HomeMy WebLinkAbout10-21-15 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
October 21, 2015
1:00 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. APPROVE THE DISTRICT’S AUDITED FINANCIAL STATEMENTS INCLUDING THE
INDEPENDENT AUDITOR’S UNQUALIFIED OPINION FOR FISCAL YEAR ENDED
JUNE 30, 2015 (DYCHITAN) [10 minutes]
4. RECEIVE THE FINDINGS OF THE 2015 CUSTOMER AWARENESS AND OPINION
SURVEY (BUELNA) [10 minutes]
5. APPROVE AN AGREEMENT WITH THE LAW FIRM OF STUTZ, ARTIANO,
SHINOFF AND HOLTZ, A PROFESSIONAL CORPORATION, FOR A TERM OF TWO
(2) YEARS THROUGH DECEMBER 31, 2017, TO PROVIDE GENERAL COUNSEL
SERVICES (WATTON) [5 minutes]
6. DISCUSSION OF CONSERVATION’S IMPACT ON REVENUES AND THE CITY OF
SAN DIEGO’S PROPOSED RECYCLED WATER RATE INCREASE;
PRESENTATION OF A NUMBER OF FINANCIAL CONSIDERATIONS WITH
REGARD TO THE CURRENT BUDGET IMPACT AND FUTURE RATE INCREASES;
AND A REQUEST FOR BOARD CONSIDERATION AND DIRECTION (BELL) [10
minutes]
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7. ADJOURNMENT
BOARD MEMBERS ATTENDING:
Mitch Thompson, Chair
Jose Lopez
All items appearing on this agenda, whether or not expressly listed for action, may be delib-
erated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the Dis-
trict’s website at www.otaywater.gov. Written changes to any items to be considered at the
open meeting, or to any attachments, will be posted on the District’s website. Copies of the
Agenda and all attachments are also available 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 October 20, 2015 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 October 20, 2015.
______/s/_ Susan Cruz, District Secretary _____
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: November 4, 2015
SUBMITTED BY:
Marissa Dychitan
Senior Accountant
PROJECT: DIV. NO. All
APPROVED BY:
Kevin Koeppen, Finance Manager
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Approve the District’s Audited Financial Statements for the
Fiscal Year Ended June 30, 2015
GENERAL MANAGER’S RECOMMENDATION:
That the Board approve the District’s Audited Financial Statements
(Attachment B), including the Independent Auditors’ unqualified
opinion, for the fiscal year ended June 30, 2015.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To inform the Board of the significant financial events which
occurred during the fiscal year ended June 30, 2015 as reflected in
the audited financial statements.
ANALYSIS:
Teaman, Ramirez & Smith, Inc., performed the audit and found that, in
all material respects, the financial statements correctly represent
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the financial position of the District. They found no material
errors in the financial records or statements (Attachment D).
Total Assets:
Total assets decreased by $7.7 million or 1.33% during Fiscal Year
2015, to $568.9 million, due primarily to depreciation partially
offset by investments in capital assets.
Deferred Outflows & Deferred Inflows:
In Fiscal Year 2015, the District implemented Governmental Accounting
Standards Board (GASB) No. 68,”Accounting and Financial Reporting for
Pensions-an amendment of GASB Statement No.27”, and No. 71,”Pension
Transition for Contributions Made Subsequent to the Measurement Date-
an amendment of GASB Statement No. 68”. In accordance with GASB 68
and 71, contributions made subsequent to the measurement date, which
was June 30, 2014 for the June 30, 2015 financial statements, should
be reported as deferred contributions (outflows) to the pension plan
and the net difference between projected and actual earnings on the
pension plan should be reported as deferred inflows amortized over
five years. In FY 2015, $3.6 million and $5.0 million are reflected
as deferred outflows and inflows of resources on the Statement of Net
Position.
Total Liabilities & Net Positions:
Total liabilities increased by approximately $33.2 million from the
previous fiscal year to $165.1 million. This is attributable to the
recognition of $38.7 million in Net Pension Liability due to the
implementation of GASB 68 and 71. This increase was partially offset
by the decrease in long-term debt of $3.8 million.
The beginning net position of $444.8 million was decreased by $40.4
million as a result of the implementation of GASB 68 and 71. The
District’s Net Position is $402.4 million as of June 30, 2015.
Capital Contributions:
Capital contributions for Fiscal Year 2015 were $3.1 million, which
consists of capacity fees and contributed fixed assets from developers
and betterment and availability fees collected from ratepayers.
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Results of Operations:
Operating revenues decreased by $2.2 million or 2.51%, mainly as a
result of the overall decrease in water sales volume from the prior
fiscal year due to mandatory conservation.
Cost of water sales decreased $1.7 million or 3.04% due to less water
consumption as a result of the mandatory conservation.
Non-Operating Revenues & Expenses:
Non-operating revenues total $8.9 million for FY 2015. Non-operating
revenues come from property taxes and assessments, rents and leases,
investment earnings, and the BABs subsidy.
Additional Audit Correspondence:
As a part of completing the audit engagement, the audit firm also
provides the following letters summarizing their observations and
conclusions concerning the District’s overall financial processes.
Management Letter: The auditors did not identify any
deficiencies in internal controls that they considered to be
material weaknesses. See Attachment C.
Audit Committee Letter: This letter describes overall aspects
of the audit, to include audit principles, performance,
dealings with management, and significant findings or issues.
There were no transactions entered into by the District during
the year for which there is a lack of authoritative guidance
or consensus. All significant transactions have been
recognized in the financial statements in the proper period.
There were no disagreements with management concerning
financial accounting, reporting, or auditing matters, and
there were no significant difficulties in dealing with
management in performing the audit. See Attachment D.
Report on Applying Agreed-Upon Procedures: A review of the
District’s investment portfolio at year end and a sample of
specific investment transactions completed throughout the
fiscal year was performed and there were no exceptions to
compliance from the District’s Investment Policy. See
Attachment E.
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FISCAL IMPACT:
None.
STRATEGIC GOAL:
The District ensures its continued financial health through long-term
financial planning, formalized financial policies, enhanced budget
controls, fair pricing, debt planning, and improved financial
reporting.
LEGAL IMPACT:
None.
Attachments:
A) Committee Action Form
B) Audited Annual Financial Statements
C) Management Letter
D) Audit Committee Letter
E) Report on Applying Agreed-Upon Procedures
ATTACHMENT A
SUBJECT/PROJECT:
Approve the District’s Audited Financial Statements for the
Fiscal Year Ended June 30, 2015
COMMITTEE ACTION:
The Finance, Administration, and Communications Committee recommend
that the Board accept the District’s audited financial statements,
including the Independent Auditor’s unqualified opinion, for the
Fiscal Year Ended June 30, 2015.
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.
OTAY WATER DISTRICT
FINANCIAL STATEMENTS
WITH
REPORT ON AUDIT BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
TABLE OF CONTENTS
JUNE 30, 2015
Page
Number
Independent Auditors’ Report 1 - 2
Management’s Discussion & Analysis 3 - 10
Basic Financial Statements:
Statements of Net Position 11 - 12
Statements of Revenues, Expenses, and Changes in Net Position 13
Statements of Cash Flows 14 - 15
Notes to Financial Statements 16 - 47
Required Supplementary Information:
Schedule of Funding Progress for DPHP 48
Schedule of Changes in the Net Pension Liability and Related Ratios 49
Schedule of Contributions 50
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
INDEPENDENT AUDITORS' REPORT
Board of Directors
Otay Water District
Spring Valley, California
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities of the Otay Water District (the “District”),
as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the
District’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting
principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States and the State Controller’s
Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position
of the business-type activities of the Otay Water District as of June 30, 2015, and the respective changes in financial position and
cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of
America, as well as the accounting systems prescribed by the California State Controller’s Office and California regulations
governing Special Districts.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
Emphasis of Matters
As described in Note 13 to the financial statements, in 2015, the District adopted new accounting guidance, GASB Statement
No. 68 Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 and GASB Statement No.
71 Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68.
Our opinion is not modified with respect to these matters.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis
and required supplementary information on pages 48-50 be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated ________ __, 2015, on our
consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.
Riverside, California
_________ __, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
Management’s Discussion and Analysis
3
As management of the Otay Water District (the “District”), we offer readers of the District’s financial
statements, this narrative overview, and analysis of the District’s financial performance during the fiscal
year ending June 30, 2015. Please read it in conjunction with the District’s financial statements that follow
Management’s Discussion and Analysis. All amounts, unless otherwise indicated, are expressed in
millions of dollars.
Financial Highlights
The assets of the District exceeded its liabilities at the close of the most recent fiscal year by $402.4 million (net position). Of
this amount, $43.7 million (unrestricted net position) may be used to meet the District’s ongoing obligations to citizens and
creditors.
Total assets decreased by $7.7 million or 1.33% during Fiscal Year 2015, to $568.9 million, due primarily to depreciation offset
by investments in capital infrastructure, contributions, and improved operating results.
Net Position at July 1, 2014 was decreased by $40.4 million due to the implementation of Governmental Accounting
Standards Board (GASB) Statements No. 68 and No. 71. The most significant impact of the implementation requires the
presentation of Defined Benefit Pension Plan’s $38.7 million Unfunded Actuarial Accrual as a liability on the Statement of Net
Position.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the District’s basic financial
statements, which are comprised of the following: 1) Statement of Net Position, 2) Statement of Revenues,
Expenses, and Changes in Net Position, 3) Statement of Cash Flows, and 4) Notes to the Financial
Statements. This report also contains other supplementary information in addition to the basic financial
statements.
The Statement of Net Position presents information on all of the District’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Over
time, increases or decreases in net positions may serve as a useful indicator of whether the financial
position of the District is improving or weakening.
The Statement of Revenues, Expenses and Changes in Net Position presents information showing how the
District’s net position changed during the most recent fiscal year. All changes in net positions are reported
as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
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Management’s Discussion and Analysis
4
The Statement of Cash Flows presents information on cash receipts and payments for the fiscal year.
The Notes to the Financial Statements provide additional information that is essential to a full
understanding of the data supplied in each of the specific financial statements listed above.
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the District’s progress in funding its obligation to provide
pension benefits to its employees.
Financial Analysis:
As noted, net position may serve, over time, as a useful indicator of an entity’s financial position. In the
case of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of
resources by $402.4 million at the close of the most recent fiscal year.
By far, the largest portion of the District’s net position, $354.0 million (80%), reflects its investment in capital
assets, less any remaining outstanding debt used to acquire those assets. The District uses these capital
assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the District’s investment in its capital assets is reported effectively as a resource, it should be
noted that the resources needed to repay the debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
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Management’s Discussion and Analysis
5
Statements of Net Position
(In Millions of Dollars)
2015 2014 2013
Assets
Current and Other Assets $ 109.7 $ 109.9 $ 106.3
Capital Assets 459.2 466.7 476.0
Total Assets 568.9 576.6 582.3
Deferred Outflows of Resources
Deferred Amount on Refunding 0.0 0.1 0.4
Deferred Contributions to Pension Plan 3.6 0.0 0.0
Total Deferred Outflows of Resources 3.6 0.1 0.4
Liabilities
Long-Term Debt Outstanding 101.5 105.3 109.0
Net Pension Liability 38.7 0.0 0.0
Other Liabilities 24.9 26.6 25.5
Total Liabilities 165.1 131.9 134.5
Deferred Inflows of Resources
Deferred Actuarial Pension Costs 5.0 0.0 0.0
Total Deferred Inflows of Resources 5.0 0.0 0.0
Net Position1
Net Investment in Capital Assets 354.0 357.9 376.5
Restricted for Debt Service 4.7 3.9 4.6
Unrestricted 43.7 83.0 67.1
Total Net Position $ 402.4 $ 444.8 $ 448.2
While the District’s operations and population continue to grow, albeit at slower rates than the housing
boom years, the pattern of reduced growth of the District’s Net Position is indicative of the reduction and
slow recovery of new development projects within the District. This reduction is a result of the slow
recovery from the national housing slump.
1 GASB No. 68 & 71 implemented in FY 2015. Prior years were not restated as the information was not
readily available.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
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Management’s Discussion and Analysis
6
In FY 2015, the District’s Capital Assets increased by $8.2 million before accumulated depreciation. (See
Note 3 in the Notes to Financial Statements). The District also saw a decrease in Long-Term Debt of $3.8
million due to the annual payments of long-term debt (See Note 4 in the Notes to the Financial
Statements).
Certain planning and environmental study costs associated with capital projects such as the Otay Mesa
Desalination and Disinfection System or San Miguel Habitat Management/Mitigation Area do not qualify
as capital costs under Generally Accepted Accounting Principles and are included in the miscellaneous
expenses of the District. For FY 2015 and FY 2014 those expenses were $1.2 million and $1.6 million,
respectively.
At the end of FY 2015 the District is able to report positive balances in all categories of net position. This
situation also held true for the prior two fiscal years.
Statements of Revenues, Expenses, and Changes in Net Position
(In Millions of Dollars)
2015 2014 2013
Water Sales $ 79.1 $ 81.3 $ 72.2
Wastewater Revenue 3.1 2.8 2.6
Connection and Other Fees 1.7 1.9 2.1
Non-operating Revenues 8.9 7.8 7.7
Total Revenues 92.8 93.8 84.6
Depreciation Expense 16.2 16.1 16.5
Other Operating Expense 75.7 76.5 70.8
Non-operating Expense 6.0 8.0 6.0
Total Expenses 97.9 100.6 93.3
Loss Before Capital
Contributions (5.1) (6.8) (8.7)
Capital Contributions 3.1 3.4 2.8
Change in Net Position (2.0) (3.4) (3.1)
Beginning Net Position, As Previously Stated 444.8 448.2 454.1
Prior Period Adjustment (40.4) 0.0 0.0
Beginning Net Position, As Restated 404.4 448.2 454.1
Ending Net Position $ 402.4 $ 444.8 $ 448.2
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
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Management’s Discussion and Analysis
7
Water Sales decreased by $2.2 million in FY 2015 and increased by $9.1 million in FY 2014. The year over
year reduction was mainly due to decreases in units sold during FY 2015 as a result of the ongoing drought
conditions. This reduction as a result of the drought was partially offset by increases in rates. The FY 2014
increase was a result of both increasing volume due to the economic recovery and rate increases.
Other Operating Expense decreased predominantly due to the decrease in Cost of Water Sales brought
about by the decrease in units purchased in FY 2015.
The reduction in District growth, as a result of the economic slowdown, continues to impact the District as
Connection and Other Fees revenues declined by $0.2 million in FY 2015 and in FY 2014. During the
nationwide housing mortgage crisis, developers had either slowed down or totally stopped work on
projects until economic conditions improve and the demand for growth returned. While the economy has
improved, the demand and development that has returned has done so at a much slower rate. This has
resulted in Capital Contributions remaining low over the last three years, compared to the extended growth
of the previous 10 years.
Non-operating Revenues
Non-operating Revenues by Major Source
(In Millions of Dollars)
2015 2014 2013
Taxes and Assessments $ 3.8 $ 3.5 $ 3.5
Rents and Leases 1.2 1.3 1.3
Other Non-operating Revenue 3.9 3.0 2.9
Total Non-operating Revenues $ 8.9 $ 7.8 $ 7.7
The District’s total non-operating revenues increased by $1.1 million in FY 2015 and by $0.1 million in
FY 2014. The increase in FY 2015 was primarily a result of increased revenues from property taxes,
availability fees, and investment earnings.
Capital Assets and Debt Administration
The District’s capital assets (net of accumulated depreciation) as of June 30, 2015, totaled $459.2 million.
Included in this amount is land. The District’s net capital assets decreased by 1.6% for FY 2015 and 2.0% for
FY 2014.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
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Management’s Discussion and Analysis
8
Capital Assets
(In Millions of Dollars)
2015 2014 2013
Land $ 13.7 $ 13.7 $ 13.7
Construction in Progress 15.1 11.7 17.5
Water System 468.7 465.9 458.8
Recycled Water System 110.5 110.3 108.9
Sewer System 42.0 41.2 41.2
Field Equipment 8.7 8.8 8.9
Buildings 19.0 18.9 18.8
Transportation Equipment 3.4 3.3 3.5
Communication Equipment 3.1 2.9 2.6
Office Equipment 18.2 17.5 17.3
702.4 694.2 690.8
Less Accumulated
Depreciation (243.2) (227.5) (214.8)
Net Capital Assets $ 459.2 $ 466.7 $ 476.0
As indicated by figures in the table above, the majority of capital assets added during both fiscal years
were related to the potable and recycled water systems. In addition, the majority of the cost of
construction-in-progress is also related to these water systems. Additional information on the District’s
capital assets can be found in Note 3 of the Notes to Financial Statements.
At June 30, 2015, the District had $101.5 million in outstanding debt (net of $3.7 million of maturities
occurring in FY 2016), which consisted of the following:
General Obligation Bonds $ 4.7
Certificates of Participation 43.4
Revenue Bonds 53.4
Total Long-Term Debt $ 101.5
In June 2013, the District issued $7.7 million of 2013 Water Revenue Refunding Bonds for an advance
refunding of its 2004 Certificates of Participation, which was called on September 1, 2014. Excluding costs
of issuance the District received $8.5 million in proceeds, including a $1.0 million premium, to fund the $8.1
million of outstanding principal and $0.4 million of remaining interest payments. In accordance with GASB
Nos. 23 and 65, the remaining interest payments of $0.1 million in FY 2014 and $0.4 million in FY 2013 are
reflected as a deferred outflow of resources on the Statement of Net Position.
Additional information on the District’s long-term debt can be found in Note 4 of the Notes to Financial
Statements
DRAFT COPY – 10/12/2015
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Management’s Discussion and Analysis
9
Prior Period Adjustment
The Governmental Accounting Standards Board (GASB) issued Statement No. 68, “Accounting and
Financial Reporting for Pensions-an amendment of GASB Statement No. 27”, and No. 71 “Pension
Transitions for Contributions Made Subsequent to the Measurement Date-an amendment of GASB No. 68”
for periods beginning after June 15, 2014. The District implemented these standards in fiscal year 2015.
The result of the implementation of these standards was to decrease the net position at July 1, 2014 by
$40.4 million which consists of net pension liability, deferred outflows of resources, deferred inflows of
resources, and pension expense.
Fiscal Year 2015-2016 Budget
Economic Factors
Demand and supply of water in the San Diego area has declined over the last five years. Although San
Diego received less than normal rainfall in Fiscal Year 2015, the District is expecting that San Diego’s
rainfall will return to its average pattern and volume in the coming years. San Diego rainfall, while a
contributing factor, is not the controlling factor for our potable water supply shortage. The San Diego
region imports 90% of its potable supply, so conditions elsewhere significantly affect the actual amount of
water available to the District. In the event the amount of water supplied to the District is reduced, water
sales revenues would decrease. Related water purchase expenses would also be reduced, mitigating the
impact of the decrease in net revenues. The amount of any supply reduction would dictate the magnitude
of the District's response and type of reaction.
The District continues to use the challenges presented by growth and the ongoing drought to create new
opportunities and new organizational efficiencies. By utilizing and continuing to refine its Strategic
Business Plan, it has captured the Board of Director’s vision and united its staff in a common mission. The
District has achieved a number of significant accomplishments based on its successful adherence to its
Strategic Business Plan. The District is not only poised to continue successfully providing an affordable,
safe, and reliable water supply for the people of its service area, but is set to reap the rewards of greater
efficiencies and economies of scale.
The District is currently at about 52% of its projected ultimate population, serving approximately 217,000
people. Long-term, this percentage should continue to increase as the District's service area continues to
develop and grow. By 2035, the District is projected to serve approximately 285,000 people, with an
average daily demand of 46 million gallons per day (MGD). Currently, the District services the needs of this
growing population by purchasing water from the San Diego County Water Authority (CWA), who in turn
purchases its water from the Metropolitan Water District (MWD) and the Imperial Irrigation District (IID).
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
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Management’s Discussion and Analysis
10
Otay takes delivery of the water through several connections of large diameter pipelines owned and
operated by CWA. The District currently receives treated water from CWA directly and from the Helix Water
District via a contract with CWA. In addition, the District has an emergency agreement with the City of San
Diego to purchase water in the case of a shutdown of the main treated water source. The City of San
Diego also has a long-term contract with the District to provide recycled water for landscape and irrigation
usage. Through innovative agreements like these, benefits can be achieved by both parties by using
excess capacity of another agency, and diversifying local supply, thereby increasing reliability.
Financial
The District is budgeted to deliver approximately 27,000 acre-feet of potable water to 49,500 potable
customer accounts during Fiscal Year 2015-2016. Management feels that these projections are realistic
after accounting for low growth, supply changes, and a focus on conservation. A combination of factors,
including the ongoing drought and recession, have created challenges in developing economic
projections for the current fiscal year. Both unemployment and levels of distressed activity in the
commercial and residential resale market have improved from their economic crisis peaks. However,
while unemployment has recovered, housing starts remain significantly below the levels of the boom years
from 2001 to 2005. The negative impacts to the District of the economic indicators and conservation are
partially offset by growth as the District’s commercial and residential permits have shown slow and steady
improvement from previous lows. While all of these factors impact the region’s water usage, people’s
need for water remains an underlying constant. Staff continues working diligently on developing new
water supplies as they work through the financial impacts of conservation and the modest economic
turnaround.
Management is unaware of any other conditions that could have a significant impact on the District’s
current financial position, net position, or operating results.
Contacting the District’s Financial Management
This financial report is designed to provide a general overview of the Otay Water District’s finances for the
Board of Directors, citizens, creditors, and other interested parties. Questions concerning any of the
information provided in the report or requests for additional information should be addressed to the
District’s Finance Department, 2554 Sweetwater Springs Blvd., Spring Valley, CA 91978-2004.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
ASSETS
Current Assets:
Cash and Cash Equivalents (Notes 1 and 2) 23,168,511$
Restricted Cash and Cash Equivalents (Notes 1 and 2) 47,083
Investments (Note 2)35,888,511
Board Designated Investments (Note 2) 22,395,347
Restricted Investments (Notes 1 and 2) 4,532,725
Accounts Receivable, Net 9,987,050
Accrued Interest Receivable 97,291
Taxes and Availability Charges Receivable, Net 321,178
Restricted Taxes and Availability Charges Receivable, Net 31,848
Inventories 807,008
Prepaid Items and Other Receivables 988,882
Total Current Assets 98,265,434
Non-current Assets:
Net OPEB Asset (Note 7)11,472,386
Capital Assets (Note 3):
Land 13,714,963
Construction in Progress 15,106,336
Capital Assets, Net of Depreciation 430,370,095
Total Capital Assets, Net of Depreciation 459,191,394
Total Non-current Assets 470,663,780
Total Assets 568,929,214
DEFERRED OUTFLOWS OF RESOURCES
Deferred Contributions to Pension Plan 3,575,595
Total Deferred Outflows of Resources 3,575,595$
Continued
STATEMENT OF NET POSITION
JUNE 30, 2015
The accompanying notes are an integral part of this statements.
11
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PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
LIABILITIES
Current Liabilities:
Current Maturities of Long-term Debt (Note 4) 3,690,000$
Accounts Payable 9,779,477
Accrued Payroll Liabilities 3,335,149
Other Accrued Liabilities 3,642,511
Customer and Developer Deposits 2,227,173
Accrued Interest 1,540,122
Liabilities Payable from Restricted Assets:
Restricted Accrued Interest 65,304
Total Current Liabilities 24,279,736
Non-current Liabilities:
Long-term Debt (Note 4):
General Obligation Bonds 4,697,208
Certificates of Participation 43,355,103
Revenue Bonds 53,402,993
Net Pension Liability 38,723,345
Other Non-current Liabilities 656,158
Total Non-current Liabilities 140,834,807
Total Liabilities 165,114,543
DEFERRED INFLOWS OF RESOURCES
Deferred Actuarial Pension Costs (Note 6)4,967,940
Total Deferred Inflows of Resources 4,967,940
NET POSITION
Net Investment in Capital Assets 354,046,090
Restricted for Debt Service 4,658,306
Unrestricted 43,717,930
Total Net Position 402,422,326$
STATEMENT OF NET POSITION - CONTINUED
JUNE 30, 2015
The accompanying notes are an integral part of this statements.
12
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
OPERATING REVENUES
Water Sales 79,135,000$
Wastewater Revenue 3,044,158
Connection and Other Fees 1,686,249
Total Operating Revenues 83,865,407
OPERATING EXPENSES
Cost of Water Sales 54,364,884
Wastewater 1,866,711
Administrative and General 19,437,141
Depreciation 16,194,992
Total Operating Expenses 91,863,728
Operating Income (Loss) (7,998,321)
NON-OPERATING REVENUES (EXPENSES)
Investment Earnings 656,925
Taxes and Assessments 3,856,276
Availability Charges 685,555
Gain (Loss) on Sale of Capital Assets 30,282
Rents and Leases 1,232,920
Miscellaneous Revenues 2,490,796
Donations (117,462)
Interest Expense (4,545,530)
Miscellaneous Expenses (1,324,155)
Total Non-operating Revenues (Expenses) 2,965,607
Income (Loss) Before Capital Contributions (5,032,714)
Capital Contributions 3,081,894
Change in Net Position (1,950,820)
Total Net Position, Beginning, As Previously Reported 444,807,820
Prior Period Adjustment (40,434,674)
Total Net Position, Beginning, As Restated 404,373,146
Total Net Position, Ending 402,422,326$
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2015
The accompanying notes are an integral part of this statements.
13
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers 84,879,648$
Receipts from Connections and Other Fees 1,686,249
Other Receipts 2,490,796
Payments to Suppliers (57,803,850)
Payments to Employees (20,838,190)
Other Payments (1,501,218)
Net Cash Provided By (Used For) Operating Activities 8,913,435
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES
Receipts from Taxes and Assessments 3,877,931
Receipts from Property Rents and Leases 1,115,458
Net Cash Provided By (Used For) Noncapital and Related
Financing Activities 4,993,389
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Proceeds from Capital Contributions 2,979,305
Proceeds from Sale of Capital Assets 30,735
Proceeds from Debt Related Taxes and Assessments 685,555
Principal Payments on Long-Term Debt (3,495,000)
Interest Payments and Fees (4,497,782)
Acquisition and Construction of Capital Assets (8,632,578)
Net Cash Provided By (Used For) Capital and Related
Financing Activities (12,929,765)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received on Investments 643,313
Proceeds from Sale and Maturities of Investments 44,917,589
Purchase of Investments (53,932,480)
Net Cash Provided By (Used For) Investing Activities (8,371,578)
Net Increase (Decrease) in Cash and Cash Equivalents (7,394,519)
Cash and Cash Equivalents - Beginning 30,610,113
Cash and Cash Equivalents - Ending 23,215,594$
Continued
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2015
The accompanying notes are an integral part of this statements.14
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
Reconciliation of Operating Income (Loss) to Net Cash Flows
Provided By (Used For) Operating Activities:
Operating Income (Loss)(7,998,321)$
Adjustments to Reconcile Operating Income to
Net Cash Provided By (Used For) Operating Activities:
Depreciation 16,194,992
Miscellaneous Revenues 2,490,796
Miscellaneous Expenses (1,501,218)
(Increase) Decrease in Accounts Receivable 2,892,071
(Increase) Decrease in Inventory (32,001)
(Increase) Decrease in Net OPEB Asset (1,087,050)
(Increase) Decrease in Prepaid Items and Other Receivables 58,826
(Increase) Decrease in Contributions to Pension Plan (318,984)
Increase (Decrease) in Accounts Payable (2,126,549)
Increase (Decrease) in Accrued Payroll and Related Expenses 280,629
Increase (Decrease) in Other Accrued Liabilities 245,011
Increase (Decrease) in Customer Deposits (191,581)
Increase (Decrease) in Prepaid Capacity Fees 6,814
Net Cash Provided By (Used For) Operating Activities 8,913,435$
Schedule of Cash and Cash Equivalents:
Current Assets:
Cash and Cash Equivalents 23,168,511$
Restricted Cash and Cash Equivalents 47,083
Total Cash and Cash Equivalents 23,215,594$
Supplemental Disclosures
Non-Cash Investing and Financing Activities Consisted of the Following:
Contributed Capital for Water and Sewer System 102,590$
Change in Fair Value of Investments and Recognized Gains/Losses 23,827
Amortization Related to Long-term Debt 78,118
Amortization Related to Pension 1,241,985
STATEMENT OF CASH FLOWS - CONTINUED
FOR THE YEAR ENDED JUNE 30, 2015
The accompanying notes are an integral part of this statements.15
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16
NOTE DESCRIPTION PAGE
1 Reporting Entity and Summary of Significant Accounting Policies..……….. 17 - 22
2 Cash and Investments………………………………………………………... 22 - 26
3 Capital Assets…………………………………………………..……………. 27
4 Long-Term Debt………………………………………………….………….. 28 - 32
5 Net Position………………………………………………………………….. 32
6 Defined Benefit Pension Plan……………………………………………….. 33 - 38
7 Other Post Employment Benefits………………………..…………............... 38 - 41
8 Water Conservation Authority………………………………………............ 41
9 Commitments and Contingencies……………………………………………. 41 - 42
10 Risk Management……………………………………………………………. 42 - 44
11 Interest Expense……………………………………………………............... 44
12 Segment Information………………………………………………..……….. 44 - 47
13 Prior Period Adjustment…………………………………………..……….. 47
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
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PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
17
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The reporting entity Otay Water District (the “District”) includes the accounts of the District and the Otay Water
District Financing Authority (the “Financing Authority”).
The Otay Water District (the “District”) is a public entity established in 1956 pursuant to the Municipal Water District
Law of 1911 (Section 711 et. Seq. of the California Water Code) for the purpose of providing water and sewer services
to the properties in the District. The District is governed by a Board of Directors consisting of five directors elected by
geographical divisions based on District population for a four-year alternating term.
The District formed the Financing Authority on March 3, 2010 under the Joint Exercise of Powers Act, constituting
Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government
Code. The Financing Authority was formed to assist the District in the financing of public capital improvements.
The financial statements present the District and its component units. The District is the primary government unit.
Component units are those entities which are financially accountable to the primary government, either because the
District appoints a voting majority of the component unit’s board, or because the component unit will provide a
financial benefit or impose a financial burden on the District. The District has accounted for the Financing Authority as
a “blended” component unit. Despite being legally separate, the Financing Authority is so intertwined with the District
that it is in substance, part of the District’s operations. Accordingly, the balances and transactions of this component
unit are reported within the funds of the District. Separate financial statements are not issued for the Financing
Authority.
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation
Measurement focus is a term used to describe “which” transactions are recorded within the various financial
statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus
applied. The accompanying financial statements are reported using the economic resources measurement focus, and
the accrual basis of accounting. Under the economic measurement focus all assets and liabilities (whether current or
noncurrent) associated with these activities are included on the Statements of Net Position. The Statements of
Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net
position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows.
The District reports its activities as an enterprise fund, which is used to account for operations that are financed and
operated in a manner similar to a private business enterprise, where the intent of the District is that the costs (including
depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered
primarily through user charges.
The basic financial statements of the Otay Water District have been prepared in conformity with accounting
principles generally accepted in the United States of America. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for governmental accounting financial reporting purposes.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
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for DISCUSSION PURPOSES ONLY
18
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation - Continued
Net position of the District is classified into three components: (1) net investment in capital assets, (2) restricted net
position, and (3) unrestricted net position. These classifications are defined as follows:
Net Investment in Capital Assets
This component of net position consists of capital assets, net of accumulated depreciation and reduced by the
outstanding balances of notes or borrowing that are attributable to the acquisition of the assets, construction, or
improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt
attributable to the unspent proceeds are not included in the calculation of the net investment in capital assets.
Restricted Net Position
This component of net position consists of net position with constrained use through external constraints imposed by
creditors (such as through debt covenants), grantors, contributions, or laws or regulations of other governments or
constraints imposed by law through constitutional provisions or enabling legislation.
Unrestricted Net Position
This component of net position consists of net position that do not meet the definition of “net investment in capital
assets” or “restricted net position”.
The District distinguishes operating revenues and expenses from those revenues and expenses that are nonoperating.
Operating revenues are those revenues that are generated by water sales and wastewater services while operating
expenses pertain directly to the furnishing of those services. Nonoperating revenues and expenses are those revenues
and expenses generated that are not associated with the normal business of supplying water and wastewater treatment
services.
The District recognizes revenues from water sales, wastewater revenues, and meter fees as they are earned. Taxes and
assessments are recognized as revenues based upon amounts reported to the District by the County of San Diego, net of
allowance for delinquencies of $39,225 at June 30, 2015.
Additionally, capacity fee contributions received which are related to specific operating expenses are offset against
those expenses and included in Cost of Water Sales in the Statements of Revenues and Expenses and Changes in Net
Position.
Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant
proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and
unrestricted - net position, a flow assumption must be made about the order in which the resources are considered to be
applied.
It is the District’s practice to consider restricted - net position to have been depleted before unrestricted - net position is
applied, however it is at the Board’s discretion.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
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for DISCUSSION PURPOSES ONLY
19
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
C) New Accounting Pronouncements
Implemented
The GASB has issued Statements No. 68, “Accounting and Financial Reporting for Pensions-an amendment of
GASB Statement No. 27”, No. 69 “Government Combinations and Disposals of Government Operations”, and No.
71 “Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment of GASB
Statement No. 68”. The requirements for Statements No. 68 and No. 71 are effective for financial statements for
periods beginning after June 15, 2014 and Statement No. 69 is effective for financial statements for periods
beginning after December 15, 2013. Statement No. 69 is not applicable to the District at this time. Statements No.
68 and No. 71 have been implemented and are reflected on the Districts financial statements and beginning net
position.
Pending Accounting Standards
GASB has issued the following statement which impact the District’s financial reporting requirements in the future:
i. GASB 72 – “Fair Value Measurement and Application”, effective for the fiscal years beginning after June 15,
2015.
ii. GASB 73 – “Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68”,
effective for fiscal years beginning after June 15, 2015.
iii. GASB 74 – “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans”, effective
for fiscal years beginning after June 15, 2016.
iv. GASB 75 – “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions”,
effective for fiscal years beginning after June 15, 2017.
v. GASB 76 – “The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments”,
effective for fiscal years beginning after June 15, 2015.
D) Deferred Outflows / Inflows of Resources
In addition to assets, the statements of net position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net
position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The District has one item that qualifies for reporting in this category, deferred
contributions to pension plan, which is related to contributions subsequent to the measurement date of the pension plan.
In addition to liabilities, the statements of net position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net
position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time.
The District has only one item that qualifies for reporting in this category. Accordingly, the item, deferred actuarial
pension cost, are deferred and recognized as an inflow of resources in the period that the amounts become available.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
20
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
E) Statements of Cash Flows
For purposes of the Statements of Cash Flows, the District considers all highly liquid investments (including
restricted assets) with a maturity period, at purchase, of three months or less to be cash equivalents.
F) Investments
Investments are stated at their fair value, which represents the quoted or stated market value. Investments that are
not traded on a market, such as investments in external pools, are valued based on the stated fair value as
represented by the external pool. All investments are stated at their fair value, the District has not elected to report
certain investments at amortized costs.
G) Inventory and Prepaids
Inventory consists primarily of materials used in the construction and maintenance of the water and sewer system and is
valued at weighted average cost. Both inventory and prepaids use the consumption method whereby they are reported
as an asset and expensed as they are consumed.
H) Capital Assets
Capital assets are recorded at cost, where historical records are available, and at an estimated historical cost where no
historical records exist. Infrastructure assets in excess of $20,000 and other capital assets in excess of $10,000 are
capitalized if they have an expected useful life of two years or more. The District will also capitalize individual
purchases under the capitalization threshold if they are part of a new capital program. The cost of purchased and self-
constructed additions to utility plant and major replacements of property are capitalized. Costs include materials, direct
labor, transportation, and such indirect items as engineering, supervision, employee fringe benefits, overhead, and
interest incurred during the construction period. Repairs, maintenance, and minor replacements of property are charged
to expense. Donated assets are capitalized at their approximate fair market value on the date contributed.
The District capitalizes interest on construction projects up to the point in time that the project is substantially
completed. Capitalized interest for fiscal year ending June 30, 2015 of $179,476 is included in the cost of water system
assets and is depreciated on the straight-line basis over the estimated useful lives of such assets.
Depreciation is calculated using the straight-line method over the following estimated useful lives:
Water System 15-70 Years
Field Equipment 2-50 Years
Buildings 30-50 Years
Communication Equipment 2-10 Years
Transportation Equipment 2-4 Years
Office Equipment 2-10 Years
Recycled Water System 50-75 Years
Sewer System 25-50 Years
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
21
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
I) Compensated Absences
It is the District’s policy to record vested or accumulated vacation and sick leave as an expense and liability as benefits
accrue to employees.
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Compensated
Absences $ 2,352,861 $ 2,700,572 $ 2,523,241 $ 2,530,192 $ 253,019
(1)Balance is reflected in Accrued Payroll Liabilities on the Statement of Net Position.
J) Classification of Liabilities
Certain current liabilities have been classified as current liabilities payable from restricted assets as they will be
funded from restricted assets.
K) Allowance for Doubtful Accounts
The District charges doubtful accounts arising from water sales receivable to bad debt expense when it is probable that
the accounts will be uncollectible. Uncollectible accounts are determined by the allowance method based upon prior
experience and management’s assessment of the collectibility of existing specific accounts. The allowance for doubtful
accounts was $158,716 for 2015.
L) Property Taxes
Tax levies are limited to 1% of full market value (at time of purchase) which results in a tax rate of $1.00 per $100
assessed valuation, under the provisions of Proposition 13. Tax rates for voter-approved indebtedness are excluded
from this limitation.
The County of San Diego (the “County”) bills and collects property taxes on behalf of the District. The County’s tax
calendar year is July 1 to June 30. Property taxes attach as a lien on property on January 1. Taxes are levied on July 1
and are payable in two equal installments on November 1 and February 1, and become delinquent after December 10
and April 10, respectively.
M) Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions,
and pension expense, information about the fiduciary net position of the District’s California Public Employees’
Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have
been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including
refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
22
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
N) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States
of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
O) Reclassifications
Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
2) CASH AND INVESTMENTS
The primary goals of the District’s Investment Policy are to assure compliance with all Federal, State, and Local laws
governing the investment of funds under the control of the organization, protect the principal of investments entrusted, and
generate income under the parameters of such policies.
Cash and Investments are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Cash Equivalents $ 23,168,511
Restricted Cash and Cash Equivalents 47,083
Investments 35,888,511
Board Designated Investments 22,395,347
Restricted Investments 4,532,725
Total Cash and Investments $ 86,032,177
Cash and Investments consist of the following:
Cash on Hand $ 2,950
Deposits with Financial Institutions 2,074,424
Investments 83,954,803
Total Cash and Investments $ 86,032,177
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
23
2) CASH AND INVESTMENTS - Continued
Investments Authorized by the California Government Code and the District’s Investment Policy
The table below identifies the investment types that are authorized for the District by the California Government Code
(or the District’s Investment Policy, where more restrictive). The table also identifies certain provisions of the
California Government Code (or the District’s Investment Policy, where more restrictive) that address interest rate risk,
credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond
trustee that are governed by the provisions of debt agreements of the District, rather than the general provisions of the
California Government Code or the District’s Investment Policy.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Of Portfolio(1) In One Issuer
U.S. Treasury Obligations 5 years None None
U.S. Government Sponsored Entities 5 years None None
Certificates of Deposit 5 years 15% None
Corporate Medium-Term Notes 5 years 15% None
Commercial Paper 270 days 15% 10%
Money Market Mutual Funds N/A 15% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
(1) Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by the bond trustee are governed by provisions of the debt agreements, rather than the
general provisions of the California Government Code or the District’s Investment Policy.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest
rates. One of the ways that the District manages its exposure to interest rates risk is by purchasing investments with shorter
durations than what is allowable under the District investment policy and by timing cash flows from maturities, so that a
portion of the portfolio is maturing or coming close to maturity evenly over time, as necessary, to provide the cash flow and
liquidity needed for operations.
Information about the sensitivity of the fair values of the District’s investments to market interest rate fluctuations are
provided by the following tables that show the distribution of the District’s investments by maturity as of June 30, 2015.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
24
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Interest Rate Risk - Continued
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60 More Than
Investment Type Or Less Months Months 60 Months
U.S. Government Sponsored Entities $ 62,730,204 $ 3,000,390 $ 28,006,120 $ 31,723,694 $ -
Local Agency Investment Fund (LAIF) 7,593,516 7,593,516 - - -
San Diego County Pool 13,584,000 13,584,000 - - -
Money Market Funds 47,083 47,083 - - -
Total $ 83,954,803 $ 24,224,989 $ 28,006,120 $ 31,723,694 $ -
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is
the minimum rating required by (where applicable) the California Government Code or the District’s Investment Policy, or
debt agreements, and the Moody’s ratings as of June 30, 2015.
Minimum Rating as of Year End
Legal Not
Investment Type Rating AAA AA A-1 Rated
U.S. Government Sponsored Entities $ 62,730,204 N/A $ 62,730,204 $ - $ - $ -
Local Agency Investment Fund (LAIF) 7,593,516 N/A - - - 7,593,516
San Diego County Pool 13,584,000 N/A - - - 13,584,000
Money Market Funds 47,083 N/A - - 47,083 -
Total $ 83,954,803 $ 62,730,204 $ - $ 47,083 $ 21,177,516
Concentration of Credit Risk
The investment policy of the District contains various limitations on the amounts that can be invested in any one type or
group of investments and in any issuer, beyond that stipulated by the California Government Code, Sections 53600 through
53692. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that
represent 5% or more of total District investments as of June 30, 2015 are as follows:
Issuer Investment Type Reported Amount
Federal Home Loan Bank U.S. Government Sponsored Entities $ 13,989,160
Federal Home Loan Mortgage Corp U.S. Government Sponsored Entities $ 22,006,280
Federal National Mortgage Association U.S. Government Sponsored Entities $ 8,003,200
Federal Farm Credit Banks U.S. Government Sponsored Entities $ 18,731,564
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
25
2) CASH AND INVESTMENTS - Continued
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government
will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an
outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities
that are in the possession of another party. The California Government Code and the District’s investment policy do not
contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other
than the following provision for deposits: The California Government Code requires that a financial institution secure
deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository
regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the
collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows
financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the secured
public deposits.
As of June 30, 2015, $1,569,955 of the District’s deposits with financial institutions in excess of federal depository
insurance limits were held in collateralized accounts.
Local Agency Investment Fund (LAIF)
The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the
District’s investment in this pool is reported in the accompanying financial statements at amounts based upon District’s pro-
rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that
portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded
on an amortized cost-basis.
San Diego County Pooled Fund
The San Diego County Pooled Investment Fund (SDCPIF) is pooled investment fund program governed by the County of
San Diego Board of Supervisors, and administered by the County of San Diego Treasurers and Tax Collector. Investments
in SDCPIF are highly liquid as deposits and withdrawals can be made at anytime without penalty.
The County of San Diego’s bank deposits are either federally insured or collateralized in accordance with the California
Government Code. Pool detail is included in the County of San Diego Comprehensive Annual Financial Report (CAFR).
Copies of the CAFR may be obtained from the County of San Diego Auditor-Controller’s Office - 1600 Pacific Coast
Highway, San Diego California 92101.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
26
2) CASH AND INVESTMENTS - Continued
Restricted Cash and Cash Equivalents
Debt Service:
Water Revenue Bond Series 2010A $ 12,816
Water Revenue Bond Series 2010B 34,267
Total $ 47,083
Board Designated Investments
Investments are Board restricted for the cost of the following District projects:
New Water Supply $ 287,697
Replacement 22,107,650
Total $ 22,395,347
Restricted Investments
Debt Service:
General Obligation Bond ID No. 27-2009 $ 793,131
Water Revenue Bond Series 2010A 1,031,267
Water Revenue Bond Series 2010B 2,708,327
Total $ 4,532,725
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
27
3) CAPITAL ASSETS
The following is a summary of changes in Capital Assets for the year ended June 30, 2015:
Beginning Ending
Balance Additions Deletions Balance
Capital Assets, Not Depreciated
Land $ 13,714,963 $ - $ - $ 13,714,963
Construction in Progress 11,642,506 9,829,453 (6,365,623) 15,106,336
Total Capital Assets Not Depreciated 25,357,469 9,829,453 (6,365,623) 28,821,299
Capital Assets, Being Depreciated
Infrastructure 617,348,375 4,032,123 (296,458) 621,084,040
Field Equipment 8,812,693 16,188 (108,693) 8,720,188
Buildings 18,928,879 63,773 - 18,992,652
Transportation Equipment 3,308,602 205,180 (115,412) 3,398,370
Communication Equipment 2,880,141 216,927 - 3,097,068
Office Equipment 17,513,193 755,189 (44,938) 18,223,444
Total Capital Assets Being Depreciated 668,791,883 5,289,380 (565,501) 673,515,762
Less Accumulated Depreciation:
Infrastructure 193,225,204 13,624,785 (278,683) 206,571,306
Field Equipment 7,495,508 182,754 (108,694) 7,569,568
Buildings 8,336,568 504,880 - 8,841,448
Transportation Equipment 2,299,848 259,162 (115,412) 2,443,598
Communication Equipment 1,746,613 473,344 - 2,219,957
Office Equipment 14,394,208 1,150,067 (44,485) 15,499,790
Total Accumulated Depreciation 227,497,949 16,194,992 (547,274) 243,145,667
Total Capital Assets Being Depreciated,
Net
441,293,934
(10,905,612)
(18,227)
430,370,095
Total Capital Assets, Net $ 466,651,403 $ (1,076,159) $ (6,383,850) $ 459,191,394
Depreciation expense for the year ended June 30, 2015 was $16,194,992.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
28
4) LONG-TERM DEBT
Long-term liabilities for the year ended June 30, 2015 are as follows:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
General Obligation Bonds:
Improvement District No. 27 - 2009 $ 5,700,000 $ - $ 550,000 $ 5,150,000 $ 570,000
Unamortized Bond Premium 133,563 - 16,355 117,208 -
Net General Obligation Bonds 5,833,563 - 566,355 5,267,208 570,000
Certificates of Participation:
1996 Certificates of Participation 9,900,000 - 500,000 9,400,000 600,000
2007 Certificates of Participation 36,790,000 - 995,000 35,795,000 1,035,000
1996 COPS Unamortized Discount (9,687) - (745) (8,942) -
2007 COPS Unamortized Discount (204,999) - (9,044) (195,955) -
Net Certificates of Participation 46,475,314 - 1,485,211 44,990,103 1,635,000
Revenue Bonds:
2010 Water Revenue Bonds Series A 11,435,000 - 845,000 10,590,000 870,000
2010 Water Revenue Bonds Series B 36,355,000 - - 36,355,000 -
2013 Water Revenue Refunding Bonds 7,075,000 - 605,000 6,470,000 615,000
2010 Series A Unamortized Premium 762,617 - 74,402 688,215 -
2013 Bonds Unamortized Premium 880,873 - 96,095 784,778 -
Net Revenue Bonds 56,508,490 - 1,620,497 54,887,993 1,485,000
Total Long-Term Liabilities $ 108,817,367 $ - $ 3,672,063 $ 105,145,304 $ 3,690,000
General Obligation Bonds
In June 1998, the District issued $11,835,000 of General Obligation Refunding Bonds. The proceeds of this issue, together
with other lawfully available monies, were to be used to establish an irrevocable escrow to advance refund and defease in
their entirety the District’s previous outstanding General Obligation Bond issue. In November 2009, the District issued
$7,780,000 of General Obligation Refunding Bonds Improvement District No. 27-2009 to refund the 1998 issue. The
proceeds from the bond issue were $7,989,884, which included an original issue premium of $209,884. An amount of
$7,824,647, which consisted of unpaid principal and accrued interest, was deposited into an escrow fund. Pursuant to an
optional redemption clause in the 1998 bonds, the District was able to redeem the 1998 bonds, without premium at any time
after September 1, 2009. On December 15, 2009 the 1998 bonds were refunded.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
29
4) LONG-TERM DEBT - Continued
General Obligation Bonds - Continued
These bonds are general obligations of Improvement District No. 27 (ID 27) of the District. The Board of Directors has the
power and is obligated to levy annual ad valorem taxes without limitation, as to rate or amount for payment of the bonds and
the interest upon all property which is within ID 27 and subject to taxation. The General Obligation Bonds are payable from
District-wide tax revenues. The Board may utilize other sources for servicing the bond debt and interest.
The Improvement District No. 27-2009 General Obligation Refunding Bonds have interest rates from 3.00% to 4.00% with
maturities through Fiscal Year 2023.
Future debt service requirements for the bonds are as follows:
For the Year Ended
June 30, Principal Interest
2016 $ 570,000 $ 187,362
2017 585,000 169,306
2018 605,000 147,700
2019 635,000 122,900
2020 650,000 97,200
2021-2025 2,105,000 127,900
$ 5,150,000 $ 852,368
Certificates of Participation (COPS)
In June 1996, COPS with face value of $15,400,000 were sold by the Otay Service Corporation to finance the cost of
design, acquisition, and construction of certain capital improvements. An installment purchase agreement between the
District, as Buyer, and the Corporation, as Seller, was executed for the scheduled payment of principal and interest
associated with the COPS. The installment payments are to be paid from taxes and net revenues, as described in the
installment agreement. The certificates bear interest at a variable weekly rate not to exceed 12%. The variable interest rate
is tied to the 30-day LIBOR index and the Securities Industry and Financial Markets Association (SIFMA) index. An
irrevocable letter of credit facility is necessary to market the District’s variable rate debt. This facility is with Union Bank
and covers the outstanding principal and interest. The facility expires on June 29, 2017. The interest rate at June 30, 2014
was 0.15%. The installment payments are to be paid annually at $350,000 to $900,000 from September 1, 1996 through
September 1, 2026.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
30
4) LONG-TERM DEBT - Continued
Certificates of Participation (COPS) - Continued
In March 2007, Revenue Certificates of Participation (COPS) with face value of $42,000,000 were sold by the Otay Service
Corporation to improve the District’s water storage system and distribution facilities. An installment purchase agreement
between the District, as a Buyer, and the Corporation, as Seller, was executed for the scheduled payment of principal and
interest associated with the COPS. The installment payments are to be paid from taxes and net revenues, as described in the
installment agreement. The certificates are due in annual installments of $785,000 to $2,445,000 from September 1, 2007
through September 1, 2036; bearing interest at 3.7% to 4.47%.
There is no aggregate reserve requirement for the COPS. Future debt service requirements for the certificates are as
follows:
For the Year 1996 COPS 2007 COPS
Ended June 30, Principal Interest(1) Principal Interest
2016 $ 600,000 $ 4,450 $ 1,035,000 $ 1,479,239
2017 600,000 4,150 1,075,000 1,439,408
2018 600,000 3,850 1,115,000 1,397,798
2019 700,000 3,508 1,155,000 1,354,234
2020 700,000 3,158 1,200,000 1,308,456
2021-2025 4,100,000 9,942 6,785,000 5,762,360
2026-2030 2,100,000 725 8,335,000 4,192,867
2031-2035 - - 10,310,000 2,208,437
2036-2037 - - 4,785,000 211,641
$ 9,400,000 $ 29,783 $ 35,795,000 $ 19,354,440
(1)Variable Rate - Interest reflected at June 30, 2015 at a rate of 0.05%.
The two COP debt issues contain various covenants and restrictions, principally that the District fix, prescribe, revise and
collect rates, fees and charges for the Water System which will at lease sufficient to yield, during each fiscal year, taxes and
net revenues equal to one hundred twenty-five percent (125%) of the debt service for such fiscal year. The District was in
compliance with these rate covenants for the fiscal year ended June 30, 2015.
Water Revenue Bonds
In April 2010, Water Revenue Bonds with a face value of $50,195,000 were sold by the Otay Water District Financing
Authority to provide funds for the construction of water storage and transmission facilities. The bond issue consisted of two
series; Water Revenue Bonds, Series 2010A (Non-AMT Tax Exempt) with a face value of $13,840,000 plus a $1,078,824
original issue premium, and Water Revenue Bonds Series 2010B (Taxable Build America Bonds) with a face value of
$36,255,000. The Series 2010A bonds are due in annual installments of $785,000 to $1,295,000 from September 1, 2012
through September 1, 2025; bearing interest at 2% to 5.25%. The Series 2010B bonds are due in annual installments of
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
31
4) LONG-TERM DEBT - Continued
Water Revenue Bonds - Continued
$1,365,000 to $3,505,000 from September 1, 2026 through September 1, 2040; bearing interest at 6.377% to 6.577%.
Interest on both Series is payable on September 1, 2010 and semiannually thereafter on March 1st and September 1st of each
year until maturity or earlier redemption. The installment payments are to be made from Taxes and Net Revenues of the
Water System as described in the installment purchase agreement, on parity with the payments required to be made by the
District for the 1996, and 2007 Certificates of Participation described above and the 2013 Water Revenue Refunding Bonds
described below.
The proceeds of the bonds will be used to fund the project described above as well as to fund reserve funds of $1,030,688
(Series 2010A) and $2,707,418 (Series 2010B). $542,666 was used to fund various costs of issuance.
The original issue premium is being amortized over the 14 year life of the Series 2010A bonds. Amortization for the year
ending June 30, 2015 was $74,402 and is included in interest expense. The unamortized premium at June 30, 2015 is
$688,215.
The 2010 Water Revenue Bonds contains various covenants and restrictions, principally that the District fix, prescribe,
revise and collection rates, fees and charges for the Water System which will at lease sufficient to yield, during each fiscal
year, taxes and net revenues equal to one hundred twenty-five percent (125%) of the debt service for such fiscal year. The
District was in compliance with these rate covenants for the fiscal year ended June 30, 2015.
In June 2013, the 2013 Water Revenue Refunding Bonds were issued to defease the 2004 Refunding Certificates of
Participation. The bonds were issued with a face value of $7,735,000 plus a $984,975 original issue premium. The bonds
are due in annual installments of $660,000 to $835,000 from September 1, 2013 through September 1, 2023; bearing
interest at 1% to 4%. The installment payments are to be made from Taxes and Net Revenues of the Water System, on
parity with the payments required to be made by the District for the 1996, and 2007 Certificates of Participation and the
2010A and 2010B described above.
The original issue premium is being amortized over the 11 year life of the Series 2013 bonds. Amortization for the year
ending June 30, 2015 was $96,095 and is included in interest expense. The unamortized premium at June 30, 2015 is
$784,778.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
32
4) LONG-TERM DEBT - Continued
Water Revenue Bonds - Continued
The total amount outstanding at June 30, 2015 and aggregate maturities of the revenue bonds for the fiscal years subsequent
to June 30, 2015, are as follows:
For the Year
2010 Water Revenue Bond
Series A
2010 Water Revenue Bond
Series B
2013 Water Revenue
Refunding Bonds
Ended June 30, Principal Interest Principal Interest Principal Interest
2016 $ 870,000 $ 478,488 $ - $ 2,371,868 $ 615,000 $ 243,425
2017 900,000 443,088 - 2,371,868 635,000 221,500
2018 940,000 406,287 - 2,371,868 660,000 195,600
2019 975,000 367,987 - 2,371,868 685,000 168,700
2020 1,015,000 323,112 - 2,371,868 715,000 140,700
2021-2025 5,890,000 779,569 - 11,859,342 3,160,000 258,800
2026-2030 - - 7,745,000 10,685,177 - -
2031-2035 - - 10,570,000 7,756,703 - -
2036-2040 - - 14,535,000 3,664,212 - -
2041-2042 - - 3,505,000 115,262 - -
$ 10,590,000 $ 2,798,531 $ 36,355,000 $ 45,940,036 $ 6,470,000 $ 1,228,725
Revenues Pledged
The District has pledged a portion of future water sales revenues to repay its Water Revenue Bonds and Certificates of
Participation. Total principal and interest remaining on the water revenue bonds and certificates of participation is
$167,961,515 payable through fiscal year 2042. For the current year, principal and interest paid by the water sales revenues
were $2,945,000 and $4,634,937, respectively.
5) NET POSITION
Designations of Net Position
In addition to the restricted net position, a portion of unrestricted net position, have been designated by the Board of
Directors for the following purposes as of June 30, 2015:
Designated Betterment $ 5,072,063
Expansion Reserve 4,486,171
Replacement Reserve 23,822,678
Designated New Supply Fund 758,956
Employee Benefits Reserve 31,445
Total $ 34,171,313
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
33
6) DEFINED BENEFIT PENSION PLAN
A) General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the District’s Plan, agent multiple-
employer defined benefit pension plans administered by the California Public Employees’ Retirement System
(CalPERS), which acts as a common investment and administrative agent for its participating member employers.
Benefit provisions under the Plans are established by State statute and District resolution. CalPERS issues publicly
available reports that include a full description of the pension plans regarding provisions, assumptions and
membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to
plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service,
equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50
with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.
The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional
Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public
Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2015, are summarized as follows:
Prior to On or After
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7% at 55 2% at 62
Benefit Vesting Schedule 5 years service 5 years service
Benefit Payments Monthly for life Monthly for life
Retirement Age 50 - 55 52 - 67
Monthly Benefits, as a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5%
Required Employee Contribution Rates 8% 6.25%
Required Employer Contribution Rates 20.869% - 25.435% 25.435% - 29.152%
Employees Covered
At June 30, 2015, the following employees were covered by the benefit terms for the Plan:
Inactive Employees or Beneficiaries Currently
Receiving Benefits
161
Inactive Employees Entitled to But Not Yet Receiving Benefits 142
Active Employees 137
Total 440
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
34
6) DEFINED BENEFIT PENSION PLAN - Continued
A) General Information about the Pension Plans - Continued
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates
for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1
following notice of a change in the rate. Funding contributions for the Plan are determined annually on
an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to
finance the costs of benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The District is required to contribute the difference between the actuarially determined
rate and the contribution rate of employees.
B) Net Pension Liability
The District’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s
fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2014, using the annual
actuarial valuation as of June 30, 2013 rolled forward to June 30, 2014 using standard update procedures. A
summary of principal assumptions and methods used to determine the net pension liability is shown below:
Actuarial Assumptions
The total pension liabilities in the June 30, 2013 actuarial valuations were determined using the following actuarial
assumptions:
Valuation Date June 30, 2013
Measurement Date June 30, 2014
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.5%
Inflation 2.75%
Payroll Growth 3.0%
Projected Salary Increase 3.3% - 14.2%(1)
Investment Rate of Return 7.5%(2)
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2013
valuation were based on the results of a January 2014 actuarial experience study for the period 1997
to 2011. Further details of the Experience Study can be found on the CalPERS website.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
35
6) DEFINED BENEFIT PENSION PLAN - Continued
B) Net Pension Liability - Continued
Discount Rate
The discount rate used to measure the total pension liability was 7.50% for the Plan. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans
that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.
Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.50 percent discount rate is
adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate
of 7.50 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results
are presented in a detailed report that can be obtained from the CalPERS website.
According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for
pension plan administrator expense. The 7.50 percent investment return assumption used in this accounting
valuation is net of administrative expenses. Administrative expenses are assumed to be 15 basis points. An
investment return excluding administrative expenses would have been 7.65 percent. Using this lower discount rate
has resulted in a slightly higher Total Pension Liability and Net Pension Liability. CalPERS checked the materiality
threshold for the difference in calculation and did not find it to be a material difference.
CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management (ALM)
review cycle that is scheduled to be completed in February 2018. Any changes to the discount rate will require
Board action and proper stakeholder outreach. For these reasons, CalPERS expects to continue using a discount
rate net of administrative expenses for GASB 67 and 68 calculations through at least 2017-18 fiscal year. CalPERS
will continue to check the materiality of the difference in calculation until such time as we have changed our
methodology.
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term
market return expectations as well as the expected pension fund cash flows. Using historical returns of all the
funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-
term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and
long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by
calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as
the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent
to the single equivalent rate calculated above the rounded down to the nearest one quarter of one percent.
The following table reflects the long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These
rates of return are net of administrative expenses.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
36
6) DEFINED BENEFIT PENSION PLAN - Continued
B) Net Pension Liability - Continued
Asset Class
New Strategic
Allocation
Real Return
Years 1 - 10(a)
Real Return
Years 11+(b)
Global Equity 47.0% 5.25% 5.71%
Global Fixed Income 19.0% 0.99% 2.43%
Inflation Sensitive 6.0% 0.45% 3.36%
Private Equity 12.0% 6.83% 6.95%
Real Estate 11.0% 4.50% 5.13%
Infrastructure and Forestland 3.0% 4.50% 5.09%
Liquidity 2.0% -0.55% -1.05%
Total 100%
(a) An expected inflation of 2.5% used for this period.
(b) An expected inflation of 3.0% used for this period.
C) Changes in the Net Position Liability
The changes in the Net Position Liability for the Plan:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Beginning Balance $ 106,716,218 $ 63,144,370 $ 43,571,848
Changes in the Year:
Service Cost 2,330,709 2,330,709
Interest on the Total Pension Liability 7,907,915 7,907,915
Changes in Benefit Terms 0 0
Differences Between Actual and Expected
Experience
0
0
Changes in Assumptions 0 0
Contribution - Employer 3,137,174 (3,137,174)
Contribution - Employee 1,074,954 (1,074,954)
Net Investment Income 10,874,999 (10,874,999)
Benefit Payments, Including Refunds of
Employee Contributions
(4,885,406)
(4,885,406)
0
Net Changes 5,353,218 10,201,721 (4,848,503)
Ending Balance $ 112,069,436 $ 73,346,091 $ 38,723,345
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
37
6) DEFINED BENEFIT PENSION PLAN - Continued
C) Changes in the Net Position Liability - Continued
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the District for the Plan, calculated using the discount rate for the
Plan, as well as what the District’s net pension liability would be if it were calculated using a discount rate that is 1-
percentage point lower or 1-percentage point higher than the current rate:
1% Decrease 6.50%
Net Pension Liability $ 53,440,281
Current Discount Rate 7.50%
Net Pension Liability $ 38,723,345
1% Increase 8.50%
Net Pension Liability $ 26,496,138
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS
financial reports.
D) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2015, the District recognized pension expense of $3,256,611. At June 30, 2015, the
District reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following services:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date $ 3,575,595 $
Differences between actual and expected experience
Changes in assumptions
Net differences between projected and actual earnings on
pension plan investments
(4,967,940)
Total $ 3,575,595 $ (4,967,940)
$3,575,595 reported as deferred outflows of resources related to contributions subsequent to the measurement date
will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized
as pension expense as follows:
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
38
6) DEFINED BENEFIT PENSION PLAN - Continued
D) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions - Continued
Year Ended
June 30
2016 $ (1,241,985)
2017 (1,241,985)
2018 (1,241,985)
2019 (1,241,985)
2020
Thereafter
E) Payable to the Pension Plan
At June 30, 2015, the District reported a payable of $167,970 for the outstanding amount of contributions to the
pension plan required for the year ended June 30, 2015.
7) OTHER POST EMPLOYMENT BENEFITS
Plan Description
The District’s defined benefit postemployment healthcare plan, (DPHP), provides medical benefits to eligible retired District
employees and beneficiaries. DPHP is part of the Public Agency portion of the California Employers’ Retiree Benefit Trust
Fund (CERBT), an agent multiple-employer plan administered by California Public Employees’ Retirement System
(CalPERS), which acts as a common investment and administrative agent for participating public employers within the State
of California. CalPERS issues a separate Comprehensive Annual Financial Report. Copies of the CalPERS’ annual
financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, California 95814.
Prior to the plan agreements signed in 2011, the eligibility in the plan was broken into 3 tiers, employees hired before
January 1, 1981, employees hired on or after January 1, 1981 but before July 1, 1993 and employees hired on or after
July 1, 1993. Board members elected before January 1, 1995 are also eligible for the plan. Eligibility also includes age
and years of service requirements which vary by tier. Benefits include 100% medical and dental premiums for life for
the retiree for Tier I, II or III employees, and up to 100% spouse premium until death of retiree or age 65 whichever is
greater and dependent premium up to age 19 depending on the tier. The plan also includes survivor benefits to
Medicare.
Subsequent to the agreements in 2011 and 2012 all employees are eligible for the plan after 20 years of consecutive
service and unrepresented employees hired before January 1, 2013 are eligible after 15 years. Survivor benefits are
covered beyond Medicare.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
39
7) OTHER POST EMPLOYMENT BENEFITS - Continued
Funding Policy
The contribution requirements of plan members and the District are established and may be amended by the Board of
Directors. Effective January 1, 2013, represented employees hired prior to January 1, 2013 or hired on or after January
1, 2013 from another public agency that has reciprocity without having a break in service of more than six months,
contribute .75% of covered salaries. In addition, unrepresented and represented employees hired on or after January 1,
2013, and do not have reciprocity from another public agency, contribute 1.75% and 2.5% of covered salaries,
respectively. DPHP members receiving benefits contribute based on their selected plan options of EPO, HMO or PPO
and whether they are outside the State of California. Contributions by plan members range from $0 to $165 per month
for coverage to age 65, and from $0 to $170 per month, respectively, thereafter.
Annual OPEB Cost and Net OPEB Obligation/Asset
The District’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer
(ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal annual cost. Any
unfunded actuarial liability (or funding excess) is amortized over a period not to exceed thirty years. The current ARC
rate is 11.4% of the annual covered payroll.
The following table shows the components of the District’s annual OPEB cost for the year, the amount actually
contributed to the plan, and changes in the District’s net OPEB obligation/asset for the year ended June 30, 2015:
Annual Required Contribution (ARC) $ 1,413,000
Interest on Net OPEB Asset (752,937)
Adjustment to Annual Required Contribution (ARC) 713,000
Annual OPEB Cost (Expense) 1,373,063
Contributions Made 2,460,113
Increase in Net OPEB Asset (1,087,050)
Net OPEB Asset - Beginning of Year (10,385,336)
Net OPEB Asset - End of Year $ (11,472,386)
For 2015, in addition to the ARC, the District contributed cash benefit payments outside the trust (healthcare premium
payments for retirees to Special District Risk Management Authority (SDRMA) in the amount of $929,113, which is
included in the $2,460,113 of contributions shown above.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
40
7) OTHER POST EMPLOYMENT BENEFITS - Continued
Annual OPEB Cost and Net OPEB Obligation/Asset - Continued
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB
obligation/asset for the fiscal years 2015, 2014 and 2013 were as follows:
THREE-YEAR TREND INFORMATION FOR CERBT
Fiscal Annual OPEB Percentage of Net OPEB
Year Cost (AOC) OPEB Cost Contributed Obligation
6/30/15 $ 1,373,063 179% $ (11,472,386)
6/30/14 $ 1,386,456 175% $ (10,385,336)
6/30/13 $ 1,226,662 183% $ (9,345,437)
Funded Status and Funding Progress
The funded status of the plan as of June 30, 2013, the most recent actuarial valuation date, was as follows:
Actuarial Accrued Liability (AAL) $ 22,891,000
Actuarial Value of Plan Assets $ 11,831,000
Unfunded Actuarial Accrued Liability (UAAL) $ 11,060,000
Funded Ratio (Actuarial Value of Plan Assets/AAL) 51.68%
Covered Payroll (Active Plan Members) $ 11,969,000
UAAL as a Percentage of Covered Payroll 92.41%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. The schedule of funding progress, presented as required
supplementary information following the notes to the financial statements, presents multi-year trend information about
whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the
employer and plan members) and include the types of benefits provided at the time of each valuation and the historical
pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and
the actuarial value of assets, consistent with the long-term perspective of the calculations.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
41
7) OTHER POST EMPLOYMENT BENEFITS - Continued
The following is a summary of the actuarial assumptions and methods:
Valuation Date June 30, 2013
Actuarial Cost Method Entry Age Normal Cost Method
Amortization Method Level Percent of Payroll
Remaining Amortization Period 23-Year Fixed (Closed) Period as of the Valuation Date
Asset Valuation Method 5-Year Smoothed Market
Actuarial Assumptions:
Investment Rate of Return 7.25% (Net of Administrative Expenses)
Projected Salary Increase 3.25%
Inflation 3.00%
Individual Salary Growth CalPERS 1997-2007 Experience Study
Healthcare Cost Trend Rate Medical: 10% per annum graded down in approximately
one-half percent increments to an ultimate rate of 5%.
Dental: 4% per annum.
8) WATER CONSERVATION AUTHORITY
In 1999 the District formed the Water Conservation Garden Authority (the “Authority”), a Joint Powers Authority, with
other local entities to construct, maintain and operate a xeriscape demonstration garden in the furtherance of water
conservation. The authority is a non-profit public charity organization and is exempt from income taxes. During the year
ended June 30, 2015, the District contributed $117,462 for the development, construction and operation costs of the
xeriscape demonstration garden.
A summary of the Authority’s June 30, 2014 audited financial statement is as follows (latest report available):
Assets $ 1,467,333
Liabilities 0
Net Assets $ 1,467,333
Revenues, Gains and Other Support $ 520,000
Expenses 604,707
Changes in Net Assets $ (84,707)
9) COMMITMENTS AND CONTINGENCIES
Construction Commitments
The District had committed to capital projects under construction with an estimated cost to complete of $12,724,286 at June
30, 2015.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
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for DISCUSSION PURPOSES ONLY
42
9) COMMITMENTS AND CONTINGENCIES - Continued
Litigation
Certain claims, suits and complaints arising in the ordinary course of operation have been filed or are pending against the
District. In the opinion of the staff and counsel, all such matters are adequately covered by insurance, or if not so covered,
are without merit or are of such kind, or involved such amounts, as would not have significant effect on the financial
position or results of operations of the District if disposed of unfavorably.
Refundable Terminal Storage Fees
The District has entered into an agreement with several developers whereby the developers prepaid the terminal storage fee
in order to provide the District with the funds necessary to build additional storage capacity. The agreement further allows
the developers to relinquish all or a portion of such water storage capacity. If the District grants to another property owner
the relinquished storage capacity, the District shall refund to the applicable developer $746 per equivalent dwelling unit
(EDU). There were 17,867 EDUs that were subject to this agreement. At June 30, 2015, 1,750 EDUs had been
relinquished and refunded, 15,076 EDUs had been connected, and 1,041 EDUs have neither been relinquished nor
connected.
Developer Agreements
The District has entered into various Developer Agreements with developers towards the expansion of District facilities.
The developers agree to make certain improvements and after the completion of the projects the District agrees to reimburse
such improvements with a maximum reimbursement amount for each developer. Contractually, the District does not incur a
liability for the work until the work is accepted by the District. As of June 30, 2015, none of the outstanding developer
agreements had been accepted, however it is anticipated that the District will be liable for an amount not to exceed $221,320
at the point of acceptance. Accordingly, the District has accrued a liability as of year end.
10) RISK MANAGEMENT
General Liability
The District is exposed to various risks of loss related to torts, theft, damage and destruction of assets, errors and omissions,
and natural disasters. Beginning in July 2003, the District began participation in an insurance pool through the Special
District Risk Management Authority (SDRMA). SDRMA is a not-for-profit public agency formed under California
Government Code Sections 6500 et. Seq. SDRMA is governed by a board composed of members from participating
agencies. The mission of SDRMA is to provide renewable, efficiently priced risk financing and risk management services
through a financially sound pool. The District pays an annual premium for commercial insurance covering general liability,
excess liability, property, automobile, public employee dishonesty, and various other claims. Accordingly, the District
retains no risk of loss. Separate financial statements of SDRMA may be obtained at Special District Risk Management
Authority, 1112 “I” Street, Suite 300, Sacramento, CA 95814.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
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for DISCUSSION PURPOSES ONLY
43
10) RISK MANAGEMENT - Continued
General Liability - Continued
General and Auto Liability, Public Officials’ Errors and Omissions and Employment Practices Liability: Total risk
financing limits of $10 million combined single limit at $10 million per occurrence, subject to the following deductibles:
$500 per occurrence for third party general liability property damage;
$1,000 per occurrence for third party auto liability property damage;
50% co-insurance of cost expended by SDRMA, in excess of $10,000 up to $50,000, per occurrence, as respects
any employment practices claim or suit arising in whole or any part out of any action involving discipline,
demotion, reassignment or termination of any employee of the member.
Employee Dishonesty Coverage: Total of $400,000 per loss includes Public Employee Dishonesty, Forgery or Alteration
and Theft, Disappearance and Destruction coverage’s effective July 1, 2014. Coverage was increased by $600,000 during
the fiscal year for a total of $1,000,000 as of June 30, 2015.
Property Loss: Replacement cost, for property on file, if replaced, and if not replaced within two years after the loss, paid
on an actual cash value basis, to a combined total of $1 billion per occurrence, subject to a $1,000 deductible per
occurrence, effective July 1, 2014.
Boiler and Machinery: Replacement cost up to $100 million per occurrence, subject to a $1,000 deductible, effective July 1,
2014.
Public Officials Personal Liability: $500,000 each occurrence, with an annual aggregate of $500,000 per each
elected/appointed official to which this coverage applies, subject to the terms, conditions and exclusions as provided in the
Memorandum of Coverage’s, deductible of $500 per claim, effective July 1, 2014.
Comprehensive and Collision: On selected vehicles, with deductibles of $250/$500 or $500/$1,000, as elected; ACV limits;
fully self-funded by SDRMA; Policy No. LCA - SDRMA – 2014-15, effective July 1, 2014.
Workers’ Compensation Coverage and Employer’s Liability: Statutory limits per occurrence for Workers’ Compensation
and $5.0 million for Employer’s Liability Coverage, subject to the terms, conditions and exclusions as provided in the
Memorandum of Coverage, effective July 1, 2014.
Health Insurance
Beginning in January 2008, the District began providing health insurance through SDRMA covering all of its employees,
retirees, and other dependents. SDRMA is a pooled medical program, administered in conjunction with the California State
Association of Counties (CSAC).
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
44
10) RISK MANAGEMENT - Continued
Adequacy of Protection
During the past three fiscal (claims) years none of the above programs of protection have had settlements or judgments that
exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage
from coverage in the prior year.
11) INTEREST EXPENSE
Interest expense for the years ended June 30, 2015 is as follows:
Amount Expensed $ 4,545,530
Amount Capitalized as a Cost of
Construction Projects 179,476
Total Interest $ 4,725,006
12) SEGMENT INFORMATION
During the June 30, 2011 fiscal year, the District issued Revenue Bonds to finance certain capital improvements. While
water and wastewater services are accounted for jointly in these financial statements, the investors in the Revenue Bonds
rely solely on the revenues of the water services for repayment.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
45
12) SEGMENT INFORMATION - Continued
Summary financial information for the water services is presented for June 30, 2015:
Condensed Statement of Net Position
June 30, 2015
Water Services
ASSETS
Current Assets $ 98,230,595
Capital Assets 441,407,136
Other Assets 11,472,386
Total Assets 551,110,117
DEFERRED OUTFLOWS OF RESOURCES
Deferred Contributions to Pension Plans 3,411,118
Total Deferred Outflows of Resources 3,411,118
LIABILITIES
Current Liabilities 23,872,564
Long-term Liabilities 139,053,533
Total Liabilities 163,926,097
DEFERRED INFLOWS OF RESOURCES
Deferred Actuarial Pension Costs 4,739,415
Total Deferred Inflows of Resources 4,739,415
NET POSITION
Net Investment in Capital Assets 336,261,832
Restricted for Debt Service 4,658,306
Unrestricted 45,935,585
Total Net Position $ 386,855,723
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
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for DISCUSSION PURPOSES ONLY
46
12) SEGMENT INFORMATION - Continued
Condensed Statement of Revenues, Expenses and Changes in Net Position
For the Year Ended June 30, 2015
Water Services
Operating Revenues
Water Sales $ 79,135,000
Connection and Other Fees 1,679,503
Total Operating Revenues 80,814,503
Operating Expenses
Cost of Water Sales 54,324,307
Administrative and General 19,520,170
Depreciation 15,144,486
Total Operating Expenses 88,988,963
Operating Income (Loss) (8,174,460)
Nonoperating Revenues (Expenses)
Investment Earnings 583,225
Taxes and Assessments 3,855,839
Availability Charges 641,002
Gain (Loss) on Sale of Capital Assets 30,282
Rents and Leases 1,232,920
Miscellaneous Revenues 2,490,796
Donations (117,462)
Interest Expense (4,545,530)
Miscellaneous Expenses (1,312,480)
Total Nonoperating Revenues (Expenses) 2,858,592
Income (Loss) Before Capital Contributions (5,315,868)
Capital Contributions 2,394,280
Change in Net Position (2,921,588)
Total Net Position, Beginning, As Previously Stated 428,351,990
Prior Period Adjustment (38,574,679)
Total Net Position, Beginning, As Restated 389,777,311
Total Net Position, Ending $ 386,855,723
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
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47
12) SEGMENT INFORMATION - Continued
Condensed Statement of Cash Flows
For the Year Ended June 30, 2015
Water Services
Net Cash Provided/(Used) by:
Operating Activities $ 7,808,220
Non-capital and Related Financing Activities 5,110,851
Capital and Related Financing Activities (11,878,822)
Investing Activities (8,434,768)
Net Increase (Decrease) in Cash and Cash Equivalents (7,394,519)
Cash and Cash Equivalents, Beginning 30,610,113
Cash and Cash Equivalents, Ending $ 23,215,594
13) PRIOR PERIOD ADJUSTMENT
The prior period adjustment of $40,434,674 relates to the implementation of GASB Statements 68 and 71 for defined
benefit pension plans. According to GASB Statement 68, Accounting and Financial Reporting for Pensions - an
amendment of GASB 68 Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made
Subsequent to the Measurement Date – an amendment of GASB No. 68, which was implemented by the District in the
2015 fiscal year, recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expenses
related to defined benefit pension plans.
C NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
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PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
C REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2015
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PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
48
Schedule of Funding Progress for DPHP
Actuarial
Accrued UAAL as a
Actuarial Actuarial Liability Unfunded Percentage of
Valuation Value of (AAL) Entry AAL Funded Covered Covered
Date Assets Age (UAAL) Ratio Payroll Payroll
(A) (B) (B - A) (A/B) (C) [(B-A)/C]
6/30/13
Miscellaneous $ 11,831,000 $ 22,891,000 $ 11,060,000 51.68% $ 11,969,000 92.41%
6/30/11
Miscellaneous $ 7,893,000 $ 18,289,000 $ 10,396,000 43.16% $ 12,429,000 83.64%
6/30/09
Miscellaneous $ 6,273,000 $ 10,070,000 $ 3,797,000 62.29% $ 11,878,000 31.97%
C REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2015
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49
Measurement Period 2013-141
TOTAL PENSION LIABILITY
Service Cost $ 2,330,709
Interest 7,907,915
Changes of Benefit Terms 0
Difference Between Expected and Actual Experience 0
Changes of Assumptions 0
Benefit Payments, Including Refunds of Employee Contributions (4,885,406)
Net Change in Total Pension Liability 5,353,218
Total Pension Liability - Beginning 106,716,218
Total Pension Liability – Ending (a) $ 112,069,436
PLAN FIDUCIARY NET POSITION
Contributions - Employer $ 3,137,174
Contributions - Employee 1,074,954
Net Investment Income2 10,874,999
Benefit Payments, Including Refunds of Employee Contributions (4,885,406)
Other Changes in Fiduciary Net Position 0
Net Change in Fiduciary Net Position 10,201,721
Plan Fiduciary Net Position - Beginning 63,144,370
Plan Fiduciary Net Position – Ending (b) $ 73,346,091
Plan Net Pension Liability/(Asset) – Ending (a) – (b) $ 38,723,345
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 65.45%
Covered-Employee Payroll $ 12,276,578
Plan Net Pension Liability/(Asset) as a Percentage of Covered Employee Payroll 315.42%
1 Historical information is required only for measurement periods for which GASB 68 is applicable
2 Net of administrative expenses.
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have results from plan changes which
occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of Two Years Additional
Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: There were no changes in assumptions.
C SCHEDULE OF CHANGES IN THE NET PENSION
LIABILITY AND RELATED RATIOS
YEAR ENDED JUNE 30, 2015
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50
Schedule of Plan Contributions1
Fiscal Year 2013-14
Actuarially Determined Contribution2 $ 3,137,174
Contributions in Relation to the Actuarially Determined Contribution2 (3,137,174)
Contribution Deficiency (Excess) $ 0
Covered-Employee Payroll3,4 $ 12,276,578
Contributions as a Percentage of Covered-Employee Payroll3 25.55%
1 Historical information is required only for measurement periods for which GASB 68 is applicable.
2 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers
may choose to make additional contributions toward their unfunded liability. Employer contributions for such plans exceed the
actuarially determined contributions.
3 Covered-Employee Payroll represented above is based on pensionable earnings provided by the employer. However, GASB
68 defines covered-employee payroll as the total payroll of employees that are provided pensions through the pension plan.
Accordingly, if pensionable earnings are different than total earnings for covered-employees, the employer should display in
the disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related
ratios.
4 Payroll from prior year $11,919,008 was assumed to increase by the 3.00 percent payroll growth assumption.
Notes to Schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2013-14 were from
the June 30, 2011 public agency valuations.
Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details see June 30, 2011 Funding Valuation Report
Asset Valuation Method Actuarial Value of Assets. For details, see June 30, 2011 Funding Valuation
Report
Inflation 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Investment Rate of Return 7.50% Net of Pension Plan Investment and Administrative Expenses; includes
Inflation
Retirement Age
The probabilities of Retirement are based on the 2010 CalPERS Experience
Study for the period from 1997 to 2007
Mortality
The probabilities of mortality are based on the 2010 CalPERS Experience
Study for the period from 1997 to 2007. Pre-retirement and Post-retirement
mortality rates include 5 years of projected mortality improvement using Scale
AA published by the Society of Actuaries.
C SCHEDULE OF CONTRIBUTIONS
YEAR ENDED JUNE 30, 2015
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PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
Independent Auditors’ Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
Board of Directors
Otay Water District
Spring Valley, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, the financial statements of the business-type activities of the
Otay Water District (the “District”), as of and for the year ended June 30, 2015, and the related notes to the
financial statements, which collectively comprise the District’s basic financial statements, and have issued
our report thereon dated _________ __, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not
express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the District’s
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material weaknesses
or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in
internal control that we consider to be material weaknesses. However, material weaknesses may exist that
have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control
or on compliance. This report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the District’s internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Riverside, California
__________ __, 2015
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PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
___________ __ 2015
Board of Directors
Otay Water District
Spring Valley, CA
We have audited the financial statements of the business-type activities of the Otay Water District (the “District”)
for the year ended June 30, 2015. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards, as well as certain information related to the
planned scope and timing of our audit. We have communicated such information in our letter to you dated May
5, 2015. Professional standards also require that we communicate to you the following information related to
our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the District are described in Note 1 to the financial statements. As described in Note
6 to the financial statements, the District changed accounting policies related to Statement of Governmental
Accounting Standards (GASB Statement) No. 68, Accounting and Financial Reporting for Pensions and GASB
Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date – an
amendment of GASB Statement No. 68, in the 2015 fiscal year. Accordingly, the cumulative effect of the
accounting changes as of the beginning of the year are reported in the financial statements. We noted no
transactions entered into by the District during the year for which there is a lack of authoritative guidance or
consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management’s knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected. The most
sensitive estimates affecting the business-type activities’ financial statements were:
Management’s estimate of the fair value of investments is based on information provided by financial
institutions. We evaluated the key factors and assumptions used to develop the fair value of investments
in determining that it is reasonable in relation to the financial statements taken as a whole.
Management’s estimate of capital assets depreciation is based on historical estimates of each capitalized
item’s useful life. We evaluated the key factors and assumptions used to develop the capital assets
depreciation in determining that it is reasonable in relation to the financial statements taken as a whole.
Management’s estimate of net other postemployment benefits (OPEB) obligation is based on an actuarial
valuation. We evaluated the key factors and assumptions used to develop the net OPEB obligation in
determining that it is reasonable in relation to the financial statements taken as a whole.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
Management’s estimation of defined benefit pension obligation is based on an actuarial valuation. We
evaluated the key factors and assumptions used to develop the defined benefit pension obligation in
determining that it is reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement
users. The most sensitive disclosures affecting the financial statements were:
The disclosure of the fair value of investments in Note 2 to the financial statements represents amounts
susceptible to market fluctuation.
The disclosure of capital assets in Note 3 to the financial statements is based on historical information
which could differ from actual useful lives of each capitalized item.
The disclosure of other postemployment benefits and the net OPEB obligation in Note 7 to the financial
statements represents management’s estimate based on an actuarial valuation. Actual results could differ
depending on these key factors and assumptions used for the actuarial valuation.
The disclosure of defined benefit pension plan in Note 6 to the financial statements represents
management’s estimate based on an actuarial valuation. Actual results could differ depending on
these key factors and assumptions used for the actuarial valuation.
The financial statement disclosures are neutral, consistent and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other
than those that are trivial, and communicate them to the appropriate level of management. None of the
misstatements detected as of a result of audit procedures were material, either individually or in the aggregate, to the
financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter,
whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s
report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation
letter dated __________ __, 2015.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting
principle to the District’s financial statements or a determination of the type of auditor’s opinion that may be
expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards,
with management each year prior to retention as the District’s auditors. However, these discussions occurred in the
normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the management and discussion and analysis, and the required
supplementary information section, which are required supplementary information (RSI) that supplements the basic
financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the
information and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did
not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were not engaged to report on the introductory and statistical sections, which accompany the financial
statements but are not RSI. We did not audit or perform other procedures on this other information and we do not
express an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the use of the Board of Directors and management of the District and is not
intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
INDEPENDENT ACCOUNTANTS’ REPORT
ON APPLYING AGREED-UPON PROCEDURES
Mr. Joseph Beachem
Chief Financial Officer
Otay Water District
Spring Valley, CA
We have performed the procedures enumerated below, which were agreed to by the Otay Water District (the
“District”), solely to assist the District’s senior management in evaluating the investments of the District as of and
for the fiscal year ended June 30, 2015. The District’s management is responsible for evaluating the investments
of the District. This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is
solely the responsibility of those parties specified in the report. Consequently, we make no representation
regarding the sufficiency of the procedures described below either for the purpose for which this report has been
requested or for any other purpose.
Our procedures and findings are as follows:
1. Obtain a copy of the District’s investment policy and determine that it is in effect for the fiscal year
ended June 30, 2015.
Finding: At June 30, 2015, the current investment policy (Policy #27) is dated August 10, 2011
and was amended on May 7, 2014. This policy was reviewed and approved for the
2014-2015 fiscal year under Resolution No. 4233 at the May 7, 2014 regular board
meeting. Therefore the investment policy is in effect for the time period under review.
2. Select 4 investments held at year end and determine if they are allowable investments under the
District’s Investment Policy.
Finding: We selected the following investments: FHLMC - Maturity 7/29/2016, FHLMC -
Maturity 6/16/2017, FHLB - Maturity 5/11/2018, and FFCB - Maturity 3/27/2017. All
four investments are allowable and within maturity limits as stated in the District’s
investment policy at June 30, 2015.
3. For the four investments selected in #2 above, determine if they are held by a third party custodian
designated by the District.
Finding: The four investments examined are held by a third party custodian, Union Bank of
California, designated by the District in compliance with the District’s investment
policy. Per discussion with the District’s management and evidenced by Union Bank of
California’s statement, Union Bank does not act as a broker dealer for the District but
acts as a custodial agent of the District holding the investments in a trust capacity.
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
2
4. Confirm the par or original investment amount and market value for the four investments selected
above with the custodian or issuer of the investments.
Finding: No exceptions were noted as a result of our procedures.
5. Select two investment earnings transactions that took place during the year and recompute the earnings
to determine if the proper amount was received.
Finding: Selected the following investment earnings transactions: interest earned on FNMA
Note on March 6, 2015 and interest earned on FHLMC Bond on September 19, 2014.
No exceptions were noted as a result of our procedures.
6. Trace amounts received for transactions selected at #5 above into the District’s bank accounts.
Finding: No exceptions were noted as a result of our procedures.
7. Select five investment transactions (buy, sell, trade or maturity) occurring during the year under review
and determine that the transactions are permissible under the District’s investment policy.
Finding: We selected the following investment transactions: FAMC Note purchased on January
8, 2015, FFCB Bond purchased on November 25, 2014, FHLB Bond sold on August
26, 2014, FHLB Bond purchased on March 30, 2015, and FHLMC Note purchased on
December 12, 2014. Those transactions were permissible under the District’s
investment policy. No exceptions were noted as a result of our procedures.
8. Review the supporting documents for the five investments selected at #7 above to determine if the
transactions were appropriately recorded into the District’s general ledger.
Finding: No exceptions were noted as a result of our procedures.
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of an
opinion on the investments of the District for the fiscal year ending June 30, 2015. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to our
attention that would have been reported to you.
This report is limited solely for the information and use of the Board of Directors and senior management of the
Otay Water District and is not limited to be and should not be used by anyone other than these specified parties.
Riverside, California
________ __, 2015
DRAFT COPY – 10/12/2015
PRELIMINARY & TENTATIVE
for DISCUSSION PURPOSES ONLY
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: November 4, 2015
SUBMITTED BY:
Armando Buelna
Communications Officer
PROJECT: DIV. NO. ALL
APPROVED BY:
Mark Watton, General Manager
SUBJECT: 2015 Customer Awareness and Opinion Survey Report
GENERAL MANAGER’S RECOMMENDATION:
That the Board of Directors receive the findings of the 2015
Customer Awareness and Opinion Survey conducted by Rea and Parker
Research Inc.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To present the Board of Directors with the findings of the 2015
residential Customer Awareness and Opinion Survey.
ANALYSIS:
The Otay Water District's Strategic Plan (Strategic Goal 1.1.100)
calls for conducting a statistically reliable customer opinion and
awareness survey among residential customers. The purposes are to
obtain information from customers about their overall perception of
the District's services, programs, and activities, track this
information year-to-year, with the ultimate goal of the improving
customer service.
Rea and Parker Research Inc. conducted the survey, which took place
between August 31st and September 9th 2015. The survey was a random
telephone survey with a sample size of 314 customers, 214 of which
2
were traditional landline customers and 100 cell phone customers. The
margin of error is plus or minus 5.5 percent at the 95 percent
confidence level.
The respondents were screened to exclude residents who have not lived
in the Otay Water District’s service area for at least one year. The
survey cooperation rate was 47.6 percent.
The survey was available to be conducted in English or Spanish (upon
request). Spanish language respondents comprised 4.4 percent of the
survey population, including 6 percent of cell phone users.
The average length of the survey was 17 minutes.
Highlights of the 2015 survey are as follows:
The 2015 Customer Awareness and Opinion Survey found high levels
of overall satisfaction from customers with the Otay Water
District as their water service provider.
While the percentage of customers who rated the District as poor
or very poor increased slightly from the last customer survey,
this was overshadowed by the number of customers who rated the
District as being excellent (increasing from 29 to 53 percent).
With the drought on the mind of most customers, 7 in 10
respondents agree that the District has been a good partner in
helping conserve water; nearly three-fourths (74 percent)
acknowledge the District has provided its customers with
adequate and timely information about the drought; nearly three-
fifths (59 percent) state that the District is not at fault when
it comes to the drought; and while about two-fifths (39 percent)
agree with the statement “the District did not anticipate the
severity of the drought and was not well-prepared for it”, a
near equal number (38 percent) feel the District was prepared
for the severity of the drought (23 percent were unsure).
The survey found that approximately 21 percent of customers have
called the District for service or help in the past year. Among
those callers, 76 percent indicated that their service was
either excellent (59 percent) or very good (17 percent), an 8
percent increase from the previous survey.
The survey has identified that two-thirds (68 percent) of
respondents have a lawn or grass area for which someone in their
household has direct responsibility for maintaining. Among these
3
customers, nearly two-fifths (37 percent) have already replaced
grass with stone, water-wise plants or artificial turf. Another
12 percent plan to make some type of lawn replacement in the
future.
Nineteen percent of customers have no plans to replace grass
with a water-conserving alternative. These customers cite cost
as the main barrier to replacing grass. Another barrier includes
customers who indicate that they rent their residences, and
while reponsible to maintain their lawn areas, are not
responsible for major infrastructure changes.
Over 9 in 10 customers (93 percent) have familiarity with the
mandatory water-use restrictions that are in effect across the
District’s service area. Of those customers, 92 percent have
taken specific actions to reduce water use in response to these
restrictions (86 percent of all customers).
Sixty-two percent of Otay customers have visited the District
website. This represents a 10 percent increase from the last
customer survey, and continues a steady increase of customers
who have visited the website since 2008 (when 27 percent
indicated that they visited the website).
Of customers who have visited the website, nearly half reported
that they visited the website in order to pay their bill online.
In conclusion, the 2015 Customer Awareness and Opinion Survey Report
states that among customers, “there are strong indications of support
for the work of the Otay Water District", and that "the overall
satisfaction with the District as a water service provider is notably
higher than every survey period since this series of surveys began in
2005.”
The complete survey findings are included as Attachment C
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC GOAL:
1.1.100 CUSTOMER - Measure customer satisfaction. This goal measures
the level of overall customer satisfaction with the District.
4
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action
Attachment B –2015 Customer Awareness and Opinion
Survey Report PowerPoint Presentation
Attachment C - 2015 Customer Awareness and Opinion
Survey Report
ATTACHMENT A
SUBJECT/PROJECT:
2015 Customer Awareness and Opinion Survey Report
COMMITTEE ACTION:
The Finance, Administration and Communication Committee reviewed this
item at a meeting held on October 21st, 2015 and received the findings
of the 2015 Customer Awareness and Opinion Survey Report.
Customer Satisfaction and Awareness Survey
Otay Water District----------October, 2015
Principal Researchers:
Richard A. Parker, Ph.D.
Louis M. Rea, Ph.D.
Rea & Parker Research
Professors, School of Public Affairs, SDSU
1
SAMPLE
•n =314
•100 cell phone residential customers and
214 landline residential customers
•Margin of error = +/‐5.5% at 95%
confidence
•20% of respondents have annual
household incomes below $50,000
•4.4% preferred to take the survey in
Spanish
2
Otay Water District General Survey Respondent Characteristics
(weighted for cell phone and landline usage)
CHARACTERISTIC 2015 2012 2011 2010 2009 2008
ETHNICITY
White 43% 55% 56% 44% 55% 52%
Hispanic/Latino 35% 26% 26% 29% 28% 30%
Asian/Pacific Islander 13% 10% 14% 15% 8% 8%
Black/African‐American 7% 5% 2% 8% 6% 6%
HOUSEHOLD INCOME
Median $83,800 $79,900 $80,400 $85,600 $75,700 $83,500
% $100,000 or more 33% 28% 32% 36% 26% 30%
% $25,000 to under $50,000 14%‐‐‐‐‐‐ ‐‐‐‐‐ ‐‐‐‐‐ ‐‐‐‐‐ ‐‐‐‐‐
% under $25,000 6% 6% 6% 10% 8% 5%
AGE
Median 51 years 53 years 53 years 53 years 53 years 47 years
YEARS CUSTOMER
Median 10 years 12 years 15 years 9 years 12 years 8 years
EDUCATION
High School or Less 13% 17% 16% 12% 17% 22%
At Least One Year College,
Trade, Vocational School 29%32% 24% 30% 32% 28%
Bachelor’s Degree 32% 34% 34% 41% 39% 33%
1+ Year Graduate Work 26% 17% 24% 17% 12% 17%
OWN/RENT
Home Owner 80% 91% 97% 85% 91% 88%
Renter 20% 9% 3% 15% 9% 12%
3
Otay Water District
2015 General Survey Respondent Characteristics
Landline and Cell Phone Customers
CHARACTERISTIC Landline Customers Cell Phone Customers
ETHNICITY
White 44% 38%
Hispanic/Latino 35% 29%
Asian/Pacific Islander 13% 18%
Black/African‐American 7% 7%
ANNUAL HOUSEHOLD INCOME
Median $85,200 $71,300
% $100,000 or more 34% 25%
% $25,000 to under $50,000 14% 20%
% under $25,000 6% 6%
AGE
Median 54 44
YEARS CUSTOMER OF DISTRICT
Median 10 6
EDUCATION
High School or Less 13% 11%
At Least One Year College, Trade,
Vocational School 29% 34%
Bachelor’s Degree 32% 31%
1+ Year of Graduate Work 26% 24%
OWN/RENT
Home Owner 82% 64%
Renter 18% 36%
4
KEY FINDINGS
•Very strong customer support for the work of the Otay Water
District
•Higher support than in any survey from 2005 forward
•Trust in Otay Water District to provide clean, safe water AND at
reasonable prices is also higher than in any of those surveys
since 2005.
•There is much awareness of water conservation issues and a
considerable amount of action has been undertaken by
customers to reduce their water usage.
•The primary driver of these conservation measures is the drought.
•The desalination agreement for water from Rosarito Beach has
seen a slow increase in overt support and opposition seems to
have weakened somewhat.
•Use of online services for bill payment has remained relatively
unchanged, with the least use of online services being lower
income and older customers, both of which groups are less
frequent computer users, in general.5
SATISFACTION WITH
OTAY WATER
DISTRICT
6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
200820092010201120122015
26%
17%24%25%29%
53%
37%
39%30%
38%35%
21%
30%
32%31%
30%27%14%
6%11%13%
7%8%8%
1%1%2%1%4%
Overall Satisfaction with Otay Water District
as Water Service Provider
(Mean = 1.88 ‐‐Scale: 1= Excellent and 5 = Very Poor*)
Very Poor
Poor
Fair
Very Good
Excellent
*6‐point scale prior to
2015‐‐codes 4 and 5
merged for prior years
into "poor" category.
7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20092010201120122015
10%17%12%11%
32%
29%
32%
28%28%
23%
38%
38%
41%39%
25%
17%
7%13%15%13%
6%6%6%7%7%
Trust Otay Water District to Obtain Water at Reasonable Price
(Mean = 2.39‐‐Scale: 1 = Great Deal of Trust and 5 = No Trust at All)
No Trust at All
Not Much Trust
Some Trust
Good Amount of Trust
Great Deal of Trust
8
Too much, 49%Just about right, 49%
Too little, 2%
Cost of Water is...
9
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Has been a good partner in helping us conserve water
Has provided us with adequate and timely information about
the drought
Did not anticipate the severity of the drought and was not well
prepared for it
Is not at fault when it comes to the drought
Yes, 70%
Yes, 74%
Yes, 39%
Yes, 59%
No, 16%
No, 20%
No, 38%
No, 33%
Unsure, 14%
Unsure, 6%
Unsure, 23%
Unsure, 8%
During Recent Drought, the Otay Water District.....
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201120122015
58%
39%
28%
43%
59%
25%
30%
25%
17%
27%18%24%
20%
13%
9%10%10%
8%2%
6%8%8%4%9%
Satisfaction with Calls to Customer Service
(Mean Satisfaction = 1.85 ‐‐Scale: 1 = Excellent and 5 = Very Poor)
Very Poor
Poor
Fair
Very Good
Excellent
Percentage of customers
who called Customer Service
in past years:
2015 = 21%
2012 = 9%
2011 = 17%
2010 = 17%
2008 = 10%
Renters call
more often
= 31%
11
0% 20% 40% 60% 80% 100%
2008
2009
2011
2012
2015
27%
23%
23%
23%
28%
25%
18%
31%
25%
26%
17%
19%
19%
18%
21%
8%
10%
6%
8%
8%
6%
7%
4%
7%
7%
7%
10%
6%
9%
5%
10%
13%
11%
10%
5%
Best Value Among Utilities‐‐Weighted
(Utilities Ranked 1‐2‐3 and weighted‐‐3 points for first choice, 2 points for second and 1 point for third)
Water Trash Collection Gas & Electric Internet Access Sewer Cable/Satellite TV Telephone
Incomes under $50,000 favor Water (39%) and Gas & Electric (25%) over Trash Collection (18%)
12
WATER
CONSERVATION
13
Responsible for Grass
Area and Have Replaced
with Stone, Water‐Wise
Plants or Artificial Turf,
37%
Responsible for Grass
Area and Have Not
Replaced with Stone,
Water‐Wise Plants or
Artificial Turf‐‐But Plan to
Do So, 12%
Responsible for Grass
Area and Have Not
Replaced with Stone,
Water‐Wise Plants or
Artificial Turf‐‐And Do Not
Plan to Do So or Are
Unsure, 19%
Not Responsible for Grass
Area, 32%
Replaced All or Some of Grass Area with Low‐Water Use Landscaping
Overall % responsible for
grass area = 68%
Owners = 71% with responsibility
Renters = 52% with responsibility
14
Cost, 44%
Rent, 28%Aesthetics, 10%
I am too busy, 8%
Grass Area Very Small,
4%
Moving/Selling House,
3%
Other
(unspecified/irrelevant), 3%
Other, 18%
Main Barrier to Replacing Grass Area with Low‐Water Landscaping
(Among 19% with Grass Area Who Have Not Replaced or Do Not Plan to Replace It)
15
Very Familiar, 48%
Somewhat Familiar, 35%
A Little Familiar, 10%
Not Familiar, 7%
Familiarity with Mandatory Water‐Use Restrictions
(92% with Some Familiarity Have Taken Action in Response to Restrictions)
(96% have taken action)
(90% have taken action)
(77% have taken action)
Very or Somewhat Familiar:
Incomes under $50,000 = 88%
Incomes of $50,000 and over = 82%
16
0%
5%
10%
15%
20%
25%
Less
Time
Outdoor
Water
Shorter
Showers
Fewer
Days per
Week
Outdoor
Water
Let
Lawn/
Plants
Die‐‐
Remove
Wash
Only Full
Loads of
Dishes
and
Clothes
Collect
and
Reuse
Water
Use Car
Wash
Do Not
Allow
Water to
Run
Replaced
Turf with
Low
Water
Plants
Replace
Grass
with
Artificial
Turf
Irrigate
Early in
Morning
or Late
at Night
High‐
Effic'ncy
Clothes
Washer/
Low‐
flow
Fixtures
Other*
2015 23%18%11%8%7%7%6%4%3%3%2%2%6%
2012 17% 11% 8% 7% 8% 3% 2% 9% 2% 1% 5% 1% 20%
2011 19% 14% 7% 5% 11% 3% 10% 2% 6% 4% 19%
2009 24% 21% 10% 7% 10% 2% 8% 2% 2% 4% 7%
Specific Actions Taken to Reduce Water Use in Response to
Mandatory Restrictions
(Among 92% of Respondents with Some Familiarity with Restrictions and Have Taken Action =
86% of All Customers)
*Other includes: Repair Indoor
and Outdoor Leaks, Upgrade
Irrigation System, Use Broom
instead of Hose on Driveway,
Check Soil Moisture Before
Watering
17
18
WATER CONSERVATION
GARDEN
AT CUYAMACA COLLEGE
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2008
2009
2011
2012
2015
22%
28%
16%
27%
24%
22%
20%
33%
21%
25%
56%
52%
51%
52%
51%
Water Conservation Garden at Cuyamaca College
Heard of and Visited Conservation Garden Heard of but Not Visited Never Heard of or Seen Anything
(Income under $50,000: 31% have visited—Income $50,000 and over: 22% visited)
(Homeowners 29% visited—Renters only 25% are aware and 6% have visited)
19
0%
10%
20%
30%
40%
50%
60%
70%
20082009201120122015
51%
39%
52%
40%
48%49%
61%
48%
60%
52%
Made Changes to Landscaping as a Result of Visiting
Water Conservation Garden
(Among 24% Who Have Visited)
No Yes
20
0% 10% 20% 30% 40% 50% 60%
Changed Plants to Waterwise/Drought Tolerant
Adjusted Sprinkers/Reduced Outdoor Water Use
Replaced Lawn with Low‐Water Plants
Let Landscape/Lawn Die‐Eliminate
Collect and Reuse
Upgraded Irrigation System
45%
22%
14%
10%
7%
2%
39%
13%
5%
17%
13%
9%
54%
17%
9%
6%
4%
Most Significant Change in Landscape as a Result of Visiting
Water Conservation Garden
2015 2011 2009
21
ROSARITO BEACH
DESALINATION
22
0%
10%
20%
30%
40%
50%
60%
2015 2012 2011 2010
59%
57%
46%
54%
28%28%
34% 34%
13%15%
20%
12%
In Favor of Pursuing Agreement for Rosarito Beach Desalinated Water
Favor Not Favor Unsure
23
0% 5% 10% 15% 20% 25% 30%
100%
75%‐99%
50%‐74%
25%‐49%
Some but less than 25%
None
14%
12%
25%
27%
13%
9%
Percentage of All Otay Water District Water that is Preferred from
Rosarito Beach Desalination Plant
(Among 59% Who Favor the Agreement‐‐‐Median Percentage = 50%)
24
0%
10%
20%
30%
40%
50%
60%
70%
Need More
Infor‐mation
Do Not Trust
Mexican
Govt/ Mexico
Water
Quality
Put Plant in
U.S./ Create
U.S. Jobs
Cost Do Not
Desire
Interna‐tional
Involv‐ment
Danger to
Sea Life
Lack of
Control
Do Not Want
to Drink Sea‐
water
Do Not Like
Idea/ Other
2015 40% 27% 13% 12% 3% 3% 1% 1%
2012 7% 55% 13% 8% 4% 5% 3% 5%
2011 4% 41% 30% 10% 7% 5% 3%
2009 3% 68% 18%
Why Not Favor Desalination Agreement?
(Among 28% Not in Favor and 13% Unsure)
25
COMMUNICATION
26
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2008
2009
2011
2012
2015
27%
32%
39%
52%
62%
57%
57%
49%
40%
31%
16%
11%
12%
8%
7%
Visited Otay Water District Website?
Have Visited Website Have Internet Access But Have Not Visited Website Do Not Have Access to the Internet
27
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201120122015
24%
8%
18%
31%
40%
62%
53%
56%
47%30%
14%
32%
24%19%
24%
7%2%3%6%
Rating of User Friendliness of Website
(respondents = 62% who have visited website)
(Mean = 1.99‐‐Scale: 1=Excellent and 5=Poor*)
Poor
Fair
Very Good
Excellent
*2015: "Poor" category
includes 5% who rated
the website at 4 and
1% who rated it at 5.
Prior years ratings
were 1‐4 only.
28
Pay online
49%
Billing information
21%
Drought information
9%
Conservation rebate
information
7%
General Information/
Water Quality
5%
Start Service
4%
Register a Complaint
2%
Rate information 1%
Outage information 1%
Water savings calculator 1%
Other
14%
Primary Reason for Visiting Website
(among 62% who had visited website)
29
Television, 38%
Internet‐‐Other than Water
District Websites, 17%
Newspaper‐‐Union Tribune,
8%
Otay Water District
Website, 7%Otay Water District
Newsletters, 7%
Word‐of‐Mouth/
Family/Friends/Co‐workers,
7%
Informational Stuffers in
Water Bill, 6%
Radio, 6%
Newspaper‐‐Other, 3%
San Diego County Water
Authority Website, 1%
Other, 16%
Primary Source of Information About Water Issues
30
Otay Water District Rea & Parker Research
2015 Customer Opinion and Awareness Survey Report April, 2012
2015
Rea & Parker Research
September, 2015
Otay Water District
Customer Awareness and
Opinion Survey Report
Otay Water
District Rea & Parker Research
2015 Customer Opinion and Awareness Survey September
2015
i
Table of Contents
Page
Executive Summary ii
Introduction and Methodology 1
Sample 2
Survey Findings 4
Demographic Statistics/Respondent Characteristics 4
Customer Satisfaction and Confidence and Trust in Water Reliability 8
Comparative Rating of Utilities and the Cost of Water 14
Outdoor Watering and Landscape Maintenance 16
Water Conservation 18
Cuyamaca College Water Conservation Garden 20
Alternative Water Supplies: Desalination 25
Bill Payment 28
Information about Water Issues 34
Conclusions 40
Appendix 41
Questionnaire 42
Frequencies 54
Open-Ended Responses 81
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2015 Customer Opinion and Awareness Survey September
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ii
Otay Water District 2015 Residential Customer Opinion and
Awareness Survey
Executive Summary
The Otay Water District has elected to conduct a statistically reliable customer opinion and
customer awareness telephone survey among residential customers. The purpose of the survey is
twofold – first, to provide information concerning customer satisfaction and customer awareness
of water issues and secondly to compare the results of this 2015 study with the results of the 2005,
2006, 2008, 2009, 2011, and 2012 Residential Customer Opinion and Awareness Surveys as well
as the 2010 Ocean Water Desalination Opinion Survey where data are comparable for a limited
number of questions only.
Sample
The survey was conducted by a random telephone sample of 314 respondents, which equates to a
margin of error of +/- 5.5% at the 95% confidence level. Among these respondents, 100 were
customers who provided cell phone contact information to the District.
Respondents were a plurality of White customers (43 percent), with another 35 percent being
Hispanic/Latino. Survey respondents earn an annual median household income of $83,800, with
33 percent earning $100,000 or more and 20 percent earning under $50,000, including 6 percent
under $25,000. Respondents have a median age of 51 years and have been customers of the Otay
Water District for a median of 10 years. Among these respondents, 58 percent possess a Bachelor’s
degree or higher, with 13 percent having a high school education or less. Survey respondents are
mostly homeowners (80 percent) with a mean household size of 3.52.
Survey Findings
This survey report has been divided into nine essential information components as follows:
Demographic Statistics/Respondent Characteristics
Customer Satisfaction and Confidence and Trust in Water Reliability
Comparative Rating of Utilities and the Cost of Water
Outdoor Watering the Landscape Maintenance
Water Conservation
Cuyamaca College Water Conservation Garden
Alternative Water Supply: Desalination
Bill Payment
Information about Water Issues
Customer Satisfaction and Confidence and Trust in Water Reliability
Otay Water District customers demonstrate a very high level of satisfaction with the
District as their provider of water service with almost three-fourths (74 percent) rating the
District as excellent (53 percent) or very good (21 percent). These ratings are substantially
higher than those recorded in the 2012 survey where 64 percent of respondents rated their
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2015 Customer Opinion and Awareness Survey September
2015
iii
level of satisfaction as either excellent (29 percent) or very good (35 percent). This rating
also greatly exceeds the satisfaction recorded in all previous surveys dating back to 2005.
Respondents feel that the Otay Water District has responded well to issues related to the
recent drought. Specifically, 70 percent of respondents agree that the District has been a
good partner in helping conserve water. Nearly three-fourths (74 percent) acknowledge
that the District has provided its customers with adequate and timely information about the
drought. Nearly three-fifths (59 percent) state that the District is not at fault when it comes
to the drought.
Nearly four-fifths of respondents (84 percent) have a substantial amount of trust in the
ability of the Otay Water District to provide clean, safe, water for its customers (53 percent
a great deal of trust and 31 percent a good amount of trust). Only 4 percent expressed a
lack of trust. These ratings represent, again, a noteworthy increase in the amount of trust
respondents have in the ability of the District to provide clean, safe, water reversing the
ratings portrayed in previous General Surveys.
Well over one-half (55 percent) of customers have either a great deal of trust (32 percent)
or a good amount of trust (23 percent) in the ability of the Otay Water District to obtain
water at reasonable prices. This level of trust is higher than the comparable trust ratings in
previous General Surveys (ranging from 39 percent in 2009 and 2012 to 49 percent in
2010).
Among the 21 percent who called the Otay Water District for service in 2015, 76 percent
indicated that their service was either excellent (59 percent) or very good (17 percent). This
level of satisfaction is similar to the satisfaction level found in the 2012 General Survey.
Further, the satisfaction levels in both the 2015 and 2012 Surveys substantially exceed the
satisfaction levels recorded in 2009 and 2011.
Comparative Rating of Utilities and the Cost of Water
Nearly two-fifths (37 percent) of Otay Water District customers rate trash collection as the
utility with the best value for the money paid. Water (30 percent) and gas and electric (18
percent) follow trash collection in perceived value. This represents a reversal from the
2012 ratings where water was rated slightly above trash collection as the utility with the
best value.
Using a composite ranking that takes first, second, and third rankings for each utility into
account, water becomes the utility with the best value followed by trash collection and gas
and electric.
Outdoor Watering and Landscape Maintenance
Over two-thirds (68 percent) of respondents have a lawn or grass area at their residence for
which someone in their household has direct responsibility. Among these customers, nearly
two-fifths (37 percent = 25 percent of all customers) have already replaced this grass area
with a water-conserving alternative. Another 12 percent (8 percent of total customers) plan
to make some type of lawn replacement.
Among those customers who have replaced their grass area and among those who plan to
do so, one-fourth (25 percent) are making use of water-wise, drought resistant plants.
Another 23 percent view rocks and stones as an appropriate ground cover and one-fifth (20
percent) are replacing their lawns with artificial turf.
Over two-fifths (44 percent) of those who do not plan to replace their grass area cite cost
as the main barrier.
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2015 Customer Opinion and Awareness Survey September
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Water Conservation
More than 9 in 10 customers (93 percent) have familiarity with mandatory water-use
restrictions that are in effect across the Otay Water District’s service area. In fact, nearly
one-half (48 percent) report that they are very familiar with such restrictions.
Among the 93 percent of customers who express familiarity with mandatory water
restrictions, 92 percent (86 percent of all District customers) have taken specific actions
to reduce water use. One-half (50 percent) of the actions taken involve reducing water use
outdoors, including less time watering outdoors (23 percent), fewer days per week
watering outdoors (11 percent), and letting lawn/plants die (8 percent).
Just over two-fifths (44 percent) of customers are aware that the Otay Water District offers
conservation rebates and incentives.
Cuyamaca College Water Conservation Garden
Nearly one-half (49 percent) have seen or heard about the Water Conservation Garden at
Cuyamaca College. Nearly one-fourth (24 percent) of all respondents have, in fact, visited
the Garden. This visitation pattern is consistent with the patterns found in the 2008 survey
(22 percent), the 2009 survey (28 percent), and the 2012 survey (27 percent).
Over one-half (52 percent = 12 percent of all customers) of those who visited the Water
Conservation Garden made changes to their landscaping that resulted from that visit.
As a result of visiting the Water Conservation Garden, the most significant change
customers made was an effort to use more water-wise/drought tolerant plants (45 percent).
This change is followed by adjusting sprinklers and reducing outdoor water use (22
percent) and replacing lawn with low-water plants (14 percent). These adjustments are
consistent with changes made in previous survey periods.
Alternative Water Supply: Desalination
Nearly three-fifths (59 percent) of District customers favor an international agreement to
purchase desalinated water from a proposed Rosarito Beach desalination facility in
Mexico. This represents an increase of 2 percent from the results of the 2012 survey and
13 percent from the results of the 2011 survey where 46 percent favored such an agreement.
The median percentage of the District’s water that customers feel should derive from the
proposed desalination plant is 50 percent.
Among the 28 percent who oppose the international agreement with Mexico or are unsure
(13 percent) about it, two fifths (40 percent = 16 percent of all customers) say they need
more information about the Project and just over one-quarter (27 percent = 11 percent of
all customers) indicates that they do not trust the quality of water in Mexico and/or they do
not trust the Mexican government. Another 13 percent (5 percent of all customers) feels
that the plant should be located in the United States in order to create jobs domestically.
o These recent survey results affirm a positive trend in that a fairly large proportion
of respondents who feel negatively about the project are requesting more
information about it and presumably are showing more interest in it. Further, a
smaller percentage of respondents exhibits distrust for the Mexican government –
down from 55 percent in 2012.
Bill Payment
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Nearly two-thirds (66 percent) of respondents receive their monthly bill by mail in paper
format. Among the 66 percent who receive their bill by mail, over two-fifths (44 percent)
object to paperless billing because they want a paper record for bookkeeping and taxes.
Nearly one- half (48 percent) of respondents examine their bill for water usage or other
factors every time. Nearly one-fifth (17 percent) examine their bill most times and 24
percent do so sometimes.
Over two fifths (41 percent) of customers pay their bill online, 26 percent pay their bill
through automatic bank deductions, one-fourth (25 percent) pay by sending a check in the
mail and others pay by credit card over the telephone (6 percent) and in person at District
offices (2 percent). It is noteworthy that 46 percent of customers would prefer to pay online
(5 percent more than actually do so) and 20 percent would prefer to use postal mail (5
percent less than actually do so).
Respondents in 2015 demonstrate a decrease in the use of paying their bill by check through
postal mail (36 percent in 2012 to 25 percent in 2015). The use of automatic bank
deductions to pay bills increased from 18 percent in 2012 to 26 percent in 2015. There is,
therefore, some evidence that customers of the Otay Water District are using or considering
using electronic methods of bill paying and relying less on postal mail.
About 7 in 10 respondents (71 percent) who currently do not pay their bill online would
still not do so even if a chat function were available to interact directly with a customer
service representative.
Among customers who do not pay online and indicate a reason for not doing so, nearly
one-half (45 percent) indicate that there is nothing the District can do to make paying on
line more appealing. In 2012, customers who did not wish to pay online were even firmer
in their resolve that the District can do nothing to motivate them to do so (55 percent). Both
years show that three-fourths of those disinclined to pay on-line are not going to be easily
swayed.
Information about Water Issues
More than one-half (55 percent) of customers obtain information about water issues from
television (38 percent) and the Internet (17 percent---other than Water District websites).
One fifth (20 percent) receive information from sources associated with the Otay Water
District (Otay Water District website and Otay Water District newsletters – each 7 percent
– and informational stuffers in the water bill – 6 percent).
Over three-fifths (62 percent) of customers have visited the Otay Water District website.
This represents an increase over the 2012 survey results where 52 percent indicated that
they had visited the website.
Website visitors give the District Website very good ratings – 73 percent excellent or very
good, 24 percent fair, and 6 percent poor.
More than one-fourth of customers (26 percent) always read the newsletter or bill inserts
that come in the mail with the monthly water bill, 23 percent read these materials most
months, and another 33 percent read them sometimes, leaving 18 percent who never read
the newsletter or bill inserts. Survey results show a consistent increase in readership
patterns since 2008.
English is not the first language of 20 percent of the survey respondents. Among these 20
percent, 18 percent can read newsletters and reports in English and nearly 2 percent cannot
read newsletters and reports in English but they have someone available who can translate
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2015 Customer Opinion and Awareness Survey September
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this information for them. This material is inaccessible to less than 0.5 percent who cannot
read English and do not have someone available to help them translate it for them.
Conclusions
The results of the 2015 General Survey not only demonstrate that there are strong indications of
continued customer support for the work of the Otay Water District, but also that support has
reached a higher level than has been recorded during the past decade. That is, the overall
satisfaction with the District as a water service provider is notably higher than every survey period
since this series of surveys began in 2005. The level of trust and confidence in the ability of the
District to provide clean, safe water and to provide it at reasonable prices is also higher than in
previous surveys.
Water and trash collection have been the top two utilities in the District’s surveys since the
inception of these surveys. That is, these two utilities represent to customers the best value that
they perceive for the money paid among the most commonly used utilities.
The results of this survey should be viewed as a very powerful ratification by the public of the
importance and quality of the work done by the District and as an expression of the high value to
the customers of the District of the work in which the Otay Water District is engaged.
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2015 Customer Opinion and Awareness Survey September 2015
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Introduction and Methodology
In 1956, the Otay Water District was authorized by the State Legislature and gained its entitlement to water
that was imported into the region. Today, the District serves the needs of more than 217,000 people within
125.5 squares miles in southern San Diego County by purchasing water from the Metropolitan Water
District of Southern California through the San Diego County Water Authority and Helix Water District.
Sewer services are also provided to portions of the customer base. Since its inception, the Otay Water
District also has collected and reclaimed wastewater generated within the Jamacha Drainage Basin and
pumps the reclaimed water south to the Salt Creek Basin where it is used for irrigation and other non-
potable uses, such as golf courses, playing fields, parks and roadside landscape.
The Otay Water District has elected to conduct a statistically reliable customer opinion and customer
awareness telephone survey among its residential customers. The purpose of the survey is twofold – first,
to provide information concerning customer satisfaction and customer awareness of water issues and
secondly to compare the results of this 2015 study with the results of the 2005, 2006, 2008, 2009, 2011,
and 2012 Residential Customer Opinion and Awareness Surveys (referred to throughout this report as
General Surveys) as well as the 2010 Ocean Water Desalination Opinion Survey where data are comparable
for a limited number of questions only.
Rea & Parker Research was selected to conduct the 2015 study, as it was for the 2005, 2006, 2008, 2009,
2010, 2011, and 2012 studies. The purpose of the research is to:
Determine overall satisfaction with the services of the Otay Water District including the level of
trust in the District to provide enough water at reasonable rates;
Determine opinions and perceptions of various issues, including:
Effect of California’s drought on overall satisfaction with the District
Effect of the drought on landscape choices
Cost of water
Awareness and interest in water conservation
Methods of and attitudes toward mandatory and voluntary water conservation
Attitudes toward desalination
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2015 Customer Opinion and Awareness Survey September 2015
2
Formal district communication efforts including the official website
Monthly billing alternatives
Customer service
Water Conservation Garden at Cuyamaca College
Sources of information about water issues
Relative value of water service in comparison to other utilities
Obtain demographic data about the population for use in descriptive analysis and crosstabulations
of data that can result in new, optimally targeted and tailored public awareness programs.
Compare the results of this survey with the results of the 2005, 2006, and 2008, 2009, 2010, 2011,
and 2012 surveys of District customers.
Sample
The survey was conducted by a random telephone sample of 314 respondents in order to secure a margin
of error not to exceed +/-5.5 percent @ 95 percent confidence1. This figure represents the widest interval
that occurs when the survey question represents an approximate 50 percent-50 percent proportion of the
sample. When it is not 50 percent-50 percent, the interval is somewhat smaller. For example, in the survey
findings that follow, 48.0 percent of respondent households indicate that they are “very familiar” with
existing mandatory water use restrictions due to the drought. This means that there is a 95 percent chance
that the true proportion of the total population of the District’s service area that has not seen or heard these
messages is between 42.5 percent and 53.5 percent (48.0 percent +/- 5.5 percent).
Survey respondents were screened to exclude those customers who have not lived in San Diego County for
at least one year. When respondents asked about who was sponsoring the survey, they were told “this
project is sponsored by the Otay Water District, and it’s about issues related to your household water
supply.” The survey sample included, within the 314 respondents, 100 customers who indicated that they
regularly use cell phones. These cell phone users were weighted back into the over data that follow to
1 Past years’ general surveys have mostly been conducted with 300 respondents and a +/- 5.7 percent margin of error
at 95 percent confidence. In 2012, 480 respondents were obtained with a margin of error of +/- 4.5% at 95%
confidence.
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2015 Customer Opinion and Awareness Survey September 2015
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reflect 90.4 percent of Otay Water District customers who have provided a landline telephone number only
to the District and 9.6 percent who provided cell phone contact information.
The survey was conducted in both English and Spanish. Spanish language respondents comprised 4.4
percent of the survey population, including 6 percent of cell phone users. The distribution of respondents
according to gender was 52 percent male and 48 percent female.
The survey was conducted from August 31, 2015 to September 9, 2012. The total survey cooperation rate
was 47.6 percent, as indicated in Table 1. This survey report has been divided into nine essential
information components as follows:
Demographic Statistics/Respondent Characteristics
Customer Satisfaction and Confidence and Trust in Water Reliability
Comparative Rating of Utilities and the Cost of Water
Outdoor Watering and Landscape Maintenance
Water Conservation
Cuyamaca College Water Conservation Garden
Alternative Water Supplies: Desalination
Bill Payment
Information about Water Issues
Charts have been prepared for each of these major components depicting the basic survey results. Subgroup
analyses for different age groups, various levels of education, gender, home ownership/rental status,
household size, residential tenure in the community, different income categories, ethnicity of residents of
the service area, and cell phone versus land line customers will be presented in succinct bulleted format
when statistical significance and relevance warrants such treatment.
Frequency distributions for the weighted responses and verbatim listings of open-ended responses to survey
questions as well as the survey instrument, itself, are contained in the Appendix.
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2015 Customer Opinion and Awareness Survey September 2015
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Table 1
Otay Water District 2015 Customer Survey
Telephone Call Disposition Report
Unknown Eligibility
No Answer/Busy 1238
Answering Machine 1579
Not Home—Call Back 380
Language Barrier 34
Refusal/Mid-term Termination 345
Total Unknown 3576
Ineligible
Disconnect 551
Fax/Wrong Number 210
Total Ineligible 761
Not Qualified—less than one year 58
Eligible
Complete 314
Total Attempts 4,709
Cooperation Rate (Complete/(Complete + Refusal)) 47.6%
Survey Findings
Demographic Statistics/Respondent Characteristics
Table 2 presents selected demographic characteristics of the survey respondents. Respondents are a White
plurality (43 percent), with another 35 percent being Hispanic/Latino. This is the least White and most
Hispanic/Latino survey for the Otay Water District since this series of surveys began in 2005. Survey
respondents earn an annual median household income of $83,800—the highest in the series of surveys, with
33 percent earning $100,000 or more and 20 percent earning under $50,000, including 6 percent under
$25,000).
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2015 Customer Opinion and Awareness Survey September 2015
5
2 Data from 2005 and 2006 for Table 1 and all charts are available in the 2012 and prior survey reports.
3 This new category was added to Table 2 to demonstrate that 20 percent of survey respondent households earn less
than $50,000 annually. This was established as a quote that the survey sample was required to achieve.
Table 2
Otay Water District General Survey Respondent Characteristics2
(weighted for cell phone and land line usage)
Characteristic 2015
2012
2011
2010
2009
2008
Ethnicity
White 43% 55% 56% 44% 55% 52%
Hispanic/Latino 35% 26% 26% 29% 28% 30%
Asian/Pacific
Islander 13% 10% 14% 15% 8% 8%
Black/African-
American 7%
5%
2%
8%
6%
6%
Native American/
Middle East/
Mixed/Other
2% 4% 2% 4% 3% 4%
Annual
Household
Income
Median $83,800 $79,900 $80,400 $85,600 $75,700 $83,500
% $100,000 or more 33% 28% 32% 36% 26% 30%
% $25,000 to under
$50,000 14%3
% under $25,000 6% 6% 6% 10% 8% 5%
Age
Median 51 years 53 years 53 years 53 years 53 years 47 years
Years Customer
of Otay Water
District
Median 10 years 12 years 15 years 9 years 12 years 8 years
Education
High School or Less 13% 17% 16% 12% 17% 22%
At Least One Year
College, Trade,
Vocational School
29%
32%
24%
30%
32%
28%
Bachelor’s Degree 32% 34% 34% 41% 39% 33%
At Least One Year
of Graduate Work 26%
17%
24%
17%
12%
17%
Own/Rent
Home Owner 80% 91% 97% 85% 91% 88%
Renter 20% 9% 3% 15% 9% 12%
Persons Per
Household
Mean 3.52 3.12 2.83 3.67 3.28 2.88
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2015 Customer Opinion and Awareness Survey September 2015
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These respondents have a median age of 51 years and have been customers of the Otay Water District for
a median of 10 years. Among these respondents, 58 percent possess a Bachelor’s degree or more, with 13
percent having a high school education or less. Survey respondents are mostly homeowners (80 percent)
with a mean household size of 3.52. The decline in homeownership from the mid-80 percent to mid-90
percent level of past years is notable and is consistent with the lesser median number of years being a
customer (10 years versus 12-15 in the 2012 and 2011 surveys). It is also consistent with the
homeownership rate in the United States that reached a 48-year low in the second quarter of 2015.
Table 3 presents a comparison between the landline survey sample that has been the source of respondents
for these Otay Water District Customer Opinion and Awareness Surveys since 2005 and the addition in
2015 of cell phone users. Noteworthy differences between cell phone users and landline customers can be
summarized as follows:
Cell phone customers are both less White and less Hispanic/Latino, with higher Asian/Pacific
Islander (5 percent higher) and mixed or other, unspecified ethnicities (7 percent higher) present.
Annual household income among cell phone customers is $14,000 less than for landline customers.
Consistent with this is that cell phone customers are also 10 years younger.
Cell phone customers are more likely to be renters than are landline customers (36 percent versus
18 percent). The inclusion of cell phone customers in 2015 is, therefore, another contributing
factor to the lower homeownership percentage found in this 2015 General Survey. In keeping with
being renters to a greater extent and being younger, cell phone users have been customers of the
Otay Water District for 4 fewer years than have landline users.
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2015 Customer Opinion and Awareness Survey September 2015
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Table 3
Otay Water District
2015 General Survey Respondent
Characteristics
Landline and Cell Phone Customers
Characteristic
Landline
Customers
Cell Phone
Customers
Ethnicity
White 44% 38%
Hispanic/Latino 35% 29%
Asian/Pacific
Islander 13% 18%
Black/African-
American 7% 7%
Native American/
Middle East/Mixed/
Other
1% 8%
Annual
Household
Income
Median $85,200 $71,300
% $100,000 or more 34% 25%
% $25,000 to under
$50,000 14% 20%
% under $25,000 6% 6%
Age
Median 54 44
Years Customer
of Otay Water
District
Median 10 6
Education
High School or Less 13% 11%
At Least One Year
College, Trade,
Vocational School
29% 34%
Bachelor’s Degree 32% 31%
At Least One Year
of Graduate Work 26% 24%
Own/Rent
Home Owner 82% 64%
Renter 18% 36%
Persons Per
Household
Mean 3.27 3.95
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2015 Customer Opinion and Awareness Survey September 2015
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Customer Satisfaction and Confidence and Trust in Water Reliability
Chart 1 shows that customers of the Otay Water District demonstrate a high level of satisfaction with the
District as their provider of water service. In fact, 74 percent rate the Otay Water District as either excellent
(53 percent) or very good (21 percent). It is noteworthy that the percentage of respondents rating the Otay
Water District as “excellent” in the current survey is substantially higher than the percentage of respondents
who provided this rating in the 5 previous general surveys that are shown on Chart 1 and is also higher
than the two surveys done prior to those shown on the chart. That is, this opinion that the Otay Water
District is serving its customers in an excellent fashion exceeds any such rating during the past 10 years.4
Using a broader measure, the 2015 satisfaction ratings (74 percent excellent or very good) exceed those
recorded in the 2011 and 2012 surveys where 63 percent and 64 percent of respondents respectively rated
their level of satisfaction as either excellent or very good. The ratings in 2011, 2012, and 2015 are notably
higher than those expressed in the 2009 and 2010 Surveys. For example, in 2009, 56 percent of customers
rated the Otay Water District as either excellent or very good, and, in 2010, 54 percent indicated either a
very good or excellent rating. Since 2009, there has been a clear trend toward higher levels of satisfaction
with the services provided by the Otay Water District.
The high level of satisfaction accorded to the Otay Water District by its customers is further affirmed by
the mean satisfaction rating of 1.88. This mean rating is based on a scale of 1 to 5, where 1 = excellent, 2
= very good, 3 = fair, 4 = poor, and 5 = very poor.
Customers with some graduate education (mean of 2.17) are less satisfied with the Otay Water
District than are customers in all other education categories combined (mean of 1.79); this
favorability among groups with less education is particularly the case for customers with a high
school education or less (mean of 1.54).
Cell phone users (mean of 1.61) have a higher level of satisfaction than landline users (mean of
1.91).
Over four-fifths (83 percent) of respondents indicate that their satisfaction with the Otay Water District has
stayed the same over the past year (Chart 2). This finding represents a measure of stability over the past
year reaffirming the highly favorable satisfaction ratings expressed in Chart 1.
4 Rea & Parker Research is in possession of comparable data as far back as 2005.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
200820092010201120122015
26%17%24%25%29%
53%
37%
39%30%38%35%
21%
30%
32%31%
30%27%14%
6%11%13%7%8%8%
1%1%2%1%4%
Chart 1
Overall Satisfaction with Otay Water District
as Water Service Provider
(Mean = 1.88 ‐‐Scale: 1= Excellent and 5 = Very Poor*)
Very Poor
Poor
Fair
Very Good
Excellent
*6‐point scale prior to
2015‐‐codes 4 and 5
merged for prior years
Increased, 6%
Decreased,
11%
Stayed the
Same, 83%
Chart 2
Satisfaction with Otay Water District Over the Past Year
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2015 Customer Opinion and Awareness Survey September 2015
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Chart 3 shows that respondents feel that the Otay Water District has responded well to issues related to the
recent drought. For example, 7 in 10 respondents agree that the Otay Water District has been a good partner
in helping conserve water. Nearly three-fourths (74 percent) acknowledge that the District has provided its
customers with adequate and timely information about the drought. Further, nearly three-fifths (59 percent)
state that the Otay Water District is not at fault when it comes to the drought. Customers, however, have
mixed feelings regarding the District’s preparation to address the drought. About two-fifths (39 percent)
agree that the District did not anticipate the severity of the drought and was not well-prepared for it, while
another 38 percent feel that the District was prepared for the severity of the drought.
The following significant relationships are associated with customer sentiment regarding the response by
the Otay Water District to the drought.
The following subgroups agree that the Otay Water District is a good partner in helping to
conserve water:
o Cell phone users (84.0 percent) versus landline users (68.2 percent).
o Customers with one year of college education or less (78.6 percent) as opposed to
those who have a college degree or more education (63.5 percent).
0% 20% 40% 60% 80% 100%
Has been a good partner in helping us
conserve water
Has provided us with adequate and timely
information about the drought
Did not anticipate the severity of the
drought and was not well prepared for it
Is not at fault when it comes to the
drought
Yes, 70%
Yes, 74%
Yes, 39%
Yes, 59%
No, 16%
No, 20%
No, 38%
No, 33%
Unsure, 14%
Unsure, 6%
Unsure, 23%
Unsure, 8%
Chart 3
During Recent Drought, the Otay Water District.....
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
11
The following subgroups acknowledge that the Otay Water District has provided adequate
and timely information about the drought:
o Customers whose first language is English (75.5 percent) versus those whose first
language is not English (67.2 percent)
o Customers with larger household sizes – 3 or more persons per household (78.7
percent) versus customers with 1 and 2 persons per household (63.9 percent).
The following subgroups are in agreement that the Otay Water District is not at fault when
it comes to the drought:
o Customers who are 54 years of age and under (65.2 percent) versus those who are
55 years of age and older (49.3 percent).
o Cell phone users (69.0 percent) as opposed to landline users (57.5 percent).
Chart 4 shows that over four-fifths of respondents (84 percent) have a substantial amount of trust in the
ability of the Otay Water District to provide clean, safe, water for its customers (53 percent demonstrate a
great deal of trust and 31 percent a good amount of trust). Only 4 percent expressed a lack of trust. In
previous surveys from 2008 to 2012, the percentage of respondents expressing “a great deal of trust” was
much lower than in the current survey – ranging from 28 percent in 2009 and 2012 to 37 percent in 2011.
These current 2015 ratings represent an increase in the amount of trust respondents have in the ability of
the District to provide clean, safe, water, reversing a slight downward trend in this rating in the 2010, 2011,
and 2012 surveys where 78 percent, 75 percent and 65 percent respectively indicated either a great deal of
trust or a good amount of trust.
The high level of trust accorded to the Otay Water District by its customers to provide clean, safe, water is
further confirmed by the mean rating of 1.70. This mean rating is based on a scale of 1 to 5, where 1 = a
great deal of trust, 2 = a good amount of trust, 3 = some trust, 4 = not much trust, and 5 = no trust at all.
This mean rating is clearly more favorable than the mean rating in the 2012 Survey – 2.06.
Chart 5 shows that 55 percent of customers have either a great deal of trust (32 percent) or a good amount
of trust (23 percent) in the ability of the Otay Water District to obtain water at reasonable prices. One-fifth
(20 percent) lack trust in the District’s ability to provide water at reasonable prices – not much trust (13
percent) and no trust at all (7 percent). This level of trust in the ability of the District to provide water at
reasonable prices, exhibited in the current survey, is notably higher than the comparable trust ratings in
previous General Surveys (ranging from 39 percent in 2009 and 2012 to 49 percent in 2010). It is important
to note that nearly one-third (32 percent) of respondents in the current survey have “a great deal of trust”
in the District to obtain water at reasonable prices, while in previous surveys respondents expressing a great
deal of trust ranged from 10 percent in 2009 to 17 percent in 2010.
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
12
The relatively high level of trust accorded to the Otay Water District by its customers to obtain water at
reasonable prices is further affirmed by the mean rating of 2.39. This mean rating is based on a scale of 1
to 5, where 1 = a great deal of trust, 2 = a good amount of trust, 3 = some trust, 4 = not much trust, and 5 =
no trust at all. This mean rating is clearly more favorable than the mean rating in the 2012 Survey – 2.79.
The following subgroups tend to have a lower level of trust in the ability of the Otay Water District to obtain
water at reasonable prices.
Customers with some graduate education (mean of 2.90) have less trust in the Otay Water
District to obtain water at reasonable prices than do customers in all other education
categories combined (mean of 2.22); particularly the case for customers with a high school
education or less (mean of 1.95).
Customers who are between 55 and 64 years of age (mean of 2.88) have less trust in the
Otay Water District to obtain water at reasonable prices than do customers in all other age
brackets combined (mean of 2.19); particularly the case for customers who are 34 years of
age and under (mean of 1.96).
Customers who have lived in the District for 11 years or more (mean of 2.60) have less
trust that water will be obtained at reasonable prices than those who have lived in the
District for 5 years or less (mean of 2.12).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
200820092010201120122015
30%28%31%37%28%
53%
42%40%
44%41%
37%
31%
23%28%21%19%
29%
12%
4%3%2%2%3%2%1%1%2%1%1%2%
Chart 4
Trust Otay Water District to Provide Clean, Safe Water
(Mean = 1.70‐‐Scale: 1 = Great Deal of Trust and 5 = No Trust at All)
No Trust at All Not Much Trust Some Trust Good Amount of Trust Great Deal of Trust
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
13
Landline users (mean of 2.42) have less trust in the District regarding prices than do cell
phone users (mean of 2.11),
Chart 6 indicates that 21 percent of customers have called the Otay Water District for service or help in
the past year. In previous surveys, customers were asked to indicate whether they called the District for
service or help in the previous 6 months. This doubling of the call period coincides with a doubling of the
call rate from the 2012 survey period, where the percentage of customers who reported to have called the
District for service was 9 percent. It can be concluded that the call rate has not changed from the 2012
survey period. The effective call rates in 2015 and 2012 are lower than the call rates in the 2009 and 2011
surveys – both at 17 percent. This can be taken as one possible indication of the high satisfaction level
demonstrated by Otay Water District customers. Among the 21 percent who called for service in the current
2015 survey, 76 percent indicated that their service was either excellent (59 percent) or very good (17
percent) (Chart 6). This level of satisfaction is similar to the satisfaction level found in the 2012 Survey.
Further, the satisfaction levels in both the 2015 and 2012 General Surveys substantially exceed the
satisfaction levels recorded in 2009 and 2011.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20092010201120122015
10%17%12%11%
32%
29%
32%
28%28%
23%
38%
38%
41%39%
25%
17%7%13%15%13%
6%6%6%7%7%
Chart 5
Trust Otay Water District to Obtain Water at Reasonable Prices
(Mean = 2.39‐‐Scale: 1 = Great Deal of Trust and 5 = No Trust at All)
No Trust at All Not Much Trust Some Trust Good Amount of Trust Great Deal of Trust
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
14
Customers who rent their residence (30.6 percent) are more likely to call the Otay Water District
for service than are those who own their residence (18.5 percent).
Comparative Rating of Utilities and the Cost of Water
Chart 7 indicates that 37 percent of Otay Water District customers rate trash collection as the utility with
the best value for the money paid. Water (30 percent) and gas and electric (18 percent) follow trash
collection in perceived value. This represents a reversal from the 2012 ratings where water was rated
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201120122015
58%
39%
28%
43%
59%
25%
30%
25%
17%
27%18%24%
20%
13%
9%10%10%
8%2%
6%8%8%4%9%
Chart 6
Satisfaction with Calls to Customer Service
(Mean Satisfaction = 1.85 ‐‐Scale: 1 = Excellent and 5 = Very Poor)
Very Poor Poor Fair Very Good Excellent
Percentage of
customers
who called
Customer Service
in past year:
2015 = 21%
2012 = 9%
2011 = 17%
2010 = 17%
2008 = 10%
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
15
slightly above trash collection as the utility with the best value; moreover, the current 2015 ratings represent
a return to 2011 where trash collection was rated as the best value and water was rated second.
The following subgroups tend to rate trash collection as the utility with the best value:
Customers who earn $100,000 or more annually (51.6 percent) versus those who earn under
$100,000 annually (28.0 percent)
Respondents with a higher level of education – 1 year of college or more education (38.0 percent)
as opposed to those with a high school education or less (24.4 percent).
Chart 8 further analyzes the customers’ ratings regarding the utility with the best value by accounting for
second and third rankings. Using a composite ranking that takes first, second, and third rankings for each
utility into account, water becomes the utility with the best value followed by trash collection and gas and
electric. Other utilities are far behind by comparison. In 2011 and 2012, trash collection emerged as the
best value when composite, weighted rankings were used. However, in 2008 and 2009, based on composite
rankings, water was reported to be the best value with trash collection following in second place.
0% 20% 40% 60% 80% 100%
2008
2009
2011
2012
2015
35%
24%
36%
21%
37%
28%
28%
22%
23%
30%
15%
17%
19%
17%
18%
6%
8%
3%
9%
6%
5%
8%
5%
10%
3%
4%
5%
3%
8%
3%
7%
10%
12%
12%
3%
Chart 7
Best Value Among Utilities
Trash Collection Water Gas & Electric Internet Access
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
16
Nearly one-half (49 percent) of District customers report that the cost of water is too high. Another 49
percent indicate that the cost is just about right (Chart 9).
Customers whose first language is English (53.9 percent) are more likely to feel that the cost of
water is just about right more so than those whose first language is not English (32.8 percent).
Outdoor Watering and Landscape Maintenance
Chart 10 shows that over two-thirds (68 percent) of respondents have a lawn or grass area at their residence
for which someone in their household has direct responsibility. Among these customers, nearly two-fifths
(37 percent) have already replaced this grass area with stone, water-wise plants or artificial turf. Another
12 percent plan to make some type of lawn replacement. Nearly one-fifth (19 percent) of those who are
responsible for a grass area do not plan to replace their grass with a water-conserving alternative.
0% 20% 40% 60% 80% 100%
2008
2009
2011
2012
2015
27%
23%
23%
23%
28%
25%
18%
31%
25%
26%
17%
19%
19%
18%
21%
8%
10%
6%
8%
8%
6%
7%
4%
7%
7%
7%
10%
6%
9%
5%
10%
13%
11%
10%
5%
Chart 8
Best Value Among Utilities‐‐Weighted
(Utilities Ranked 1‐2‐3 and weighted‐‐3 points for first choice, 2 points for second
and 1 point for third)
Water Trash Collection Gas & Electric Internet Access
Sewer Cable/Satellite TV Telephone
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
17
Among those customers who have replaced their grass area (37 percent) and among those who plan to do
so (12 percent), one-fourth (25 percent = 12 percent of total population) of them are making use of water-
wise, drought resistant plants. Another 23 percent (11 percent of total) view rocks and stones as an
appropriate alternative ground cover and one-fifth (20 percent= 10 percent of total) are replacing their lawns
with artificial turf (Chart 11). Over two fifths (44 percent) of those who do not plan to replace their grass
area cite cost as the main barrier. Another 28 percent indicated that they rent their residence and, while
they are responsible to maintain their lawn area, they are not responsible for major infrastructural changes
in the landscape of their residence (Chart 12).
The following subgroup plans to replace some or all of their lawn with low-water use landscaping within
the next year.
Customers with a higher level of education – College degree or more (45.6 percent) versus one year
of college or less (26.3 percent).
The following subgroups have taken action or plan to take action to replace their grass area within the next
year:
Let grass die or replace grass with ground cover
Responsible for Grass
Area and Have
Replaced with Stone,
Water‐Wise Plants or
Artificial Turf, 37%
Responsible for Grass
Area and Have Not
Replaced with Stone,
Water‐Wise Plants or
Artificial Turf‐‐But Plan
to Do So, 12%
Responsible for Grass
Area and Have Not
Replaced with Stone,
Water‐Wise Plants or
Artificial Turf‐‐And Do
Not Plan to Do So or
Are Unsure, 19%
Not Responsible for
Grass Area, 32%
Chart 10
Replaced All or Some of Grass Area with Low‐
Water Use Landscaping
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
18
o Customer households earning less than $100,000 annually (19.3 percent) versus household
earning over $100,000 (2.0 percent).
o Females (20.3 percent) versus males (6.8 percent).
Replace lawn with water-wise plants
o Males (28.4 percent) versus females (14.5 percent)
o Customer households earning less than $50,000 annually (36.0 percent) as opposed to those
earning $50,000 or more (15.0 percent).
Replace lawn with rocks and stones
o Females (24.6 percent) versus Males (18.9 percent).
Water Conservation
Chart 13 indicates that over 9 in 10 customers (93 percent) have familiarity with mandatory water-use
restrictions that are in effect across the Otay Water District’s service area. In fact, nearly one-half (48
percent) report that they are very familiar with such restrictions. Among the 93 percent of customers who
express familiarity with mandatory water restrictions, 92 percent have taken specific actions to reduce water
use in response to these restrictions. This represents 86 percent of all customers.
Water‐wise,
drought resistent
plants, 25%
Rocks and
Stones, 23%Artificial turf,
20%
Ground cover
and
rocks/stones,
14%
Let grass die and
use ground cover
(e.g. wood
chips), 13%
Cement/
Concrete, 5%
Chart 11
Action Taken or to be Taken to Replace Grass Area
(Among 37% Who Have Replaced and 12% Who Plan to)
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
19
Cost, 44%
Rent, 28%
Aesthetics,
10%I am too busy, 8%
Grass Area Small,
4%
Moving/
Selling House,
3%
Other (unspecified),
3%
Other, 18%
Chart 12
Main Barrier to Replacing Grass Area with Low‐Water Landscaping
(Among 19% with Grass Area Who Have Not Replaced or Do Not Plan to Replace It)
Very Familiar,
48%
Somewhat
Familiar, 35%
A Little Familiar,
10%Not Familiar, 7%
Chart 13
Familiarity with Mandatory Water‐Use Restrictions
(96%have taken action)
(90% have taken action)
(77% have taken action)
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
20
Customers who are over the age of 55 tend to be very familiar (61.9 percent) with mandatory water
restrictions more so than are those 54 years of age and under (36.7 percent).
The following two subgroups are either very familiar or somewhat familiar with mandatory water
restrictions:
o Females (88.0 percent) versus males (78.1 percent).
o Customers whose first language is English (87.5 percent) as opposed to those whose first
language is not English (67.2 percent).
Chart 14 shows that one-half (50 percent) of the actions taken by customers to comply with these
restrictions involves reducing water use outdoors, including less time watering outdoors (23 percent), fewer
days per week watering outdoors (11 percent), and letting lawn/plants die (8 percent). Nearly one-fifth (18
percent) of those who have taken action report that they take shorter showers. Similar actions were taken
by customers in previous survey periods to reduce water use. In 2012, nearly one-fifth (17 percent) spent
less time watering outdoors and 11 percent took shorter showers. Similar to the current survey, customers
in the 2011 survey also indicated that the dominant methods they used to conserve water were through
spending less time watering outdoors (19 percent) and taking shorter showers (14 percent).
Chart 15 shows that just over two fifths (44 percent) of customers are aware that the Otay Water District
offers conservation rebates and incentives.
The following two subgroups tend to be particularly aware of conservation rebates and incentives:
Customers whose first language is English (48.5 percent) versus those whose first language is not
English (27.1 percent).
Whites (53.1 percent) versus African-Americans (28.6 percent) and Asians (23.7 percent).
Cuyamaca College Water Conservation Garden
A Water Conservation Garden is located at Cuyamaca College in El Cajon. The Garden demonstrates
various drought resistant and water efficient plants in an attractive and educational environment.
Respondents were asked if they had ever seen or heard anything about the Garden and nearly one-half of
the respondents (49 percent) responded in the affirmative; 24 percent of all respondents have, in fact, visited
the Cuyamaca College Water Conservation Garden. The visitation pattern in the current survey is consistent
with the patterns found in the 2008 survey (22 percent), the 2009 survey (28 percent), and the 2012 survey
(27 percent). In 2008, visitation was notably low at 16 percent (Chart 16).
Otay Water District Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015 21
0%
5%
10%
15%
20%
25%
Less
Time
Outdoor
Water
Shorter
Showers
Fewer
Days per
Week
Outdoor
Water
Let
Lawn/
Plants
Die‐‐
Remove
Wash
Only
Full
Loads of
Dishes
and
Clothes
Collect
and
Reuse
Water
Use Car
Wash
Do Not
Allow
Water
to Run
Replace
d Turf
with
Low
Water
Plants
Replace
Grass
with
Artificial
Turf
Irrigate
Early in
Morning
or Late
at Night
High‐
Effic'ncy
Clothes
Washer/
Low‐
flow
Fixtures
Other*
2015 23%18%11%8%7%7%6%4%3%3%2%2%6%
2012 17% 11% 8% 7% 8% 3% 2% 9% 2% 1% 5% 1% 20%
2011 19% 14% 7% 5% 11% 3% 10% 2% 6% 4% 19%
2009 24% 21% 10% 7% 10% 2% 8% 2% 2% 4% 7%
Chart 14
Specific Actions Taken to Reduce Water Use in Response to
Mandatory Restrictions
(Among 92% of 93% with Some Familiarity with Restrictions=86% of All Customers)
*Other includes: Repair Indoor
and Outdoor Leaks, Upgrade
Irrigation System, Use Broom
instead of Hose on Driveway,
Check Soil Moisture Before
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
22
Yes , 44%No, 56%
Chart 15
Aware that Otay Water District Offers Conservation
Rebates and Incentives
0% 20% 40% 60% 80% 100%
2008
2009
2011
2012
2015
22%
28%
16%
27%
24%
22%
20%
33%
21%
25%
56%
52%
51%
52%
51%
Chart 16
Water Conservation Garden at Cuyamaca College
Heard of and Visited Conservation Garden Heard of but Not Visited Never Heard of or Seen Anything
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
23
The following subgroups are more likely to have heard or seen something about the Cuyamaca College
Water Conservation Garden:
Females (57.2 percent) versus males (41.6 percent).
Whites (60.2 percent) versus Latinos (40.6 percent), Asians (35.1 percent), and African-Americans
(28.6 percent).
Longer-term customers of the Otay Water District (6 or more years – 48.7 percent) versus shorter
term customers (5 or fewer years – 31.2 percent).
Homeowners (54.9 percent) versus renters (25.4 percent).
Smaller household sizes (1 and 2 persons per household – 64.8 percent) versus larger households
of 3 persons or more (41.1 percent).
Customers who are 45 years of age and older (59.3 percent) versus those who are 44 years of age
and younger (32.2 percent).
Landline users (50.2 percent) versus cell phone users (37.8 percent).
The following subgroups are more likely to have visited the Cuyamaca College Water Conservation
Garden:
Homeowners (53.0 percent) versus renters (25.0 percent).
Customers with a higher level of education – one year of college or more (52.6 percent) as opposed
to high school or less (20.0 percent).
Chart 17 shows that over one-half (52 percent) of those who visited the Water Conservation Garden made
changes to their landscaping that resulted from their visit(s). This represents a decline among visitors who
made changes to their watering and landscaping practices from 2012 where 60 percent made such changes.
The results of the current survey are more consistent with customers in 2011 (48 percent) and 2008 (49
percent) than they are with customers in 2009 (61 percent) in terms of those who made changes to their
landscaping as a result of visiting the Garden.
After visiting the Garden, males (66.7 percent) are more likely to make changes to their landscaping
than are females (38.5 percent).
As a result of visiting the Water Conservation Garden, the most significant change customers made was an
effort to use more water-wise/drought tolerant plants (45 percent). This change is followed by adjusting
sprinklers and reducing outdoor water use (22 percent) and replacing lawn with low-water plants (14
percent). These adjustments are fairly consistent with the changes made by customers in 2011 and 2009
after they visited the Cuyamaca Water Conservation Garden (Chart 18).
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
24
0%
10%
20%
30%
40%
50%
60%
70%
20082009201120122015
51%
39%
52%
40%
48%49%
61%
48%
60%
52%
Chart 17
Made Changes to Landscaping as a Result of Visiting
Water Conservation Garden
(Among 24% Who Have Visited)
No Yes
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
25
Alternative Water Supply: Desalination
Chart 19 shows that 59 percent of District customers favor an international agreement to purchase
desalinated water from a proposed Rosarito Beach desalination facility in Mexico. This percentage
represents an increase of 2 percent from the results of the 2012 survey and 13 percent from the results of
the 2011 survey where 46 percent favored such an agreement. The favorability rating in the current survey
is comparable to the one in 2010 where 54 percent of customers indicated that they favored an international
agreement with Mexico. It is important to recall that the 2010 survey was conducted specifically about
desalination and a great deal of information was included in that survey in contrast to the few questions and
limited information in the 2011, 2012 and 2015 general customer surveys. The evidence shows that
customer support is building for an international agreement with Mexico to purchase desalinated ocean
water from the proposed Rosarito Beach facility.
Males (67.3 percent) tend to favor an international agreement with Mexico more so than do females
(49.0 percent).
0% 10% 20% 30% 40% 50% 60%
Changed Plants to
Waterwise/Drought Tolerant
Adjusted Sprinkers/Reduced
Outdoor Water Use
Replaced Lawn with Low‐Water
Plants
Let Landscape/Lawn Die‐
Eliminate
Collect and Reuse
Upgraded Irrigation System
45%
22%
14%
10%
7%
2%
39%
13%
5%
17%
13%
9%
54%
17%
9%
6%
4%
Chart 18
Most Significant Change in Landscape as a Result of Visiting
Water Conservation Garden
2015 2011 2009
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
26
Among the 59 percent of District customers who favor the Agreement, over one-fourth (26 percent) feels
that 75 to 100 percent of the District’s water should derive from the Rosarito Beach desalination plant.
Another 25 percent thinks that 50 to 74 percent of the District’s water should come from this plant. The
median percentage of the District’s water that customers feel should derive from the proposed Desalination
Plant is 50 percent (i.e. half of the residents who favor the plant prefer a higher percentage and half prefer
a lower percentage) (Chart 20).
0%
10%
20%
30%
40%
50%
60%
2015 2012 2011 2010
59%57%
46%
54%
28%28%
34% 34%
13%15%
20%
12%
Chart 19
In Favor of Pursuing Agreement for Rosarito Beach Desalinated Water
Favor Not Favor Unsure
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
27
Among the 28 percent who oppose the international agreement with Mexico or are unsure (13 percent)
about it, two fifths (40 percent) say they need more information about the Project and just over one-quarter
(27 percent) indicates that they do not trust the quality of water from Mexico and/or they do not trust the
Mexican government. Another 13 percent feels that the plant should be located in the United States in order
to create jobs domestically. In previous surveys, the opinions for opposing the desalination agreement with
Mexico differ from the current survey in three important ways. First, a much smaller percentage of
respondents in 2012 (7 percent), 2011 (4 percent), and 2009 (3 percent) needed more information about the
Desalination Plant than in 2015. Trust in the Mexican government and in water quality in Mexico has
improved substantially since 2009 when 68 percent expressed a lack of trust in Mexico. Since 2011, a
smaller percentage of respondents are advocating that the Desalination Plant should be located in the U.S.
to create jobs in the U.S. (13 percent) – down from 30 percent in 2011. A positive trend emerges as
respondents have become interested enough in the Desalination Project to require more information about
it, they have less distrust in the Mexican government and the quality of water in Mexico, and there is less
negative sentiment about locating the plant in Mexico as opposed to the United States and the foregone
opportunity to create jobs in the United States (Chart 21). This likely reflects either a greater degree of
0% 5% 10% 15% 20% 25% 30%
100%
75%‐99%
50%‐74%
25%‐49%
Some but less than 25%
None
14%
12%
25%
27%
13%
9%
Chart 20
Percentage of All Otay Water District Water that is Preferred from
Rosarito Beach Desalination Plant
(Among 59% Who Favor the Agreement‐‐‐Median Percentage = 50%)
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
28
faith in the U.S. economy than in 2011 or an increased recognition that the time and cost to create such a
plant in the United States may be problematic.
Customers who are 45 years of age and older (17.9 percent) tend to distrust the Mexican
government and the water quality in Mexico more so than those 44 years of age and under (7.7
percent).
Bill Payment
Chart 22 shows that nearly two-thirds (66 percent) of respondents receive their monthly bill by mail in
paper format. Among the 66 percent who receive their bill by mail, over two-fifths (44 percent) object to
paperless billing because they want a paper record for bookkeeping and taxes and 15 percent indicate that
they do not use computers very often. The percentage of customers who are concerned that the paperless
option does not afford a paper record increased substantially since the 2011 survey (27 percent in 2011 to
0%
10%
20%
30%
40%
50%
60%
70%
Need
More
Infor‐
mation
Do Not
Trust
Mexican
Govt/
Mexico
Water
Quality
Put
Plant in
U.S./
Create
U.S.
Jobs
Cost Do Not
Desire
Interna‐
tional
Involv‐
ment
Danger
to Sea
Life
Lack of
Control
Do Not
Want to
Drink
Sea‐
water
Do Not
Like
Idea/
Other
2015 40% 27% 13% 12% 3% 3% 1% 1%
2012 7% 55% 13% 8% 4% 5% 3% 5%
2011 4% 41% 30% 10% 7% 5% 3%
2009 3% 68% 18%
Chart 21
Why Not Favor Desalination Agreement?
(Among 28% Not in Favor and 13% Unsure)
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
29
44 percent in 2015). Computer use seems to be increasing among these respondnets to a limited extent.
Those who indicated that they do not use computer very often fell from 23 percent in 2011 to 16 percent in
2012 and to 15 percent in 2015. Finally, in the current 2015 survey, respondnents also offered the following
reasons for their objection to paperless bill paying: They will forget to check the computer for the bill and
the bill simply comes by mail and I pay it– each 9 percent (Chart 23).
The following subgroups are more likely to receive a paper copy of their bill:
African-Americans (76.2 percent), Whites (68.7 percent), and Latinos (68.6 percent) as opposed to
Asians (45.0 percent).
Longer-term customers of the Otay Water District – 11 or more years (78.5 percent) versus 10 years
and under (54.8 percent).
Older residents of the Otay Water District – 65 years of age and older (85 percent) versus 34 years
of age and under (52.3 percent).
Yes , 66%
No, 34%
Chart 22
Receive Monthly Bill by Mail in Paper Format?
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
30
Residents with less education – high school education or less (87.5 percent) as opposed to 1 year
of college or more (61.8 percent).
Chart 24 indicates that nearly one- half (48 percent) of respondents examine their bill for water usage or
other factors every time. Nearly one-fifth (17 percent) examine their bill most times and 24 percent do so
sometimes.
44%
15%
9%
9%
4%
4%
2%
2%
11%
46%
16%
6%
8%
15%
9%
27%
23%
7%
18%
14%
11%
0% 10% 20% 30% 40% 50%
Want Paper Record
Do Not Use Computers That Often
Will Forget to Check Computer for Bill
My Bills Come That Way and I Pay Them
Comfortable Paying by Check
Lack of Security/Do Not Keep Personal
Records on Computer
Do Not Want People to Lose Jobs
Difficulty Accessing Account/My Bank Does
Not Allow
Other (unspecified or irrelevant)
Chart 23
Objection to Paperless Bill Paying
2015
2012
2011
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
31
The following subgroups tend to examine their bill frequently.
Customers who examine their bill everytime:
o Whites (56.9 percent) versus African-Americans (45.0 percent), Latinos (41.0 percent),
and Asians (35 percent).
o Homeowners (52.6 percent) as opposed to renters (31.7 percent).
Customers who examine their bill everytime or most months:
o Longer-term residents of the Otay Water District – 11 years or more (71.8 percent) versus
10 years and under (59.9 percent).
o Customers who are 55 years of age and over (78.2 percent) as opposed to those 54 years
of age and under (56.3 percent).
Chart 25 shows that over two fifths (41 percent) of customers pay their bill online, 26 percent pay their
bill through automatic bank deductions, one-fourth (25 percent) pay by sending a check in the mail and
others pay by credit card over the telephone (6 percent) or in person at District offices (2 percent). It is
noteworthy that 46 percent of customers would prefer to pay online (5 percent more than actually do so)
and 20 percent would prefer to use postal mail (5 percent less than actually do so). Respondents in 2015
Every time, 48%
Most times, 17%
Sometimes, 24%
Never, 11%
Chart 24
Examine Bill for Water Usage or Other Factors?
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
32
demonstrate a decrease in the use of paying their bill by check through postal mail (36 percent in 2012 to
25 percent in 2015). The use of automatic bank deductions to pay bills increased from 18 percent in 2012
to 26 percent in 2015). These trends point to the conclusion that customers of the Otay Water District are
either using or considering the use of electronic methods of bill paying and wish to rely less on postal mail.
The following subgroups are more likely to pay their water bill online (Internet);
Larger households of 3 persons or more (45.4 percent) versus smaller households of 1 or 2 persons
(34.0 percent).
Cell phone users (47.5 percent) versus landline users (40.6 percent).
Renters (49.2 percent) versus owners (39.3 percent).
Customers with some graduate education (54.4 percent) as opposed to those with a college degree
or less education (37.4 percent).
Latinos (56.3 percent) versus Asians (35.0 percent, Whites (34.6 percent), and African-Americans
(23.8 percent).
Customers who earn $50,000 or more annually (48.0 percent) as opposed to those who earn under
$50,000 (27.6 percent).
Customers who have less residential tenure in the District – 20 years or fewer (45.5 percent) versus
21 or more years (26.9 percent).
The following subgroups tend to pay their water bill by sending a check in the mail.
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Online
Automatic Bank Deduction
Check by Mail
Credit Card by Telephone
In‐Person at Otay Water
District Office
In‐Person at Payment
Center
41%
26%
25%
6%
1%
1%
41%
18%
36%
2%
2%
1%
46%
26%
20%
6%
1%
1%
48%
18%
29%
3%
2%
1%
Chart 25
Actual and Preferred Methods for Paying Bill
Actual Method 2015 Actual Method 2012 Preferred Method 2015 Preferred Method 2012
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
33
Homeowners (27.1 percent) versus renters (14.3 percent)
Landline users (25.5 percent) as opposed to cell phone users (14.1 percent).
Smaller households of 3 persons or fewer (33.3 percent) versus larger households of 4 or more
persons (14.8 percent).
Longer term customers of the District – 21 or more years (49.3 percent) versus customers who have
lived in the District for 20 years and under (17.3 percent).
The following subgroups indicate that they would prefer to pay their bill on-line no matter how they
currently pay their bill.
Renters (53.2 percent) versus homeowners (43.7 percent).
Customers with some graduate education (57.5 percent) as opposed to those with a college degree
or less – 42.6 percent).
Latinos (61.2 percent) versus African-Americans (23.8 percent).
Cell phone users (54.5 percent) versus landline users (44.3 percent).
Shorter-term residential tenure in the District – 20 years or less (49.8 percent) versus 21 or more
years (28.8 percent).
Customers who are 54 years of age and under (59.9 percent) versus those who are 55 years of age
and older (26.2 percent.
The following subgroups would prefer to pay their water bill by sending a check in the mail no matter how
they currently pay their bill.
Homeowners (22.3 percent) versus renters (9.7 percent).
Landline users (20.8 percent) versus cell phone users (10.1 percent).
Residents whose annual household income is $50,000 and over (51.8 percent) as opposed to those
who earn less than $50,000 (32.1 percent).
Longer-term residential tenure – 21 years or more (43.9 percent) versus 20 years or less (13.2
percent).
Chart 26 shows that about 7 in 10 respondents (71 percent) of the 59 percent who currently do not pay
their bill on-line would still not do so even if a chat function were available to interact directly with a
customer service representative.
The following subgroups are more likely to use a chat function to interact directly with a customer service
representative.
Asians (46.2 percent) versus Whites (8.0 percent).
Renters (35.5 percent) as opposed to homeowners (19.0 percent).
Cell phone users (39.6 percent) versus landline users (20.3 percent).
Residents of the District for 20 years or less (28.6 percent) as opposed to those who are residents
of 21 years or more (3.9 percent).
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2015 Customer Opinion and Awareness Survey September 2015
34
Chart 27 shows that, among customers who do not pay online and indicate a reason for not doing so, nearly
one-half (45 percent) indicate that there is nothing the District can do to make paying online more appealing
and another 28 percent do not really know what the District can do in this regard. Some customers indicate
that discounts on their bill would make paying on-line more appealing and multiple payment options to
make transactions easier would facilitate online bill paying – 9 percent each. In 2012, customers who did
not wish to pay online were even firmer in their resolve that the District can do nothing to motivate them
to do so (55 percent). Further, in 2012, the uncertainty about what the District could do to make online bill
paying more appealing stood at 20 percent. In both 2015 and 2012, these two dominant responses indicate
that these customers cannot think of anything that would move them toward online bill payment— both
years show that three-fourths of those disinclined to pay online are not going to be easily swayed.
Yes, 22%
No, 71%
Unsure, 7%
Chart 26
Use Website to Pay If Chat Function Were Available to Interact Directly
with Customer Service Representative?
(Among 59% Who Do Not Presently Pay Online)
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
35
Information about Water Issues
Chart 28 shows that more than one-half (55 percent) of customers obtain information about water issues
from television (38 percent) and the Internet (17 percent--other than Water District websites). One fifth
(20 percent) receive information from various sources associated with the Otay Water District (Otay Water
District Website and Otay Water District Newsletters – each 7 percent – and informational stuffers in the
water bill – 6 percent).
The following subgroups are more likely to obtain information about water issues from the Internet:
Latinos (22.5 percent) versus African-Americans (5.0 percent)
Shorter residential tenure – 10 years or less as a resident of the District (20.7 percent) as opposed
to 11 or more years (11.2 percent).
Cell phone users (36.4 percent) versus landline users (14.6 percent).
The following subgroups are more likely to obtain information about water issues from television.
Customers with an annual household income of under $100,000 (43.2 percent) versus those with
household incomes of $100,000 or more (23.3 percent).
0% 10% 20% 30% 40% 50% 60%
Nothing/Do Not Like Online Financial…
Do Not Know
Discounts
Make Transactions Easier/Credit…
Make Transaction More Secure
No Service Charges
Phone App
Other (unspecifed or irrelevant)
45%
28%
9%
9%
4%
2%
2%
1%
55%
20%
10%
5%
2%
2%
6%
37%
39%
15%
9%
Chart 27
What Can Otay Water District Do to Make
Paperless Bill Paying a More Appealing Option?
(Among 59% Who Do Not Presently Pay Online)
20
15
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
36
African-Americans (50 percent) and Asians (45.0 percent) versus Whites (36.6 percent) and
Latinos (33.3 percent).
Landline users (38.5 percent) as opposed to cell phone user (29.3 percent).
Customers who are 18-24 years of age (75.0 percent) versus customers who are 25 years of age and
over (37.8 percent).
Chart 29 shows that over three-fifths of customers (62 percent) have visited the Otay Water District
website. This represents a substantial increase over the 2012 survey results where 52 percent indicated that
they had visited the website. Further, there has been a steady increase of customers who have visited the
Otay Water District website since 2008. Specifically, in 2008, 27 percent visited the website, 32 percent
visited the website in 2009, and 39 percent visited the website in 2011.
The following subgroups are more likely to have visited the Otay Water District website:
Customers of 10 years or less – 75.4 percent versus longer term customers of 11 years or more –
46.8 percent.
Television, 38%
Internet‐‐Other
than Water District
Websites, 17%
Newspaper‐‐Union
Tribune, 8%
Otay Water
District Website,
7%
Otay Water
District
Newsletters, 7%
Word‐of‐Mouth/
Family/Friends/Co
‐workers, 7%
Informational Stuffers
in Water Bill, 6%
Radio, 6%
Newspaper‐‐Other, 3%
San Diego County
Water Authority
Website, 1%
Other, 16%
Chart 28
Primary Source of Information About Water Issues
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
37
Customers who rent their residence (71.0 percent) as opposed to those who are homeowners (60.1
percent).
Customers with annual incomes $50,000 and over (67.9 percent) versus those with annual incomes
of under $50,000 (35.1 percent).
Respondents who are 54 years of age and under (74.7 percent) as opposed to those 55 years of age
and older (44.3 percent).
Chart 30 indicates that website visitors give the Otay Water District website very good ratings – 70 percent
excellent or very good, 24 percent fair, and 6 percent poor. These ratings represent a decline from the 2012
survey ratings where 78 percent rated the website as either excellent or very good. The current 2015 ratings
are well above the 2009 ratings (61 percent rating the Website as excellent or very good) but well below
the 2008 ratings (86 percent rating the Website as excellent or very good). The rating of the website,
therefore, varies considerably from year-to-year, which could parallel updates and changes to the website.
It might be interesting to examine this potential correlation.
Customers who have visited the website rate the website with an overall mean of 1.99. This mean is based
upon a scale of 1 to 4, where 1 = excellent, 2 = very good, 3 = fair, and 4 = poor. This reaffirms the
0% 20% 40% 60% 80% 100%
2008
2009
2011
2012
2015
27%
32%
39%
52%
62%
57%
57%
49%
40%
31%
16%
11%
12%
8%
7%
Chart 29
Visited Otay Water District Website?
Have Visited Website Have Internet Access But Have Not Visited Website
Do Not Have Access to the Internet
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
38
relatively high rating indicated and explained above. The current mean rating is less positive, however,
than the 1.83 rating recorded in 2012.
Higher income customers rate the Website less favorably -- $150,000 or more (mean of 2.53) versus
all other income categories (mean of 1.85).
Among the 62 percent of customers who visited the Otay Water District Website, nearly one half (49
percent) reported that they do so in order to pay their bill online (Chart 31). Another one fifth (21 percent)
access the website to obtain billing information. Nearly 1 in 10 (9 percent) of website visitors are seeking
drought information and 7 percent are in search of conservation rebate information.
Chart 32 shows that 26 percent of customers always read the newsletter or bill inserts that come in the mail
with the monthly water bill, 23 percent read these materials most months, and another 33 percent read them
sometimes, leaving 18 percent who never read the newsletter or bill inserts. These results show a consistent
increase in readership patterns since 2008. For example, in the current 2015 survey, 49 percent of
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009201120122015
24%
8%
18%
31%40%
62%
53%
56%
47%30%
14%
32%
24%19%
24%
7%2%3%6%
Chart 30
Rating of User Friendliness of Website
(respondents = 62% who have visited website)
(Mean = 1.99‐‐Scale: 1=Excellent and 5=Poor*)
Poor Fair Very Good Excellent
*2015: "Poor" category
includes 5% who rated
the website at 4 and
1% who rated it at 5.
Prior years ratings
were 1‐4 only.
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
39
respondents read these materials every month or most months. In 2012 and 2011, 52 percent and 49 percent
of customers respectively read the newsletter and bill inserts that frequently. It is noteworthy that the last
four survey periods (2009, 2011, 2012, and 2015) show a higher readership pattern than does the 2008
survey (31 percent every month or most months). Also, the percentage of customers who never read the
newsletter or bill inserts decreased by 9 percent over the 2008 survey (27 percent in 2008 to 18 percent in
2015).
Customers with longer residential tenure in the District tend to read the Newsletter and bill inserts
every time or most times more so than do customers with a shorter residential tenure (11 years or
more – 57.7 percent; 10 years and under -- 41.3 percent)
Chart 33 indicates that English is not the first language of 20 percent of the survey respondents. Among
these 20 percent, 18 percent can read newsletters and reports in English and nearly 2 percent cannot read
newsletters and reports in English but they have someone available who can translate this information for
them. Less than 0.5 percent cannot read English and do not have someone available to help them translate
newsletters and reports for them.
Pay online
49%
Billing
information
21%
Drought
information
9%Conservation
rebate
information
7%General Information/
Water Quality
5%
Start Service
4%
Register a Complaint
2%
Rate information 1%
Outage information 1%
Water savings calculator
1%
Other
14%
Chart 31
Primary Reason for Visiting Website
(among 62% who had visited website)
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
40
Conclusions
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
20082009201120122015
27%
21%
17%
14%
18%
42%
31%
34%34%33%
15%16%
25%
21%
23%
16%
32%
24%
31%
26%
Chart 32
Read Newsletters and Bill Inserts
Never Sometimes Most Times Every Time
English is first
language, 80%
English is not first
language but can
read newsletters and
reports in English,
18%
English is not first
language, cannot
read newsletters and
reports in English,
but have someone
who can, 2%
Chart 33
Ability to Read and Understand Newsletters, Water Quality Reports, Rate
Increase Notices in English
Less than 0.5 percent cannot read in English
and do not have someone to help
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
41
The results of the 2015 General Survey not only demonstrate that there are strong indications of continued
customer support for the work of the Otay Water District, but also that support has reached a higher level
than has been recorded during the past decade. That is, the overall satisfaction with the District as a water
service provider is notably higher than every survey period since this series of surveys began in 2005. The
level of trust and confidence in the ability of the District to provide clean, safe water and to provide it at
reasonable prices is also higher than in previous surveys.
Water and trash collection have been the top two utilities in the District’s surveys since the inception of
these surveys. That is, these two utilities represent to customers the best value that they perceive for the
money paid among the most commonly used utilities.
The results of this survey should be viewed as a very powerful ratification by the public of the importance
and quality of the work done by the District and as an expression of the high value to the customers of the
District of the work in which the Otay Water District is engaged.
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
42
APPENDIX
Questionnaire
Frequencies—Weighted
Open-Ended Responses, including Other, Please Specify
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
43
Otay Water District
General Survey 2015
INT. Hello, my name is _______________. I'm calling on behalf of the Otay Water District.
We're conducting a study about some issues having to do with your household water
supply and we're interested in your opinions. [IF NEEDED:] Are you at least 18 years
of age or older? [IF 18+ HOUSEHOLDER NOT AVAILABLE NOW, ASK FOR FIRST
NAME AND MAKE CB ARRANGEMENTS]
VER. [VERSION OF INTERVIEW:] 1 - VERSION A 2 - VERSION B*
* = RESPONSE OPTIONS REVERSED ON VERSION B FOR ALL QUESTIONS INDICATED
IC. Let me assure you that no names or addresses are associated with the telephone
numbers, and all of your responses are completely anonymous. The questions take
about 15 minutes. To ensure that my work is done honestly and correctly, this call may
be monitored. Do you have a few minutes right now?
[IF ASKED ABOUT MONITORING:] My supervisor randomly listens to interviews to
make sure we're reading the questions exactly as written and not influencing answers in
any way.
TOP. [ONLY IF ASKED FOR MORE INFORMATION ABOUT TOPIC OR WHO'S
SPONSORING IT?:] This project is sponsored by the Otay Water District, and it's about
some issues related to your household water supply. [IF SPONSOR INFORMATION
GIVEN TO RESPONDENT, "TOPIC"=1]
CUST. How long have you been a customer of the Otay Water District? [IF LESS THAN ONE
YEAR, THANK AND CODE NQR-RES]
_________ YEARS
0 -----------> "NQR-RES"
99 - DK/REF, BUT AT LEAST ONE YEAR
SEX. [RECORD GENDER OF RESPONDENT:]
1 - MALE
2 - FEMALE
-------------------------- QUALIFIED RESPONDENT: QUOTAS CHECKED; DATA SAVED -------------------------
LP. [IF INDICATED BY ACCENT:] Would you prefer that we speak in...
1 - English or
2 - Spanish?
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2015 Customer Opinion and Awareness Survey September 2015
44
SATISFACTION---OPERATIONAL EXCELLENCE
Q1: On a scale of 1 to 5, where 1 is Excellent and 5 is Poor, how would you rate your overall
satisfaction with the Otay Water District as your water service provider?
1---Excellent
2—
3 --
4 --
5—Poor
9 - DK/REF [DO NOT READ]
Q2. During the past year, has your satisfaction with the Otay Water District…
1—Increased?
2—Decreased?
3—Stayed the same?
9 - DK/REF [DO NOT READ]
Q3a-d. During this recent drought, would you say that the Otay Water District…
Yes (1) No (2) DK/REF(9) Do Not Read
a---has been a good partner in helping us to conserve water?
b—has provided us with adequate and timely information about the drought?
c—did not anticipate the severity of the drought and was not well prepared for it?
d—is not at fault when it comes to the drought?
Q4: Have you called the Otay Water District for service or other help during the last year?
1 - YES
2 - NO – [GO TO Q5]
9 - DK/REF [DO NOT READ]– [GO TO Q5]
Q4a—[IF Q4 = 1] On a scale of 1 to 5, where 1 is Excellent and 5 is Poor, how would
you rate your overall level of satisfaction with the service you received when you called
for service or help? REVERSE
1---Excellent
2
3
4
5—Poor
9 - DK/REF [DO NOT READ]
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2015 Customer Opinion and Awareness Survey September 2015
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Q5. With 1 being a great deal of trust and 5 being no trust at all, how much trust do you have in
the ability of the Otay Water District to provide clean, safe water to the district? REVERSE
1 – a great deal of trust,
2
3
4
5 – no trust at all?
9 - DK/REF [DO NOT READ]
Q6. Again with 1 being a great deal of trust and 5 being no trust at all, how much trust do you
have in the Otay Water District to obtain this water for you at a reasonable price? REVERSE
1 – a great deal of trust,
2
3
4
5 – no trust at all
9 - DK/REF [DO NOT READ]
Q7. Have you ever visited the Otay Water District website?
1 - YES
2 – HAVE ACCESS TO INTERNET, BUT HAVE NOT VISITED WEBSITE ---------
--------------> GO TO Q8
3—DO NOT HAVE ACCESS TO THE INTERNET----------GO TO Q8
9 - DK/REF [DO NOT READ)-----------------> GO TO Q8
Q7a. [IF Q7 = 1] On a scale of 1 to 5, with 1 being excellent and 5 being poor, how
would you rate the user friendliness of the website? Would you say...
1 - excellent
2
3
4
5 - poor
9 - DK/REF [DO NOT READ]
Q7b. What was the reason for your last visit to the Otay Water District website?
____________________________________________
RECORD ONE RESPONSE
DO NOT READ-------------CODE USING FOLLOWING SCHEMA]
1. Drought Information
2. Water Savings Calculator
3. Billing Information
4. Pay Online
5. Rate Information
6. How to Read the Water Meter
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7. How to Check for Leaks
8. Outages
9. Conservation Rebate Information
10. Board of Directors Meetings and Information
11. Employee Directory
20. Other, specify_____________________
25. DK/REF
WATER RATES
Q8a-c. I am going to mention six utilities that serve the needs of residents and businesses in the
region. Considering only those utilities that you pay for, which would you say is the best
value for the amount of money that you pay. Which ones are second and third?
[ROTATE LIST]
MOST (8a) SECOND (8b) THIRD (8c)
a. Trash collection 1 1 1
b. Water 2 2 2
c. Sewer 3 3 3
d. Telephone 4 4 4
e. Cable or Satellite TV 5 5 5
f. Internet access 6 6 6
g. Gas & Electric 7 7 7
Q9. Do you feel that water costs too much, too little, or priced about right?
1. water costs too much
2. the cost of water is just about right
3. water costs too little
BILLING
We would like to ask a few questions about the District’s invoices
Q10. Do you get a paper copy of your bill?
1. YES
2. NO –GO TO Q11
3. DK/REF—DO NOT READ—GO TO Q11
Q10a. [IF Q10 =1] Why haven’t you chosen to receive electronic, paperless invoices?
_______________________________________________
[USE FOLLOWING CODING BUT DO NOT READ—ENTER OTHER ANSWERS
VERBATIM—99 = DK/REF]
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2015 Customer Opinion and Awareness Survey September 2015
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1. Want paper record
2. Computers can fail
3. Trust/security
4. Do not use computers that often
5. I do not keep personal records on the computer
6. Used to paying by check
7. I will forget to check for the bill on the computer
8. That is just the way the bills have been coming
20. Other, specify___________________________
Q11. No matter how you get your monthly water bill, do you look through your monthly water
bill to examine your water usage or other factors …
1 - every time,
2 - most times,
3 - sometimes, or
4 - never? ---------------
9 - DK/REF [DO NOT READ]----
Q12. How do you pay your water bill most months?
1—Send check by mail
2—Automatic bank deduction
3—Credit card over the telephone
4—In person at the Otay Water District office
5—In person at payment center
6—On-line (Internet) [GO TO Q13]
Q12a. [IF Q12 DOES NOT = 6] Do you think that you would use the website to pay your
bill if a chat function were available that allows you to ask questions directly to a customer
service representative?
1—YES
2—NO
9 - DK/REF—DO NOT READ
Q12b. [IF Q12 DOES NOT = 6] What else can the District do to make paying on-line a
more appealing option for you?
_______________________________________________________________
DK/REF = 99
[USE THE FOLLOWING CODES BUT DO NOT READ THEM. ENTER ALL OTHER
ANSWERS VERBATIM—CODE 20]
1. THERE IS NOTHING THAT WOULD MAKE ME PAY ONLINE
2. OFFER DISCOUNTS ON THE BILL
3. OFFER MORE PAYMENT OPTIONS (SUCH AS PAYPAL, CREDIT/DEBIT
CARDS)
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4. NO SERVICE CHARGES
5. ENHANCED SECURITY
20. Other, specify____________________________________
Q13. No matter how you presently pay your bill, how would you prefer to pay your bill most of
the time?
1—Send check by mail
2—Automatic bank deduction
3—Credit card over the telephone
4—In person at the Otay Water District office
5—In person at payment center
6—On-line (Internet)
9 - DK/REF [DO NOT READ
SOCIAL MEDIA/INFORMATION
Q14. What source do you primarily rely upon to get information about water issues affecting
our region? (DO NOT READ: PROBE AND RECORD ONLY ONE)
1 – NEWSPAPER: UNION TRIBUNE
2 - NEWSPAPER: OTHER
3. – OTAY WATER DISTRICT WEBSITE
4. - THE SAN DIEGO COUNTY WATER AUTHORITY WEBSITE
5. – THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
WEBSITE
6 - INTERNET—other than water district websites
7. – RADIO
8. – TELEVISION
9. – MAGAZINES
10. – SPEAKERS AT COMMUNITY GROUPS
11. – WORD-OF-MOUTH/FAMILY/FRIENDS/CO-WORKERS
12. – Otay Water District Newsletters
13. – Informational stuffers in my water bill
20. – OTHER, SPECIFY: ___________________________________________
99—NONE—DK/REF—DO NOT READ
Q. 15 Do you read the newsletter or bill inserts that come in the mail or come electronically
with your bill
1 - every time,
2 - most times,
3 - sometimes, or
4 - never?
9 - DK/REF [DO NOT READ]
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CONSERVATION GARDEN
Q16. Have you ever seen or heard anything about the Water Conservation Garden at
Cuyamaca College?
1 - YES
2 - NO------------> GO TO Q17
3 - DK/REF ------------> GO TO Q17
Q16a. [IF Q16 = 1:] Have you or any member of your family ever visited the
garden?
1 - YES
2 - NO
3 - DK/REF
Q16b. [IF Q16a = 1]. Have you made any changes to your watering or
landscaping practices as a result of visiting the Garden?
1 – YES
2 – NO—GO TO Q17
3 -- DK/REF—GO TO Q17
Q16c. What is the most significant change you have made as a result of visiting
the garden?
[DO NOT READ-------------CODE USING FOLLOWING SCHEMA]
1 Adjusted sprinklers/reduced water usage
2. Changed plants to be more drought-tolerant/waterwise
3. Eliminated plants/let plants die
4. Eliminated lawn/let lawn die—replaced with waterwise
ground cover
5. Replaced unused turf with low-water plants
6. Check the soil’s moisture level before watering
7. Upgraded irrigation system to include new, higher-
efficiency equipment
20. Other, specify _______________________________
OUTDOOR WATERING
Q17. These next few questions deal with using water outdoors. Does your residence have any
lawn or grass area that someone in your household is directly responsible for
maintaining?
1 - YES
2 - NO/APT/CONDO/NO YARD RESPONSIBILITIES ------------> GO TO Q19
3 - DK/REF—DO NOT READ ------------> GO TO Q19
Q18. Have you replaced some or all of your lawn or grass area with low-water-use landscaping
including water-wise plants, stone or artificial turf?
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1 – YES –GO TO Q18b-c
2 - NO (GO TO Q18a)
9 - DK/REF [DO NOT READ]—GO TO Q18a
Q18a. Do you plan to replace some or all of your grass area with low-water-use
landscaping including water-wise plants, stone or artificial turf within the next year?
1 – YES
2 - NO (GO TO Q18d)
9 - DK/REF [DO NOT READ]—GO TO Q18d
Q18b-c. What did you do to replace your grass area or what are you planning to do
within the next year?
[DO NOT READ-------------CODE USING FOLLOWING SCHEMA]
RECORD UP TO TWO RESPONSES
1—Let grass area die and will leave as is or throw ground cover (e.g. wood
chips) on former grass area
2—Ground cover and rocks/stones
3—Rocks and stones
3—Water-wise, drought resistant plants
4—artificial turf
9—other, specify______________________________
GO TO Q19
Q18d. (IF Q18a = 2 or 3) What is the main barrier keeping you from replacing some
or all of your grass with low-water-use landscaping including water-wise plants,
stone or artificial turf?
[DO NOT READ-------------CODE USING FOLLOWING SCHEMA]
1. Cost
2. Homeowner association regulations
3. Need help knowing which plants to use
4. Not physically capable of doing the work
5. Don’t know where to start
6. Aesthetics. Don’t like rocks, cactus or succulents
7. I am too busy
20. Other, specify ______________________________
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CONSERVATION
Q19. Mandatory water-use restrictions are in effect across the Otay Water
District’s service area. Generally speaking, how familiar are you with the
restrictions in your community?
1. Very familiar
2. Somewhat familiar
3. A little familiar
4. Not at all familiar (GO TO Q22)
Q20a-b. What specific actions, if any, have you taken to reduce your water
use in response to the mandatory water-use restrictions?
[DO NOT READ-------------CODE USING FOLLOWING SCHEMA:]
RECORD UP TO TWO RESPONSES
1 – OUTDOOR WATER LESS TIME
2 - USE THE WATERING CALCULATOR FOUND ON THE DISTRICT’S
WEBSITE OR AT WWW.BEWATERWISE.COM TO SET A WATER-
WISE IRRIGATION SCHEDULE
3 - IRRIGATE EARLIER IN THE MORNING OR LATER AT NIGHT
4—LET MY LANDSCAPE/LAWN DIE
5 - OUTDOOR WATERING FEWER DAYS DAY PER WEEK
6 - CHECK THE SOIL’S MOISTURE LEVEL BEFORE WATERING
7 - REPLACE UNUSED TURF WITH LOW-WATER PLANTS
8 - UPGRADE IRRIGATION SYSTEM TO INCLUDE NEW, HIGH-
EFFICIENCY EQUIPMENT
9 – PURCHASE A HIGH EFFFICENCY CLOTHES WASHER
10 – WASH ONLY FULL LOADS OF CLOTHES OR DISHES
11 – TAKE SHORTER SHOWERS
12 – USE A BROOM INSTEAD OF A HOSE ON PAVED AREAS
13 – FIX INDOOR LEAKS (TOILET, FAUCET, ETC.)
14 – FIX OUTDOOR LEAKS (SPRINKLERS, SPAS, ETC.)
15-- DO NOT LET WATER RUN
16 – COLLECT AND REUSE
17 – REPLACE GRASS WITH ARTIFICIAL/SYNTHETIC TURF
20 – OTHER, SPECIFY___
________________________________
25—NONE (GO TO Q22)
99—DK/REF (GO TO Q22)
Q21a-b. What motivated you to reduce your water use?
[DO NOT READ—CODE USING FOLLOWING SCHEMA RECORD UP TO TWO
RESPONSES]
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1. Watching our budget/trying to save money
2. Concerned about the drought
3. Water agency tells us to
4. Messages in the media
5. Conserving water is the “right” thing to do
6. Anticipating higher rates in the future and want to be better prepared
15. Other, specify___________________________________
20. DK/REF/NOTHING—DO NOT READ
Q.22 Are you aware that the Otay Water District offers conservation rebates and incentives to
help the District’s customers reduce their water usage?
1 - YES
2 - NO
3 - DK/REF [DO NOT READ]
DESALINATION
Q23. AN OCEAN WATER DESALINATION PLANT IS TENTATIVELY PLANNED FOR THE
CITY OF ROSARITO BEACH IN MEXICO AND THE OTAY WATER DISTRICT HAS
THE OPPORTUNITY TO PURCHASE SOME OF THAT WATER AS EARLY AS 2018.
THIS PROJECT WOULD BE FINANCED AND OPERATED BY INTERNATIONAL
COMPANIES WITH CONSIDERABLE EXPERIENCE IN OCEAN WATER
DESALINATION, WITH TIJUANA, ROSARITO BEACH, AND THE OTAY WATER
DISTRICT BEING THE PLANT’S CUSTOMERS.
Would you be in favor of pursuing such an agreement with these international
companies to develop additional supplies of water from ocean water desalination?
1. Yes
2. No—GO TO Q23b
9 - DK/REF [DO NOT READ]—GO TO Q23b
Q23a. [IF Q23 =1 Please stop me when I say the approximate percentage of all
of the water supplied by the Otay Water District that would you like to see come
from this desalination plant? ____________
[REVERSE]
1. All/100%
2. Not all but at least 75%
3. Between half/50% and 75%
4. Between one-fourth/25% and half/50%
5. Some, but less than 25%
6. None
(GO TO LAN)
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Q23b. [IF Q23 NOT = 1] Why are you not in favor or uncertain about this
desalination agreement?
__________________________________________________________
[USE FOLLOWING CODING BUT DO NOT READ—ENTER OTHER ANSWERS VERBATIM
WITH CODE = 20— DK/REF = 99]
1. Questionable water quality
2. It should be done in U.S—US needs the jobs.
3. Do not trust/want to deal with Mexico
4. High cost
5. Do not know enough yet—Need more information
6. Do not want to drink ocean/sea water
7. Want local control
ASK ALL:
In closing, these questions are for comparison purposes only.
LAN (IF LP=1—Otherwise go to LAN-a): Is English your first language?
1—YES (Go to PPH)
2—NO
9 - DK/REF—DO NOT READ (GO TO PPH)
LAN-a: The Otay Water District sends its customers information in
newsletters, water quality reports and rate increase notices in English.
Are you able to read and understand this information that the District
sends to you?
1—YES (Go to PPH)
2—NO
9 - DK/REF—DO NOT READ
LAN-b. Do you have someone available who can translate this
information for you?
1—YES
2—NO
9 - DK/REF—DO NOT READ
PPH. How many persons, including yourself, live in your household?
___________
99 - DK/REF
TEN. Is your residence owned by someone in your household, or is it rented?
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1 - OWN
2 - RENT/OTHER STATUS
9 - DK/REF [DO NOT READ
EDU. What is the highest grade or year of school that you have completed and received credit
for...
1 - high school or less,
2 - at least one year of college, trade or vocational school,
3 - graduated college with a bachelor's degree, or
4 - at least one year of graduate work beyond a bachelor's degree?
9 - DK/REF [DO NOT READ
AGE. Please tell me when I mention the category that contains your age...
1 - 18 to 24,
2 - 25 to 34,
3 - 35 to 44,
4 - 45 to 54,
5 - 55 to 64, or
6 - 65 or over?
9 - DK/REF [DO NOT READ
ETH. Which of the following best describes your ethnic or racial background...
1 - white, not of Hispanic origin;
2 - black, not of Hispanic origin;
3 - Hispanic or Latino;
4 - Asian or Pacific Islander;
5 - Native American;
6 – Middle Eastern
15 - another ethnic group? [SPECIFY:] __________________________________
20 - DK/REF [DO NOT READ
INC. Now, we don't want to know your exact income, but just roughly, could you tell me if your
annual household income before taxes is...
1 - under $25,000,
2 - $25,000 up to but not including $50,000,
3 - $50,000 up to (but not including) $75,000,
4 - $75,000 up to (but not including) $100,000,
5 - $100,000 up to but not including $150,000?
6 -- $150,000 and over
9 - DK/REF [DO NOT READ
ZIP. RECORD ZIP CODE FROM CALL LIST ____________________________
PHONE. RECORD FROM CALL LIST 1—Landline
2---Cell Phone
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Frequency Table--WEIGHTED
CUST. How long have you been a customer of the Otay Water District?
Frequency Percent Valid Percent
Cumulative
Percent
Valid 1 29 9.3 9.4 9.4
2 33 10.4 10.5 19.9
3 15 4.7 4.7 24.6
4 15 4.9 5.0 29.6
5 18 5.8 5.8 35.5
6 12 3.8 3.8 39.3
7 12 3.9 3.9 43.1
8 11 3.4 3.5 46.6
9 4 1.3 1.3 47.9
10 18 5.7 5.8 53.7
11 4 1.1 1.1 54.9
12 9 2.7 2.8 57.6
13 6 1.8 1.8 59.4
14 8 2.5 2.6 62.0
15 15 4.9 5.0 67.0
16 12 3.9 3.9 70.9
17 2 .7 .7 71.6
18 3 1.0 1.0 72.7
19 1 .4 .4 73.1
20 15 4.9 5.0 78.1
21 3 .8 .9 78.9
22 1 .4 .4 79.3
23 4 1.3 1.3 80.6
24 1 .4 .4 81.0
25 9 2.7 2.8 83.8
26 4 1.3 1.3 85.1
27 3 .8 .9 85.9
30 12 3.8 3.8 89.8
31 4 1.3 1.3 91.0
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35 4 1.3 1.3 92.3
36 1 .4 .4 92.8
37 1 .4 .4 93.2
38 5 1.7 1.7 94.9
39 3 .8 .9 95.7
40 5 1.7 1.7 97.4
41 1 .4 .4 97.9
44 3 .8 .9 98.7
50 4 1.3 1.3 100.0
Total 311 99.1 100.0
Missing Don't Know 0 .1
System 2 .8
Total 3 .9
Total 314 100.0
Gender
Frequency Percent Valid Percent
Cumulative
Percent
Valid Male 165 52.4 52.4 52.4
Female 149 47.6 47.6 100.0
Total 314 100.0 100.0
Language Preference
Frequency Percent Valid Percent
Cumulative
Percent
Valid English 302 96.0 96.0 96.0
Spanish 12 4.0 4.0 100.0
Total 314 100.0 100.0
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Q1: How would you rate your overall satisfaction with the Otay Water District as your water
service provider?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Excellent 163 51.9 52.8 52.8
Very Good 66 21.0 21.4 74.2
Neutral 43 13.8 14.1 88.3
Not Good 24 7.7 7.8 96.1
Poor 12 3.8 3.9 100.0
Total 308 98.2 100.0
Missing DK/REF 6 1.8
Total 314 100.0
Q2. During the past year, has your satisfaction with the Otay Water District…
Frequency Percent Valid Percent
Cumulative
Percent
Valid Increased 17 5.4 5.4 5.4
Decreased 35 11.1 11.2 16.7
Stayed the same 258 82.3 83.3 100.0
Total 310 98.7 100.0
Missing DK/REF 4 1.3
Total 314 100.0
Q3a. OWD has been a good partner in helping us to conserve water
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 219 69.7 69.7 69.7
No 51 16.4 16.4 86.1
DK/REF 44 13.9 13.9 100.0
Total 314 100.0 100.0
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Q3b. OWD has provided us with adequate and timely information about the drought
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 232 74.0 74.0 74.0
No 64 20.3 20.3 94.2
DK/REF 18 5.8 5.8 100.0
Total 314 100.0 100.0
Q3c. OWD did not anticipate the severity of the drought and was not well prepared for it
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 121 38.5 38.5 38.5
No 119 38.0 38.0 76.5
DK/REF 74 23.5 23.5 100.0
Total 314 100.0 100.0
Q3d. OWD is not at fault when it comes to the drought
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 184 58.6 58.6 58.6
No 106 33.6 33.6 92.2
DK/REF 24 7.8 7.8 100.0
Total 314 100.0 100.0
Q4: Have you called the Otay Water District for service or other help during the last year?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 66 20.9 21.0 21.0
No 247 78.7 79.0 100.0
Total 313 99.6 100.0
Missing DK/REF 1 .4
Total 314 100.0
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Q4a: How would you rate your overall level of satisfaction with the service you received when
you called for service or help?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Excellent 38 12.1 59.1 59.1
Very Good 11 3.4 16.8 75.9
Neutral 9 2.7 13.3 89.2
Not Good 1 .4 2.1 91.3
Poor 6 1.8 8.7 100.0
Total 64 20.5 100.0
Missing DK/REF 1 .4
System 248 79.1
Total 250 79.5
Total 314 100.0
Q5. How much trust do you have in the ability of the Otay Water District to provide clean, safe water to the
district?
Frequency Percent Valid Percent
Cumulative
Percent
Valid A great deal of trust 160 51.1 52.8 52.8
Some trust 95 30.2 31.2 84.0
Neutral 36 11.3 11.7 95.7
More distrust than trust 7 2.1 2.1 97.8
No trust at all 7 2.1 2.2 100.0
Total 304 96.9 100.0
Missing DK/REF 10 3.1
Total 314 100.0
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Q6. How much trust do you have in the Otay Water District to obtain this water for you at a reasonable price?
Frequency Percent Valid Percent
Cumulative
Percent
Valid A great deal of trust 99 31.5 32.2 32.2
Some trust 72 22.8 23.4 55.6
Neutral 76 24.1 24.7 80.4
More distrust than trust 39 12.4 12.7 93.0
No trust at all 21 6.8 7.0 100.0
Total 306 97.6 100.0
Missing DK/REF 8 2.4
Total 314 100.0
Q7. Have you ever visited the Otay Water District website?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 194 61.7 62.2 62.2
Have access to the internet, but
have not visited the websit 97 30.9 31.2 93.4
Do not have access to the
internet 21 6.5 6.6 100.0
Total 311 99.2 100.0
Missing DK/REF 3 .8
Total 314 100.0
Q7a. How would you rate the user friendliness of the website? Would you say...
Frequency Percent Valid Percent
Cumulative
Percent
Valid Excellent 73 23.2 39.8 39.8
Very Good 54 17.2 29.5 69.3
Neutral 44 13.9 23.9 93.1
Not Good 10 3.1 5.4 98.5
Poor 3 .8 1.5 100.0
Total 183 58.3 100.0
Missing DK/REF 11 3.4
System 120 38.3
Total 131 41.7
Total 314 100.0
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Q7b. What was the reason for your last visit to the Otay Water District website?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Drought information 18 5.8 9.4 9.4
Water savings calculator 1 .4 .7 10.1
Billing information 40 12.7 20.6 30.6
Pay online 95 30.3 49.1 79.7
Rate information 3 .9 1.5 81.2
Outages 1 .4 .7 81.9
Conservation rebate information 13 4.3 6.9 88.9
Start service 8 2.6 4.2 93.1
Register a complaint 3 1.0 1.7 94.7
General information--water quality
information--check out website 10 3.2 5.3 100.0
Total 194 61.7 100.0
Missing System 120 38.3
Total 314 100.0
Q8a. Considering only those utilities that you pay for, which would you say is the best value for the
amount of money that you pay.
Frequency Percent Valid Percent
Cumulative
Percent
Valid Trash collection 115 36.5 36.5 36.5
Water 95 30.2 30.2 66.7
Sewer 9 2.9 2.9 69.7
Telephone 8 2.6 2.6 72.3
Cable or satellite TV 9 2.8 2.8 75.1
Internet access 20 6.4 6.4 81.5
Gas & Electric 58 18.5 18.5 100.0
Total 314 100.0 100.0
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Q8b. Second best value among utilities
Frequency Percent Valid Percent
Cumulative
Percent
Valid Trash collection 51 16.1 16.1 16.1
Water 87 27.6 27.6 43.6
Sewer 28 8.8 8.8 52.4
Telephone 22 6.9 6.9 59.4
Cable or satellite TV 17 5.5 5.5 64.8
Internet access 29 9.2 9.2 74.0
Gas & Electric 82 26.0 26.0 100.0
Total 314 100.0 100.0
Q8c. Third best value among utilities
Frequency Percent Valid Percent
Cumulative
Percent
Valid Trash collection 52 16.6 16.6 16.6
Water 64 20.4 20.4 37.0
Sewer 48 15.3 15.3 52.3
Telephone 23 7.2 7.2 59.5
Cable or satellite TV 38 12.2 12.2 71.8
Internet access 33 10.5 10.5 82.3
Gas & Electric 56 17.7 17.7 100.0
Total 314 100.0 100.0
Q9. Do you feel that water costs too much, too little, or priced about right?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Water costs too much 154 49.1 49.1 49.1
The cost of water is just about
right 154 49.0 49.0 98.1
Water costs too little 6 1.9 1.9 100.0
Total 314 100.0 100.0
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Q10. Do you get a paper copy of your bill?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 205 65.3 65.6 65.6
No 108 34.3 34.4 100.0
Total 313 99.6 100.0
Missing DK/REF 1 .4
Total 314 100.0
Q10a-1. Why haven't you chosen to receive electronic, paperless invoices?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Want a paper record 89 28.4 43.9 43.9
Trust/security 7 2.2 3.4 47.3
Do not use computers that often 27 8.5 13.2 60.5
I do not keep personal records on
the computer 0 .1 .1 60.6
Used to paying by check 8 2.6 4.1 64.7
I will forget to check for the bill on
the computer 18 5.8 9.0 73.7
That is just the way the bills have
been coming 19 6.0 9.2 83.0
Difficulty accessing account/Bank
will not allow automatic deduction 4 1.2 1.9 84.9
Not aware of paperless option 2 .6 .9 85.8
Do not want people to lose jobs 3 .9 1.5 87.3
Other 26 8.2 12.7 100.0
Total 203 64.7 100.0
Missing DK/REF 2 .6
System 109 34.7
Total 111 35.3
Total 314 100.0
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Q11. No matter how you get your monthly water bill, do you look through your monthly water bill
to examine your water usage or other factors...
Frequency Percent Valid Percent
Cumulative
Percent
Valid Every time 150 47.9 48.2 48.2
Most times 54 17.3 17.4 65.5
Sometimes 74 23.7 23.8 89.3
Never 33 10.6 10.7 100.0
Total 312 99.5 100.0
Missing DK/REF 2 .5
Total 314 100.0
Q12. How do you pay your water bill most months?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Send check by mail 76 24.2 24.4 24.4
Automatic bank deduction 81 25.7 25.9 50.3
Credit card over the phne 18 5.7 5.8 56.1
In person at the Otay Water
Discrict office 4 1.3 1.3 57.4
In person at payment center 4 1.4 1.4 58.8
On-line (internet) 128 40.8 41.2 100.0
Total 311 99.1 100.0
Missing DK/REF 3 .9
Total 314 100.0
Q12a. Do you think that you would use the website to pay your bill if a chat function were
available that allows you to ask questions directly to a customer service representative?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 41 13.0 22.0 22.0
No 131 41.7 70.6 92.5
DK/REF 14 4.4 7.5 100.0
Total 186 59.2 100.0
Missing System 128 40.8
Total 314 100.0
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Q12b-1. What else can the District do to make paying on-line a more appealing option for you?
Frequency Percent Valid Percent
Cumulative
Percent
Valid There is nothing that would make
me pay online/do not use internet 81 25.7 62.9 62.9
Offer discounts on the bill 17 5.4 13.1 76.0
Offer more payment options (such
as paypal, credit/debit car 3 .8 2.1 78.1
No service charges 4 1.4 3.3 81.4
Enhanced security 6 1.8 4.4 85.8
Make it easier to use/ability to talk
to somebody/instructions online 10 3.1 7.6 93.4
phone app 4 1.4 3.3 96.8
My bank does not make it
available 2 .7 1.7 98.5
Other 2 .6 1.5 100.0
Total 128 40.9 100.0
Missing DK/REF 50 15.9
System 136 43.2
Total 186 59.1
Total 314 100.0
Q13. No matter how you presently pay your bill, how would you prefer to pay your bill most of the time?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Send check by mail 61 19.6 19.7 19.7
Automatic bank deduction 82 26.0 26.2 46.0
Credit card over the telephone 19 6.1 6.2 52.2
In person at the Otay Water
District office 4 1.1 1.1 53.3
In person at payment center 4 1.4 1.4 54.7
On-line (internet) 141 44.9 45.3 100.0
Total 311 99.1 100.0
Missing DK/REF 3 .9
Total 314 100.0
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Q14. What source do you primarily rely upon to get information about water issues affecting our region?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Newspaper: Union Tribune 23 7.5 7.8 7.8
Newspaper: Other 9 3.0 3.1 10.9
Otay Water District website 21 6.5 6.8 17.6
The San Diego County Water
Authority website 3 .9 1.0 18.6
Internet - other than water district
websites 51 16.1 16.8 35.4
Radio 17 5.3 5.5 40.9
Television 114 36.2 37.6 78.5
Speakers at community groups 0 .1 .1 78.6
Word-of-mouth/family/friends/co-
workers 22 7.1 7.4 86.0
Otay Water District newsletters 22 7.1 7.4 93.4
Informational stuffers in my water
bill 19 5.9 6.2 99.6
Other 1 .4 .4 100.0
Total 302 96.1 100.0
Missing DK/REF 12 3.9
Total 314 100.0
Q15. Do you read the newsletter or bill inserts that come in the mail or come electronically with
your bill
Frequency Percent Valid Percent
Cumulative
Percent
Valid Every time 82 26.1 26.3 26.3
Most times 71 22.6 22.7 49.0
Sometimes 103 32.7 32.9 81.8
Never 57 18.1 18.2 100.0
Total 312 99.5 100.0
Missing DK/REF 2 .5
Total 314 100.0
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Q16. Have you ever seen or heard anything about the Water Conservation Garden at
Cuyamaca College?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 150 47.9 49.0 49.0
No 156 49.8 51.0 100.0
Total 307 97.7 100.0
Missing DK/REF 7 2.3
Total 314 100.0
Q16a. Have you or any member of your family ever visited the garden?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 74 23.6 49.3 49.3
No 76 24.3 50.7 100.0
Total 150 47.9 100.0
Missing System 164 52.1
Total 314 100.0
Q16b. Have you made any changes to your watering or landscaping practices as a result of
visiting the Garden?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 39 12.3 52.1 52.1
No 36 11.3 47.9 100.0
Total 74 23.6 100.0
Missing System 240 76.4
Total 314 100.0
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Q16c. What is the most significant change you have made as a result of visiting the garden?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Adjusted sprinklers/reduced water
usage 9 2.7 22.1 22.1
Changed plants to be more
drought-tolerant/waterwise 18 5.6 45.4 67.6
Eliminated plants/let plants die 1 .4 3.4 71.0
Eliminated lawn/let lawn die-
replaced with waterwise ground 3 .8 6.9 77.9
Replaced unused turf with low-
water plants 5 1.7 13.7 91.6
Upgraded irrigation system to
include new, higher-efficiency 1 .2 1.6 93.1
Collect and reuse 3 .8 6.9 100.0
Total 39 12.3 100.0
Missing System 275 87.7
Total 314 100.0
Q17. Does your residence have any lawn or grass area that someone in your household is directly responsible
for maintaining?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 211 67.3 67.5 67.5
No/Apt/Condo/No yard
responsibilities 101 32.3 32.5 100.0
Total 313 99.6 100.0
Missing DK/REF 1 .4
Total 314 100.0
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69
Q18. Have you replaced some or all of your lawn or grass area with low-water-use
landscaping including water-wise plants, stone or artificial turf?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 115 36.7 55.0 55.0
No 94 30.1 45.0 100.0
Total 210 66.7 100.0
Missing DK/REF 2 .5
System 103 32.7
Total 104 33.3
Total 314 100.0
Q18a. Do you plan to replace some or all of your grass area with low-water-use landscaping
including water-wise plants, stone or artificial turf within the next year?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 36 11.4 37.4 37.4
No 52 16.5 54.0 91.4
DK/REF 8 2.6 8.6 100.0
Total 96 30.6 100.0
Missing System 218 69.4
Total 314 100.0
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70
Q18b. What did you do to replace your grass area or what are you planning to do within the next year?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Let grass area die and will leave
as is or throw ground cove 19 6.1 13.2 13.2
Ground cover and rocks/stones 22 7.1 15.6 28.8
Rocks and stones 31 9.8 21.4 50.2
Water-wise, drought resistant
plants 32 10.2 22.1 72.3
Artificial turf 31 10.0 21.7 94.1
Cement/Concrete 7 2.3 5.0 99.1
Other 1 .4 .9 100.0
Total 144 45.9 100.0
Missing DK/REF 4 1.4
System 166 52.7
Total 170 54.1
Total 314 100.0
Q18c. What did you do to replace your grass area or what are you planning to do within the next year? Second
change.
Frequency Percent Valid Percent
Cumulative
Percent
Valid Let grass area die and will leave
as is or throw ground cove 6 1.9 11.0 11.0
Ground cover and rocks/stones 5 1.7 9.9 20.9
Rocks and stones 14 4.6 26.7 47.5
Water-wise, drought resistant
plants 16 5.0 29.4 76.9
Artificial turf 9 3.0 17.6 94.5
Cement/Concrete 3 .9 5.5 100.0
Total 54 17.1 100.0
Missing DK/REF 4 1.1
System 257 81.7
Total 260 82.9
Total 314 100.0
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Q18d. What is the main barrier keeping you from replacing some or all of your grass with low-water-use
landscaping including water-wise plants, stone or artificial turf?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Cost 24 7.7 44.1 44.1
Homeowner association
regulations 0 .1 .6 44.7
Aesthetics. Don't like rocks,
cactus or succulents 6 1.8 10.3 55.0
I am too busy 4 1.4 7.9 62.8
Renter 15 4.9 28.2 91.0
Moving/selling home 2 .5 3.0 94.0
Grass area very small 2 .6 3.5 97.6
Other 1 .4 2.4 100.0
Total 54 17.4 100.0
Missing DK/REF 6 1.8
System 254 80.9
Total 259 82.6
Total 314 100.0
Q19. Mandatory water-use restrictions are in effect across the Otay Water District's service area.
Generally speaking, how familiar are you with the restrictions in your community?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Very familiar 150 47.9 47.9 47.9
Somewhat familiar 110 35.1 35.1 83.0
A little familiar 32 10.3 10.3 93.2
Not at all familiar 21 6.8 6.8 100.0
Total 314 100.0 100.0
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72
Q19a - Have you taken any specific actions to reduce your water use in response to the
mandatory water-use restrictions?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 258 82.0 91.8 91.8
No 23 7.4 8.2 100.0
Total 281 89.4 100.0
Missing DK/REF 12 3.8
System 21 6.8
Total 33 10.6
Total 314 100.0
Q20a. What specific action, if any, have you taken to reduce your water use in response to the mandatory water-
use restrictions?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Outdoor Water Less Time 85 26.9 32.8 32.8
Use The Watering Calculator
Found On The District's Website 2 .5 .6 33.5
Irrigate Earlier In The Morning Or
Later At Night 6 2.0 2.4 35.9
Let My Landscape/Lawn Die 23 7.3 8.9 44.8
Outdoor Watering Fewer Days
Day Per Week 34 10.7 13.1 57.9
Check The Soil's Moisture Level
Before Watering 5 1.7 2.1 60.0
Replace Unused Turf With Low-
Water Plants 12 3.8 4.6 64.6
Upgrade Irrigation System To
Include New, High-Efficiency Eq 3 .9 1.1 65.7
Wash Only Full Loads Of Clothes
Or Dishes 11 3.6 4.4 70.1
Take Shorter Showers 38 12.2 14.9 85.0
Use A Broom Instead Of A Hose
On Paved Areas 1 .4 .5 85.5
Fix Indoor Leaks (Toilet, Faucet,
Etc.) 3 .9 1.1 86.7
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Fix Outdoor Leaks (Sprinklers,
Spas, Etc.) 3 .8 1.0 87.7
Do Not Let Water Run 6 1.9 2.3 90.0
Collect And Reuse 8 2.6 3.1 93.1
Replace Grass With
Artificial/Synthetic Turf 5 1.6 1.9 95.0
Do not wash car at home 7 2.4 2.9 97.9
Replaced
toilet/dishwasher/shower heads 5 1.5 1.8 99.7
Wash car with buckets/restricted
hose nozzle 1 .2 .2 99.9
Other 0 .1 .1 100.0
Total 258 82.0 100.0
Missing System 56 18.0
Total 314 100.0
Q20b. What specific action, if any, have you taken to reduce your water use in response to the mandatory water-
use restrictions? Second action
Frequency Percent Valid Percent
Cumulative
Percent
Valid Outdoor Water Less Time 21 6.8 12.8 12.8
Irrigate Earlier In The Morning Or
Later At Night 3 .8 1.6 14.4
Let My Landscape/Lawn Die 12 3.9 7.3 21.7
Outdoor Watering Fewer Days
Day Per Week 13 4.0 7.5 29.2
Replace Unused Turf With Low-
Water Plants 4 1.4 2.6 31.8
Purchase A High Effficency
Clothes Washer 1 .2 .4 32.1
Wash Only Full Loads Of Clothes
Or Dishes 17 5.4 10.2 42.3
Take Shorter Showers 32 10.2 19.1 61.5
Use A Broom Instead Of A Hose
On Paved Areas 0 .1 .2 61.7
Fix Indoor Leaks (Toilet, Faucet,
Etc.) 4 1.3 2.4 64.0
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Fix Outdoor Leaks (Sprinklers,
Spas, Etc.) 3 .9 1.8 65.8
Do Not Let Water Run 9 3.0 5.7 71.5
Collect And Reuse 19 6.1 11.5 83.0
Replace Grass With
Artificial/Synthetic Turf 7 2.3 4.3 87.3
Do not wash car at home 11 3.6 6.8 94.1
Replaced
toilet/dishwasher/shower heads 3 .9 1.8 95.9
Wash car with buckets/restricted
hose nozzle 1 .2 .4 96.3
Displacers in toilet/Less flushing 5 1.5 2.7 99.0
Other 2 .5 1.0 100.0
Total 167 53.1 100.0
Missing DK/REF 3 1.0
System 144 45.8
Total 147 46.9
Total 314 100.0
Q21a. What motivated you to reduce your water use?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Watching our budget/trying to
save money 45 14.3 17.5 17.5
Concerned about the drought 134 42.5 51.8 69.3
Water agency tells us to 20 6.3 7.7 77.0
Messages in the media 1 .2 .2 77.2
Conserving water is the "right"
thing to do 54 17.2 21.0 98.2
Anticipating higher rates in the
future and want to be better
prepared
3 .8 1.0 99.3
Other 2 .6 .7 100.0
Total 258 82.0 100.0
Missing System 56 18.0
Total 314 100.0
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
75
Q21b. What motivated you to reduce your water use? Second motivation
Frequency Percent Valid Percent
Cumulative
Percent
Valid Watching our budget/trying to
save money 16 5.0 23.6 23.6
Concerned about the drought 11 3.5 16.7 40.2
Water agency tells us to 6 1.9 8.9 49.1
Messages in the media 1 .4 2.0 51.1
Conserving water is the "right"
thing to do 16 5.1 24.0 75.1
Anticipating higher rates in the
future and want to be better
prepared
6 1.8 8.4 83.6
Other 11 3.5 16.4 100.0
Total 66 21.2 100.0
Missing System 247 78.8
Total 314 100.0
Q.22 Are you aware that the Otay Water District offers conservation rebates and incentives to
help the District's customers reduce their water usage?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 135 43.0 43.7 43.7
No 174 55.3 56.3 100.0
Total 309 98.3 100.0
Missing DK/REF 5 1.7
Total 314 100.0
Q23. Would you be in favor of pursuing such an agreement with these international
companies to develop additional supplies of water from ocean water desalination?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 185 58.8 58.8 58.8
No 87 27.8 27.8 86.6
DK/REF 42 13.4 13.4 100.0
Total 314 100.0 100.0
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
76
Q23a. Please stop me when I say the approximate percentage of all of the water supplied by the Otay Water
District that would you like to see come from this desalination plant?
Frequency Percent Valid Percent
Cumulative
Percent
Valid All/100% 26 8.2 14.0 14.0
Not all but at least 75% 21 6.8 11.6 25.6
Between half/50% and 75% 46 14.7 25.0 50.6
Between one-fourth?25% and
half/50% 51 16.1 27.4 78.0
Some, but less than 25% 24 7.8 13.3 91.3
None 16 5.1 8.7 100.0
Total 185 58.8 100.0
Missing System 129 41.2
Total 314 100.0
Q23b-1. Why are you not in favor or uncertain about this desalination agreement?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Questionable water quality 10 3.1 9.1 9.1
It should be done in the US, US
needs the jobs 15 4.8 14.1 23.2
Do not trust/want to deal with
Mexico 14 4.5 13.3 36.5
High cost 13 4.1 12.0 48.5
Do not know enough yet, need
more information 48 15.3 45.1 93.6
Want local control 1 .3 .8 94.5
Do not trust international
companies 3 .8 2.5 97.0
Danger to sea life 3 1.0 3.0 100.0
Total 107 34.0 100.0
Missing DK/REF 22 7.1
System 185 58.8
Total 207 66.0
Total 314 100.0
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
77
Q23b-2. Why are you not in favor or uncertain about this desalination agreement? Second reason
Frequency Percent Valid Percent
Cumulative
Percent
Valid Questionable water quality 6 1.8 46.3 46.3
It should be done in the US, US
needs the jobs 1 .4 11.0 57.2
Do not trust/want to deal with
Mexico 3 .8 21.9 79.1
High cost 1 .4 11.0 90.1
Do not want to drink ocean/sea
water 1 .3 7.4 97.5
Want local control 0 .1 2.5 100.0
Total 12 3.9 100.0
Missing System 302 96.1
Total 314 100.0
Is English your first language?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 241 76.7 79.8 79.8
No 61 19.4 20.2 100.0
Total 302 96.0 100.0
Missing System 12 4.0
Total 314 100.0
LAN-a: The Otay Water District sends its customers information in newsletters, water quality
reports and rate increase notices in English. Are you able to read and understand this
information that the District sends to you?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 65 20.6 88.3 88.3
No 9 2.7 11.7 100.0
Total 73 23.3 100.0
Missing System 241 76.7
Total 314 100.0
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
78
LAN-b. Do you have someone available who can translate this information for you?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Yes 7 2.2 81.0 81.0
No 2 .5 19.0 100.0
Total 9 2.7 100.0
Missing System 305 97.3
Total 314 100.0
PPH. How many persons, including yourself, live in your household?
Frequency Percent Valid Percent
Cumulative
Percent
Valid 1 25 8.1 8.1 8.1
2 81 25.9 26.0 34.1
3 57 18.2 18.2 52.3
4 66 21.0 21.0 73.3
5 53 17.0 17.0 90.3
6 11 3.5 3.5 93.8
7 11 3.4 3.4 97.3
8 6 1.9 1.9 99.2
9 3 .8 .8 100.0
Total 314 99.9 100.0
Missing Don't Know/refused 0 .1
Total 314 100.0
TEN. Is your residence owned by someone in your household, or is it rented?
Frequency Percent Valid Percent
Cumulative
Percent
Valid Own 250 79.7 80.0 80.0
Rent/Other status 63 19.9 20.0 100.0
Total 313 99.6 100.0
Missing DK/REF 1 .4
Total 314 100.0
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2015 Customer Opinion and Awareness Survey September 2015
79
EDU. What is the highest grade or year of school that you have completed and received credit for...
Frequency Percent Valid Percent Cumulative Percent
Valid High school or less 40 12.9 13.1 13.1
At least one year of college, trade
or vocational school 91 29.0 29.4 42.5
Graduated college with a
bachelor's degree 98 31.3 31.7 74.1
At least one year of graduate
work beyond a bachelor's degre 80 25.5 25.9 100.0
Total 310 98.7 100.0
Missing DK/REF 4 1.3
Total 314 100.0
AGE. Please tell me when I mention the category that contains your age...
Frequency Percent Valid Percent
Cumulative
Percent
Valid 18 - 24 4 1.4 1.4 1.4
25 - 34 40 12.7 12.8 14.2
35 - 44 73 23.2 23.4 37.5
45 - 54 61 19.4 19.6 57.1
55 - 64 53 17.0 17.1 74.2
65 or over 80 25.6 25.8 100.0
Total 311 99.2 100.0
Missing DK/REF 3 .8
Total 314 100.0
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2015 Customer Opinion and Awareness Survey September 2015
80
ETH. Which of the following best describes your ethnic or racial background...
Frequency Percent Valid Percent
Cumulative
Percent
Valid White, not of Hispanic origin 132 42.0 43.4 43.4
Black, not of Hispanic origin 21 6.6 6.8 50.2
Hispanic or Latino 105 33.5 34.7 84.9
Asian or Pacific Islander 40 12.6 13.0 97.9
Native American 2 .5 .5 98.4
Middle Eastern 3 .8 .8 99.3
Mixed ethnicities 2 .7 .7 100.0
Total 304 96.8 100.0
Missing DK/REF 10 3.2
Total 314 100.0
Total Household Income
Frequency Percent Valid Percent
Cumulative
Percent
Valid Under $25,000 16 5.2 5.9 5.9
$25,000 up to but not including
$50,000 40 12.8 14.4 20.3
$50,000 up to (but not including)
$75,000 59 18.6 21.0 41.2
$75,000 up to (but not including)
$100,000 71 22.5 25.3 66.5
$100,000 up to but not including
$150,000 51 16.4 18.4 84.9
$150,000 and over 42 13.4 15.1 100.0
Total 279 89.0 100.0
Missing DK/REF 35 11.0
Total 314 100.0
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81
Zip Code
Frequency Percent Valid Percent
Cumulative
Percent
Valid 91902 7 2.3 2.3 2.3
91910 42 13.4 13.4 15.7
91911 50 16.0 16.0 31.7
91913 55 17.6 17.6 49.4
91914 32 10.3 10.3 59.7
91915 30 9.6 9.6 69.2
91917 1 .4 .4 69.7
91935 12 3.7 3.7 73.3
91941 1 .4 .4 73.8
91977 34 10.7 10.7 84.4
91978 7 2.1 2.1 86.6
92019 33 10.5 10.5 97.0
92020 7 2.1 2.1 99.2
92109 1 .4 .4 99.6
92113 1 .4 .4 100.0
Total 314 100.0 100.0
Source
Frequency Percent Valid Percent
Cumulative
Percent
Valid Landline 214 68.2 68.2 68.2
Cell phone list 100 31.8 31.8 100.0
Total 314 100.0 100.0
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82
Frequencies—OPEN-ENDED
Other reasons for visiting website
Frequency Percent Valid Percent
Cumulative
Percent
Valid 295 93.9 93.9 93.9
Checking out the website 1 .3 .3 94.3
Checking quality of Otay water 1 .3 .3 94.6
Checking water usage 1 .3 .3 94.9
Compare their usage from last
year to the current year 1 .3 .3 95.2
Comparing last year's bill to this
year's bill 1 .3 .3 95.5
General information 2 .6 .6 96.2
I was checking schedule and
requirements for the pool we
installed
1 .3 .3 96.5
Initial hook up 1 .3 .3 96.8
Just to look 1 .3 .3 97.1
Open account 1 .3 .3 97.5
Random information 1 .3 .3 97.8
To check it out 1 .3 .3 98.1
To make a complaint 1 .3 .3 98.4
To see tips & info on what to
expect from customers 1 .3 .3 98.7
To set up service 1 .3 .3 99.0
To sign up 1 .3 .3 99.4
Water quality 1 .3 .3 99.7
We had an appt with them and
they never showed up or called to
change.
1 .3 .3 100.0
Total 314 100.0 100.0
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
83
Why getting paper bill?
Frequency Percent Valid Percent
Cumulative
Percent
Valid 282 89.8 89.8 89.8
Because I'm too lazy 1 .3 .3 90.1
Because you might miss out on
the rebates only receive by mail 1 .3 .3 90.4
Can't setup automatic pay
through USAA bank 1 .3 .3 90.8
Decision of husband 1 .3 .3 91.1
Don't have time to go online
sometimes 1 .3 .3 91.4
Email address got discontinued 1 .3 .3 91.7
Father worked for the postal
services 1 .3 .3 92.0
Going to do it 1 .3 .3 92.4
Haven't be prompted to 1 .3 .3 92.7
Haven't had chance will probably
do that 1 .3 .3 93.0
Haven't had the time 1 .3 .3 93.3
Haven't signed up 1 .3 .3 93.6
I do both 1 .3 .3 93.9
I have ask for electronic invoice 1 .3 .3 94.3
I haven't set up my auto bill pay
yet but I will do them both at the
same time
1 .3 .3 94.6
I'm a retired postal worker and I
like to keep my ex employees in a
job
1 .3 .3 94.9
If the water company had an app I
would use it 1 .3 .3 95.2
It wasn't available when I
requested through the bank 1 .3 .3 95.5
It's a pain with all the passwords 1 .3 .3 95.9
Just never thought about it 1 .3 .3 96.2
Laziness 1 .3 .3 96.5
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84
May have already done that 1 .3 .3 96.8
Never had it brought up to me 1 .3 .3 97.1
Never told about paperless 1 .3 .3 97.5
No other choice. 1 .3 .3 97.8
Provides more jobs for people 1 .3 .3 98.1
Sometimes it is difficult to access
my account 1 .3 .3 98.4
Tried to through Navy Federal
Credit Union and was to do
automatic pay
1 .3 .3 98.7
Was unsuccessful at setting it up 1 .3 .3 99.0
Was working and didn't have
check computer 1 .3 .3 99.4
Wife pay bill and easy to keep
record, internet might not work on
phone
1 .3 .3 99.7
Work on computer don't want to
come home and get on computer 1 .3 .3 100.0
Total 314 100.0 100.0
What can District do to encourage paperless?
Frequency Percent Valid Percent
Cumulative
Percent
Valid 284 90.4 90.4 90.4
An online orientation about the
water usage & how to conserve
water
1 .3 .3 90.8
App friendly user 1 .3 .3 91.1
Be more user friendly 1 .3 .3 91.4
Changing my attitude about the
online 1 .3 .3 91.7
Cutting edge water research
information made available
through their website
1 .3 .3 92.0
Develop an app 1 .3 .3 92.4
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85
Easier access for auto pay/more
user friendly 1 .3 .3 92.7
Fix website; processing problem 1 .3 .3 93.0
Have offices closer by us 1 .3 .3 93.3
If it were on my statement and
info online 1 .3 .3 93.6
If online payment was available
through Navy Federal Credit
Union would pay on l
1 .3 .3 93.9
Make easier 1 .3 .3 94.3
Make it available 1 .3 .3 94.6
Make it easy 1 .3 .3 94.9
Make it more easily to speak with
someone 1 .3 .3 95.2
Make it more user friendly 1 .3 .3 95.5
No internet service 2 .6 .6 96.2
No jobs for people that's why I
prefer to pay in the mail 1 .3 .3 96.5
Offer some senior discounts 1 .3 .3 96.8
Over the phone is better because
sometime don't have internet
signal
1 .3 .3 97.1
Send text messages to cell phone
with easy payment available 1 .3 .3 97.5
Send text reminders for bill pay 1 .3 .3 97.8
The ability to make changes to
the amount paid 1 .3 .3 98.1
The way I do it is easier 1 .3 .3 98.4
To be available 1 .3 .3 98.7
To make more computer friendly 1 .3 .3 99.0
We don't have internet 1 .3 .3 99.4
We have no computer 1 .3 .3 99.7
Whatever reduces the cost for the
company which would reduce the
cost for payers
1 .3 .3 100.0
Total 314 100.0 100.0
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
86
Other outdoor conservation actions undertaken
Frequency Percent Valid Percent
Cumulative
Percent
Valid 293 93.3 93.3 93.3
Artificial grass, removed water
pond, we plan to start collecting
rain water
1 .3 .3 93.6
Brick and cement 1 .3 .3 93.9
Bubbler on the plants 1 .3 .3 94.3
Cement 1 .3 .3 94.6
Cement for parking maybe 1 .3 .3 94.9
Cement in backyard 1 .3 .3 95.2
Cement instead of grass 1 .3 .3 95.5
Concrete pool 1 .3 .3 95.9
Desert setting 1 .3 .3 96.2
Garden 1 .3 .3 96.5
Grass area is very small 1 .3 .3 96.8
I put concrete where part of my
lawn used to be 1 .3 .3 97.1
Less plants 1 .3 .3 97.5
More cement less grass 1 .3 .3 97.8
Pavers 1 .3 .3 98.1
Replacing with concrete 1 .3 .3 98.4
turf to pavers, don't plan on doing
anything else 1 .3 .3 98.7
unsure grass is dying 1 .3 .3 99.0
waiting for rain to bring back my
grass 1 .3 .3 99.4
we do not water plan to use
stones 1 .3 .3 99.7
zero scaping 1 .3 .3 100.0
Total 314 100.0 100.0
Otay Water District
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2015 Customer Opinion and Awareness Survey September 2015
87
Barriers to taking outdoor conservation actions
Frequency Percent Valid Percent
Cumulative
Percent
Valid 287 91.4 91.4 91.4
Area is too small and artificial is
too hot and rough for child's play 1 .3 .3 91.7
Backyard is concrete 1 .3 .3 92.0
Because I rent 1 .3 .3 92.4
Because I'm renting and cost 1 .3 .3 92.7
Because renting landlord won't
allow 1 .3 .3 93.0
Big back yard 1 .3 .3 93.3
Everyone's grass is brown like
mine so i don't see the point in
investing
1 .3 .3 93.6
Getting ready to move 1 .3 .3 93.9
Grass area too small 1 .3 .3 94.3
I don't just don't because it just
might die out again 1 .3 .3 94.6
I might sell my home 1 .3 .3 94.9
I'm lazy 1 .3 .3 95.2
It's not our yard renting 1 .3 .3 95.5
The grass we currently have cost
us a lot of money. 1 .3 .3 95.9
We are renters 13 4.1 4.1 100.0
Total 314 100.0 100.0
Other mandatory restrictions actions
Frequency Percent Valid Percent
Cumulative
Percent
Valid 298 94.9 94.9 94.9
A tank-less water heater 1 .3 .3 95.2
Appliances 1 .3 .3 95.5
Aware of extra flushing of toilet 1 .3 .3 95.9
Covers pool; use paper plates 1 .3 .3 96.2
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
88
Don't flush my toilet all the time 1 .3 .3 96.5
Don't let the children play in the
water 1 .3 .3 96.8
Grass died dirt 1 .3 .3 97.1
Kids take shower instead of baths 1 .3 .3 97.5
Less flushing 1 .3 .3 97.8
Never home in the navy 1 .3 .3 98.1
No baths, waters garden less,
different ways to wash clothes
and dishes
1 .3 .3 98.4
Not washing car with hose, not
flushing urine, just watering plants 1 .3 .3 98.7
Wash the car with buckets rather
than hose 1 .3 .3 99.0
Water bottle in toilet 1 .3 .3 99.4
Water displacers in toilet 1 .3 .3 99.7
When washing car using water
restricted hose nozzle 1 .3 .3 100.0
Total 314 100.0 100.0
\\
Other opposition to desalination
Frequency Percent Valid Percent
Cumulative
Percent
Valid 299 95.2 95.2 95.2
Don't harm sea life and
environmentally friendly 1 .3 .3 95.5
Don't like money leaving the state 1 .3 .3 95.9
Don't want to deal international
company 1 .3 .3 96.2
Get capital gain here, better to
invest in US 1 .3 .3 96.5
Have to look into some other
options 1 .3 .3 96.8
I don't know what the outcome will
be 1 .3 .3 97.1
Otay Water District
Rea & Parker Research
2015 Customer Opinion and Awareness Survey September 2015
89
I don't know where the waste will
be going to 1 .3 .3 97.5
Inefficient and there better
methods 1 .3 .3 97.8
Makes me nervous having
international company dealing
with my water
1 .3 .3 98.1
Taking water from sea animals 1 .3 .3 98.4
They are planning to use the
money to support building more
condos
1 .3 .3 98.7
They need to do the extensive
research because it is very
detrimental to sea life
1 .3 .3 99.0
Unless it stops raining completely
for a significant period of time 1 .3 .3 99.4
What will happen to sea life? 1 .3 .3 99.7
Would be more comfortable with it
being in the US 1 .3 .3 100.0
Total 314 100.0 100.0
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: November 4, 2015
SUBMITTED BY:
Mark Watton,
General Manager
PROJECT: DIV. NO. ALL
SUBJECT: Approve Agreement for General Counsel Services
GENERAL MANAGER’S RECOMMENDATION:
Approve an agreement with the law firm of Stutz, Artiano, Shinoff and
Holtz, A Professional Corporation, for a term of two (2) years
through December 31, 2017, to provide general counsel services to the
District.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To present for the Board’s consideration an agreement with the law
firm of Stutz, Artiano, Shinoff and Holtz, A Professional
Corporation, for a term of two (2) years through December 31, 2017,
to provide general counsel services to the District.
ANALYSIS:
Stutz, Artiano, Shinoff and Holtz, A Professional Corporation (SASH),
has served as the District’s special counsel since January 1, 2011.
The District’s current contract with SASH was for a two-year period
and is set to expire at the end of calendar year 2015.
The District has been happy with the services SASH has provided and
is recommending that the board approve the proposed agreement as per
the terms indicated in the agreement (Attachment B). If approved,
the agreement would provide for a two (2) year term expiring on
December 31, 2017.
2
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The agreement allows for one hundred (100) hours or $20,000 per
calendar month of basic retainer services as described in the
attached agreement. Additional services, as described in Section 4.b
of the agreement, and time in excess of the one hundred (100) hours
will be compensated on an hourly basis based on the rates noted in
the agreement. Legal expenses associated with this agreement has
been budgeted in the FY 2016 budget.
LEGAL IMPACT:
None.
Attachments:
Attachment A – Committee Actions
Attachment B – Proposed Legal Services Agreement
ATTACHMENT A
SUBJECT/PROJECT:
Approve Agreement for General Counsel Services
COMMITTEE ACTION:
The Finance, Administration and Communications Committee is scheduled
to review this item on October 21, 2015. This attachment will be
updated with notes from the committee’s discussion.
LEGAL SERVICES AGREEMENT
1. IDENTIFICATION OF PARTIES. This Agreement, executed in duplicate with each party
receiving an executed original, is made between Stutz Artiano Shinoff & Holtz, A Professional
Corporation, hereinafter referred to as “Law Firm” and Otay Water District, hereinafter referred
to as “Client.” This Agreement is entered into beginning the month of January, 2016, for legal
services. The agreement is made for a term of two years up to and including December 31, 2017.
The Client and Law Firm will hold an annual review in 2016 regarding expectations, performance,
and other issues impacting the Client and Law Firm under this agreement.
2. LEGAL SERVICES TO BE PROVIDED. The legal services to be provided by Law Firm to
Client are as follows:
Representation, counsel and consultation in connection with Client’s general counsel
needs; human resources, legal support including review of policies and procedures, contract
review; preparation and participation in monthly Board meetings and special meetings
(“Services”).
Without limiting the generality of the foregoing, this Agreement shall govern so long as
Client desires to retain the Law Firm in connection with Services.
3. RESPONSIBILITIES OF LAW FIRM AND CLIENT. Law Firm will perform the services
called for under this Agreement, keep Client informed of progress and developments, and
respond promptly to Client’s inquiries and communications. Daniel R. Shinoff and Jeffery A.
Morris are intended to be the Law Firm attorneys primarily responsible for the consultation and
representation. Client will cooperate with the Law Firm in the representation set forth herein,
and will timely make any payments required by this Agreement.
4. ATTORNEY’S FEES. Client will pay Law Firm for attorneys’ fees for the consultation
and legal services provided under this Agreement as follows:
A. Basic Retainer. Law Firm shall be compensated for the performance of
basic retainer services pursuant to this Agreement in the amount of Twenty Thousand Dollars
($20,000) per calendar month commencing as of the effective date of this Agreement. Basic
retainer services for the purposes of this Agreement shall be deemed to be the first one hundred
(100) hours of Law Firm’s legal services rendered each month.
B. Additional Services. Law Firm shall be compensated for additional
services in accordance with the following:
1. As directed by the General Manager or Board President;
2. PERB hearings, writs of mandate, or other litigated matters not covered
by insurance;
ATTACHMENT B
3. Other complex matters, employment, personnel matters, or special
projects with the approval of the General Manager or Board President.
Additional services and time in excess of the one hundred (100) hours per calendar
month spent by Law Firm’s Attorneys, Law Firm shall be compensated on an hourly basis at
$240.00 per hour for partners, $210.00 per hour for associates, and $95.00 per hour for
paralegals. The Law Firm will charge in increments of one-tenth of an hour, rounded off for each
particular activity to the nearest one-tenth of an hour. The minimum time charged for any
particular activity will be one-tenth of an hour.
Law Firm will charge for all activities undertaken in providing consultation and legal
services to Client under this Agreement, including, but not limited to, the following: time spent
formulating and dispensing legal advice and opinions; negotiation; gathering relevant
information; conferences; correspondence and legal documents (review and preparation); legal
research; and telephone conversations.
Client acknowledges that Law Firm has made no promises about the total amount of
attorneys’ fees to be incurred by Client under this Agreement.
5. COSTS. Client will pay all “costs” in connection with Law Firm’s representation of
Client under this Agreement. Costs will be billed directly to Client unless, at the option of Law
Firm, costs are advanced by Law Firm. Costs include, but are not limited to, long-distance
telephone charges, messenger service fees, photocopying expenses, as well as any other items
generally accepted as “costs.”
6. STATEMENTS AND PAYMENTS. Law Firm will send Client monthly statements
indicating attorneys’ fees and costs incurred and their basis, any amounts applied from deposits,
and any current balance owed. If no attorney’s fees or costs are incurred for a particular month,
or if they are minimal, the statement may be held and combined with that for the following
month. Any balance will be paid in full within thirty (30) days after the statement is mailed.
7. MEDIATION CLAUSE. Client and Law Firm are agreeing to have any and all disputes
(except where Client may request arbitration of a fee dispute by the State Bar) that arise out of,
or relate to this Agreement, including but not limited to claims of negligence or malpractice
arising out of or relating to the legal services provided by Law Firm to Client, go to mediation
before the filing of any civil proceeding. Client, however, may request arbitration of a fee dispute
by the State Bar or San Diego County Bar Association as provided by Business and Professions
Code Section 6200, et seq.
8. ERRORS AND OMISSIONS INSURANCE. The Law Firm maintains errors and omissions
insurance coverage applicable to the services to be rendered under this Agreement.
9. TERMINATION. The Client or the Law Firm may, at any time, with or without reason,
terminate this Agreement upon thirty (30) days prior written notice to the other party. In the
event of termination, the Law Firm shall be entitled to payment only for acceptable and allowable
work performed under this Agreement through the date of termination.
THE FOREGOING IS AGREED TO BY:
DATED: ______________________ OTAY WATER DISTRICT
By: _________________________________
Mark Watton
General Manager
DATED: ______________________ STUTZ ARTIANO SHINOFF & HOLTZ
A Professional Corporation
By: _________________________________
Daniel R. Shinoff, Esq.
Partner
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: November 4, 2015
SUBMITTED BY:
Rita Bell, Finance Manager
Kevin Koeppen, Finance
Manager
Andrea Carey, Customer
Service Manager
PROJECT: Various DIV. NO. ALL
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Asst. General Manager
Mark Watton, General Manager
SUBJECT: Due to Conservation’s Impact on Revenues and the City of San
Diego’s Proposed Recycled Water Rate Increase, Staff is
Presenting to the Board a Number of Financial Considerations
with Regard to the Current Budget Impact and Future Rate
Increases. Staff is Seeking Board Consideration and
Direction.
GENERAL MANAGER’S RECOMMENDATION:
Due to conservation’s impact on revenues and the City of San Diego’s
proposed recycled water rate increase, staff is presenting to the
Board a number of financial considerations with regard to current
budget impact and future rate increases. Staff is seeking Board
consideration and direction.
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To update the Board on the financial impact of both conservation and
the City of San Diego’s recycled water rate increase. Conservation
is projected to reduce net water revenues for this fiscal year by
$1.55 million from the budget levels.
The City of San Diego has proposed a unitary recycled water rate
increase which will cause an addition unanticipated water cost of
$740,000 in this fiscal year and $1.9 million in the following years.
Staff is working very diligently to have the City of San Diego
consider and implement a zone rate for recycled water. Staff has
reviewed financial information from the City, has met with numerous
community leaders, and has also met with many City staff and
officials.
On November 17, 2015, the City of San Diego Council will vote on this
issue. A vote for unitary recycled water rates will have a
substantial impact on this year’s budget as the rates are set to
increase on January 1, 2016. A vote for zone rates will also produce
a budget impact; however, not as substantial.
Staff provides this information to the Board and looks to discuss
with the Board possible directions to protect the District finances
and credit rating.
ANALYSIS:
A State mandated water conservation target of 20% is in effect, and
Otay’s customers have achieved an even greater monthly water savings
percentage. With this savings, water sales have significantly
decreased. Each 1% of conservation brings the District’s net
revenues down by $136,000. This, along with the City of San Diego’s
proposed water rate increase, places the District in a difficult
financial position where it might not have sufficient net revenues to
meet its bond covenants. The Board can react using many options, a
few are discussed below.
1) Using only the savings staff has identified below and without an
additional rate increase this year the District is able to
mitigate much of the financial impact. No additional rate
increase is certainly one strategy; however, this delays and
heightens the impact on rates in January 2017.
2)
a. If the City selects zone rates, and no increases in
expected conservation or expenses occur, then the District
is within $150,000 of violating the bond covenants. This
is a narrow margin and would require ongoing monitoring to
insure that violation of the bond covenant does not occur.
The rate increase in 2017 would likely be 8.8%.
b. If the City selects a unitary rate, the District’s net
revenues will be $290,000 below the point of violating the
bond covenant. Additional savings would need to be
identified to avoid violation of the bond covenant. The
rate increase in 2017 would likely be 10.5%.
3) Raise rates solely to cover the City’s rate increase. Under
both the following options the 2017 rate increase would be held
down to around 7.0%.
a. If the City selects a zone rate, an additional rate
increase of 1.2% would be needed this year. The District’s
net revenues would be at $420,000 above the minimum needed
to maintain debt coverage, again a fairly narrow margin.
b. If the City selects a unitary rate, an additional rate
increase of 2.8% would be needed this year. The District’s
net revenues would be $500,000 above the minimum to
maintain debt coverage.
4) Raising rates an additional 4.1% will keep the overall rate
increase under 10%. This additional increase would offset the
City’s proposed rate increase and also offset some of the
projected conservation. This would reduce the impact on 2017
rates bringing them down to a projected 4.4% if the City selects
zone rates and 5.4% if the City selects unitary rates.
Conservation Financial Impact on the District’s Debt Coverage Ratio
Currently, staff’s projections indicate that the actual conservation
levels will exceed the budgeted conservation levels. As a result,
the lower than budgeted potable water sales revenue adds significant
pressure to the District’s ability to meet debt coverage covenants.
In the FY 2016 budget process, a 12% conservation percentage off the
FY 2013 volumes was used. This would allow the District to bear a
17.2% conservation level before the debt coverage ratio was
compromised. Staff has projected that potable water sales will have
a conservation level of 25.7% at year-end and 5% conservation for
recycled water sales. These conservation levels are in terms of
reductions from the 2013 levels.
The chart below compares the monthly actual potable water usage from
2013, 2015, and the 20% state target level. The District’s customers
have consistently exceeded the target from May through September. To
meet the 20% state target through February, when the order expires,
the District would only need to conserve 14% per month going forward.
May June July August September
Target 20% 20% 20% 20% 20%
Actual 27% 26% 29% 25% 29%
Budget - - 12% 12% 12%
Impact of Failing to Meet the Debt Coverage Ratio Covenants
In the event that the District violates the coverage requirements, it
will be placed on credit watch by the rating agencies and will be
subject to 90-day reviews. Any action taken by the rating agencies
would be dependent on the actions the District takes to bring itself
back into compliance. If the District continues to violate the
coverage compliance in consecutive years, the District can expect to
have its credit rating downgraded. Also, the bond holders can force
the District to hire a rate consultant to oversee the budget and rate
setting process.
There are no legal requirements to disclose a debt coverage ratio
violation early; however, it is recommended to keep communications
open with the rating agencies so that they are aware of the
District’s financial position. If the District is proactive and
reports the violation to rating agencies prior to the annual review,
the District will then be required to update the status on a regular
basis. If the District is proactive in reporting the violation, our
financial advisor, Suzanne Harrell, recommends that the District file
a notification upon completion of the FY 2017 budget process, during
which time the District should perform a preliminary debt coverage
forecast for FY 2016.
1,000
1,500
2,000
2,500
3,000
3,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
20% Reduction Target
2013 2015 State Target Reduction
Potable Water Rate Increase
With an additional 4.1% rate increase on top of the already approved
5.8% rate increase, the significant financial impacts of conservation
and the City of San Diego’s rate increase will be absorbed over two
years instead of all falling to the 2017 rate increase. The increase
will also coincide more closely with the City of San Diego’s rate
increase.
If the City of San Diego approves a zone rate, and if there is no
additional rate increase to address the added costs and reduced
revenues, staff projects that one-time savings and other budget
modifications will make it possible to avoid violation of the bond
covenants. However, this is not sustainable and the financial impact
of this would fall solely on the 2017 rate increase. The current
projection of the 2017 rate increase, with a favorable zone rate,
goes from the current 5.4% to 8.8%. As mentioned above, this jumps
to 10.8% if the City selects the unitary rate.
Recycled Water Rate Increases
On November 17, 2015, the City of San Diego will have a Proposition
218 hearing for water rates, including increasing the recycled water
rates.
The City of San Diego’s own analysis for a zone rate calculates
separate rates of $1.17 hcf for the South system and $2.14 hcf for
the North system. A unitary rate of $1.73 hcf could also be adopted
by the City which would mean that South Bay customers would pay $1.2
million annually more than what it costs to serve them, and North
customers would pay $1.2 million less than what it would cost to
serve them. South Bay customers would be subsidizing the North by
$7.2 million over the next six years to pay for a North system they
do not use.
In the FY 2016 Rate Model, staff had no indication that the City of
San Diego would raise recycled water rates. The rates the City
adopts will determine the financial impact on the District.
Recycled Rate Notices and Proposition 218 Notices
The Proposition 218 notices completed in 2013 allows the District to
pass through all water rate increases from our providers. The
potential City of San Diego increase qualifies as a pass-through and
therefore no additional Proposition 218 hearing is required. The
District would however, be required to send a rate increase notice to
all customers no less than 30 days prior to the affected usage.
Recycled Pricing Impact on the District’s Debt Coverage Ratio
Staff has analyzed both the zone rate and unitary rate scenarios and
has determined the shortfall that would need to be overcome in order
to achieve the obligation to keep a minimum debt coverage of 125%.
The two scenarios include the zone rate at $1.17 hcf and the unitary
rate at $1.73 hcf.
Below are the items that are projected to bring the District’s net
revenues below the minimum debt coverage ratio of 125%. These
projections are as of year-end. What is not shown is an additional
$1 million loss of revenues that is projected to bring the debt
coverage ratio down from a budgeted 140% to a minimum of 125%.
Description
Recycled
$1.17 hcf
Recycled
$1.73 hcf
Impact of Conservation Efforts $ 550,000 $ 550,000
City of San Diego Pricing 300,000 740,000
Impact of Legal/Outreach 100,000 *100,000
Total Required Savings $ 950,000 $1,390,000
*If the unitary rate is approved by the City of San Diego, additional
legal/outreach costs are likely to be incurred which will impact the 2017 rates.
This cost is potentially significant.
Operational Budget Cuts and/or Deferrals
Finance staff has worked with the departments to identify budget
savings and/or deferral of costs which are outlined below.
On-going reductions in costs or increases in
revenues:
Property Tax Collections $ 116,000
Current & Projected Vacancies 170,000
Desalination consultant *24,000
OPEB 120,000
Conservation Efforts **200,000
Total on-going savings $ 630,000
*This amount will increase to $48,000 in future years.
**Projected to decrease by 50% in future years.
One-time savings
Temporary Services $ 50,000
Emergency kits/emergency response supplies 75,000
Engineering Outside Services & misc. admin
costs
54,000
Estimated reductions for leak detection
program
195,000
Variable Debt Interest 100,000
Total one-time savings $ 474,000
Total Savings $ 1,104,000
Conclusion
Conservation has put the District and all the water districts in
difficult financial positions. On top of this, Otay is being
challenged with the City of San Diego’s pending decision to raise
recycled water rates. To meet these challenges the Board can select
one of the options listed above or can consider a number of other
approaches.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Staff has identified a number of options that the Board might use to
meet the current financial challenge. Each option has different
financial impacts. Staff is looking for direction from the Board on
how to mitigate the impact of the City of San Diego’s rate increase
and impact of conservation.
STRATEGIC GOAL:
Maintain the District’s financial strength.
LEGAL IMPACT:
None.
Attachments:
A) Committee Action
ATTACHMENT A
SUBJECT/PROJECT:
Due to Conservation’s Impact on Revenues and the City of
San Diego’s Proposed Recycled Water Rate Increase, Staff is
Presenting to the Board a Number of Financial
Considerations with Regard to the Current Budget Impact and
Future Rate Increases. Staff is Seeking Board
Consideration and Direction.
COMMITTEE ACTION:
That Finance, Administration, and Communications Committee is asking
that the Board review the options presented with regard to a possible
rate increase and advise staff on how they would like to proceed.
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.