (SWRCB) to take immediate action to achieve a 25
percent reduction in urban potable water use.
On May 5, 2015, the SWRCB adopted emergency regulations mandating all
urban water suppliers to cut potable water use by 8 to 36 percent
depending on their residential gallons-per-capita-per-day average in
2013. The SWRCB set the Otay Water District’s water conservation
target at 20 percent of 2013 levels.
In June, 2015, the District adopted Ordinance No. 551 which declared
a state drought emergency and called for mandatory conservation
measures to achieve the state mandated conservation target and
implemented Section 40 of the District’s Code of Ordinances. In
adopting Ordinance No. 551, the District noted that it did not have a
water supply shortage. Rather, because of the SWRCB mandate,
Ordinance 551 was to reduce potable water use 20 percent based on
2013 levels in compliance with the SWRCB action.
In February, 2016, the SWCRB began allowing urban water suppliers to
request credits for investments made in drought-resilient water
supplies, as well as growth and climate adjustments, but extended the
mandatory conservation regulations through October 31, 2016.
CONSERVATION OUTREACH
In response to the SWRCB mandate, staff took a variety of actions to
advise customers of the conservation target including calls and
emails to all District customers; letters to the District’s top 10
percent of residential users as well as all potable commercial
irrigation customers; conservation messages on the outside of the
bill envelopes, inserts and messages on the bill itself; online
target usage tracking; leak alarm notifications; water waste
tracking; and community outreach to numerous homeowners and
commercial customers.
While containing a number of elements, the District’s response to the
state drought emergency was designed to be scaled up or down based on
customer response to conservation messages and meeting the state’s
conservation targets. For example, following an initial high level of
outreach that resulted in the District exceeding its conservation
goal, the campaign was scaled back to bring conservation levels more
in line with the cumulative target.
3
As a result, despite February 2016 being one of the hottest months on
record in San Diego County, the District ended the initial
measurement period (June 2015 to March 2016) with its cumulative
conservation level within one percent of the state’s 20 percent
target.
IMPACT OF CONSERVATION MANDATE
The SWRCB conservation target, unfortunately, did not give credit to
agencies that had already made significant gains in water
conservation or to regions that had worked to develop drought-proof
water supplies. For example, as a result diversifying its water
supplies over the past 25 years, in 2015, the San Diego County Water
Authority (SDCWA) had enough water to meet 99 percent of its typical
water demands for its member agencies despite four years of record
drought. When the Claude “Bud” Lewis Desalination Plant came online
in late 2015, the region had 107 percent of the water it would need
to meet typical demand.
Another consequence of the state action resulted in limiting outdoor
irrigation to no more than two days per week. This neglected to take
into consideration the possible impact reduced irrigation would have
on the health of trees in the urban forest. Trees already stressed
due to years of drought, were they to die, represent not only a lost
investment to owners and a diminishing of a region’s quality of life,
but can be costly to remove, create a hazard and resulting liability
to homeowners, and can become a fire danger particularly in areas
within the wildland urban fire interface.
4
Moreover, irrigation limited to two days a week is inadequate to deep
water trees, to establish drought tolerant landscaping, maintain the
health of plants used in fire-safe buffers, and this can be
especially problematic in areas with little precipitation and high
evapotranspiration rates such as San Diego County.
REVISED CONSERVATION TARGET
Based on numerous statewide requests to make conservation standards
more equitable, in February 2016, the SWRCB began allowing urban
water suppliers to request credits for investments made in drought-
resilient water supplies, along with adjustments for growth and
climate.
Suppliers in San Diego applied for and, because of investments made
in the Claude “Bud” Lewis Carlsbad Desalination Plant, were approved
for the maximum credit of 8 percent toward achieving their
conservation target. The revised conservation standards in San Diego
County were lowered to between 8 to 29 percent, with a regional
aggregate target of 13 percent. No agency, however, can go below 8
percent. Otay received the maximum 8 percent reduction credit,
reducing its conservation target from 20 percent to 12 percent based
on 2013 levels.
The timeframe for the cumulative savings calculation will be from
June 2015 until October 2016. To date, the District is exceeding the
state mandated target with a cumulative savings of 19 percent.
In response to obtaining the drought-resilient supply credit, on
March 24, 2016, the SDCWA Board of Directors voted to rescind its
previous ordinance declaring a regional drought response Level 2 or
requiring member agencies to limit outdoor watering to no more than
two days per week. This action gives member agencies the flexibility
to choose the most appropriate drought level for their individual
agency and their unique state-mandated water conservation standard.
RECOMMENDATION:
Staff recommends the Board authorize the General Manager to lift the
two-day per week limit on outdoor irrigation effective immediately.
Outdoor irrigation would be permitted up to three days per week, and
up to 15 minutes per irrigation station. All other mandatory water
conservation measures under the Level 2 – Drought Alert condition
would remain in effect.
5
Staff believes that returning to a traditional three-day per week
irrigation schedule authorized under a Level 2 – Drought Alert
condition will enable the District to meet its 12 percent cumulative
conservation target while also permitting customers more flexibility
to deep-water trees to maintain the urban forest, protect investments
in residential landscaping, establish new water-wise landscaping, and
maintaining fire-safe buffers in wildland-urban interface areas.
Staff will then advise customers of the new conservation target via
its newsletter, bill inserts, and social media, but will also
continue to closely monitor the rate of conservation and will react
accordingly to ensure customers remain mindful of the cumulative
conservation target.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
It is expected that water sales will gradually increase as result of
this action, though the rate of that increase is difficult to
predict. The proposed FY 2017 budget projects a slight recovery in
sales, which would be in line with the staff recommendation.
STRATEGIC GOAL:
Actively manage water supply and demand.
LEGAL IMPACT:
None
Attachments: Attachment A – Committee Action
ATTACHMENT A
SUBJECT/PROJECT:
COMMITTEE ACTION:
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.
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: May 04, 2016
PROJECT: DIV. NO. ALL
SUBMITTED BY: Michael Kerr
Information Technology Manager
APPROVED BY:
Adolfo Segura, Chief, Administrative Services
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: ADOPT RESOLUTION #4299 TO REVISE BOARD POLICY #05-A, RECORDS
POLICY AND PROCEDURES – RECORDS RETENTION AND DESTRUCTION
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution #4299 in support of revisions to Board
Policy #05-A, Records Policy and Procedures – Records Retention and
Destruction, including modification of policy/subject title to “#05-A
Records Retention and Destruction”.
COMMITTEE ACTION:
Please see “Attachment A”.
PURPOSE:
To request that the Board adopt Resolution #4299 (Attachment B) and
approve revisions to Board Policy #05-A, Records Policy and Procedures
– Records Retention and Destruction (Exhibit 1).
ANALYSIS:
Consistent with the District’s Strategic Plan, the District regularly
reviews policies and procedures to ensure they are streamlined and are
clear and consistent with applicable laws.
Updates deemed appropriate at this time are detailed below and revisions
are shown in the attached strike-through versions of the policy (Exhibit
1).
Board Policy #05-A, Records Policy and Procedures – Records Retention
and Destruction
In cooperation with General Counsel, staff has reviewed the current
Records Retention and Destruction program as well as those of some of
our neighboring agencies and determined that some changes would be
appropriate at this time. The most significant proposed change is that
most email communication does not create records that must be preserved
under the law. Retaining only email that is directly relevant to District
business and/or required by law, will streamline and minimize overhead
associated with the management of email and cost.
Based on researched policies and referenced email management practices
by neighboring agencies, staff is recommending an email lifecycle or
retention of 100 days from origination (sent or received) to destruction,
unless otherwise noted in the District’s Records Retention Schedule
(Attachment D). Staff also conferred with General Counsel to ensure the
District’s retention and destruction practice is aligned with applicable
laws. Staff concludes that this modification of the email retention
policy is both applicable for statutory and regulatory compliance as
this policy addresses both business and non-business email in a
transitory state.
Non-business/transitory emails do not qualify as official records as
they are temporary and non-substantive in nature to include copies or
reproduced or printed documents, preliminary work materials, and
information only items, therefore can be deleted when no longer needed.
Business email that needs to be preserved will be profiled according to
the records retention schedule and maintained accordingly. For example,
substantive emails related to a contract and/or a project will be placed
in the contract or project file and kept for the same duration of time
as the official record series.
Other proposed changes to streamline the District’s records management
practice is the merging of similar record types with same or similar
retention periods.
Based on the above, it is requested that the Board of Directors adopt
Resolution #4299 in support of the proposed revisions to be effective
July 1, 2016.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
Optimize the District’s Operating Efficiency.
LEGAL IMPACT:
None.
ATTACHMENTS:
Attachment A – Committee Action Report
Attachment B – Resolution #4299
Exhibit 1 – Draft Copy, Board Policy #05-A, Records Policy
And Procedures – Retention and Destruction
Attachment C – Proposed Copy, Board Policy #05-A, Records Retention and
Destruction
Attachment D – Otay Water District – Records Retention Schedule
ATTACHMENT A
SUBJECT/PROJECT: ADOPT RESOLUTION #4299 TO REVISE BOARD POLICY #05-A, RECORDS
POLICY AND PROCEDURES – RECORDS RETENTION AND DESTRUCTION
COMMITTEE ACTION:
The Finance, Administration and Communications Committee met on April
20, 2016 to review this item. The Committee supports presentation to the
full Board for their consideration.
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. 4299
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE OTAY WATER DISTRICT
TO REVISE AND UPDATE VARIOUS DISTRICT BOARD POLICIES
WHEREAS, the Board of Directors of Otay Water District have
established policies, procedures, ordinances, and resolutions for the
efficient operation of the District; and
WHEREAS, it is the policy of the District to establish procedures
to review policies, procedures, ordinances, and resolutions
periodically to ensure they are current and relevant; and
WHEREAS, District staff has identified policy number 05-A, as
requiring revisions as per the attached strike-through copy. All other
required Board policies do not require updates and are current at this
time;
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of
the Otay Water District amend policy number 05-A in the form presented
to the Board at this meeting.
PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay
Water District at a regular meeting held this 4th of May, 2016.
_______________________________
President
ATTEST:
____________________________
Secretary
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS POLICY AND PROCEDURES - RECORDS
RETENTION AND DESTRUCTION
05-A 2/3/10 7/1/16
Page 1 of 5
I. PURPOSE
To ensure that necessary records and documents of the Otay Water
District are adequately protected and maintained and to ensure that
records that are no longer needed or are of no value are discarded at
the proper time. This Policy is also serves as assistance in providing
management with the information necessary for andthe purpose of aiding
of District employees in understanding their obligations in retaining
electronic documents that are developdeveloped during phases of records
creation and to assist in controlling the life cycle of all District
records, including e-mail, Web files, text files, sound and movie files,
PDF documents, and all Microsoft Office or other formatted files.
II. SCOPE
This policy is applicable to all District departments and offices
directly responsible to the General Manager. The objectives of the
Records Retention Policy are:
To ensure that all legal, historical, fiscal, and administrative
requirements are satisfied before records are destroyed.
To conserve District resources, such as space and staff time, by
managing records and removing inactive or obsolete material from
office files.
To maintain a regular, controlled flow of records from offices
to destruction or archive storage.
III. POLICY
This policyPolicy represents the District’s policy regarding the
retention and disposal of records, including electronic documents.
Attached as Appendix 1 is a Record Retention Schedule that is approved
as the District’s maintenance, retention and disposal schedule for
physical records and the retention and disposal of electronic documents.
IV. DEFINITION
(a) Public Record – Any writing as set forth in California Government
Code Section 6252, but generally shall include any writing
containing information relating to the conduct of the public’s
business prepared, owned, used or retained by the District,
regardless of physical form or characteristics.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS POLICY AND PROCEDURES - RECORDS
RETENTION AND DESTRUCTION
05-A 2/3/10 7/1/16
Page 2 of 5
(b) Records Management – The planned and systematic control of business
records from their creation or receipt, through final disposition.
(c) Records Retention Schedule – The document that outlines how long a
document must be kept by law, or longer, if needed for District
operations.
(d) Official Record - The records to which retention schedules apply.
(e) Retention Period – The length of time a record needs to be
maintained to satisfy the purposes for which it was created, and to
fulfill legal, fiscal, and administrative requirements of the
District.
(f) Transitory Records – Records that are of informal communications
produced via a computer (E-mail), routine requests, posted notes or
other temporary medium. Transitory records are designed to have a
limited retention period and as such, are not considered records
unless they are in relation to another document or project.
(g) Abbreviations – The following abbreviations are used in the Records
Retention Schedule:
A = Active Financial Audit
ACT = Active (e.g., while the contract is active or while an
employee is still working for the District)
C = Closed, Expired
CY = Calendar Year
FY = Fiscal Year
L = Life of Facility
P = Permanent
R = Revised, Cancelled, Obsolete, or Superseded
T = Termination, Death
V. ADMINISTRATION
A. General
1. The District’s Chief Information Officer (the
‘‘Administrator’’)General Manager is the officer in charge
of the administration of this Policy and the implementation
of processes and procedures to ensure that the Record
Retention Schedule is followed.
2. The General ManagerAdministrator is also authorized to, in
consultation with the General Manager: make modifications
to these procedures and to the Record Retention Schedule
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS POLICY AND PROCEDURES - RECORDS
RETENTION AND DESTRUCTION
05-A 2/3/10 7/1/16
Page 3 of 5
from time to time to ensure that it is in compliance with
local, state and federal laws and includinges policies and
procedures, the appropriate documents and record categories
for the District; work with the District’s General Counsel
to monitor local, state and federal laws affecting record
retention; periodically annually review the record
retention and disposal program; and monitor compliance with
this Policy.
B. Suspension of Record Disposal due to Litigation or Claims
In the event the District is served with any subpoena or
request for documents or any employee becomes aware of a
governmental investigation or audit or the commencement of any
litigation against or concerning the District, such employee
shall inform the General Manager Administrator and any further
disposal of documents shall be suspended until such time as
the General ManagerAdministrator, with the advice of counsel,
determines otherwise. The General ManagerAdministrator shall
take steps to promptly inform all staff of any suspension in
the further disposal of documents.
CC.. Records Retention Schedule Organization
1. The Record Retention Schedule is organized by type of
records and reflects each department’s responsibility,
description of records, governing authority, and its
retention period.
D. Records Management, Filing and DestructionIf deemed necessary
by the Administrator and the General Manager, a person, firm or
service may be retained to assist the District with the
management, filing, retention and destruction of records. If the
aggregate payments under the contract do not exceed the General
Manager’s contracting authority, the General Manager is authorized
to determine the terms and conditions of such contract in
consultation with the General Counsel.
D. Destruction of Records
All records shown on the Records Retention Schedule shall be
retained for the period indicated on the Records Retention
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS POLICY AND PROCEDURES - RECORDS
RETENTION AND DESTRUCTION
05-A 2/3/10 7/1/16
Page 4 of 5
Schedule and may be destroyed thereafter. The General Manager
or designee of the District is authorized to destroy records
of the District according to the Records Retention Schedule
without further authorization from the Board of Directors.
E. Method of Destruction of Records
Official records at the end of their retention period are
eligible for destruction. A destruction approval report is
used to list eligible records and obtain appropriate
approvals. Official records shall not be destroyed if any
legal action, audit or government investigation involving
those records is identified. Destruction of paper records
shall be by shredding or other legally acceptable method. A
Certificate of Destruction or other accepted form of
documentation shall be prepared and saved permanently within
the District’s Retention Management System. Electronic
records shall be deleted by removing those records from the
system on which they reside and erasing the data. Deleted
electronic records, including emails are considered to have
been disposed/destroyed once they are deleted from the active
computer system and any storage devices.
CITATIONS
B & P – Business and Professions Code
CCP - Code of Civil Procedures
CCR - Code of California Regulations
CEQA - California Environmental Quality Act
CFR - Code of Federal Regulations
CVC - California Vehicle Code
GC - Government Code
H&S - Health & Safety
LC - Labor Code
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS POLICY AND PROCEDURES - RECORDS
RETENTION AND DESTRUCTION
05-A 2/3/10 7/1/16
Page 5 of 5
OMB - Office Management & Budget
OPS - Opinion Attorney General
OSHA - Occupational Safety & Health Act
PC - Penal Code
USC - United States Code
WC - Water Code
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS RETENTION AND DESTRUCTION 05-A 2/3/10 7/1/16
Page 1 of 4
I. PURPOSE
To ensure that necessary records and documents of the Otay Water
District are adequately protected and maintained and to ensure that
records that are no longer needed or are of no value are discarded at
the proper time. This Policy also serves as assistance in providing
management with the information necessary for and aiding of District
employees in understanding their obligations in retaining electronic
documents that are developed during phases of records creation and to
assist in controlling the life cycle of all District records, including
e-mail, Web files, text files, sound and movie files, PDF documents, and
all Microsoft Office or other formatted files.
II. SCOPE
This policy is applicable to all District departments and offices
directly responsible to the General Manager. The objectives of the
Records Retention Policy are:
To ensure that all legal, historical, fiscal, and administrative
requirements are satisfied before records are destroyed.
To conserve District resources, such as space and staff time, by
managing records and removing inactive or obsolete material from
office files.
To maintain a regular, controlled flow of records from offices
to destruction or archive storage.
III. POLICY
This policy represents the District’s policy regarding the
retention and disposal of records, including electronic documents.
Attached as Appendix 1 is a Record Retention Schedule that is approved
as the District’s maintenance, retention and disposal schedule for
physical records and the retention and disposal of electronic documents.
IV. DEFINITION
(a) Public Record – Any writing as set forth in California Government
Code Section 6252, but generally shall include any writing
containing information relating to the conduct of the public’s
business prepared, owned, used or retained by the District,
regardless of physical form or characteristics.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS RETENTION AND DESTRUCTION 05-A 2/3/10 7/1/16
Page 2 of 4
(b) Records Management – The planned and systematic control of business
records from their creation or receipt, through final disposition.
(c) Records Retention Schedule – The document that outlines how long a
document must be kept by law, or longer, if needed for District
operations.
(d) Official Record - The records to which retention schedules apply.
(e) Retention Period – The length of time a record needs to be
maintained to satisfy the purposes for which it was created, and to
fulfill legal, fiscal, and administrative requirements of the
District.
(f) Transitory Records – Records that are of informal communications
produced via a computer (E-mail), routine requests, posted notes or
other temporary medium. Transitory records are designed to have a
limited retention period and as such, are not considered records
unless they are in relation to another document or project.
(g) Abbreviations – The following abbreviations are used in the Records
Retention Schedule:
A = Active Financial Audit
ACT = Active (e.g., while the contract is active or while an
employee is still working for the District)
C = Closed, Expired
CY = Calendar Year
FY = Fiscal Year
L = Life of Facility
P = Permanent
R = Revised, Cancelled, Obsolete, or Superseded
T = Termination, Death
V. ADMINISTRATION
A. General
1. The District’s General Manager is the officer in charge of
the administration of this Policy and the implementation of
processes and procedures to ensure that the Record Retention
Schedule is followed.
2. The General Manager is also authorized to make modifications
to these procedures and to the Record Retention Schedule
from time to time to ensure that it is in compliance with
local, state and federal laws including policies and
procedures, the appropriate documents and record categories
for the District; work with the District’s General Counsel
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS RETENTION AND DESTRUCTION 05-A 2/3/10 7/1/16
Page 3 of 4
to monitor local, state and federal laws affecting record
retention; periodically review the record retention and
disposal program; and monitor compliance with this Policy.
B. Suspension of Record Disposal due to Litigation or Claims
In the event the District is served with any subpoena or
request for documents or any employee becomes aware of a
governmental investigation or audit or the commencement of any
litigation against or concerning the District, such employee
shall inform the General Manager and any further disposal of
documents shall be suspended until such time as the General
Manager, with the advice of counsel, determines otherwise. The
General Manager shall take steps to promptly inform all staff
of any suspension in the further disposal of documents.
C. Records Retention Schedule Organization
1. The Record Retention Schedule is organized by type of
records, description of records, governing authority, and
its retention period.
D. Destruction of Records
All records shown on the Records Retention Schedule shall be
retained for the period indicated on the Records Retention
Schedule and may be destroyed thereafter. The General Manager
or designee of the District is authorized to destroy records
of the District according to the Records Retention Schedule
without further authorization from the Board of Directors.
E. Method of Destruction of Records
Official records at the end of their retention period are
eligible for destruction. A destruction approval report is
used to list eligible records and obtain appropriate
approvals. Official records shall not be destroyed if any
legal action, audit or government investigation involving
those records is identified. Destruction of paper records
shall be by shredding or other legally acceptable method. A
Certificate of Destruction or other accepted form of
documentation shall be prepared and saved permanently within
the District’s Retention Management System. Electronic
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
RECORDS RETENTION AND DESTRUCTION 05-A 2/3/10 7/1/16
Page 4 of 4
records shall be deleted by removing those records from the
system on which they reside and erasing the data. Deleted
electronic records, including emails are considered to have
been disposed/destroyed once they are deleted from the active
computer system and any storage devices.
CITATIONS
B & P – Business and Professions Code
CCP - Code of Civil Procedures
CCR - Code of California Regulations
CEQA - California Environmental Quality Act
CFR - Code of Federal Regulations
CVC - California Vehicle Code
GC - Government Code
H&S - Health & Safety
LC - Labor Code
OMB - Office Management & Budget
OPS - Opinion Attorney General
OSHA - Occupational Safety & Health Act
PC - Penal Code
USC - United States Code
WC - Water Code
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
Legal OWD
Event Codes: Printed 4/14/2016 7:37 PM Page 1
A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
1 Accounts Payable Records relating to payment of financial obligations. Includes benefit billing, vendor
invoices, check requests, receiving documents and blue copy of checks.
WC §50942; GC §60201; GC
§12236 FY+7 FY+7
2 Annexation Records relating to Annexation and De-Annexation or Detachment. WC §50942; GC §60201; GC
§12236; WC §60201(d)(10) P P
3 Audits Supporting documentation for financial audits. Records include reports, notes,
account reconciliation, and backup information.
WC §50942; GC §60201; GC
§12236 FY+7 FY+7
4 Availability Listing of Availability Charges. WC §50942; GC §60201; GC
§12236 A+3 A+3
5 Backflow
Compliance
Records include notifications, reports of testing and maintenance of backflow
preventors.
WC §50942; GC §60201; GC
§12236, GC 17 CCR § 7605(f) CY+3 CY+3
6 Bankruptcies Court documents reflecting Otay as a creditor in customer's bankruptcy. WC §50942; GC §60201 A+2 A+2
7 Bank Statements
and Reconciliation
Records relating to banking activities. Includes statements reflecting deposits,
withdrawals, reconciliations, check registers for operating and payroll bank accounts.
GC § 34090; 26 CFR 1.6001-1 A+5 A+5
8 Benefit
Administration
Documentation related to medical benefits including, but not limited to, third party
benefit administrators, medical/prescription drugs, dental insurance, life insurance,
deferred comp, flexible spending accounts, disability insurance, COBRA
administration, retiree billing summary, benefits consultants, CalPERS retirement,
employee assistance program, and pre-paid legal plan.
GC § 6250 et seq.;
OMB A-129;
29 CFR 1602.30, 1602.32
R+7 R+7
9 Benefit Summary
Plan Descriptions Records related to medical, dental, and flexible benefit summary plans. GC § 6250 et seq.; 29 USC §§
1027, 1037; 45 CFR § 160.414 ACT+6 P
10 Board of Directors
Records relating to the Board of Directors including agenda, minutes of the Board of
Directors, staff reports, audio and video recordings, minutes of Board Standing and
Ad Hoc Committee Meetings, and board adopted Resolutions and Code of
Ordinances (code policies and code sections)
WC §50942; GC §60201; GC
§12236; WC §60201(d)(2)&(3) P P
11 Budget - Published
Budgets
Published operating and capital budgets as adopted by the Board of Directors to
include District Strategic Plan, Employee Survey, and Customer Satisfaction
Surveys.
WC §50942; GC §60201; GC
§12236 P P
12 Claims Records related to liability claims and OWD property losses, liability due to vehicle
accidents, property damage due to water main breaks, and FEMA claims.
WC §50942; GC §60201; GC
§12236 ACT+3 ACT+5
13 As Built Plans Includes plans for Potable Water, Sewer, Recycled Water and related facilites WC §50942 P P
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
Legal OWD
Event Codes: Printed 4/14/2016 7:37 PM Page 2
A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
14a Contracts and
Agreements (A)
Records relating to obligations under contracts and/or agreements between OWD
and outside parties. Includes banking services, blanket POs, deferral agreements,
financial services, general consulting, general contracts, general services, general
interagency agreements, Joint Participation Agreements (JPA), lobbying files, labor
services, leases, legal services, service/maintenance, sewer contracts and non-CIP
warranties.
WC §50942; GC §60201; GC
§12236; CCP §§ 336a, 337, 337.2,
343; B&P §7042.5; GC §4004;
H&S § 19850
T+5 non
capital T+10
14b Contracts and
Agreements (B)
Records relating to obligations under contracts and/or agreements between OWD
and outside parties. Includes contruction services, design consulting, environmental
consulting, management construction, professional engineering services, professional
environment services, and reimbursement agreements, CIP, development agreements
and warranties.
WC §50942; GC §§ 4004, 12236,
60201; CCP §§ 336a, 337, 337.1,
337.2, 337.5, 337.6, 337.15, 343;
H&S § 19850
T+10 T+20
14c Contracts and
Agreements (C)
Records relating to obligations under contracts and/or agreements between OWD
and outside parties. Includes permanent interagency agreements, Land Use and
Memorandums of Understanding (MOU)
WC §50942; GC §§ 4004, 12236,
60201; CCP §§ 336a, 337, 337.1,
337.2, 337.5, 337.6, 337.15, 343;
H&S § 19850
P P
15a Correspondence
(A)
Records relating to internal and external communications including, but not limited
to, memos, reports, faxes and letters. Correspondence of a general nature, not related
to any specific projects or contracts.
WC §50942; GC §60201; GC
§12236 3 3
15b Correspondence
(B)
Records relating communications including, but not limited to, memos, reports, faxes
and letters related to potential or future development normally generated by Public
Services.
WC §50942; GC §60201; GC
§12236 3 10
16 Corrosion Control
Records
Records relating to corrosion control tests, methods, procedures, test data, reports
and cathodic protection.
WC §50942; GC §60201; GC
§12236; 40 CFR 141.91 CY+12 CY+12
17 County Collected
Revenues
Revenues collected through the county tax rolls including portion of the 1% property
tax, availability fees, debt related assessment and delinquencies.
WC §50942; GC §60201; GC
§12236 A+3 A+3
18 Debt
Records relating to long-term debt having to do with bonds and loans, including but
not limited to Certificates of Participation (COPS), General Obligation Bond, Water
Revenue Bond, State Sewer Loan and State Water Resource Control Board
WC §50942; GC §60201; GC
§12236; CCP §337.5 C+10 P
19 District Policies &
Guidelines
Records providing administrative procedures and guidelines that are approved by the
Board of Directors, including but not limited to Human Resources policies and
purchasing manual.
WC §50942; GC §60201; GC
§12236 R+2 R+5
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
Legal OWD
Event Codes: Printed 4/14/2016 7:37 PM Page 3
A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
20 DMV Driving records including DMV Pull notice.
WC §50942; GC §60201; GC
§12236; CVC 1808.45/ .46/.47;
GC §12946; 8 USC 1324(a)
CY+7 CY+7
21 Drug & Alcohol
Tests
Confidential records relating to drug and alcohol testing (random and suspicious,
excluding pre-employment and previous employer).
WC §50942; GC §60201; GC
§12236; USDOT title 49 CY+7 CY+7
22
Employee
Eligibility &
Benefit Files
Records relating to individual employee benefits. Files may include, but are not
limited to, enrollment forms and change requests for health, life, dental, vision,
deferred comp pension, long term disability insurance, leave of absence, computer
loan and tuition reimbursement. Records relating to immigration documentation,
eligibility to work in the U.S. (I-9 form).
WC §50942; GC §60201(12); GC
§12236; WC §60201(d)(10); GC
6250 et seq.; OMB A-129; 29 CFR
1602.30; 29 CFR 1602.32
T+7 T+7
23 Employee MOU
Employee MOU. Records including negotiations and amendment to MOU (side
letter agreement). Documentation related to employee association negotiations,
current enforced MOU and history.
WC §50942; GC §60201; GC §
12236; 29 USC §§ 203, 207, 211 P P
24 Employee
Personnel Files
Records relating to individual employees. Includes employment applications,
employment actions (e.g., promotions, reclassifications, transfers, discipline, and
salary information), performance evaluations, educational documents, and separation
documents. Upon employee separation, additional information such as reference
checks, ethnicity and disclosures.
WC §50942; GC §60201; GC
§12236 T+7 T+7
25 Employee
Relations
Records relating to association representatives including correspondence, employee
association financial statement, employees’ association election representation,
reported grievances and actions taken, and documents related to employee
investigations.
WC §50942; GC §60201; GC
§12236; GC § 12946; 29 USC
211; 29 CFR 1602
C+2 C+10
26 Employee Surveys
Records may include, but are not limited to, forms completed by OWD employees in
response to questions regarding OWD administrative policy, departmental policy or
amenities.
WC §50942; GC §60201; GC
§12236; GC § 12946; 29 USC
516.6(2); 29 CFR 1602.14
CY+2 CY+10
27 Employee Training
Records related to employee training on district policies, procedures, and
orientations including training logs/sign-in sheets. Training includes, but is not
limited to, safety, tailgate, HAZWOPER and employee trainings.
WC § 50942; GC § 60201; GC §§
6250 et seq.; GC § 34090
CY+7 or
T+7
CY+7 or
T+7
28
Environmental
Studies
Records related to environment studies not specific to projects such as Multiple
Species Conservation Program and Habitat Management Area (HMA) reports.
WC §50942; GC §60201; GC §
12236; CCP § 338; GC § 34090;
14 CCR §§ 15000 et seq.
CY+7,
C/CY+2 or
P
P
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
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A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
30 Financial Reports
and Statements
Records relating to audits performed by contracted auditors including
Comprehensive Annual Financial Report (CAFR), State Controller’s Report and
Single Audit Report.
WC §50942; GC §60201; GC
§12236
ACT+4/7
* P
31a Fixed Assets
(Infrastructure)
Purchase of infrastructure assets, equipment, and facilities, related to Bond Debt WC §50942; GC §60201; GC
§12236
P P
31b Fixed Assets (Non-
infrastructure)
Purchase of non-infrastructure assets, equipment, and facilities, not related to Bond
Debt
WC §50942; GC §60201; GC
§12236; GC §§ 6250 et seq.
L+2 L+2
32 Fuel and Oil Usage
Files Records documenting the amount of fuel delivered and dispensed. WC §50942; GC §60201; GC
§12236; CCP §337 A+3 CY+7
33 Fuel Storage Tanks Records relating to leak detection monitoring, cleanup, and condition of fuel storage
tanks.
WC §50942; GC §60201; GC
§12236 P P
34a GL Journal Entries Records including General Journal Entry Posting (Located in IG General Ledger). WC §50942; GC §60201; GC
§12236
P p
34b GL Journal
Vouchers Records including General Journal Vouchers and supporting documentation. WC §50942; GC §60201; GC
§12236 A+4 A+4
35 Grants
Records relating to City, State, and Federal requests and approvals for new and on-
going District projects whether as an individual agency or in conjunction with
member agencies. This includes grant applications, grants and grant agreements.
This excludes CIP related grants.
WC §50942; GC §60201; GC
§12236 C+5 C+5
36 Hazardous
Compliance Plans
Documents related to compliance plans for hazardous material including
Underground Storage Tank (UST) Monitoring System Certification, UST Response
Plan, UST Monitoring Plan and Spill Prevention and Countermeasure (SPCC) Plan
WC §50942; GC §60201; GC
§12236; Cal OSHA; 40 CFR
122.21; GC § 34090
CY+2,
CY+10 or
P
P
37 Hazardous
Material
Records related to the use of hazardous waste, hazardous materials, chemicals leaks
and spills, chlorine, and asbestos records. Includes asbestos training records, asbestos
medical records, handling, transportation, use, generation and disposal of hazardous
waste, chemical spill cleanup, disposal manifests, removal receipts, sludge reports
and fees, pesticides/herbicide, material safety data sheets and environment workplace
safety sampling and studies
WC §50942; GC §60201; GC
§12236; Cal OSHA; 40 CFR
122.21
P P
38 Incident Reports
Records relating to accidents/incidents, including vehicle, property and personnel.
Includes but is not limited to, investigation reports, public complaints, traffic
collision coding, and report of traffic accidents occurring in CA.
29CFR 1904.2, 29 CFR 1904.6 C+7 C+7
39 Incorporation
Records State approved formation documents creating the Otay Municipal Water District. WC §50942; GC §60201(1); GC
§12236 P P
Otay Water District - Records Retention Schedule
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Title
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A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
40 Insurance Policies
Records relating to contracts for liability coverage involving employee on the job
injuries, OWD property, or third property liability, owner - controlled insurance
program, aircraft, crime, travel accident and contracts for insurance brokers.
WC §50942; GC §60201; GC
§12236 P P
41a Interagency Files
(General)
Records such as correspondences, reports, interagency billing relating to cities and
other interagencies including but not limited to San Diego County Water Authority,
Metropolitan Water District, sister agencies (Padre, Helix, Sweetwater, etc.), City of
Chula Vista, City of San Diego, County of San Diego, State of California, Water
Conservation Garden JPA, and California Urban Water Conservation Council
WC §50942; GC §60201; GC
§12236 CY+2 CY+2
41b Interagency Files
(Permanent)
Records such as correspondences, reports, including election card filing, and
statement of economic interest relating to cities and other interagencies including but
not limited to San Diego County Water Authority, Metropolitan Water District, and
LAFCO
WC §50942; GC §60201; GC §
34090; GC §§ 6250 et seq.; GC §
81009
T+7 or P P
42 Investment Records relating to purchase contract documentation of investments.
WC §50942; GC §60201; GC
§12236; WC §60201(d)(10); 26
CFR 1.6001-1
A+5 A+5
43 Job Descriptions Current and historical job descriptions. WC §50942; GC §60201; GC
§12236 SU+2 R+10
44 Laboratory
Analysis
Records of all laboratory analysis performed by the District or external laboratories.
Analysis for potable, reclaimed water systems, and reclamation plant. Receipt of
samples, tracking sheets, lists and logs showing locations and dates of samples. This
excludes CIP related lab analysis.
WC §50942; GC §60201; GC
§12236 CY+12 CY+12
45 Land Surveys
Records relating to information on control and boundary monuments, above and
below ground structures including but not limited to survey books, field books, and
data.
WC §50942; GC §60201; GC
§12236; 40 CFR 141.33 CY+10 P
46 Legal Opinions
(Confidential) Records relating to legal opinions on issues, problems and policies impacting OWD. GC § 34090; GC § 6254 R+2 R+2
47 Liens Liens on Properties/Parcels for unpaid debts. WC §50942; GC §60201; GC
§12236 A+3 A+3
48 Litigation Records relating to threatened, pending or settled litigation. This excludes CIP
related claims.
WC §50942; GC §60201; GC
§12236; CCP §583.320(a)(3) C+3 C+6
49 Medical and
Exposure Records
Records related to medical examination/exposure including, but not limited to,
substance, hearing, and respirator testing.
WC §50942; GC §60201; GC
§12236; 29 CFR 1910.1020 T+30 P
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
Legal OWD
Event Codes: Printed 4/14/2016 7:37 PM Page 6
A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
50 Payroll Records related to employee payroll file including garnishment/court orders,
employee deduction (W-4 Form), tax levies and CalPERS Summary Report.
WC §50942; GC §60201; GC
§12236; 29 CFR 516.6 T+7 T+7
51 Pension Records related to employee pensions prior to 1995, excluding CalPERS. WC §50942; GC §60201; GC
§12236; 29 CFR 516.6 30Y 2025
52 Permits, Licenses
and Certifications
District-wide permits, licenses and certifications required for business including, but
not limited to, hazardous material permit, radio station authorization, APCD, storm
water general permit, waste discharge requirement, master reclamation permit, EPA
identification number, RW site certification, underground storage tank operating
permit, lab certification and permit to operate air pressure tank.
WC §50942; GC §60201; GC
§12236; T+4 T+4
53 Procedures &
Guidelines
Records providing administrative procedures and guidelines that are approved by the
General Manager or at the departmental level for operating day-to-day business.
This includes departmental procedures, guidelines, standard operating procedures,
employee handbook, performance evaluation manual, records retention schedule, and
other required program for disaster and emergency management plans such as
National Incident Management System (NIMS) Emergency Management Plan,
Standardized Emergency Management Plan (SEMS), Injury Illness Prevention
Program (IIPP), Fire Department Emergency Plans, evacuation plans, vulnerability
assessment, emergency response inspection requirements and first response training
records.
WC §50942; GC §60201; GC
§12236
R+2
(while
active)
R+5
54 Projects
Records relating to the construction of OWD projects (CIP, Non-CIP, and
Developer). This includes, but is not limited to, engineering test records,
environmental reports, daily construction reports, study reports, task orders, design
reports, developer bonds, reimbursement request, claims, grants, warranties, and
miscellaneous project files.
GC § 34090; CCP § 337.15 C+10 C+20
55 Public Notices Notices pertaining to public hearings for availability fees, rate increases,
annexations, detachments, water conservation, and environment impact.
WC §50942; GC §60201; GC
§12236 P P
56
Public Services
District Fees and
Deposits
Calculation of Public Services District Fees and Deposits filed quarterly by fiscal
year. This includes annexation and capacity fees.
WC §50942; GC §60201(d)(10);
GC §12236 P P
57 Real Property
Records related to the property and structural purchase including drawings, grant
deeds, title transfers, beneficiary, escrow instruction, appraisal, quitclaims, easement,
outside user easements, exclusive easement, encroachment and use of private laterals
(sphagetti lines).
WC §50942; GC §60201; GC
§12236; 24 CFR 570.502(b)(3) P P
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
Legal OWD
Event Codes: Printed 4/14/2016 7:37 PM Page 7
A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
58 Recruitment /
Selection Files Records relating to the interview and selection process for prospective employees.
GC §12946; GC §6250 et. seq.; 29
CFR 1602, et. seq.; 29 CFR 1607,
29 CFR 1627.3
C+3 C+3
59 Regulatory
Compliance
Regulatory compliance records required by outside agencies to include, but not be
limited, to Air Pollution Control District (APCD), Air Resource Board (ARB),
Bureau of Automotive Repair (BAR), Division of Drinking Water (DDW) of the
California Water Board, California Highway Patrol (CHP), California Occupational
Safety and Health Program (CalOSHA), California Regional Water Quality Control
Board (CRWQCB), California State Board of Equalization (BOE), Department of
Environmental Health (DEH), Employment Development Department (EDD),
Environmental Laboratory Accreditation Program (ELAP), Equal Employment
Opportunities Commission (EEOC), Internal Revenue Service (IRS), Local Agency
Formation Commission (LAFCO). San Diego Regional Water Quality Control Board
(SDWQCB) and Social Security Administration (SSA)
WC §50942; GC §60201; GC
§12236; GC § 34090 CY + 12 P
60a Reports and
Studies
Records related to reports and studies completed by outside vendors or in-house on
areas that impact the operations of OWD. This includes, but is not limited general
reports and studies, customer surveys and appraisals of properties for possible
acquisition. Records related to reports and studies completed by outside vendors or
in-house on areas that impact the operations of OWD. This includes but is not
limited project technical reports, Sub-Area Master Plan (SAMP) and Water Resource
Master Plan. Program Environmental Impact Report (PEIR), Integrated Water
Resources Plan, Urban Water Management Plan and Water Supply Assessment and
Verification Reports.
WC §50942; GC §60201; GC
§12236; GC § 34090; GC § 6294
C+2 or CY
+ 2
P
61
Request for
Proposals (RFP)/
Invitation for Bids
Records related to request for proposals, invitation for bids, proposals, bids and
quotations.
WC §50942; GC §60201; GC
§12236 C+2 C+2
62 Safety
Records relating general nature of safety and risk management, including but not
limited to safety inspection forms, hot permits, confine space entry, lockout/tagout,
ergonomic, full body harness, and trenching/excavation.
WC §50942; GC §60201; GC
§12236; 29 CFR 1904.4; OMB
1220-0029
C+5; R+2 CY+5
63 Salary
Administration
Records relating to collected survey data used in determining and monitoring
compensation for various OWD classifications.
WC §50942(12); GC §60201; GC
§12236; OMB 1220-0029 C+7 C+7
Otay Water District - Records Retention Schedule
No. Record Series
Title
Record Series Description Authority Retention (Yrs)
Legal OWD
Event Codes: Printed 4/14/2016 7:37 PM Page 8
A=Annual Financial Audit CCR=Code of Cal. Reg. FY=Fiscal Year OMB=Office Mgmt & Budget R=Revised, Cancelled, Obsolete, Supersede
ACT=Active CEQA=Cal Env Quality Act GC=Cal Goc Code OPS=Opinion Attorney General T=Termination, Death
B&P=Business & Profes Code CFR=Code Fed Regulations H&S=Health & Safety Code OSHA=Occup. Safety & Health Act USC=United States Code
C=Closed, Expired CVC=Calif Vehicle Code L=Life of Facility P=Permanent WC=Water Code
CCP=Code of Civ. Proc. CY=Calendar Year LC=Labor Code Cal PC=Penal Code
64 Security Records Records relating to the security issues for facilities, includes police incident reports. WC §50942; GC §60201; GC
§12236 CY+2 CY+5
65
Surplus
Declaration and
Disposal
Records related to the surplus declaration and disposal of District minor assets as any
individual items (materials, supplies, and equipment) which had an acquisition cost
of $5,000 or less.
WC §50942; GC §60201; GC
§12236; GC § 34090 CY+2 CY+5
66 Tax Reports
Tax report filing including but limited to Payroll Tax Forms (DE6, W2, 941), AP
Tax Forms (1096, 1099 and W-9 Forms), Form 5500F, Form 990N, Underground
Storage Tank Maintenance Fee Return, Government Entity Diesel Fuel Tax Return,
and State, Local and District Sales and Use Tax Return
WC §50942; GC §60201; GC
§12236; GC § 34090 CY + 15 P
67 Underground
Utilities
Records regarding notices for the location of underground utilities for purpose of
digging.
WC §50942; GC §60201; GC
§12236; GC § 4003, GC § 4004;
H&S § 19850
P P
68 Water
Conservation
Records relating to Water Conservation programs, IAWP (SAWR) Reduction Plan,
large and residential survey reports.
WC §50942; GC §60201; GC
§12236 C+2 C+2
69
Workers'
Compensation
Files
Records relating to Workers' Compensation. Records include checks, injuries,
litigated and non-litigated cases, and ergonomic records of work site
inspections/recommendations (maintained in HR). Includes 300, 300A and 301
forms.
WC §50942; GC §60201; GC
§12236; 8 CCR § 15400.2; Cal.
Labor Code § 110, et seq.
P P
70 Email System
Email and voicemail system backup; transitory records that are informal
communications produced via computer or electronic devices to include routine
requests for information, routine communication containing no substantive
information. Official Email records pertaining to record description (this document)
will be retained according to retention schedule.
GC §60201; GC § 34090
OPS §80-1006 100 Days 100 Days
72 District Services
Permits
Records related to District meter services including but not limited to water, sewer
and recycled services, Service Installation Requests (SIRs), fire services,
annexations, plan checks and legacy Water Sewer Orders (WSOs).
WC §50942; GC §60201(d)(10);
GC §12236 P P
75 Certificate of
Destruction
Records relating to desctruction of documents, including certificate of destruction,
invoices and destruction approval reports.
WC §50942; GC §60201; GC
§12236; GC § 34090 P P
76 Recycled Water
Sites
Records relating to OWD recycled water use sites. This includes, but is not limited
to, test reports, inspection reports, controller charts, recycled water use agreements,
data sheets, approval letters, and general correspondence.
WC §50942; GC §60201; GC
§12236; GC § 34090 P P
77 Records Retention
Program Records – Schedules, Destruction Records, Policy, and Procedures GC §60201 P P