HomeMy WebLinkAboutFY 2008 Comprehensive Annual Financial Report~
iJ I
-f r-~r! ~II!. 0 I .~ 0 I
~ I ~ ~,
~ I ~ ~.'
~ ~ "4 ~~
~ ! -,\)
. . . . ~~ I \ ' . '1'\ I \ I·
RSt:ll YBII fllllell IUIIB 31, 21111
640-1 and 640-2 Reservoirs Project-October 2007
Prepared by the Finance Department
Spring Valley, California
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal……………………………………………………………………. 1
Organization Chart……………………………………………………………………… 9
List of Principal Officials……………………………………………………………….. 10
GFOA Certificate of Achievement……………………………………………………… 11
FINANCIAL SECTION
Independent Auditors’ Report………………………………………………………….. 13
Management’s Discussion & Analysis…………………………………………………... 15
Basic Financial Statements:
Statement of Net Assets……………………………………………………………….. 23
Statement of Revenues, Expenses, and Changes in Net Assets……………………….. 24
Statement of Cash Flows……………………………………………………………….. 25
Notes to Financial Statements…………………………………………………………... 27
Required Supplementary Information:
Schedule of Funding Progress for PERS………………………………………………... 49
Schedule of Funding Progress for DPHP……………………………………………...... 49
STATISTICAL SECTION
Net Assets By Component……………………………………………………………… 52
Changes in Net Assets…………………………………………………………………... 53
Operating Revenues by Source…………………………………………………………. 54
Operating Expenses by Function……………………………………………………….. 55
Non-Operating Revenues by Source…………………………………………………… 56
Non-Operating Expenses by Function………………………………………………… 57
Assessed Valuation of Taxable Property Within The District………………………… 58
Water Purchases, Production, and Sales……………………………………………...… 59
Meter Sales by Type……………………………………………………………………. 60
Number of Customers by Service Type………………………………………………… 61
Property Tax Levies and Collections…………………………………………………… 62
Water and Sewer Rates…………………………………………………………………. 63
Ten Largest Customers…………………………………………………………………. 64
Ratios of Outstanding Debt by Type……………………………………………………. 65
Pledged Revenue Coverage…………………………………………………………….. 66
Ratios of General Bonded Debt Outstanding…………………………………………… 67
Computation of Direct and Overlapping Bonded Debt……………………………..… 68
Principal Employers…………………………..………………………………………... 69
Demographic and Economic Statistics………………………………………………….. 70
Number of Employees by Function…………………………………………………….. 71
Active Meters by Size………………………………………………………………..… 72
Operating and Capital Indicators……………………………………………………….. 73
~ lntroductorv
October 24, 2008
Honorable Board of Directors
Otay Water District
I am pleased to present the Otay Water District’s (the “District”) Comprehensive Annual
Financial Report (CAFR) for the fiscal year ended June 30, 2008.
This report was prepared by the District’s Finance Department following guidelines set forth by
the Government Accounting Standards Board (GASB) and generally accepted accounting
principles (GAAP). Responsibility for both the accuracy of the data presented, and the
completeness and fairness of the presentation, including all disclosures, rests with District
management. We believe the data, as presented, is accurate in all material respects and that it is
presented in a manner that provides a fair representation of the financial position and results of
operation of the District. Included are all disclosures we believe necessary to enhance your
understanding of the financial condition of the District. GAAP requires that management
provide a narrative
introduction, overview and
analysis, to accompany the
basic financial statements in
the form of Management’s
Discussion and Analysis
(MD&A), which should be
read in conjunction with this
report. The District’s MD&A
can be found immediately
following the Independent
Auditors’ Report.
The District’s financial statements have been audited by Teaman, Ramirez and Smith Inc., a firm
of licensed certified public accountants. The goal of the independent audit was to provide
reasonable assurance that the financial statements of the District for the fiscal year ended June
30, 2008, are free of material misstatement. The independent audit involved examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements; assessing the
accounting principles used and significant estimates made by management; and evaluating the
overall financial statement presentation. The independent auditor concluded, based upon the
audit, that there was reasonable basis for rendering an unqualified opinion that the District’s
financial statements for the fiscal year ended June 30, 2008, are fairly presented in conformity
with GAAP. The Independent Auditors’ Report is presented as the first component of the
financial section of this report.
1
REPORTING ENTITY
The District is a publicly-owned water and sewer agency, authorized on January 27, 1956 as a
California special district by the State Legislature, with an entitlement to import water under the
provisions of the Municipal Water District Act of 1911. Its ordinances, policies, taxes, and rates
for service are set by five Directors, elected by voters in their respective divisions, to serve
staggered four-year terms on its Governing Board. The District is a “revenue neutral” public
agency, meaning that each end-user pays only their fair share of the District’s costs of water
acquisitions and the construction, operation, and maintenance of the public facilities.
The General Manager reports directly to the Board of Directors, and through two Assistant
General Managers and the District management, oversees day-to-day operations. One Assistant
General Manager oversees the departments of Administrative Services, Finance, Information
Technology and Strategic Planning, while the other oversees the Water Operations and
Engineering departments. These and other lines of reporting are shown on the organization chart
on page 9.
Over the last 52 years, the District has grown from a handful of customers and two employees to
become an organization operating a network with more than 903 miles of pipelines, 43
operational reservoirs, a sewer treatment plant, and one of the largest recycled water distribution
networks in San Diego County. The character of the service area has also changed from
predominantly dry-land farming and cattle ranching, to
businesses, high-tech industries, and large master-planned
communities.
Today the District provides water service to nearly 47,340
potable and 640 recycled customers within approximately
125 square miles of southeastern San Diego County. In
the past, all of the potable water delivered by the District
was purchased from the San Diego County Water
Authority (CWA) who in turn purchases water from the
region’s water importer, the Metropolitan Water District
of Southern California (MWD). Last year the District
began purchasing raw water from CWA and having that
water treated by the Helix Water District. This action
brought regional water treatment closer to our customers
and reduced dependence on water treatment located
outside of San Diego proper.
The District also owns and operates a wastewater collection and recycling system to provide
public sewer service to approximately 4,630 homes and businesses, equivalent to 6,640 Assigned
Service Units, within portions of the communities of La Mesa, Rancho San Diego, El Cajon,
Jamul, and Spring Valley. Recycled water from the Ralph W. Chapman Water Recycling
Facility (RWCWRF) is capable of reclaiming wastewater at a rate of 1.3 million gallons per day.
The District also purchases up to 6 million gallons per day of recycled water from the City of
San Diego’s South Bay Reclamation Plant. Recycled water from these two sources is used to
2
Balanced Scorecard
irrigate golf courses, schools, public parks, roadway landscapes, and various other approved uses
in eastern Chula Vista.
MISSION, CURRENT ECONOMIC CONDITIONS, AND OUTLOOK
The mission of the District is to provide customers with the best quality water, wastewater, and
recycled water service in a professional, effective, and efficient manner. To do so, this year and
in coming years, we will be faced with several key challenges. These challenges include: the
slowdown in the local and national economy; instability in the financial markets; widespread
home foreclosures; the likelihood of continued drought in the Southwest; and possible water
shortages due in part to the reduction in water deliveries from the Sacramento – San Joaquin Bay
Delta.
Given these uncertain times, the District must
find the best solutions that balance the
expectations placed on it by our customers
and key community and financial
stakeholders with the significant challenges
we face. Meeting these challenges requires
dedication and a commitment to continuous
improvement and the innovative use of
technologies and resources.
While overall growth in San Diego County
has slowed over the last two years, population
within the District’s service area continues to
increase albeit at a much reduced rate. As of
July 2008, it is estimated that the District
served 191,500 residents. The San Diego
Association of Governments (SANDAG), the
regional planning agency, has estimated the
District’s growth will continue for a decade or more. The District projects an ultimate customer
population of 277,000 residents.
BUDGET SUMMARY
The District’s Fiscal Year 2009 budget is $98 million, with operating expenditures of $67.1
million and capital expenditures of $30.9 million. The District’s goal is to provide the most
effective and efficient service possible while maintaining affordability of the water supply for the
community.
The District’s operating expenditures are derived from its three major sectors: potable water,
recycled water, and sewer, totaling $67,062,700 for Fiscal Year 2009. Revenues from potable
and recycled water for Fiscal Year 2009 are projected to be $55,573,900, about $4.8 million
(9.5%) greater than Fiscal Year 2008. Water sales volumes are expected to decrease as a result
of the slowing economy and expanded efforts to promote water conservation, while the cost of
3
water increases due to supply limitations. Sewer revenues are projected to be $2,145,300, about
$270,000 less than Fiscal Year 2008, due to a change in sewer billing methodology and lower
water consumption. The remaining non-operating revenues of $9,343,500 consist of investment
income, taxes and assessments, availability charges, and miscellaneous revenues.
Significant aspects of the Operating Budget are:
• A balanced budget meeting the goals of the Strategic Plan.
• An updated a six-year Rate Model to ensure sound financial planning and reserve levels.
• Unprecedented water supply rate increases of 13.2% from CWA because of the high cost
of supply programs, in addition to higher energy and operating costs.
• Planned rate increases in potable and recycled water and sewer. This included pass-
through rate increases from CWA, and County of San Diego who raised costs to water
and sewer customers.
• Expanded residential, landscape, and commercial water conservation programs.
• In response to the economic slowdown, the District has reduced staffing levels from 173
full time equivalents to 169, and cut operating expenditures by $885,800 due to program
deferrals and other discretionary spending cuts.
• Of San Diego County’s 23 water agencies, Otay’s water rate is the ninth-lowest and
below the county-wide average.
The Capital Budget consists of 66 projects and a budget of $30,939,000. The budget emphasizes
long-term planning for on-going programs while functioning within fiscal constraints and
population growth. This year’s CIP budget was reduced by $7.5 million, compared to last year’s
projection, in response to the housing slowdown.
STRATEGIC PLAN
The primary way to achieve our objectives is to improve all aspects of our core business
processes. The main tool we will utilize in this regard is the Strategic Business Plan, which was
updated this year and adopted by your Board for the 2009 through 2011 timeframe.
Efficiency improvements have become the new competitive advantage for utilities. As a result,
the theme of the plan is to capitalize on the infrastructure investments we have already made in
the last few years. We will use the slowdown in the regional economy to realign our energies
and optimize how we manage and maintain the nearly half billion dollars of “in-ground” assets,
utilizing the technology we have recently put in place.
The Strategic Business Plan also carries forth the District’s transformation from a growth-centric
to a maintenance-based organization. Where capital and developer fees supported growth, the
District was very successful in managing long-term maintenance and replacement of our
infrastructure.
4
This necessary change is illustrated by the
business maturity curve. During high
growth, we focus on achieving the macro
targets of building and installing new
infrastructure. In the future, the resources
required to support slower growth are
reduced but the effort to maintain and
improve assets increases. Income, however,
will be derived more from rates and less
from fees. Consequently, increased costs
place pressure more directly on rates. Therefore, to meet our customer and financial goals, the
District will emphasize internal efficiency and development of technology assisted best practices.
In effect, we will use our investments in technology to do more with the same or fewer
resources.
The Future
The coming years will be challenging times for everyone
in the water industry. Following Governor
Schwarzenegger’s declaration of a statewide drought in
California in June, the District declared a Level 1 drought
watch. By doing so, we have begun calling on all
customers to achieve up to a 10 percent reduction in their
water use through voluntary measures. By summer of next
year we estimate we could be in Level 2 drought alert, or
perhaps even a drought emergency where voluntary
conservation gives way to mandatory measures and all
customers are required to cut water use by 30 to 40
percent.
As you would expect, this will impact the finances of the
District and staff throughout the District are working
diligently to prepare for the consequences of an extended
drought, should it come to pass. With that in mind, our
strength as an organization is vastly enhanced by the
practices and policies put in place by your Board to ensure
the strength and stability of the District as we move
forward into uncertain times. These actions will assure our
success as an organization and the well-being of the customers we serve.
ACCOUNTING SYSTEM
The Finance Department is responsible for providing financial services to the District, including
financial accounting, reporting, payroll, accounts payable, investment of funds, billing and
collection of water and wastewater charges, taxes, and other revenues. The District’s books and
records are maintained on an enterprise basis, matching revenues against the costs of providing
5
services. Revenues and expenses are recorded on the accrual basis in the period in which revenue
is earned and expenses are incurred.
INTERNAL CONTROLS
Otay Water District operates within a system of internal controls established and continually
reviewed by management. This provides reasonable assurance that assets are adequately
safeguarded and transactions are recorded correctly according to District policies and procedures.
When establishing or reviewing controls, management must consider the cost of the control and
the value of the benefit derived from its utilization. Management normally maintains and
implements all sensitive controls and those controls whose value adequately exceeds their cost.
Management believes the District’s internal controls, procedures, and policies adequately
safeguard assets and provide reasonable assurance of proper recording of financial transactions.
In addition, the District maintains controls to provide for compliance with all finance related
legal and contractual provisions. Management believes the activities reported within the
presented Comprehensive Annual Financial Report (CAFR) comply with these finance related
legal and contractual provisions, including bond covenants and fiduciary responsibilities.
BUDGETING CONTROLS
The District views the budget as an essential tool for proper financial management. The budget
is developed with input from the various departments of the organization and is adopted prior to
the start of each fiscal year. It is designed and presented for the general needs of the District, its
staff, and customers. It is a comprehensive and balanced financial plan that features District
services, resources and their allocation, financial policies, and other useful information to allow
the users to gain a general understanding of the District’s financial status and future. Monthly
comparison reports of budget to actual are prepared and distributed along with variance
explanations to all department heads, with top level information provided to the Board at the
monthly Board meetings.
CASH MANAGEMENT
During the year, available funds are invested in eligible securities, as required by law, and in
accordance with the District’s own investment policy adopted by the Board of Directors. The
investment objectives of the District, in order of priority, are: 1) to preserve the capital of the
portfolio; 2) to maintain adequate liquidity to meet cash flow requirements; and 3) to obtain a
reasonable rate of return without compromising the first two objectives.
RISK MANAGEMENT
In 2003, the District became a member of the Special District Risk Management Authority
(SDRMA), a pool program which provides the District's coverage for property, auto, liability,
health benefits, and workers’ compensation claims. During Fiscal Year 2007-2008, the District
continued its proactive liability risk management role through careful monitoring of losses and
designing and implementing programs to minimize risks and losses. In addition, the District’s
6
Safety Committee analyzes workers’ compensation issues by monitoring work conditions, and
organizing and implementing safety training programs to reduce employee exposure to hazards.
PENSION PLANS
In addition to participating in Social Security, the District provides a defined benefit pension
plan for its employees through the California Public Employees’ Retirement System (CalPERS).
The District contributes a specified percentage of covered employees’ payroll, which is invested
by CalPERS. Upon retirement, District employees are entitled to a specified retirement benefit.
The plan is more fully described in Note 8 to the Financial Statements.
OTHER POST-EMPLOYMENT BENEFITS (OPEB)
The District provides other post-employment benefits (OPEB) as a part of the total compensation
offered to attract and retain the services of qualified employees. OPEB includes healthcare and
other forms of benefits (for example life insurance), in addition to the benefits provided from
specific pension plans. Financial reporting of the actuarial accrued liabilities corresponding to
all promised benefits associated with past services of District employees is not required until
Fiscal Year 2008-2009. However, setting the District apart from most state and local
government employers, during Fiscal Year 2007-2008 the District elected to set up an OPEB
trust fund with CalPERS and pre-funded $5.6 million of its net OPEB obligations, approximately
half of the actuarial accrued liability, as of the latest actuarial projection, dated June 30, 2007.
The District has also designated an additional $5.8 million to allow for significant funding of the
remaining obligations. For additional information see Note 9 to the Financial Statements.
AWARDS AND ACKNOWLEDGMENTS
To recognize the District’s Supply Link Project, connecting our
recycled water system to the City of San Diego’s South Bay Water
Reclamation Plant, the American Society of Civil Engineers (ASCE)
presented the District the 2007 Outstanding Civil Engineering
Project for the 30” Recycled Water Pipeline, Dairy Mart Road to the
450-1 Reservoir. Additionally, for this same project, the
Construction Management Association of America (CMAA)
presented Otay Water District the 2008 Project Achievement Award
for the Recycled Water Pipeline to recognize outstanding
achievement in the practice of construction management.
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to Otay Water
District for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June
30, 2007. This was the fourth consecutive year that the District has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government agency must publish
an easily readable and efficiently organized Comprehensive Annual Financial Report. This
report must satisfy both generally accepted accounting principles and applicable legal
requirements.
7
8
A Certificate of Achievement is valid for a period of one year only. We believe that our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to the GFOA to determine its eligibility for
another certificate.
The District also received a Distinguished Budget Presentation Award from the GFOA for the
District's Operating and Capital Budget for Fiscal Year beginning July 1, 2007, as well as four
awards from the CSMFO for Excellence in Budgeting, Excellence in Capital Budgeting,
Meritorious in Public Communications, and Meritorious in Innovation. These prestigious
awards recognize conformance with the highest standards for preparation of state and local
government financial reports.
I would like to thank all of the staff involved for their efforts in preparing this Comprehensive
Annual Financial Report, and for their hard work to ensure a successful outcome. I would also
like to thank the firm of Teaman, Ramirez and Smith, Inc., for their professional work and
opinion. To the Board of Directors, staff and I acknowledge and appreciate their continued
support and direction in achieving excellence in financial management.
A£~ -
Mark Watton, General Manager
rganization hart
BOARD OF DIRECTORS
GENERAL MANAGER
FINANCEADMINISTRATIVE
SERVICES
INFORMATION
TECHNOLOGY
AND STRATEGIC
PLANNING
ENGINEERING WATER
OPERATIONS
Controller and
Budgetary Services
Treasury and
Accounting
Services
Customer
Service
Payroll and
Accounts Payable
Human
Resources
Purchasing and
Facilities
Safety and Risk
Administration
Water
Conservation
IT
Applications
Public Services
Construction
Survey
Environmental
Water System
Operations
Utility
Maintenance/
Construction
Collection/
Treatment/
Recycle
Operations
GIS
ASSISTANT GENERAL MANAGER ASSISTANT GENERAL MANAGER
IT
Operations Water Resources
Design
Planning
CITIZENS AND
CUSTOMERS
9
Board of Directors
Listed from Left to Right
Larry Breitfelder - Division 1
Jose Lopez – Vice President, Division 4
Jaime Bonilla – Treasurer, Division 2
Mark Robak - Division 5
Gary Croucher - President, Division 3
District Financial Management
Mark Watton - General Manager
German Alvarez - Assistant General Manager, Finance and Administration
Manny Magaña - Assistant General Manager, Engineering and Operations
Joseph R. Beachem - Chief Financial Officer
LIST OF PRINCIPAL OFFICIALS
FISCAL YEAR 2007-2008
10
AWARD
11
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Otay Water District
California
Por its Comprt:hensivc Annual
Finnnc:ial Report
for the Fital Year Ended
June 30, 2007
A Ccl1ir~Catc of Ac.lnc.-...:mmt JOr &oc:lknoc. 10 fuaocial
Repoltilt,~~ il presented by b: Guvr:riii"''K''d Flnanc:c OtrJCCn
AssociAtion of the Ufti\cd Slllk:l add Canada 110
~QVtmmfGI. unha illd pubi/Q ••ll'-,.'N rellrcmrnl
l)'!ltcrM ~80 conprdten5i\'CI.,..,...I fln:anc:'-1
rqM)tll (CAFRs) achit\'c: tbc ba.ghcsc
suadardt in to'~n'lml .:::counting
•nd finef!l('ial Jti)OfiUII-
Uxecu1ivc orr~tor
~ Financial
•::re>csTEAMAN, RAMIREZ&SMITH, INC . •• I ~ CER TIF I ED P UBLI C ACCOU fi TAtiTS
Board of Directors
Otay Water District
Spring Valley, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the business-type activities of the Otay Water District, as of and for the
years ended June 30, 2008 and 2007, which collectively comprise the District's basic fmancial statements, as listed in the Table of
Contents. These basic financial statements are the responsibility of the District's management. Our responsibility is to express an
opinion 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence suppmting the
amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective fmancial
position of the business-type activities of the Otay Water District, as of June 30, 2008 and 2007, and the cash flows where
applicable, thereof for the years then ended in confonnity with accounting principles generally accepted in the United States of
America.
In accordance with Government Auditing Standards, we have also issued our report dated October 24, 2008 on our consideration
of the District's internal control over financial reporting and our test 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 the internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
The information identified in the accompanying table of contents as Management's Discussion and Analysis and Required
Supplementa~y Information is not a required part of the basic financial statements, but are supplementary information required by
the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of
inquires of management regarding the methods of measurement and presentation of the supplementary information. However, we
did not audit the information and do not express an opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements that collectively comprise the
Otay Water District's basic financial statements. The introductory section and statistical section, as listed in the table of contents,
are presented for purposes of additional analysis and are not a required part of the basic financial statements. The introductory
section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
October 24, 2008
Richard A . Teaman, CPA • Greg W. Fankhanel, CPA • David M . Ramirez, CPA • Javier H . Carrillo, CPA
4201 Brockton Ave. Suite 100, Riverside CA 92501 • 951.274.9500 • 951.274.7828 FAX • www.trscpas.com
. . ~~" ~· ~:· ""'·c~ .....
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, 2008. 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 $456.8 million
(net assets). Of this amount, $82.0 million (unrestricted net assets) may be used to meet the District’s ongoing
obligations to citizens and creditors.
• The District’s total net assets increased by $9.8 million. This is primarily attributable to capital contributions of
$14.9 million during the fiscal year.
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 Assets, 2) Statement of Revenues, Expenses and Changes in Net Assets,
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 Assets presents information on all of the District’s assets and liabilities, with the difference between
the two reported as net assets. Over time, increases or decreases in net assets 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 Assets presents information showing how the District’s net
assets changed during the most recent fiscal year. All changes in net assets 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).
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 earlier, net assets may serve over time as a useful indicator of an entity’s financial position. In the case of the
District, assets exceeded liabilities by $456.8 million at the close of the most recent fiscal year.
By far the largest portion of the District’s net assets, $372.5 million (82%), reflects its investment in capital assets, less any
related debt used to acquire those assets that is still outstanding. 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 net of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
MANAGEMENT’S DISCUSSION AND ANALYSIS
15
Statement of Net Assets
(In Millions of Dollars)
2008 2007 2006
Assets
Current and Other Assets $ 106.4 $ 122.1 $ 86.4
Capital Assets 446.7 424.3 397.0
Total Assets 553.1 546.4 483.4
Liabilities
Long-term Debt Outstanding 71.7 74.2 33.9
Other Liabilities 24.6 25.2 27.4
Total Liabilities 96.3 99.4 61.3
Net Assets
Invested in Capital Assets
Net of Related Debt 372.5 374.6 361.6
Restricted 2.3 2.1 2.4
Unrestricted 82.0 70.3 58.1
Total Net Assets $ 456.8 $ 447.0 $ 422.1
At the end of FY-2008 the District is able to report positive balances in all categories of net assets. This situation also held
true for the prior two fiscal years. In FY-2008 total Net Assets increased approximately $9.8 million, to $456.8 million, as
compared to FY-2007 when Net Assets increased by over $24.9 million. While the District’s operations and population
continue to grow, albeit at slower rates than in prior years, the pattern of reduced growth of the District’s Net Assets is
indicative of the reduction in new development projects within the District. This reduction is a result of the ongoing national
housing slump and financial crisis.
The increase in Current and Other Assets of $35.7 million in FY-2007 corresponds with the increase in Long-term Debt of
$40.3 million, due to the issuance of $42 million in new Certificates of Participation (COPS-2007). (See Note 5 in the Notes
to Financial Statements). These funds are being used as a part of the District’s substantial Capital Improvement Plan (CIP),
as evidenced by an increase in Capital Assets of $27.3 million (net of accumulated depreciation) in FY-2007. In FY-2008
use of the COPS-2007 funds to finance the CIP program continued, contributing to the increase in Capital Assets of $22.4
million. The use of the COPS-2007 funds is also reflected in the decrease of Current and Other Assets of $15.7 million. (See
Note 3 in the Notes to Financial Statements).
MANAGEMENT’S DISCUSSION AND ANALYSIS
16
Statements of Revenues, Expenses, and Changes in Net Assets
(In Millions of Dollars)
2008 2007 2006
Water Sales $ 50.8 $ 48.6 $ 43.8
Wastewater Revenue 2.4 2.6 2.3
Connection and Other Fees 2.5 2.1 1.8
Non-operating Revenues 13.6 11.1 8.5
Total Revenues 69.3 64.4 56.4
Depreciation Expense 13.0 10.8 10.1
Other Operating Expense 58.5 53.9 49.5
Non-operating Expense 2.9 1.3 1.2
Total Expenses 74.4 66.0 60.8
Loss Before Capital
Contributions (5.1)(1.6)(4.4)
Capital Contributions 14.9 26.5 15.4
Change in Net Assets 9.8 24.9 11.0
Beginning Net Assets 447.0 422.1 411.1
Ending Net Assets $ 456.8 $ 447.0 $ 422.1
Water Sales increased by $4.8 in FY-2007 and $2.2 million in FY-2008, mainly due to reduced rainfall during both years as
well as rate increases in both years. Growth also had a partial impact, with new water meter sales of 548 and 220 meters
respectively. Non-operating Revenues increased by $2.6 million in FY-2007 due primarily to rising rates of return on
investment income. Despite a reversal of market rates of return in FY-2008, Non-operating Revenues increased an additional
$2.5 million due to the increased level of investments from the COPS-2007, increased property tax revenues, and healthcare
reimbursements from CalPERS for other post employment benefits (OPEB). (See Note 9 in the Notes to Financial
Statements).
Depreciation Expense increased by a modest $0.7 million in FY-2007 and then $2.2 million in FY-2008, due to a
comprehensive review and write-off of long-term fixed assets that were obsolete and/or no longer serviceable. Other
Operating Expense increased by approximately $4.4 million in FY-2007 and $4.6 million in FY-2008 as a result of the cost
of the additional water sold each year, as well as increases in outside services and higher pension costs. Non-operating
Expense was consistent from FY-2006 to FY-2007, but increased $1.6 million in FY-2008 due to a full year of interest
expense from the COPS-2007.
Capital Contributions increased $11.1 million in FY-2007 due to the completion of several developer construction projects.
However, because of the nationwide housing mortgage crisis throughout FY-2008, developers either slowed-down or totally
stopped work on as many projects as possible until economic conditions improve and the demand for growth returns,
resulting in a decrease in Capital Contributions of $11.6 million from the prior year.
MANAGEMENT’S DISCUSSION AND ANALYSIS
17
MANAGEMENT’S DISCUSSION AND ANALYSIS
Capital Assets and Debt Administration
Capital Assets. The District’s capital assets as of June 30, 2008, totaled $446.7 million (net of accumulated depreciation).
Included in this amount is land. The total increase in the District’s capital assets was 6.9% for FY-2007 and 4.6% in FY-
2008.
Capital Assets
(In Millions of Dollars)
2008 2007 2006
Land $ 13.0 $ 13.0 $ 12.5
Construction in Progress 42.3 40.3 58.9
Water System 365.6 356.6 333.0
Recycled Water System 93.0 73.5 49.1
Sewer System 36.7 37.7 37.7
Buildings 17.6 17.6 17.5
Transportation Equipment 3.1 3.1 2.9
Engineering Equipment 5.7 5.6 5.7
Power Operated Equipment 1.6 1.6 1.6
Other Equipment 19.7 18.5 10.9
598.3 567.5 529.8
Less Accumulated
Depreciation (151.6) (143.2) (132.8)
Net Capital Assets $ 446.7 $ 424.3 $ 397.0
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.
Long-term Debt. At June 30, 2008, the District had $71.7 million in outstanding debt which consisted of the following:
General Obligation Bonds $ 7.7
Certificates of Participation 63.3
Notes Payable 0.7
Total Long-term Debt $ 71.7
Additional information on the District’s long-term debt can be found in Note 5 of the Notes to Financial Statements.
18
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year 2008-2009 Budget
Economic Factors
Growth in the San Diego area has slowed over the last 2 years, and demand for housing is reflected in a similarly reduced
pace. The District currently provides water service to about 69% of its total projected population, serving approximately
191,500 people. Long-term, this percentage should continue to increase as the District's service area continues to develop
and grow. Ultimately, the District is projected to serve approximately 277,000 people, creating an average daily demand of
56 million gallons per day (MGD).
The District is projected to deliver approximately 38,800 acre-feet of water to 47,340 customers during Fiscal Year 2008-
2009. Management feels that these projections are very realistic after accounting for low growth, supply changes, and a
focus on conservation. Current economic conditions throughout America have created an unprecedented uncertainty for
business and economic projections in the current fiscal year. The nationwide housing mortgage crisis has resulted in
hundreds of foreclosures throughout the District. Additionally, the crisis in the banking and financial industry has begun to
have a ripple effect of employee layoffs across a wide swath of the business community. One of the subsequent results of
these two broad events is the relocation of many homeowners and renters into new housing arrangements throughout San
Diego County. However, as housing patterns change throughout the District, people’s need for water remains an
underlying constant.
Financial
The District has implemented a six-year rate study projection that forecasts minimum essential rate increases in order to
fund required growth and improvements in infrastructure, as well as to pass along cost increases from the City of San
Diego, the County of San Diego, and the San Diego County Water Authority. The expanding demand for water service
over the past few years continues to support the incremental costs associated with meeting this increase in demand. As a
result, the District has been able to implement strategic changes that will provide long-term benefits to the District, while
only increasing rates at modest levels.
Conversely, lower than average levels of rainfall over the last three years have caused historic dry conditions and depleted
water reserves throughout the entire state. Following Governor Schwarzenagger’s declaration of a statewide drought in
California in June 2008, the District declared a Level 1 drought watch. By doing so, we have begun calling on all
customers to achieve up to a 10 percent reduction in their water use through voluntary measures. By summer of next year,
we estimate we could be in Level 2 drought alert where voluntary conservation gives way to mandatory measures and all
customers are required to cut water use by up to 20 percent. Mitigating the impact of this revenue decrease would be
corresponding reductions in expenses, to include the cost of water and the associated electricity required for pumping.
Management is unaware of any other conditions that could have a significant past, present, or future impact on the
District’s current financial position, net assets 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, taxpayers, 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.
19
Basic Financial Slalllllnls
640-1 and 640-2 Reservoirs Project-October 2008
2008 2007
ASSETS
Current Assets:
Cash and Cash Equivalents (Note 2)23,351,911$ 8,048,633$
Restricted Cash and Cash Equivalents (Note 2)3,753,983 11,191,213
Investments (Note 2)60,682,507 68,912,864
Restricted Investments (Note 2)19,975,538
Accounts Receivable 7,689,720 8,675,458
Accrued Interest Receivable 715,900 1,559,081
Restricted Taxes and Availability Charges Receivable 537,195 443,854
Inventory 711,240 633,697
Prepaid Expenses and Other Current Assets 1,908,028 1,164,300
Total Current Assets 99,350,484 120,604,638
Non-current Assets:
Net OPEB Obligation 5,649,008
Capital Assets, Net of Depreciation (Note 3)446,714,397 424,260,968
Other Non-current Assets (Note 4)1,408,971 1,490,515
Total Non-current Assets 453,772,376 425,751,483
Total Assets 553,122,860 546,356,121
LIABILITIES
STATEMENT OF NET ASSETS
JUNE 30, 2008 AND 2007
LIABILITIES
Current Liabilities:
Current Maturities of Long-term Debt (Note 5)2,445,214 1,519,048
Accounts Payable 11,075,807 10,930,658
Accrued Payroll Liabilities 2,491,182 2,270,958
Other Accrued Liabilities 1,615,402 1,597,012
Customer Deposits 2,719,331 2,622,646
Liabilities Payable From Restricted Assets:
Accounts Payable 2,629,759 4,492,364
Accrued Interest 886,642 882,888
Total Current Liabilities 23,863,337 24,315,574
Non-current Liabilities:
Liabilities Payable From Restricted Assets:
Prepaid Capacity Fees 690,709 890,473
Long-term Debt (Note 5)
General Obligation Bonds 7,678,302 8,045,029
Certificates of Participation 63,361,579 65,051,790
Notes Payable 701,516 1,031,730
Total Non-current Liabilities 72,432,106 75,019,022
Total Liabilities 96,295,443 99,334,596
NET ASSETS (NOTE 7)
Invested in Capital Assets, Net of Related Debt 372,527,786 374,667,591
Restricted for Construction 2,314,400 2,071,307
Unrestricted 81,985,231 70,282,627
Total Net Assets 456,827,417$ 447,021,525$
The accompanying notes are an integral part of this statement.
23
2008 2007
OPERATING REVENUES
Water Sales 50,808,825$ 48,605,606$
Wastewater Revenue 2,386,285 2,604,431
Connection and Other Fees 2,519,735 2,040,444
Total Operating Revenues 55,714,845 53,250,481
OPERATING EXPENSES
Cost of Water Sales 35,296,002 33,994,841
Wastewater 2,009,876 1,508,672
Administrative and General 21,127,922 18,418,441
Depreciation 13,040,572 10,729,096
Total Operating Expenses 71,474,372 64,651,050
Operating Income (Loss)(15,759,527) (11,400,569)
NON-OPERATING REVENUES (EXPENSES)
Investment Income 4,538,791 4,416,342
Taxes and Assessments 4,591,023 4,151,956
Availability Charges 744,722 715,664
Gain on Sale of Capital Assets 15,243 1,817
Miscellaneous Revenues 3,676,963 1,809,802
Donations (80,541)(80,000)
Interest Expense (2,601,252) (950,479)
Miscellaneous Expenses (261,492) (271,410)
Total Non-operating Revenues (Expenses)10,623,457 9,793,692
Income (Loss) Before Contributions (5,136,070) (1,606,877)
Capital Contributions 14,941,962 26,563,075
Change in Net Assets 9,805,892 24,956,198
Total Net Assets, Beginning 447,021,525 422,065,327
Total Net Assets, Ending 456,827,417$ 447,021,525$
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
The accompanying notes are an integral part of this statement.
24
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 54,276,851$ 49,477,123$
Cash from Other Operating Activities 2,520,417 2,040,444
Other Receipts 1,797,869 894,234
Cash Payments to Suppliers (41,996,845) (41,462,779)
Cash Payments to Employees (23,670,840) (15,835,985)
Other Payments (135,104) (167,472)
Net Cash Provided (Used) By Operating Activities (7,207,652) (5,054,435)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Receipts from Taxes and Assessments 4,497,682 4,026,192
Receipts from Property Rents and Leases 977,313 951,020
Net Amounts Paid for Acquisition and Maintenance of
Demonstration Garden (80,541)(80,000)
Net Cash Provided (Used) By Noncapital Financing Activities 5,394,454 4,897,212
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from Capital Contributions 6,807,761 17,476,332
Proceeds from Sale of Capital Assets 15,243 1,817
Proceeds from Debt Related Taxes and Assessments 744,722 715,664
Proceeds from Long-Term Debt (Note 5) 40,989,797
Principal Payments on Long-Term Debt (Note 5) (1,519,048) (1,529,848)
Acquisition and Construction of Capital Assets (27,359,800) (28,915,737)
Interest Paid (2,597,498) (481,033)
Net Cash (Used) By Capital and Related Financing Activities (23,908,620) 28,256,992
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received on Investments 5,381,971 3,676,059
Proceeds from Sale and Maturities of Investments 88,909,995 44,708,111
Purchase of Investments (60,704,100) (71,000,000)
Net Cash Provided (Used) by Investing Activities 33,587,866 (22,615,830)
Net Increase (Decrease) in Cash and Cash Equivalents 7,866,048 5,483,939
Cash and Cash Equivalents - Beginning of Year 19,239,846 13,755,907
Cash and Cash Equivalents - End of Year 27,105,894$ 19,239,846$
The accompanying notes are an integral part of this statement.
25
2008 2007
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Net Operating Income (Loss)(15,759,527)$ (11,400,569)$
Adjustments to Reconcile Operating Income to
Net Cash Provided (Used) by Operating Activities:
Depreciation 13,040,572 10,729,096
Miscellaneous Revenues 2,712,869 894,234
Miscellaneous Expenses (135,104) (167,472)
(Increase) Decrease in Accounts Receivable 985,738 (1,866,459)
(Increase) Decrease in Inventory (77,543) (41,271)
(Increase) Decrease in Net OPEB Obligation (5,649,008)
(Increase) Decrease in Prepaid Expenses and Other Current Assets (743,728) (500,167)
Increase (Decrease) in Accounts Payable (1,717,456) (3,827,697)
Increase (Decrease) in Accrued Payroll and Related Expenses 220,224 (77,895)
Increase (Decrease) in Other Accrued Liabilities 18,390 913,662
Increase (Decrease) in Customer Deposits 96,685 133,545
Increase (Decrease) in Prepaid Capacity Fees (199,764) 156,558
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
Total Cash Provided (Used) By Operating Activities (7,207,652)$ (5,054,435)$
SUPPLEMENTAL DISCLOSURES
Non-cash Investing and Financing Activities Consisted of the Following:
Contributed Capital for Water and Sewer System 8,134,201$ 8,812,611$
Change in Fair Value of Investments and Recognized Gains/Losses 109,847 223,829
Capital Contribution Resulting from Prepaid Capacity Fees 33,356 156,558
Amortization Related to Long-term Debt 126,387 103,938
Cash Paid for Interest Expense 2,970,780$ 1,478,461$
The accompanying notes are an integral part of this statement.
26
NOTE DESCRIPTION PAGE
1 Reporting Entity and Summary of Significant Accounting Policies..… 28
2 Cash and Investments…………………………………………..……... 30
3 Capital Assets…………………………………………………..……... 34
4 Other Non-current Assets…………………………………………….. 35
5 Long-Term Debt………………………………………………….…… 35
6 Segment Information………………………………………………..… 38
7 Net Assets…………………………………………………………….. 40
8 Defined Benefit Pension Plan………………………………………….40
9 Other Post Employment Benefits………………………..…………..... 42
10 Water Conservation Authority………………………………………... 43
11 Commitments and Contingencies…………………………………….. 44
12 Risk Management…………………………………………………….. 44
13 Interest Expense……………………………………………………..... 45
Required Supplementary Information:
1 Schedule of Funding Progress for PERS……………………………... 49
2 Schedule of Funding Progress for DPHP…………………………….. 49
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
27
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
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.
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation
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.
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. 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. Revenues and expenses are recognized on the accrual basis. Revenues are recognized in
the accounting period in which they are earned and expenses are recognized in the period incurred.
Fund equity is displayed as three components: (1) Invested in capital assets, net of related debt, which reflects the cost of
capital assets less accumulated depreciation and less the outstanding principal of related debt not associated with unspent
bond proceeds; (2) Restricted, which reflects the carrying value of assets less related liabilities that are restricted by
outside covenants or by law; and (3) Unrestricted, which represents the remaining fund equity balance.
The District distinguishes operating revenues and expenses from those revenues and expenses that are non-operating.
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. Non-operating revenues and expenses are those revenues
and expenses generated that are not directly 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 $59,688 and $49,317 at June 30, 2008 and 2007, respectively.
Additionally, capacity fee contributions received in an amount corresponding to expansion specific operating expenses
are offset against these expenses and included in Cost of Water Sales in the Statement of Revenues and Expenses and
Changes in Net Assets.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources
first, then unrestricted resources as they are needed.
The accounting policies of the District conform to generally accepted accounting principles (GAAP) as applicable to
governmental enterprise funds. In accordance with GASB Statement 20, the District has elected to follow all GASB
Pronouncements and apply all Financial Accounting Standards Board Statements and Interpretations issued on or before
November 30, 1989, with the exception of those that conflict with or contradict GASB Pronouncements.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
28
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
C) Statement of Cash Flows
For purposes of the Statement 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.
D) Investments
As a governmental entity other than an external investment pool in accordance with GASB 31, the District’s
investments are stated at fair value, which is determined using selected basis. Short-term investments are reported
at cost, which approximates fair value. Investments in government obligations are valued on over-the-counter bid
quotations available at year-end. Cash deposits are reported at carrying amount, which reasonably estimates fair
value. Investments in governmental investment pools are reported on the fair value per share, of the pool’s
underlying portfolio.
E) 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.
F) 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 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, 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 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
Engineering Equipment 2-50 Years
Buildings 30-50 Years
Power Operated Equipment 5-10 Years
Transportation Equipment 2-4 Years
Other Equipment 2-10 Years
Reclaimed Water System 50-75 Years
Sewer System 25-50 Years
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
29
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
G) Compensated Absences
In accordance with GASB Statement No. 16, a liability is recorded for unused vacation and sick leave balances since the
employees’ entitlement to these balances are attributable to services already rendered and it is probable that virtually all
of these balances will be liquidated by either paid time-off or payment upon termination or retirement.
H) Restricted Assets and Liabilities
Certain current liabilities have been classified as current liabilities payable from restricted assets as they will be
funded from restricted assets.
I) 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.
J) Use of Estimates
The financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America and necessarily include amounts based on estimates and assumptions by management.
K) 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 March 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.
L) 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.
The District’s Investment Policy and State statues authorize the District to invest in obligations of the U.S. Treasury, agencies
and instrumentalities, prime commercial paper, and negotiable certificates of deposit. Funds may also be invested in the State
Treasurer’s Local Agency Investment Fund (LAIF) and the San Diego County Treasurer’s Pooled Money Fund.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
30
2) CASH AND INVESTMENTS - Continued
Cash and Investments are classified in the accompanying financial statements as follows:
Statement of Net Assets:
Cash and Cash Equivalents $ 23,351,911
Investments 60,682,507
Restricted:
Cash and Cash Equivalents 3,753,983
Total Cash and Investments $ 87,788,401
Cash and investments consist of the following:
Cash on Hand $ 2,800
Deposits with Financial Institutions 2,655,933
Investments 85,129,668
Total Cash and Investments $ 87,788,401
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
Federal Agency Securities 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.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
31
2) CASH AND INVESTMENTS - Continued
Investments Authorized by Debt Agreements
Investment 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 a combination of shorter
term and longer term investments 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 (including investments held by the bond
trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the District’s
investments by maturity.
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60 More Than
Investment Type Or Less Months Months 60 Months
Federal Agency Securities $ 58,630,803 $ $ 22,018,478 $ 36,612,325 $
Local Agency Investment Fund
(LAIF)
12,228,060
12,228,060
Corporate Medium-Term Notes 2,051,704 2,051,704
San Diego County Pool 12,219,101 12,219,101
Total $ 85,129,668 $ 24,447,161 $ 22,018,478 $ 38,664,029 $ 0
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 actual rating as of year end for each investment type.
Minimum Rating as of Year End
Legal Not
Investment Type Rating AAA AA Rated
Federal Agency Securities $ 58,630,803 N/A $ 58,630,803 $ $
Local Agency Investment
Fund (LAIF)
12,228,060
N/A
12,228,060
Corporate Medium-Term Notes 2,051,704 2,051,704
San Diego County Pool 12,219,101 N/A 12,219,101
Total $ 85,129,668 $ 60,682,507 $ 0 $ 24,447,161
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
32
2) CASH AND INVESTMENTS - Continued
Concentration of Credit Risk
The investment policy of the District contains no limitation on the amount that can be invested in any one 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 are as
follows:
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 Entity’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, 2008, $1,442,408 of the District’s deposits with financial institutions in excess of federal depository insurance
limits were held in collateralized accounts. As of June 30, 2008, District investments in the following investment types were
held by the same broker-dealer (counter party) that was used by the District to buy the securities:
Investment Type Reported Amount
Federal Agency Securities $ 58,630,803
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.
The LAIF is a special fund of the California State Treasury through which local governments may pool investments. The
District may invest up to $40,000,000 in the fund. Investments in LAIF are highly liquid, as deposits can be converted to
cash within 24 hours without loss of interest. Investments with LAIF are secured by the full faith and credit of the State of
California. The yield of LAIF during the quarter ended June 30, 2008 was 3.11%. The carrying value and estimated market
value of the LAIF Pool at June 30, 2008 was $70,027,950,242 and $70,024,464,150, respectively. The District's share of the
Pool at June 30, 2008 was approximately 0.018 percent. Included in LAIF's investment portfolio are structured notes and
asset-backed securities totaling $6,113,006,000 and $4,188,272,000, respectively. LAIF's and the District's exposure to risk
(credit, market or legal) is not currently available. The LAIF has oversight by the Local Investment Advisory Board. The
LAIF Board consists of five members as designated by statute.
Issuer Investment Type Reported Amount
Federal Home Loan Bank Federal Agency Securities $ 38,641,000
Federal Home Loan Mortgage Corp Federal Agency Securities $ 13,987,228
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
33
2) CASH AND INVESTMENTS - Continued
San Diego County Pooled Fund
As permitted by its Investment Policy, the District has placed funds with the San Diego County Pooled Fund. The pool may
invest some of their portfolios in derivatives. Detailed information on derivative investments held by this pool is not readily
available.
Collateral for Deposits
All cash and Certificates of Deposit are entirely insured or collateralized.
Under the provisions of the California Government Code, California banks and savings and loan associations are required to
secure the District's deposits by pledging government securities as collateral. The market value of the pledged securities must
equal at least 110% of the District's deposits. California law also allows financial institutions to secure city deposits by
pledging first trust deed mortgage notes having a value of 150% of the District's total deposits.
The District may waive the 110% collateral requirement for deposits which are insured up to $100,000 by the FDIC.
3) CAPITAL ASSETS
The following is a summary of changes in Capital Assets for the year ended June 30, 2008:
Beginning Ending Balance Additions Deletions BalanceCapital Assets, Not Depreciated Land $ 12,971,479 $ 53,885 $ $ 13,025,364 Construction in Progress 40,300,055 27,173,621 (25,135,456) 42,338,220 Total Capital Assets Not Depreciated 53,271,534 27,227,506 (25,135,456) 55,363,584 Capital Assets, Being Depreciated Infrastructure 467,803,021 31,880,962 (4,434,610) 495,249,373 Field Equipment 9,358,862 122,501 (51,087) 9,430,276 Buildings 17,607,655 28,469 17,636,124 Transportation Equipment 3,056,708 239,024 (193,071) 3,102,661 Communication Equipment 599,452 90,502 689,954 Office Equipment 15,787,313 1,060,821 (22,541) 16,825,593 Total Capital Assets Being Depreciated 514,213,011 33,422,279 (4,701,309) 542,933,981 Less Accumulated Depreciation: Infrastructure 119,327,467 10,219,528 (4,414,282) 125,132,713 Field Equipment 8,577,175 187,951 (51,087) 8,714,039 Buildings 5,064,435 573,250 5,637,685 Transportation Equipment 2,614,884 137,328 (193,071) 2,559,141 Communication Equipment 265,119 104,445 369,564 Office Equipment 7,374,497 1,818,070 (22,541) 9,170,026 Total Accumulated Depreciation 143,223,577 13,040,572 (4,680,981) 151,583,168 Total Capital Assets Being Depreciated, Net 370,989,434 20,381,707 (20,328) 391,350,813 Total Capital Assets, Net $ 424,260,968 $ 47,609,213 $(25,155,784) $ 446,714,397
Depreciation expense for the year ended June 30, 2008 and 2007 was $13,040,572 and $10,729,096, respectively.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
34
4) OTHER NON-CURRENT ASSETS
Contracts receivable totaled $41,375 and $55,759, net of no allowance as of June 30, 2008 and 2007, respectively.
Deferred bond issue costs totaled $1,198,791 and $1,254,821, net of accumulated amortization of $389,352 and $357,952 as
of June 30, 2008 and 2007, respectively. The 2004 COPS had refunding transactions net of accumulated amortization of
$168,805 for June 30, 2008 and $179,935 for June 30, 2007. The costs are amortized on the straight-line method based on the
estimated term of the related bond debt. Amortization expense of $31,400 for the years ended June 30, 2008 and 2007 is
included with miscellaneous expense.
5) LONG-TERM DEBT
Long-term liabilities for the year ended June 30, 2008 are as follows:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
General Obligation Bonds:
Improvement District No. 27 $ 9,210,000 $ $ 400,000 $ 8,810,000 $ 415,000
Unamortized Bond Discount (110,953) (7,397) (103,556)
Deferred Amount of Funding (654,018) (40,876) (613,142)
Net General Obligation Bonds 8,445,029 351,727 8,093,302 415,000
Certificates of Participation:
1996 Certificates of Participation 12,800,000 300,000 12,500,000 400,000
2004 Certificates of Participation 11,335,000 500,000 10,835,000 515,000
2007 Certificates of Participation 42,000,000 42,000,000 785,000
1996 COPS Unamortized Discount (14,903) (745) (14,158)
2007 COPS Unamortized Discount (268,307) (9,044) (259,263)
Net Certificates of Participation 65,851,790 790,211 65,061,579 1,700,000
Notes Payable
State Water Resource Control
Board
1,350,778
319,048
1,031,730
330,214
Total Long-Term Liabilities $ 75,647,597 $ $ 1,460,986 $ 74,186,611 $ 2,445,214
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. 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.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
35
5) LONG-TERM DEBT - Continued
The refunding resulted in a deferred amount of $1,021,903, which is being amortized over the remaining life of the refunded
debt. Amortization for the years ended June 30, 2008 and 2007 was $40,876 for each year and is included in miscellaneous
non-operating expenses. As of June 30, 2008 and 2007, the amortized deferred amount of refunding is $613,142, and
$654,018, respectively.
The 1998 General Obligation Bonds have interest rates from 4.5% to 5% with maturities through Fiscal Year 2023.
Future debt service requirements for the bonds are as follows:
For the Year
Ended June 30, Principal Interest
2009 $ 415,000 $ 422,047
2010 435,000 402,705
2011 455,000 382,235
2012 475,000 360,607
2013 495,000 337,565
2014-2018 2,870,000 1,287,673
2019-2023 3,665,000 475,875
$ 8,810,000 $ 3,668,707
The following General Obligation Bonds have been authorized by the Board of Directors, but were unissued as of June 30,
2008:
Improvement Construction
Date Authorized District (ID)Purpose Bond Amount
December 30, 1960 5 Water System $ 605,000
December 20, 1960 6 Sewer System 705,000
August 23, 1960 1 - 3 Sewer System 405,000
August 23, 1960 1 - 4 Water System 75,000
March 18, 1970 U - 18 Sewer System 2,700,000
April 19, 1971 U - 19 Water System 1,000,000
May 17. 1971 U - 20 Water System 13,000,000
June 5, 1972 U - 22 Water System 6,000,000
May 1, 1978 U - 25 Water System 5,050,000
November 1, 1989 U - 27 Water System 88,500,000
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 interest rate at June 30, 2008 was 1.33%. 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
YEARS ENDED JUNE 30, 2008 AND 2007
36
5) LONG-TERM DEBT - Continued
Certificates of Participation (COPS) - Continued
In July 2004, Refunding Certificates of Participation (COPS) with a face value of $12,270,000 were sold by the Otay Service
Corporation to advance refund $11,680,000 of outstanding 1993 COPS. An installment agreement between the District, as
Buyer, and the Corporation, as Seller, was executed for the scheduled payment of principle 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 $445,000 to $895,000 from September 1, 2005 through September 1, 2023;
bearing interest at 3% to 4.625%.
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 principle 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 2004 COPS 2007 COPS
Ended June 30, Principal Interest* Principal Interest Principal Interest
2009 $ 400,000 $ 160,930 $ 515,000 $ 418,309 $ 785,000 $ 1,730,532
2010 400,000 155,610 530,000 402,634 815,000 1,701,487
2011 400,000 150,290 545,000 386,236 850,000 1,671,333
2012 400,000 144,970 565,000 368,607 885,000 1,639,458
2013 500,000 138,320 580,000 349,566 920,000 1,606,270
2014-2018 2,800,000 583,870 3,250,000 1,401,425 5,175,000 7,485,187
2019-2023 3,700,000 361,760 3,955,000 660,819 6,260,000 6,411,638
2024-2028 3,900,000 82,460 895,000 20,697 7,670,000 5,028,046
2029-2033 9,460,000 3,261,119
2034-2037 9,180,000 1,025,500
$ 12,500,000 $ 1,778,210 $ 10,835,000 $ 4,008,293 $ 42,000,000 $ 31,560,570
* Variable Rate - Interest reflected at June 30, 2008 at a rate of 1.33%.
Note Payable
In December 1990, the District entered into a 3.5% note payable to the State Water Resources Control Board. This note is
unsecured and payable in annual installments of $366,325 including principal and interest from 1994 through 2010. The total
amount outstanding at June 30, 2008 and aggregate maturities of the note for the fiscal years subsequent to June 30, 2008, are
as follows:
For the Year Ended
June 30, Principal Interest
2009 $ 330,214 $ 36,111
2010 341,772 24,553
2011 359,744 12,591
$ 1,031,730 $ 73,255
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
37
6) SEGMENT INFORMATION
The District issued Certificates of Participation to finance certain capital improvements. Both the water and sewer
departments are accounted for in a single fund. The sewer department operates the District’s sewage treatment plant,
sewage pumping stations, and collection systems, while the water department accounts for all other services. However,
investors in the Certificates of Participation rely solely on the revenues generated by the individual activities for
repayment.
Summary financial information for the water and sewer departments is presented below.
Condensed Statement of Net Assets
Water Sewer Total
Assets:
Current Assets $ 94,971,245 $ 88,061 $ 95,059,306
Current Restricted Assets 4,291,178 4,291,178
Net OPEB Obligation 5,649,008 5,649,008
Capital Assets 430,098,108 16,616,289 446,714,397
Other Non-current Assets 1,408,971 1,408,971
Total Assets 536,418,510 16,704,350 553,122,860
Liabilities:
Current Liabilities 20,025,537 321,399 20,346,936
Current Liabilities Payable from
Restricted Assets
3,423,865
92,536
3,516,401
Non-current Liabilities Payable
from Restricted Assets
683,209
7,500
690,709
Non-current Liabilities 71,741,397 71,741,397
Total Liabilities 95,874,008 421,435 96,295,443
Net Assets:
Invested in Capital Assets, Net of
Related Debt
355,911,497
16,616,289
372,527,786
Restricted 2,314,400 2,314,400
Unrestricted 82,318,605 (333,374) 81,985,231
Total Net Assets $ 440,544,502 $ 16,282,915 $ 456,827,417
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
38
6) SEGMENT INFORMATION - Continued
Condensed Statement of Cash Flows
Water Sewer Total
Net Cash Provided (Used) by:
Operating Activities $ (6,462,401) $ (745,251) $ (7,207,652)
Non-capital Financing Activities 5,000,523 393,931 5,394,454
Capital and Related Financing Activities (23,668,567) (240,053) (23,908,620)
Investing Activities 32,996,493 591,373 33,587,866
Net Increase (Decrease) 7,866,048 0 7,866,048
Beginning Cash and Cash Equivalents 19,239,846 0 19,239,846
Ending Cash and Cash Equivalents $ 27,105,894 $ 0 $ 27,105,894
Condensed Statement of Revenues, Expenses, and Changes in Net Assets
Water Sewer Total
Operating Revenues $ 53,328,560 $ 2,386,285 $ 55,714,845
Depreciation (12,160,845) (879,727) (13,040,572)
Other Operating Expenses (56,423,924) (2,009,876) (58,433,800)
Operating Income (15,256,209) (503,318) (15,759,527)
Non-operating Revenues (Expenses):
Investment Income 3,947,418 591,373 4,538,791
Taxes and Assessments 4,197,092 393,931 4,591,023
Availability Charges 688,123 56,599 744,722
Gain on Sale of Capital Assets 15,243 15,243
Other Non-operating Revenues 3,676,963 3,676,963
Donations (80,541) (80,541)
Interest Expense (2,560,489) (40,763) (2,601,252)
Other Non-operating Expenses (261,492) (261,492)
Transfers 1,198,468 (1,198,468) 0
Capital Contributions 14,941,962 14,941,962
Total Non-operating Revenues (Expenses) 25,762,747 (197,328) 25,565,419
Change in Net Assets 10,506,538 (700,646) 9,805,892
Total Net Assets, Beginning* 430,037,964 16,983,561 447,021,525
Total Net Assets, Ending $ 440,544,502 $ 16,282,915 $ 456,827,417
*Beginning balances were restated from the prior year to reclassify infrastructure capital assets from water to sewer activities.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
39
7) NET ASSETS
A summary of changes in net assets for the year ended June 30, 2008 is as follows:
Investment in
Capital Assets Restricted Unrestricted
Description (Net of Related Debt)Net Assets Net Assets Total
Beginning of Year $ 374,667,591 $ 2,071,307 $ 70,282,627 $ 447,021,525
Income (Loss) Before Contributions (13,040,572)* 2,734,492 5,170,010 (5,136,070)
Capital Contributions
Construction of Water and Sewer Systems 8,134,201 8,134,201
Capacity Fees and Capital Contributions 6,281,326 6,281,326
Annexation Fees 526,435 526,435
Decrease in Related Capital Debt/(Transfers) (24,593,234) 26,054,220 (1,460,986) 0
Acquisition and Construction/(Transfers) 27,359,800 (34,826,945) 7,467,145 0
End of Year $ 372,527,786 $ 2,314,400 $ 81,985,231 $ 456,827,417
*Depreciation Expense
Designated Net Assets
In addition to the restricted net assets, unrestricted net assets have been designated by the Board of Directors for the following
purposes as of June 30, 2008 and 2007:
2008 2007
Replacement Reserve $ 31,785,910 $ 31,779,960
Insurance Reserve 10,458,191 16,893,128
Expansion Reserve 34,877,733 17,809,405
Total $ 77,121,834 $ 66,482,493
8) DEFINED BENEFIT PENSION PLAN
Plan Description
The District’s defined plan, (the “Plan”), provides retirement and disability benefits, annual cost-of-living adjustments, and
death benefits to plan members and beneficiaries. The Plan is part of the Public Agency portion of the California Public
Employees’ Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a
common investment and administrative agent for participating public employers within the State of California. A menu of
benefit provisions as well as other requirements is established by State statute within the Public Employees’ Retirement Law.
The Plan selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits
through District resolution. 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.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
40
8) DEFINED BENEFIT PENSION PLAN - Continued
Funding Policy
Active members in the Plan are required to contribute 8% of their annual covered salary. The District has elected to
contribute 7% on behalf of its employees. The District is required to contribute the actuarially determined remaining amounts
necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the
CalPERS Board of Administration. The required employer contribution rate for the fiscal year ended June 30, 2008 was
19.523%. The contribution requirements of the Plan members are established by State statute and the employer contribution
rate is established and may be amended by the CalPERS.
Annual Pension Costs
For the fiscal year ended June 30, 2008, the District’s annual pension cost and actual contribution was $2,252,601. The
required contribution for the fiscal year ended June 30, 2008, was determined as part of the June 30, 2005 actuarial valuation.
The following is a summary of the actuarial assumptions and methods:
Valuation Date June 30, 2005
Actuarial Cost Method Entry Age Actuarial Cost Method
Amortization Method Level Percent of Payroll
Average Remaining Period 22 Years as of the Valuation Date
Asset Valuation Method 15 Year Smoothed Market
Actuarial Assumptions:
Investment Rate of Return 7.75% (Net of Administrative Expenses)
Projected Salary Increase 3.25% to 14.45% Depending on Age, Service, and Type of Employment
Inflation 3.00%
Payroll Growth 3.25%
Individual Salary Growth A merit scale varying by duration of employment coupled with an assumed
annual inflation component of 3.00% and an annual production growth of 0.25%.
Initial unfunded liabilities are amortized over a closed period that depends on the Plan’s date of entry into CalPERS.
Subsequent Plan amendments are amortized as a level percentage of pay over a closed 20-year period. Gains and losses that
occur in the operation of the plan are amortized over a rolling period, which results in an amortization of 6% of unamortized
gains and losses each year. If the plan’s accrued liability exceeds the actuarial value of the plan assets, then the amortization
payment of the total unfunded liability may be lower than the payment calculated over a 30-year amortization period.
THREE-YEAR TREND INFORMATION FOR PERS
Fiscal Annual Pension Percentage of Net Pension
Year Cost (APC)APC Contributed Obligation
6/30/08 2,252,601 100%0
6/30/07 1,925,758 100%0
6/30/06 2,120,529 100%0
Fund Status and Funding Progress
As of June 30, 2006, the most recent actuarial valuation date, the plan was 74.4% funded. The actuarial accrued liability (AAL)
for benefits was $54,228,041, and the actuarial value of assets was $40,321,483, resulting in an unfunded actuarial accrued
liability (UAAL) of $13,906,558. The covered payroll (annual payroll of active employees covered by the plan) was $10,470,766,
and the ratio of the UAAL to the covered payroll was 132.8%.
The schedule of funding progress, presented as required supplementary information following the notes to the financial
statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over
the time relative to the actuarial accrued liability for benefits.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
41
9) 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. A menu of benefit provisions as well as other requirements is established by State statute within the Public
Employees’ Retirement Law. DPHP selects optional benefit provisions from the benefit menu by contract with CalPERS and
adopts those benefits through District resolution. 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.
Funding Policy
The contribution requirements of plan members and the District are established and may be amended by the Board of
Directors. DPHP members receiving benefits contribute based on their selected plan options of EPO, Silver or Gold and if
they are located outside the State of California. Contributions by plan members range from $38 to $65 per month for
coverage to age 65, and from $30 to $53 per month, respectively, thereafter.
The District is required to contribute 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 normal cost each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years. The current ARC rate is 7.7% of the annual covered payroll.
Annual OPEB Cost
For 2008, the District’s annual OPEB cost (expense) of $846,000 for DPHP was equal to the ARC. In addition to the
ARC, the District contributed an additional $5,000,000 and has cash and implied subsidy (healthcare reimbursements from
CalPERS) amounts of $649,008 to the plan. The District’s annual OPEB cost, the percentage of annual OPEB cost
contributed to the plan, and the net OPEB obligation for the 2008 and the two preceding years were as follows:
THREE-YEAR TREND INFORMATION FOR CERBT
Fiscal Annual OPEB Percentage of Net OPEB
Year Cost (AOC)OPEB Cost Contributed Obligation
6/30/08 $ 846,000 100% $(5,649,008)
6/30/07 ***
6/30/06 ***
*The information for the two preceding years is unavailable. GASB 45 was implemented in fiscal year 2008.
Funded Status and Funding Progress
The funded status of the plan as of June 30, 2007, was as follows:
Actuarial Accrued Liability (AAL)$ 11,408,000 Actuarial Value of Plan Assets $0
Unfunded Actuarial Accrued Liability (UAAL)$ 11,408,000 Funded Ratio (Actuarial Value of Plan
Assets/AAL)
0%
Covered Payroll (Active Plan Members)$ 10,951,000
UAAL as a Percentage of Covered Payroll 104.2%
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
42
9) OTHER POST EMPLOYMENT BENEFITS - Continued
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 multiyear trend information that shows 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.
The following is a summary of the actuarial assumptions and methods:
Valuation Date June 30, 2007
Actuarial Cost Method Entry Age Normal Cost Method
Amortization Method Level Percent of Payroll
Remaining Amortization Period 30 Years as of the Valuation Date
Asset Valuation Method 15 Year Smoothed Market
Actuarial Assumptions:
Investment Rate of Return 7.75% (Net of Administrative Expenses)
Projected Salary Increase 3.25%
Inflation 3.00%
Individual Salary Growth CalPERS 1997-2002 Experience Study
10) WATER CONSERVATION AUTHORITY
In 1999 the District formed the Water Conservation 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 years ended June 30, 2008
and 2007, the District contributed $80,541 and $80,000, respectively, for the development, construction and operation costs of
the xeriscape demonstration garden.
A summary of the Authority’s June 30, 2007 audited financial statement is as follows (latest report available):
Assets $ 2,556,885
Liabilities 97,538
Revenues, Gains and Other Support 685,299
Changes in Net Assets 12,540
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
43
11) COMMITMENTS AND CONTINGENCIES
Construction Commitments
The District had committed to capital projects under construction with an estimated cost to complete of $1,992,831 at June 30,
2008.
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, 2007, 1,750 EDUs had been relinquished and
refunded, 13,424 EDUs had been connected, and 2,693 EDUs have neither been relinquished nor connected. At June 30,
2008, 1,750 EDUs had been relinquished and refunded, 14,622 EDUs had been connected, and 1,495 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, 2008, none of the 6 outstanding developer
agreements had been accepted, however it is anticipated that the District will be liable for an amount not to exceed $924,831
at the point of acceptance. Accordingly, the District did not accrue a liability as of year end.
12) 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. The District pays an annual premium for commercial insurance covering general liability, excess
liability, property, automobile, public employee dishonesty, and various other claims. Coverage limits range up to $100
million. Accordingly, the District retains no risk of loss.
Workers’ Compensation
The District is a member of 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 is insured up to $300,000,000 for statutory workers’
compensation and $5,000,000 for employers’ liability coverage with no deductible. Separate financial statements of
SDRMA may be obtained at Special District Risk Management Authority, 1112 “I” Street, Suite 300, Sacramento, CA
95814.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
44
12) RISK MANAGEMENT - Continued
Health Insurance
The District maintains a self-insurance program covering all of its employees, retirees, and other dependents. Health claims
are processed and administered through a health insurance administrator and paid by the District upon presentation. The
District has obtained a stop-loss insurance policy to cover individuals with claims exceeding $45,000. The District has
estimated accrued claims to be $137,029 and $474,413 at June 30, 2008 and 2007, respectively. Accrued health costs are
included in other accrued liabilities. Changes in the balances of claims liabilities during the past two years are as follows:
Year Ended Year Ended
June 30, 2008 June 30, 2007
Unpaid Claims, Beginning of Fiscal Year $ 474,413 $ 422,327
Incurred Claims (Including IBNRS) 1,712,810 1,399,661
Claim Payments (2,050,194) (1,347,575)
Unpaid Claims, End of Fiscal Year $ 137,029 $ 474,413
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.
13) INTEREST EXPENSE
Interest expense for the years ended June 30, 2008 and 2007, is as follows:
2008 2007
Amount Expensed $ 2,601,252 $ 950,479
Amount Capitalized as a Cost of
Construction Projects 373,282 997,428
Interest Paid $ 2,974,534 $ 1,947,907
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2008 AND 2007
45
1) SCHEDULE OF FUNDING PROGRESS FOR PERS
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]
6/30/06
Miscellaneous $ 40,321,483 $ 54,228,041 $ 13,906,558 74.4%$ 10,470,766 132.8%
6/30/05
Miscellaneous $ 36,029,595 $ 50,249,943 $ 14,220,348 71.7%$ 10,005,158 142.1%
6/30/04
Miscellaneous $ 31,591,156 $ 45,156,690 $ 13,565,534 70.0%$ 9,764,596 138.9%
2) 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]
6/30/07
Miscellaneous $ 0 $ 11,408,000 $ 11,408,000 0%$ 10,951,000 104.2%
6/30/06
Miscellaneous * * *** *
6/30/05
Miscellaneous * * *** *
*GASB 45 was implemented in fiscal year 2008. The information for the two preceding years is unavailable.
REQUIRED SUPPLEMENTARY INFORMATION
YEARS ENDED JUNE 30, 2008 AND 2007
49
~ Statistical
This part of understanding what the information in the financial statements, note disclosures, and
required supplementary information says about the District’s overall financial health.
CONTENTS PAGE
FINANCIAL TRENDS 5522
These schedules contain trend information to help the reader understand how the
District’s financial performance and well-being have changed over time.
REVENUE CAPACITY 5588
These schedules contain information to help the reader assess the factors affecting the
District’s ability to generate its water, reclaimed, and sewer sales as well as property
and sales taxes.
DEBT 6655
These schedules present information to help the reader assess the affordability of the
District’s current levels of outstanding debt and the District’s ability to issue
additional debt in the future.
DEMOGRAPHIC AND ECONOMIC INFORMATION 6699
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the District’s financial activities take place
and to help make comparisons over time and with other governments.
OPERATING INFORMATION 771
These schedules contain information about the District’s operation and resources to
help the reader understand how the District’s financial information relates to the
services the District provides and the activities it performs.
SOURCES
Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports of the relevant year. The District implemented GASB Statement 34
in 2001; schedules presenting government-wide information include information beginning in
that year.
STATISTICAL SCHEDULES
51
Invested in
Fiscal Capital Assets Total
Year Net of Related Debt Restricted Unrestricted Net Assets
2008 372,527,786$ 2,314,400$ 81,985,231$ 456,827,417$
2007 374,667,591 2,071,307 70,282,627 447,021,525
2006 361,590,845 2,408,473 58,066,009 422,065,327
2005 325,676,089 16,188,364 69,224,020 411,088,473
2004 291,863,666 23,853,441 67,244,139 382,961,246
2003 269,579,907 40,945,837 49,828,535 360,354,279
2002 245,290,752 46,866,439 45,580,508 337,737,699
2001 (1) 237,230,807 42,923,480 41,854,311 322,008,598
NET ASSETS BY COMPONENT
LAST TEN FISCAL YEARS
(1) As recommended by GASB 44, this schedule provides data retroactive to the year GASB 34 was implemented.
The District implemented GASB 34 in Fiscal Year 2002 and presented comparative data for Fiscal Year 2001.
Accordingly, the last eight fiscal years are presented.
Source: Otay Water District
$300,000,000
$320,000,000
$340,000,000
$360,000,000
$380,000,000
$400,000,000
$420,000,000
$440,000,000
2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
TOTAL NET ASSETS
52
Total
Non-Operating Income (Loss) Change
Fiscal Operating Operating Operating Revenues/ Before Capital Capital in Net
Year Revenues Expenses Income (Expenses) Contributions Contributions Assets
2008 55,714,845$ 71,474,372$ (15,759,527)$ 10,623,457$ (5,136,070)$ 14,941,962$ 9,805,892$
2007 53,250,481 64,651,050 (11,400,569) 9,793,692 (1,606,877) 26,563,075 24,956,198
2006 47,861,088 59,528,094 (11,667,006) 7,242,280 (4,424,726) 15,401,580 10,976,854
2005 43,335,915 56,449,475 (13,113,560) 6,271,482 (6,842,078) 34,969,305 28,127,227
2004 41,539,293 51,516,096 (9,976,803) 3,484,492 (6,492,311) 29,099,278 22,606,967
2003 36,961,980 46,143,486 (9,181,506) 4,517,049 (4,664,457) 22,616,580 17,952,123
2002 37,312,385 43,509,038 (6,196,653) 6,193,303 (3,350) 15,732,451 15,729,101
2001 (1) 22,598,438 40,203,049 (17,604,611) 10,526,110 (7,078,501) 30,209,604 23,131,103
CHANGES IN NET ASSETS
LAST TEN FISCAL YEARS
(1) As recommended by GASB 44, this schedule provides data retroactive to the year GASB 34 was implemented.
The District implemented GASB 34 in Fiscal Year 2002 and presented comparative data for Fiscal Year 2001.
Accordingly, the last eight fiscal years are presented.
Source: Otay Water District
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
CHANGES IN NET ASSETS
53
Fiscal Wastewater Connection and Percent
Year Water Sales Revenue Other Fees Total Change
2008 50,808,825$ 2,386,285$ 2,519,735$ 55,714,845$ 4.6%
2007 48,605,606 2,604,431 2,040,444 53,250,481 11.3%
2006 43,755,610 2,331,094 1,774,384 47,861,088 10.4%
2005 39,348,056 2,018,596 1,969,263 43,335,915 4.3%
2004 39,044,712 1,774,366 720,215 41,539,293 12.4%
2003 34,621,890 1,648,227 691,863 36,961,980 -0.9%
2002 34,980,289 2,031,855 300,241 37,312,385 65.1%
2001 20,645,462 (1) 1,578,581 374,395 22,598,437 -31.5%
OPERATING REVENUES BY SOURCE
LAST TEN FISCAL YEARS
2000 30,928,092 1,742,537 333,389 33,004,018 24.2%
1999 24,732,564 1,544,975 293,908 26,571,447 13.6%
(1) During the year ended June 30, 2001, the District's Board authorized three separate potable water rebates totaling
$9,700,089. The rebates were accounted for as a reduction of Water Sales.
Source: Otay Water District
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
TOTAL OPERATING REVENUES
54
Administrative Percent
Year Water Sales Wastewater and General Depreciation Total Change
2008 35,296,002$ 2,009,876$ 21,127,922$ 13,040,572$ 71,474,372$ 10.6%
2007 33,994,841 1,508,672 18,418,441 10,729,096 64,651,050 8.6%
2006 32,043,395 1,899,957 15,477,287 10,107,455 59,528,094 5.5%
2005 30,127,087 2,050,643 13,747,611 10,524,134 56,449,475 9.6%
2004 27,899,376 2,446,603 11,081,599 10,088,518 51,516,096 11.6%
2003 24,477,487 2,548,881 9,310,381 9,806,737 46,143,486 6.1%
2002 23,070,355 2,404,720 8,388,045 9,645,918 43,509,038 8.2%
2001 20,998,534 2,447,034 8,014,245 8,743,236 40,203,049 9.5%
OPERATING EXPENSES BY FUNCTION
LAST TEN FISCAL YEARS
2000 19,416,956 1,833,775 7,444,505 8,023,280 36,718,516 11.5%
1999 16,730,248 1,519,670 6,466,836 8,225,750 32,942,504 14.0%
Source: Otay Water District
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
OPERATING EXPENSES
Cost of Water Sales Wastewater Administrative and General Depreciation
55
Fiscal Investment Taxes and Availability Percent
Year Income Assessments Charges Miscellaneous Total Change
2008 4,538,791$ 4,591,023$ 744,722$ 3,692,206$ 13,566,742$ 22.3%
2007 4,416,342 4,151,956 715,664 1,811,619 11,095,581 29.7%
2006 3,188,645 2,779,635 609,099 1,978,632 8,556,011 4.1%
2005 2,052,292 2,326,526 556,590 3,285,128 (1) 8,220,536 15.5%
2004 1,097,449 3,071,685 1,132,278 1,816,967 7,118,379 -10.8%
2003 2,578,231 2,600,411 1,069,750 1,731,384 7,979,776 -12.4%
2002 4,466,383 2,381,170 1,052,222 1,207,920 9,107,695 -31.8%
2001 7,606,185 3,054,917 1,116,084 1,568,874 13,346,060 24.7%
2000 5 088 516 3 164 910 949 612 1 499 818 10 702 856 56%
NON-OPERATING REVENUES BY SOURCE
LAST TEN FISCAL YEARS
2000 5,088,516 3,164,910 949,612 1,499,818 10,702,856 5.6%
1999 5,142,904 2,523,746 1,084,910 1,387,088 10,138,648 -15.7%
(1) The District sold capital assets during Fiscal Year 2005 which resulted in a gain of $2,196,655.
Source: Otay Water District
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
TOTAL NON-OPERATING REVENUES
56
Fiscal Interest Percent
Year Donations (1)Expense Miscellaneous Total Change
2008 80,541$ 2,601,252$ 261,492$ 2,943,285$ 126.1%
2007 80,000 950,479 271,410 1,301,889 -0.9%
2006 75,000 959,225 279,506 1,313,731 -32.6%
2005 61,411 1,327,844 559,799 1,949,054 -46.4%
2004 59,220 1,252,307 2,322,360 3,633,887 4.9%
2003 68,756 947,099 2,446,872 3,462,727 18.8%
2002 131,225 1,503,063 1,280,104 2,914,392 3.3%
2001 145,500 1,543,336 1,131,114 2,819,950 -6.8%
2000 184 507 1 540 592 1 301 961 3 027 060 31 0%
NON-OPERATING EXPENSES BY FUNCTION
LAST TEN FISCAL YEARS
2000 184,507 1,540,592 1,301,961 3,027,060 -31.0%
1999 1,602,883 1,809,747 974,558 4,387,188 53.9%
(1) Donations are contributions to the Water Conservation Authority formed in 1999. See Note 10 in the Notes to Financial
Statements for more information.
Source: Otay Water District
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
NON-OPERATING EXPENSES
Miscellaneous Interest Expense Donations
57
Fiscal Percent
Year Secured Unsecured Total Change
2008 25,333,821,005$ 568,975,196$ 25,902,796,201$ 14.19%
2007 22,166,251,649 518,441,943 22,684,693,592 15.94%
2006 19,204,029,184 361,636,280 19,565,665,464 19.13%
2005 16,121,465,817 301,937,884 16,423,403,701 16.23%
2004 13,833,852,366 296,691,701 14,130,544,067 16.50%
2003 11,786,410,218 343,253,933 12,129,664,151 15.63%
2002 10,239,985,732 249,933,698 10,489,919,430 16.67%
2001 8,767,643,482 223,676,433 8,991,319,915 9.33%
2000 7 809 527 552 414 404 800 8 223 932 352 15 61%
ASSESSED VALUATION OF TAXABLE PROPERTY WITHIN THE DISTRICT
LAST TEN FISCAL YEARS
2000 7,809,527,552 414,404,800 8,223,932,352 15.61%
1999 6,953,623,384 159,752,464 7,113,375,848 7.51%
Source: County of San Diego Auditor and Controller
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
In
T
h
o
u
s
a
n
d
s
.
.
Fiscal Year
ASSESSED VALUATION OF PROPERTY
58
Fiscal
Year Purchases Sales Production Purchases Sales
2008 16,572,271 15,575,662 538,227 1,566,148 2,001,137
2007 18,255,735 16,059,464 550,206 284,499 (2) 1,920,287
2006 17,972,146 14,723,988 537,400 - 1,722,057
2005 16,412,711 13,708,001 501,114 - 1,447,020
2004 18,424,007 14,711,176 568,589 - 1,492,453
2003 16,486,502 13,613,885 486,739 - 1,109,691
2002 17,084,537 13,723,241 471,581 - 1,000,007
2001 14,521,902 12,057,399 418,873 - 674,670
2000 14,801,644 12,023,682 408,636 - 564,843
1999 12,537,309 10,335,051 363,029 - 390,603
Per 100 Cubic Feet
Potable Water (1)
WATER PURCHASES, PRODUCTION, AND SALES
LAST TEN FISCAL YEARS
Recycled Water (1)
Per 100 Cubic Feet
POTABLE WATER PURCHASES AND
RECYCLED WATER PRODUCTION
(1) Rates are not presented on this schedule because the District has multiple water rates for various meter sizes and
cannot represent rates in a meaningful manner with a weighted average rate. See Water and Sewer rates on page 63
for meter sizes and their corresponding water rates.
(2) The District entered into an agreement with the City of San Diego and began purchasing recycled water from
their South Bay Water Reclamation Plant in 2007.
Source: Otay Water District
0
5,000,000
10,000,000
15,000,000
20,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Hu
n
d
r
e
d
C
u
.
F
t
.
….
Fiscal Year
Potable Water Purchases Recycled Water Production Recycled Water Purchases
59
Fiscal
Year Potable Recycled Total
2008 224 22 246
2007 563 85 648
2006 788 47 835
2005 1,406 95 1,501
2004 2,125 64 2,189
2003 1,782 123 1,905
2002 2,308 33 2,341
2001 2,667 43 2,710
2000 2,485 78 2,563
METER SALES BY TYPE
LAST TEN FISCAL YEARS
1999 2,010 69 2,079
Source: Otay Water District
-
500
1,000
1,500
2,000
2,500
3,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
METER SALES
Recycled Meter Sales Potable Meter Sales
60
Fiscal Year Potable Recycled Sewer Total
2008 47,591 626 4,627 52,844
2007 47,461 588 4,567 52,616
2006 46,851 558 4,571 51,980
2005 46,042 483 4,570 51,095
2004 44,583 348 4,548 49,479
2003 42,438 312 4,510 47,260
2002 40,732 189 4,342 45,263
2001 38,502 128 4,240 42,870
2000 36,005 106 4,199 40,310
NUMBER OF CUSTOMERS BY SERVICE TYPE
LAST TEN FISCAL YEARS
1999 32,773 59 4,094 36,926
Source: Otay Water District
0
20,000
40,000
60,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
NUMBER OF CUSTOMERS
Potable Recycled Sewer
61
LEVIES (1)
Fiscal 1% Property Special Total Total Net Percent
Year Tax Assessments Levies Collections (1) Receivable Collected
2008 3,202,880 2,627,518 5,830,398 5,754,836 75,562 99%
2007 2,775,882 2,465,497 5,241,379 5,263,367 (21,988) 100%
2006 1,420,049 2,519,927 3,939,976 3,935,983 3,993 100%
2005 1,173,319 2,430,267 3,603,586 3,455,852 147,734 96%
2004 1,844,604 2,442,356 4,286,961 4,108,581 178,380 96%
2003 1,541,362 2,246,865 3,788,227 3,721,776 66,451 98%
2002 1,314,354 2,305,191 3,619,545 3,558,105 61,440 98%
2001 1,134,675 3,171,206 4,305,882 4,176,331 129,551 97%
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
2000 997,055 3,321,696 4,318,751 4,053,482 265,269 94%
1999 870,451 2,753,571 3,624,023 3,475,903 148,120 96%
(1) Levies and collections include Current Secured, Current Unsecured, and Supplemental Homeowners Exemptions.
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
LEVIES AND COLLECTIONS
Levies Collections
62
Base Rate (Meter Size) 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Residential
3/4"12.30$ 11.30$ 10.25$ 10.25$ 10.25$ 10.25$ 10.25$ 10.25$ 10.25$ 10.25$
1"19.80 18.15 16.50 16.50 16.50 16.50 16.50 16.50 16.50 16.50
1.5"35.75 32.50 32.50 32.50 32.50 32.50 32.50 32.50 32.50
Non-Residential & Others (1)
3/4"24.00 22.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00
1"36.95 33.90 30.80 30.80 30.80 30.80 30.80 30.80 30.80 30.80
1.5"51.95 47.50 43.30 43.30 43.30 43.30 43.30 43.30 43.30 43.30
2"64.95 59.60 54.20 54.20 54.20 54.20 54.20 54.20 54.20 54.20
3"104.55 95.90 87.20 87.20 87.20 87.20 87.20 87.20 87.20 87.20
4"119.70 109.80 99.80 99.80 99.80 99.80 99.80 99.80 99.80 99.80
6"239.20 219.45 199.50 199.50 199.50 199.50 199.50 199.50 199.50 199.50
10"456.60 418.90 380.50 380.50 380.50 380.50 380.50 380.50 380.50 380.50
Fire Services
All Types 25.40 23.30 21.20 21.20 21.20 21.20 21.20 21.20 21.20 21.20
Usage Rate
Residential:
WATER AND SEWER RATES
LAST TEN FISCAL YEARS
Residential:
Tier 1 (1-5)1.12 1.08 1.05 1.01 1.01 1.01 1.01 1.01 1.01 1.01
Tier 2 (6-25)1.85 1.78 1.73 1.67 1.67 1.67 1.67 1.67 1.67 1.67
Tier 3 (26-35)2.01 1.94 1.88 1.81 1.81 1.81 1.81 1.81 1.81 1.81
Tier 4 (36-50) (2)2.94 2.83 2.75 2.65 2.13 2.13 2.13 2.13 2.13 2.13
Tier 5 (51+)- - - - 2.65 2.65 2.65 2.65 2.65 2.65
Master Meter:
Tier 1 (1-5)1.85 1.78 1.73 1.67 1.78 1.78 1.78 1.78 1.78 1.78
Tier 2 (6-25)2.01 1.94 1.88 1.81 - - - - - -
Tier 3 (16+)2.94 2.83 2.75 2.65 - - - - - -
Publicly-Owned 2.06 1.99 1.93 1.86 1.86 1.86 1.86 1.86 1.86 1.86
Commercial & Others (3)1.98 1.91 1.85 1.78 1.78 1.78 1.78 1.78 1.78 1.78
Recycled (Commercial)1.67 1.65 1.57 1.51 1.51 1.51 1.51 1.51 1.51 1.51
Recycled (Publicly-Owned)1.75 1.73 1.65 1.59 1.59 1.59 1.59 1.59 1.59 1.59
Sewer Rates 33.26 32.70 30.90 26.90 23.35 20.95 20.95 20.95 20.95 20.95
Note: Above rates do not include Infrastructure Access Charge, a pass-through charge from CWA and MWD.
(1) For services provided through one meter to more than one occupancy, an additional fee of $3.21 will be charged
for each unit in a multiple unit residential, commercial or industrial building.
(2) Effective January 2005, Tier 5 has been eliminated and replaced by Tier 4 (36+).
(3) Others include landscaping, agricultural, and temporary meters. Agricultural customers under Interim
Agricultural Water Program (IAWP) shall receive a $0.33 discount per hundred cubic feet (HCF)
Source: Otay Water District
63
FISCAL YEAR 2008
Annual % of
Business Type Revenues Water Sales
1. City of Chula Vista Publicly Owned 1,934,992$ 3.8%
2. State of California Publicly Owned 961,095 1.9%
3. County of San Diego Publicly Owned 772,190 1.5%
4. Eastlake III Community Assoc Construction (Potable, Temporary)602,122 1.2%
5. Eastlake Country Club Irrigation (Reclaimed, Permanent)399,287 0.8%
6. Steele Canyon Irrigation (Reclaimed, Permanent)359,162 0.7%
7. Salt Creek Partners LLC Irrigation (Reclaimed, Permanent)349,322 0.7%
8. Eastlake Summit Mater-Metered (Potable, Permanent)316,696 0.6%
9. Sweetwater School District Publicly Owned 294,320 0.6%
10. Otay Project LP Construction (Potable, Temporary)271,068 0.5%
Total (10 Largest)6,260,254$ 12.3%
Other Customers 44,548,571$ 87.7%
TEN LARGEST CUSTOMERS
CURRENT YEAR AND NINE YEARS AGO
Customer Name
Total Water Sales 50,808,825$ 100.0%
FISCAL YEAR 2004 (1)
Annual % of
Business Type Revenues Water Sales
1. City of Chula Vista Publicly Owned 1,127,011$ 2.9%
2. State of California Publicly Owned 849,140 2.2%
3. County of San Diego Publicly Owned 725,507 1.9%
4. Steele Canyon Irrigation (Potable Permanent)526,582 1.3%
5. Eastlake III Business/Irrigation (Reclaimed)419,942 1.1%
6. Singing Hills Residential/Irrigation (Potable Permanent)390,720 1.0%
7. McMillin Construction (Potable Temporary)377,591 1.0%
8. Eastlake Country Club Irrigation (Reclaimed Permanent)325,036 0.8%
9. California Bank & Trust Irrigation (Reclaimed Permanent)243,689 0.6%
10. Sweetwater School District School/Irrigation (Reclaimed Publicly Owned)224,054 0.6%
Total (10 Largest)5,209,273$ 13.3%
Other Customers 33,835,439$ 86.7%
Total Water Sales 39,044,712$ 100.0%
(1) Because the District did not begin tracking its ten largest customers until Fiscal Year 2004, data for nine years ago is not available.
Accordingly, the current fiscal year and Fiscal Year 2004 are presented.
Source: Otay Water District
Customer Name
64
As a Share
Fiscal Population GO Capital Per of Personal
Year Estimate Bond COPS Notes Leases Total Capita Income (1)
2008 191,500 8,093,302$ $65,061,579 1,031,730 - 74,186,611$ 387.40 0.91%
2007 190,000 8,445,029$ $65,851,790 1,350,778 - 75,647,597$ 398.15 0.93%
2006 189,000 8,776,755 24,909,352 1,659,037 51,589 35,396,733 187.28 0.46%
2005 186,000 9,093,482 25,653,607 1,956,871 100,666 36,804,626 197.87 0.49%
2004 180,000 9,395,209 25,666,312 2,244,633 147,343 37,453,497 208.07 0.54%
2003 176,000 9,681,937 26,298,239 2,522,665 191,742 38,694,583 219.86 0.62%
2002 166,000 9,953,664 26,915,166 2,791,295 - 39,660,125 238.92 0.69%
2001 156,000 10,210,392 27,517,093 3,050,841 - 40,778,326 261.40 0.77%
2000 147 000 10 452 118 28 004 021 3 301 610 41 757 749 284 07 0 87%
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
2000 147,000 10,452,118 28,004,021 3,301,610 - 41,757,749 284.07 0.87%
1999 142,000 10,683,845 28,480,948 3,543,899 - 42,708,692 300.77 0.99%
(1) See the Demographics and Economic Statistics schedule on page 70 for personal income data. Because
per capita personal income data was not available for 2007 or 2008 the percentages for 2008 and 2007 were
calculated using per capita personal income for 2006.
Source: Otay Water District
$0
$100
$200
$300
$400
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
OUTSTANDING DEBT PER CAPITA
65
Adjusted Net Revenue
Fiscal Adjusted Operating Available for Debt Service Requirements Coverage
Year Revenue (1) Expense (2) Debt Service Principal Interest Total Factor (3)
2008 63,732,275$ 56,420,286$ 7,311,989 $800,000 $2,567,884 3,367,884 217%
2007 69,442,301 52,413,282 17,029,019 790,000 1,513,834 2,303,834 739%
2006 58,572,428 47,520,682 11,051,746 745,000 917,790 1,662,790 665%
2005 56,597,040 43,936,109 12,660,931 650,000 869,715 1,519,715 833%
2004 57,195,289 38,980,975 18,214,314 635,000 891,796 1,526,796 1,193%
2003 53,077,164 33,787,868 19,289,296 620,000 908,416 1,528,416 1,262%
2002 51,604,999 31,904,402 19,700,597 605,000 987,467 1,592,467 1,237%
2001 51,547,298 29,012,779 22,534,519 490,000 1,181,032 1,671,032 1,349%
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
2000 46,922,341 26,861,461 20,060,880 480,000 1,252,054 1,732,054 1,158%
1999 39,509,478 23,197,084 16,312,394 470,000 1,202,210 1,672,210 975%
(1) Adjusted revenues exclude sewer revenues and taxes collected for Improvement District 27 and are inclusive
of capacity fees.
(2) Adjusted operating expenses exclude sewer expenses and depreciation expense.
(3) The District's bond covenants require a minimum coverage factor of 120%.
Source : Otay Water District
0%
200%
400%
600%
800%
1000%
1200%
1400%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
PLEDGED REVENUE COVERAGE
66
Net Bonded
Net Debt to Net Bonded
Fiscal Population Assessed Bonded Assessed Debt Per
Year Estimate Valuation Debt Valuation Capita
2008 191,500 25,902,796,201$ $8,093,302 0.03%42.26
2007 190,000 22,684,693,592$ $8,449,025 0.04%44.47
2006 189,000 19,565,665,464 8,776,755 0.04%46.44
2005 186,000 16,423,403,701 9,093,482 0.06%48.89
2004 180,000 14,130,544,067 9,395,209 0.07%52.20
2003 176,000 12,129,664,151 9,681,937 0.08%55.01
2002 166,000 10,489,919,430 9,953,664 0.09%59.96
2001 156 000 8 991 319 915 10 210 392 0 11%65 45
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
2001 156,000 8,991,319,915 10,210,392 0.11%65.45
2000 147,000 8,223,932,352 10,452,118 0.13%71.10
1999 142,000 7,113,375,848 10,683,845 0.15%75.24
Source: Otay Water District
0.00%
0.02%
0.04%
0.06%
0.08%
0.10%
0.12%
0.14%
0.16%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
BONDED DEBT RATIOS
67
2007-08 Assessed Valuation:25,902,796,201$
Redevelopment Incremental Valuation:257,829,228
Adjusted Assessed Valuation:25,644,966,973$
Total Debt District’s Share ofOVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2008 % Applicable (1) Debt 6/30/08
Metropolitan Water District 327,215,000$ 1.450%4,744,618$
Otay Municipal Water District Improvement District No. 27 8,810,000 100.000 8,810,000
Padre Dam Municipal Water District Improvement District No. CB 120,000 0.204 29
Grossmont-Cuyamaca Community College District 206,552,021 17.531 36,210,635
Southwestern Community College District 86,458,580 48.012 41,510,493
Grossmont Union High School District 168,645,422 18.089 30,506,270
Sweetwater Union High School District 356,614,445 55.777 198,908,822
Chula Vista City School District 83,065,000 65.747 54,612,746
San Ysidro School District 89,977,104 48.139 43,314,078
Other School Districts 2,030,768,250 Various 31,958,153
City of San Diego 8,170,000 0.95 77,615
San Diego Open Space Park Facilities District No. 1 7,010,000 0.95 66,595
Grossmont Healthcare District 85,627,076 15.974 13,678,069
City of Chula Vista Community Facilities District 245,035,000 100 245,035,000 Chula Vista City School District Community Facilities Districts 7,125,000 100 7,125,000
Sweetwater Union High School District Community Facilities Districts 204,656,814 2.523-100 190,040,214 City 1915 Act Bonds (Estimate)67,765,489 37.539-100 55,730,074
California Statewide Communities Development Authority San Diego County/ Venture Community Center Assessment District 1,131,727 100 1,131,772
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT 963,460,183$
Less: San Diego Open Space Park Facilities District No. 1 (self-supporting)66,595
TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT 963,393,588$
COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
JUNE 30, 2008
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations 357,645,000$ 7.476% 26,737,540$
San Diego County Pension Obligations 1,053,187,916 7.476 78,736,329
San Diego Superintendent of Schools Certificates of Participation 17,267,500 7.476 1,290,918
Otay Water District Certificates of Participation 65,335,000 100.000 65,335,000
Grossmont and Southwestern Community College District General Fund Obligations 3,775,000 17.531 & 48.012 1,201,309
Grossmont Union High School District Certificates of Participation 1,592,500 18.089 288,067
Sweetwater Union High School District Certificates of Participation 15,030,000 55.777 8,383,283
Chula Vista City School District Certificates of Participation 131,565,000 65.747 86,500,041
San Ysidro School District Certificates of Participation 32,925,000 48.139 15,849,766
Other School District Certificates of Participation 18,840,000 Various 4,960,260
City of Chula Vista Certificates of Participation 135,045,000 74.342 100,395,154 City of Chula Vista Pension Obligations 8,820,000 74.342 6,556,964
City of San Diego General Fund Obligations 463,645,000 0.95 4,404,628 San Miguel Consolidated Fire Protection District Certificates of Participation 8,100,000 57.357 4,645,917
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 405,285,176$
Less: Otay Water District Certificates of Participation (self-supporting)65,335,000
Sweetwater Union High School District self-supporting Qualified Zone Academy Bonds 348,606
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 339,601,570$
GROSS COMBINED TOTAL DEBT (2)1,368,745,359$
NET COMBINED TOTAL DEBT 1,302,995,158$
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the district.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to 2007-08 Assessed Valuation:
Total Gross Overlapping Tax and Assessment Debt 3.72%
Total Net Overlapping Tax and Assessment Debt 3.72%
Ratios to Adjusted Assessed Valuation:
Gross Combined Direct Debt ($65,335,000)0.25%
Net Combined Direct Debt 0.00% Gross Combined Total Debt 5.34%
Net Combined Total Debt 5.08%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/08: $0
Source: California Municipal Statistics, Inc. and Otay Water District
68
2008 1999
% of Total % of Total
County County
Employer Employees Rank Employment Employees Rank Employment
United States Navy 42,000 1 2.84%---
Federal Government 39,100 2 2.65% 43,300 1 3.31%
State of California 37,100 3 2.51% 32,600 2 2.49%
University of California, San Diego 24,790 4 1.68% 18,829 3 1.44%
San Diego Unified School District 21,073 5 1.43% 12,292 5 0.94%
City of San Diego 20,700 6 1.40% 11,100 6 0.85%
County of San Diego 18,900 7 1.28% 17,700 4 1.35%
Sharp Healthcare 13,872 8 0.94% 7,931 8 0.61%
Scripps Health 10,313 9 0.70% 5,898 10 0.45%
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Kaiser Permanente 7,386 10 0.50%---
United States Postal Service ---7,018 9 0.54%
Qualcomm, Inc.---10,500 7 0.80%
Total 235,234 16.36% 167,168 12.76%
Source: San Diego County Water Authority, County of San Diego, and San Diego Business Journal
69
Personal Per Capita
Income Personal Unemployment
Year Population (in 000'S)Income Rate
2006 (1)2,948,362 126,193,721$ 42,801$ 4.20%
2005 2,941,658 118,792,540 40,383 4.50%
2004 2,938,822 113,003,044 38,452 5.10%
2003 2,932,802 104,630,453 35,676 5.70%
2002 2,908,091 100,655,726 34,612 5.30%
2001 2,870,023 97,009,480 33,801 4.30%
2000 2,825,752 92,654,006 32,789 4.30%
1999 2 789 593 84 346 910 30 236 3 30%
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
1999 2,789,593 84,346,910 30,236 3.30%
(1) Information for Fiscal Year 2008 and Fiscal Year 2007 was not available at the time of this report.
Source: County of San Diego
3.00%
3.50%
4.00%
4.50%
5.00%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Fiscal Year
UNEMPLOYMENT RATE
70
Department 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
General Manager 6 6 6 6 4 4 3 6 8 8
Finance 36 35 34 34 33 32 32 33 33 32
Operations/Maintenance 71 71 72 71 70 70 71 73 74 71
Engineering 27 31 15 13 33 31 24 27 32 31
Administrative Services 20 19 19 20 21 24 16 19 14 14
IT and Strategic Planning 13 13 12 11 10 10 6 6 7 6
Development Services (1) - - 17 17 - - - - - -
Total 173 175 175 172 171 171 152 164 168 162
NUMBER OF EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
TOTALEMPLOYEES
(1) Development Services was broken out from the Engineering and Planning Department in FY 2005
and then re-combined in FY 2007.
Source: Otay Water District
125
130
135
140
145
150
155
160
165
170
175
180
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
TOTAL EMPLOYEES
71
ACTIVE METERS BY SIZE
LAST TEN FISCAL YEARS
Meter Size 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
3/4" 43,551 43,544 43,070 42,420 41,069 39,138 37,178 35,014 32,672 30,456
1" 1,747 1,618 1,514 1,364 1,220 1,132 1,110 1,079 1,041 1,010
LAST TEN FISCAL YEARS
1-1/2" 1,275 1,242 1,199 1,147 1,037 918 889 837 806 766
2" 1,283 1,262 1,242 1,199 1,168 1,140 1,124 1,084 1,059 992
3"76 76 69 67 66 61 57 50 43 40
4"258 275 277 289 329 308 526 496 431 55
6"19 24 27 27 27 27 40 35 34 14
Others 10 7 11 12 15 26 35 35 25 12
Total 48,219 48,048 47,409 46,525 44,931 42,750 40,959 38,630 36,111 33,345
% Change0.4%1.3%1.9%3.5%5.1%4.4%6.0%7.0%8.3%7.5%g
Increase 171 639 884 1,594 2,181 1,791 2,329 2,519 2,766 2,325
ACTIVE METERS
35,000
40,000
45,000
50,000
20,000
25,000
30,000
,
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Otay Water District
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fiscal Year
72
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Water System
Service Area (Square Miles)125.5 125.5 125.5 125.5 125.5 125.5 125.5 125.5 125.5 125.5
Miles of Potable Water Main 722 680 663 623 609 594 576 554 539 501
Number of Operational Storage
Reservoirs in Service 36 37 37 36 37 37 38 37 37 37
Water Storage Capacity
(in Acre-Feet)605.5 601.7 601.7 582.4 585.4 582.3 587.5 538.4 538.4 538.4
Total Water Connections
(No. of Meters in Service)48,376 47,615 47,409 46,525 44,931 42,750 40,959 38,630 36,111 33,345
Number of Pump Stations 24 24 22 21 21 21 21 20 20 20
Number of Potable Water
Valves 19,131 18,721 18,042 17,696 16,204 15,830 15,073 14,296 13,519 12,340
Sewer System
Miles of Sewer Lines 88.0 86.2 86.2 85.9 85.4 84.8 83.5 82.9 82.1 81.3
Number of Treatment Plants 1 1 1 1 1 1 1 1 1 1
OPERATING AND CAPITAL INDICATORS
LAST TEN FISCAL YEARS
Treatment Plant Capacity
(Million Gallons per Day)1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3
Total Flows for Fiscal Year
2008 (in Million Gallons)503 514 528 506 479 463 455 452 442 413
Recycled System
Miles of Recycled Water Mains 93.0 83.0 77.6 76.4 70.7 60.6 49.2 40.3 37.7 29.3
Number of Pumping Facilities 3 3 2 2 2 2 1 1 1 1
Number of Acre-Feet Storage 135.0 134.1 97.3 97.3 97.3 97.3 86.9 86.9 86.9 86.9
Number of Recycled Water
Valves 1,314 1,245 1,189 1,155 1,097 948 730 588 542 437
0
100
200
300
400
500
600
700
800
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Mi
l
e
s
..
Fiscal Year
MILES OF POTABLE WATER MAINS
73