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HomeMy WebLinkAbout11-02-22 Board PacketOTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY BOARD OF DIRECTORS MEETING 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA WEDNESDAY November 2, 2022 3:30 P.M. AGENDA 1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. APPROVAL OF AGENDA 4. APPROVE THE MINUTES OF THE REGULAR MEETING OF SEPTEMBER 7, 2022 5. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU- RISDICTION BUT NOT AN ITEM ON TODAY’S AGENDA The District’s meeting is live streamed. Information on how to watch and listen to the District’s meeting can be found at this link:https://otaywater.gov/board-of-direc- tors/agenda-and-minutes/board-agenda/ CONSENT CALENDAR 6. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PAR- TICULAR ITEM a) ADOPT ORDINANCE NO. 587 AMENDING SECTION 6, CONFLICT OF IN- TEREST CODE OF ORDINANCES TO UPDATE THE GIFT LIMIT FOR THE 2021 AND 2022 CALENDAR YEARS; AND TO NOTE THE GIFT LIMIT IN- CRASE IN JANUARY 2023 AND EVERY ODD YEAR THEREAFTER b) AWARD TWO (2) PROFESSIONAL SERVICE CONTRACTS FOR AS- NEEDED ENVIRONMENTAL SERVICES AND TO AUTHORIZE THE GEN- ERAL MANAGER TO EXECUTE TWO AGREEMENTS WITH HELIX ENVI- RONMENTAL PLANNING, INC. (HELIX) AND CHAMBERS GROUP, INC. (CHAMBERS GROUP), EACH IN AN AMOUNT NOT-TO-EXCEED $500,000.00. THE TOTAL AMOUNT OF THE TWO (2) CONTRACTS WILL NOT EXCEED $500,000.00 DURING FISCAL YEARS 2023-2025 (ENDING JUNE 30, 2025) c) AWARD TWO (2) PROFESSIONAL SERVICES CONTRACTS FOR AS- NEEDED IN-PLANT INSPECTION SERVICES AND TO AUTHORIZE THE GENERAL MANAGER TO EXECUTE TWO (2) AGREEMENTS WITH ON- SITE TECHNICAL SERVICES, INC. (ON-SITE) AND KENNY CONSULTING SERVICES, INC. (KCS), EACH IN AN AMOUNT NOT-TO-EXCEED $175,000.00 DURING FISCAL YEARS 2023 AND 2024 (ENDING JUNE 30, 2024) d) AWARD A CONSTRUCTION CONTRACT TO UNIFIED FIELD SERVICES CORPORATION (UFSC) AND TO AUTHROIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH UFSC FOR THE 1004-2 & 485-1 RESERVOIR INTERIOR/EXTERIOR COATING & UPGRADES PROJECT IN AN AMOUNT NOT-TO-EXCEED $1,857,865.00 e) AWARD TWO (2) PROFESSIONAL AS-NEEDED CORROSION ENGINEER- ING SERVICES AGREEMENTS AND TO AUTHORIZE THE GENERAL MAN- AGER TO EXECUTE TWO (2) AGREEMENTS WITH RFYEAGER ENGI- NEERING, LLC (RFYEAGER) AND JDH CORROSION CONSULTANTS, INC. (JDH), EACH IN AN AMOUNT NOT-TO-EXCEED $640,000.00 DURING FIS- CAL YEARS 2023 THROUGH 2025 (ENDING JUNE 30, 2025) ACTION ITEMS 7. BOARD a) AUTHORIZE STAFF TO CONDUCT REMOTE TELECONFERENCE MEET- INGS OF THE BOARD OF DIRECTORS, INCLUDING COMMITTEE MEET- INGS, PURSUANT TO RESOLUTION NO. 4401 WHICH THE BOARD ADOPTED AT A SPECIAL BOARD MEETING ON SEPTEMBER 27, 2021, AND IN ACCORDANCE WITH THE PROVISIONS OF GOVERNMENT CODE § 54953(e) FOR THE NEXT 30 DAYS BECAUSE (1) A STATE OF EMER- GENCY RELATED TO COVID-19 IS CURRENTLY IN EFFECT; (2) LOCAL OFFICIALS IN SAN DIEGO COUNTY HAVE IMPOSED OR RECOMMENDED MEASURES TO PROMOTE SOCIAL DISTANCING IN CONNECTION WITH COVID-19; AND (3) DUE TO THE COVID-19 EMERGENCY, MEETING IN PERSON WOULD PRESENT IMMINENT RISKS TO THE HEALTH AND SAFETY OF ATTENDEES (MARTINEZ) b) ADOPT RESOLUTION NO. 4420 TO UPDATE BOARD POLICY NO. 40, ETH- ICS POLICY (SEGURO/MARTINEZ) c) DISCUSSION OF 2022 BOARD MEETING CALENDAR (TITA RAMOS- KROGMAN) 8. FINANCE a) APPROVE THE AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 (DYCHITAN) INFORMATIONAL ITEMS 9. THE FOLLOWING ITEMS ARE PROVIDED TO THE BOARD FOR INFORMA- TIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEMS: a) UPDATE ON THE DISTRICT’S LEAK DETECTION PROGRAM (VACLAVEK) b) UPDATE OF THE DISTRICT’S HAZARD MITIGATION ACTION PLAN (ZUN- IGA) REPORTS 10. GENERAL MANAGER’S REPORT 11. SAN DIEGO COUNTY WATER AUTHORITY UPDATE 12. DIRECTORS' REPORTS/REQUESTS 13. PRESIDENT’S REPORT/REQUESTS RECESS TO CLOSED SESSION 14. CLOSED SESSION a) DISCUSSION RELATING TO CORONAVIRUS (COVID-19) AND PUBLIC SERVICES [GOVERNMENT CODE §54957] b) CONFERENCE WITH LEGAL COUNSEL, ANTICIPATED LITIGATION, GOVERNMENT CODE §54956.9 (1 MATTER) c) EVALUATION OF GENERAL COUNSEL Pursuant to Government Code §54954.5 RETURN TO OPEN SESSION 15. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION. OTAY WATER DISTRICT FINANCING AUTHORITY 16. NO MATTERS TO DISCUSS 17. ADJOURNMENT All items appearing on this agenda, whether or not expressly listed for action, may be de- liberated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the District’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda and all attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability which would require accommodation in order to enable you to participate in this meeting, please call the District Secretary at (619) 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on October 28, 2022, I posted a copy of the foregoing agenda near the reg- ular meeting place of the Board of Directors of Otay Water District, said time being at least 72 hours in advance of the regular meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on October 28, 2022. /s/ Tita Ramos-Krogman, District Secretary 1 MINUTES OF THE BOARD OF DIRECTORS MEETINGS OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY September 7, 2022 1.The meeting was called to order by President Smith at 3:32 p.m. 2.ROLL CALL Directors Present:Croucher, Keyes, Lopez, Robak and Smith Directors Absent:None Staff Present:General Manager Jose Martinez, General Counsel Dan Shinoff, Chief of Engineering Rod Posada/Michael Long, Chief Financial Officer Joe Beachem, Chief of Administration Adolfo Segura, Chief of Operations Andrew Jackson, Asst. Chief of Finance Kevin Koeppen, District Secretary Tita Ramos-Krogman and others per attached list. 3.PLEDGE OF ALLEGIANCE 4.APPROVAL OF AGENDA A motion was made by Director Keyes, seconded by Director Croucher, and carried with the following vote: Ayes: Directors Croucher, Keyes, Lopez, Robak and Smith Noes: None Abstain: None Absent: None to approve the agenda. 5.PRESENTATION OF AWARDS FOR THE 2022 “WATER IS LIFE STUDENT POSTER CONTEST” Communications Assistant Eileen Salmeron provided a PowerPoint Presentation to the board and presented the 2022 winners of the Otay Water District “Water is Life” Student Poster Contest. The winners shared a few words about their posters. Also, Ms. Cordle from Hillsdale Middle School shared a few words about the winners. Ms. Salmeron responded to questions and comments from the board. AGENDA ITEM 4 2 6. APPROVE THE MINUTES OF THE REGULAR BOARD MEETINGS OF JULY 6, 2022 AND AUGUST 3, 2022, AND SPECIAL BOARD MEETING OF AUGUST 17, 2022 A motion was made by Director Croucher, seconded by Director Keyes, and carried with the following vote: Ayes: Directors Croucher, Keyes, Lopez, Robak and Smith Noes: None Abstain: None Absent: None to approve the minutes of the regular board meetings of July 6, 2022 and August 3, 2022, and special board meeting of August 17, 2022. 7. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA No one wished to be heard. PUBLIC HEARING 8. PUBLIC HEARING ON THE PUBLIC HEALTH GOAL REPORT THE BOARD WILL BE HOLDING A PUBLIC HEARING TO CONSIDER APPROVING THE RECOMMENDATIONS IN THE PUBLIC HEALTH GOAL REPORT. THE BOARD INVITES THE PUBLIC TO PROVIDE COMMENTS ON THE REPORT. a) APPROVE THE RECOMMENDATIONS STATED IN THE JUNE 2022 PUBLIC HEALTH GOAL (PHG) REPORT TO TAKE NO FURTHER ACTION IN REDUCING THE LEVELS OF THE FIVE CONSTITUENTS LISTED IN THE REPORT TO LEVELS AT OR BELOW THE PHGs President Smith opened the public hearing at 3:45 p.m. System Operations Manager Jake Vaclavek provided a background and recommendations of the Public Health Goal Report to the board. He responded to comments and questions from the board. As there were no comments from the public, President Smith closed the public hearing at 3:55 p.m. A motion was made by Director Robak, seconded by Director Keyes and carried with the following vote: Ayes: Directors Croucher, Keyes, Lopez, Robak and Smith Noes: None 3 Abstain: None Absent: None to approve the recommendations stated in the June 2022 Public Health Goal Report to take no further action in reducing the levels of the five constituents listed in the report to levels at or below the PHGs. CONSENT ITEM 9. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PARTICULAR ITEM: A motion was made by Director Keyes, seconded by Director Lopez and carried with the following vote: Ayes: Directors Croucher, Keyes, Lopez, Robak and Smith Noes: None Abstain: None Absent: None to approve the following consent calendar item: a) AWARD A PROFESSIONAL ENGINEERING SERVICES AGREEMENT TO NV5, INC. (NV5) AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT WITH NV5 FOR DESIGN AND CONSTRUCTION SUPPORT OF THE RANCHO SAN DIEGO & JAMUL PIPELINE REPLACEMENT PROJECT IN AN AMOUNT NOT-TO-EXCEED $530,943.00 ACTION ITEMS 10. BOARD a) AUTHORIZE STAFF TO CONDUCT REMOTE TELECONFERENCE MEETINGS OF THE BOARD OF DIRECTORS, INCLUDING COMMITTEE MEETINGS, PURSUANT TO RESOLUTION NO. 4401 WHICH THE BOARD ADOPTED AT A SPECIAL BOARD MEETING ON SEPTEMBER 27, 2021, AND IN ACCORDANCE WITH THE PROVISIONS OF GOVERNMENT CODE §54953(e) FOR THE NEXT 30 DAYS BECAUSE (1) A STATE OF EMERGENCY RELATED TO COVID-19 IS CURRENTLY IN EFFECT; (2) LOCAL OFFICIALS IN SAN DIEGO COUNTY HAVE IMPOSED OR RECOMMENDED MEASURES TO PROMOTE SOCIAL DISTANCING IN CONNECTION WITH COVID-19; AND (3) DUE TO THE COVID-19 EMERGENCY, MEETING IN PERSON WOULD PRESENT IMMINENT RISKS TO THE HEALTH AND SAFETY OF ATTENDEES 4 General Manager Jose Martinez provided information on AB 2449 that passed legislature and supersedes AB 361 as far as governing virtual board meetings. If signed by the governor, it will go into effect January 1, 2023. A motion was made by Director Keyes, seconded by Director Lopez, and carried with the following vote: Ayes: Directors Croucher, Keyes, Lopez, Robak and Smith Noes: None Abstain: None Absent: None to authorize staff to conduct remote teleconference meetings of the board of directors for the next 30 days, including committee meetings, pursuant to Resolution No. 4401 which the Board adopted at a special board meeting on September 17, 2021, and in accordance with the provisions of Government Code §54953(e). b) DISCUSS THE 2022 BOARD MEETING CALENDAR President Smith encouraged board members to attend the 2022 ACWA Fall Conference, November 29th to December 1st, in Indian Wells, California. There were no changes to the board calendar. INFORMATIONAL ITEM 11. ENGINEERING a) FOURTH QUARTER OF FISCAL YEAR 2022 CAPITAL IMPROVEMENT PROGRAM REPORT Engineering Manager Michael Long provided an update on the District’s fourth quarter of Fiscal Year 2022 Capital Improvement Program. President Smith and Director Keyes provided positive comments. Mr. Long responded to questions and comments from the board. REPORTS 11. GENERAL MANAGER REPORT General Manager Martinez presented information from his report that included Cal/OSHA information related to the District’s Response to COVID-19 Pandemic, District’s Participation in Military Career Day Event to Increase Talent Pool in WaterWorks Industry, new Chief of Engineering Michael Long, Excellence in Procurement Award 2022, Sweetwater Authority and Otay Water District Ad Hoc Committee Meeting, Otay Recycled Water Program, Mexico Water Deliveries on August 1, 2022, and the District’s efforts to conserve electricity due to a Level 3 Emergency for rolling black outs. 5 12. SAN DIEGO COUNTY WATER AUTHORITY UPDATE President Smith reported that CWA discussed its Integrated Resources Plan, Erosion Protection Project near the San Luis Rey River, Desal Facility Intake Modification, electric vehicle goals in 2035, and a public opinion poll from CWA customers. Director Gary Croucher reported that CWA discussed the regional cooperation with agencies to respond to power and mega drought issues, the possibility to use San Vicente as storage, renting out CWA property to SDG&E, and Federal funds for low- income customers. In addition, he indicated that CWA’s new General Counsel David Edwards starts on October 3, 2022. Director Croucher shared that Padre Dam Municipal Water District’s Director Doug Wilson’s wife, Mrs. Pam Wilson, passed away in August 2022. Information of Mrs. Wilson’s Celebration of Life Ceremony will be forwarded to board members. 13. DIRECTORS' REPORTS/REQUESTS Written reports from Directors Croucher, Keyes and Robak were submitted to District Secretary Ramos-Krogman, which will be attached to the minutes for today’s meeting. 14. PRESIDENT’S REPORT President Smith reported that he attended an OWD & Sweetwater Authority Task Force to Develop Recycled Water Opportunities meeting on August 11, 2022, where there was a discussion for both agencies to work together on recycled water projects. President Smith requested that staff update OWD’s Ethics Policy by the end of the year. He invited board members and staff to participate in upcoming MWD tours. A written report from President Smith was submitted to District Secretary Ramos- Krogman and will be attached to the minutes for today’s meeting. U 15. CLOSED SESSION There were no items scheduled for discussion in Closed Session. RETURN TO OPEN SESSION 16. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION With no items considered in Closed Session, there is no action to report. UOTAY WATER DISTRICT FINANCING AUTHORITY 6 17. NO MATTERS TO DISCUSS There were no items scheduled for discussion for the Otay Water District Financing Authority board. 18. ADJOURNMENT There was a moment of silence for Mrs. Pam Wilson, the wife of Director Doug Wilson from the Padre Dam Municipal Water District, who passed away in August 2022. With no further business to come before the Board, President Smith adjourned the meeting at 5:17 p.m. President ATTEST: District Secretary (Director’s Signature) GM Receipt: Date: FOR OFFICE USE: TOTAL MILEAGE REIMBURSEMENT: $ OTAY WATER DISTRICT BOARD OF DIRECTORS PER-DIEM AND MILEAGE CLAIM FORM Pay To: Tim Smith Period Covered: Employee Number: 1845 From: 08/01/22 To: 08/31/22 ITEM DATE MEETING PURPOSE / ISSUES DISCUSSED (Via Teleconference) MILEAGE HOME to OWD OWD to HOME MILEAGE OTHER LOCATIONS 1 08/03/22 OWD Board Meeting Monthly Board Meeting - - 2 8/11/22 OWD/SWA Meeting Task Force Meeting to develop recycled water opportunities 3 08/12/22 Directors’ Quarterly Meeting Met with General Manager Jose Martinez to discuss District matters/updates. - - 4 08/12/22 Committee Agenda Briefing Met with General Manager Jose Martinez to discuss agenda items for the August committee meeting (NO CHARGE) - - 5 08/17/22 EO&WR Committee Meeting Monthly committee meeting to discuss/review agenda items going to the September board meeting - - 6 08/17/22 Special Board Meeting Board meeting to consider district agenda item (NO CHARGE) - - 7 08/22/22 CWA Matters Meeting Met with GM Martinez to discuss CWA matters - - 8 08/24/22 East County Caucus Meeting Discuss East County issues with agencies and CWA - 44 Total Meeting Per Diem: $912 ($152 per diem) Total Mileage Claimed: 44 miles 09/26/2022 OTAY WATER DISTRICT BOARD OF DJ RECTORS PER-DIEM AND MILEAGE CLAlM FORM Pay To: Gary Croucher Employee Number: 7011 ITEM I 2 3 4 5 6 7 8 9 DATE MEETING 8/03/22 OWD Board Meeting 8/17/22 EO&WR Committee Meeting 8/17/22 Special Board Meeting 8/24/22 CWA Matters Meeting Total Meeting Per Diem: ($152 per diem) $456 Total Mileage Claimed: Period Covered: 8/1/22 PURPOSE / ISSUES DISCUSSED (Via Teleconference) Monthly Board Meeting Met with President Smith, GM Martinez, Legal Counsel and staff to review agenda items for the September 7, 2022, board meeting Meeting with board members to consider and approve AB 361; Attended Closed Session meeting (NO CHARGE) Met with President Smith and GM Martinez to discuss CW A matters miles To: 8/31/22 MILEAGE MILEAGE HOMEtoOWD OTHER OWDtoHOME LOCATIONS -- -- -- -- GM Receipt: ------(Director's Signature) Dak: -�t/_��l�z�z ___ _' f FOR OFFICE USE: TOTAL MILEAGE REIMBURSEMENT: $ _____ _ OT A Y WATER DISTRICT BOARD OF DIRECTORS PER-DIEM AND MILEAGE CLAIM FORM Pay To: Ryan Keyes Employee Number: ITEM DATE 8-2-22 2 8-3-22 3 8-12-22 4 8-29-22 5 8-31-22 7 8 9 10 1896 MEETING SCEDC OWD Regular Board Meeting GM Quarterly Meeting CSDA Course CSDA Course Total Meeting Per Diem: ($152 per meeting) $760 Total Mileage Claimed: 0 Period Covered: 8-1-22PURPOSE / ISSUES DISCUSSED Monthly Board Meeting Monthly Board Meeting Quarterly Meeting with General Manager When redistricting and CA Voters Rights Act Collide Developing a Ground Water Sustainability Plan Miles To: 8-31-22MILEAGE MILEAGE HOMEtoOWD OTHER OWDtoHOME LOCATIONS -- -- -- - - -- -- -- -- -- GM Receipt: �-----Date: q,/e,(z,oz.,1..__, I I FOR OFFICE USE: TOTAL MILEAGE REIMBURSEMENT: $ _____ _ INSTRUCTIONS ON REVERSE Pay To: Mark Robak OTA Y WATER DISTRICT BOARD OF DIRECTORS PER-DIEM AND MILEAGE CLAIM FORM Employee Number 7014 From: ITEM DATE l 8/2/2022 2 8/3/2022 3 8/5/2022 4 8/8/2022 5 8/11/2022 6 8/17/2022 7 8/18/2022 8 8/22/2022 9 8/23/2022 10 8/24/2022 11 8/25/2022 Total Meeting Per Diem: ($152 PER ;\IEE TING) Total Mileage Claimed: GM Receipt: MEETING PURPOSE / ISSUES ACWA Region 10 ACWA update, Colorado River Discussion and General Mannagers panel Otay Water District Board Meeting East County Chamber of First Friday Breakfast at University Club -NO Commerce CHARGE Otay Water District Quarterly meeting with General Manager SWA/OWD Ad-Hoc Task Force to develop recycled water opportunities Otay Water District Special Board Meeting CSDA Quarterly Dinner Speaker from SANDAGMeeting CSDA Annual Conference Leadership Conference for Special Districts CSDA Annual Conference Leadership Conference for Special Districts CSDA Annual Conference Leadership Conference for Special Districts CSDA Annual Conference Leadership Conference for Special Districts $ 1,520 Director Signature :::: __ 4-+l✓_/z.-+-/_7._c_2._L_ r, FOR OFFICE USE: TOTAL MILEAGE REIMBURSEMENT: $ ____ _ Period Covered 8/1/2022 8/31/2022 i\llLE,\GE IIOi\lE MILEAGE TOOWDOWDTO OTIIER IIOi\lE LOCATIONS 0 84 0 0 0 0 0 0 0 0 0 0 0 38 0 161 0 0 0 0 0 161 0 444 444 Pay To: Mark Robak Employee Number: 7014 OT A Y WATER DISTRICT BOARD OF DIRECTORS EXPE SE CLAIM FORM ITEMIZED REIMBURSEMENT CLAIMED (Attach receipts for expenses greater than$ I 0) Date Type of Reimbursement 8-24-22 Dinner at Yard House Period Covered: From: 8-1-22----- EXHIBIT D To: 8-31-22Amount $22.92 TOT ALReimbursement Claimed: $22.92 Director Signature: CM Apprnval: ::::: -':-;,.:..._/�-2 ;-7.-'t:l_Z_:Z, ____ _ r1 STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: November 2, 2022 SUBMITTED BY: Tita Ramos-Krogman, District Secretary W.O./G.F. NO: APPROVED BY: Tita Ramos-Krogman, District Secretary Jose Martinez, General Manager DIV. NO. SUBJECT: Adoption of Ordinance No. 587 Amending Section 6, Conflict of Interest Code, of the District’s Code of Ordinances GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Ordinance No. 587 amending Section 6, Conflict of Interest Code (COIC), contained within the District’s Code of Ordinances to update the gift limit for the 2021 and 2022 calendar years; and to note the gift limit increase in January 2023 and every odd year thereafter in accordance with Government Code 89503(f). PURPOSE: To amend Section 6, COIC, contained within the District’s Code of Ordinances pursuant to Government Code Section 89503(f) to update the gift limit for the 2021 and 2022 calendar years; and to note the gift limit increase in January 2023 and every odd year thereafter. COMMITTEE ACTION: See Attachment A. ANALYSIS: As required by the Political Reform Act (“Act”), staff has conducted a biennial review of the District’s COIC. The District’s General Counsel reviewed the COIC and has suggested that the COIC be updated to include Designated Persons gift limit for the 2021 and 2022 calendar years, and to note the gift limit increase for the 2023 calendar year and every odd year thereafter. The language has been added to Footnote 8 for Section 6.10: PROHIBITION ON RECEIPT OF GIFTS IN EXCESS OF AMOUNT ESTABLISHED BY LAW and states: AGENDA ITEM 6a Designated Persons are prohibited from accepting gifts from any single source in a calendar year with a total value in excess of designated amounts. See Govt. Code § 89503, sub-divisions (e), (f) and (g). [Note: Pursuant to Gov. Code § 89503(f), the FPPC adjusts the gift limit every odd-numbered year to reflect changes in the Consumer Price Index; the gift limit for the 2021 and 2022 calendar years is set at $520; therefore, the gift limit will be updated in January 2023 and every odd year thereafter, until further notice. See also 2 CCR § 18940.2] Ordinance No. 587 is submitted for the Board’s approval to amend the COIC as indicated above. A strike-thru copy of the COIC is attached to the ordinance for reference. FISCAL IMPACT: None. LEGAL IMPACT: None. Attachments: Attachment A – Committee Notes Attachment B - Ordinance No. 587 Strike-Thru Copy of the District’s COIC Attachment C – Clean Copy of the Proposed COIC ATTACHMENT A SUBJECT/PROJECT: Adoption of Ordinance No. 587 Amending Section 6, Conflict of Interest Code, of the District’s Code of Ordinances COMMITTEE ACTION: The Conservation, Public Relations, Legal and Legislative Committee (Committee) reviewed and discussed this item at a meeting held on October 17, 2022, and the following comments were made: •Legal counsel indicated that the gift limit for the 2021 and2022 calendar years is set at $520 and will be updated inJanuary 2023. The previous gift limit was $420. This amendment applies to everyone individual who files a Form 700. Following the discussion, the committee supported staffs’ recommendation and presentation to the full board as a consent item. ORDINANCE NO. 587 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING SECTION 6, CONFLICT OF INTEREST CODE, OF THE DISTRICT’S CODE OF ORDINANCE BE IT ORDAINED by the Board of Directors of Otay Water District that the District’s Code of Ordinances, Section 6, Conflict of Interest Code (COIC), be amended to update the limit for the 2021 and 2022 calendar years; and to note the gift limit increase in January 2023 and every odd year thereafter (Government Code Section 89503(f).) The amendments are presented in Exhibit A attached to this ordinance. NOW, THEREFORE, BE IT RESOLVED that the amendments to Section 6, Conflict of Interest Code, to the District’s Code of Ordinances shall become effective immediately upon adoption. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting duly held this 2nd day of November 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ President ATTEST: _____________________________ District Secretary ATTACHMENT B -201 OTAY WATER DISTRICT CONFLICTS OF INTEREST CODE DIVISION I DISTRICT ADMINISTRATION CHAPTER 5 PERSONNEL PRACTICES SECTION 6 CONFLICT OF INTEREST CODE The Political Reform Act (Government Code section 81000, et seq.) requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Sec. 18730) that contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency’s code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached Appendix, designating positions and establishing disclosure requirements, shall constitute the Conflict of Interest Code of the Otay Water District (District). 6.01 DEFINITIONS The definitions contained in the Political Reform Act of 1974 (Government Code Sections 81000 et seq.), regulations of the Fair Political Practices Commission (2 Cal. Code of Regs. Sections 18100, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this Conflict of Interest Code. 6.02 DESIGNATED EMPLOYEES The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on financial interests. The General Manager or his/her designee shall have the authority to designate any person holding a position within the District as a person designated to provide disclosures regardless of whether or not the position that the person holds is included in the Appendix if, in the view of the General Manager or his/her designee, the person has the potential to make or participate in the making of decisions which may foreseeably have a material effect on financial interests. Exhibit A -202 6.03 DISCLOSURE CATEGORIES This Code does not establish any disclosure obligation for those designated employees who are also specified in Government Code Section 87200 if they are designated in this code in that same capacity, or if the geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction in which those persons must report their financial interest pursuant to Article 2 of Chapter 7 of the Political Reform Act, Government Code Sections 87200, et seq.1 In addition, this code does not establish any disclosure obligation for any designated public officials who are designated in a conflict of interest code for another agency, if all of the following apply: (A)The geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction of the other agency; (B)The disclosure assigned in the code of the other agency is the same as that required under Article 2 of Chapter 7 of the Political Reform Act, Government Code Section 87200; and (C)The filing officer is the same for both agencies. Such persons are covered by this Code for disqualification purposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds of financial interests are reportable. Such a designated employee shall disclose in his or her Statement of Economic Interest those financial interests he or she has which are of the kind described in the disclosure categories to which he or she is assigned in the Appendix. It has been determined that the financial interests set forth in a designated employee’s disclosure categories are the kinds of financial interests which he or she foreseeably can affect materially through the conduct of his or her office. 6.04 STATEMENTS OF ECONOMIC INTERESTS: PLACE OF FILING All officials and employees required to submit a Statement of Economic Interest (employees in Designated Positions) shall file their statements with the General Manager, or his or her designee. The District shall make and retain a copy of all statements filed by Designated Positions and forward the originals of such statements to the Executive Office of the Board of Supervisors of San Diego County. 1 Designated employees who are required to file statements of economic interest under any other agency’s Conflict of Interest Code or under Article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interest in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and district statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by the designated employee as if it were an original. See Government Code Section 81004. -203 All retained statements, originals or copies shall be available for public inspection and reproduction. (Cal. Gov’t Code § 81008).2 The General Manager, or his or her designee may file Statements of Economic Interests electronically in accordance with the provisions of Government Code Section 87500.2. 6.05 STATEMENTS OF ECONOMIC INTERESTS: TIME OF FILING (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated, and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements. All persons assuming designated positions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. If a person assumes an office between October 1 and December 31 and files an assuming office Statement of Economic Interests, that person need not file an annual Statement of Economic Interests pursuant to Section 87203 until one year later than the date specified in subsection C below. (C) Annual Statements. All designated employees shall file statements no later than April 1. (D) Leaving Office Statements. All persons who leave designated positions shall file statements within 30 days after leaving office. (E) Military Service. If a person reports for military service as defined in the Servicemember's Civil Relief Act, the deadline for the annual statement of economic interests is 30 days following his or her return to office, provided the person, or someone authorized to represent the person's interests, notifies the filing officer in writing prior to the applicable filing deadline that he or she is subject to that federal statute and is unable to meet the applicable deadline, and provides the filing officer verification of his or her military status. 2 See Government Code section 81010 and 2 Cal. Code of Regs. section 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. -204 6.06 STATEMENTS FOR PERSONS WHO RESIGN PRIOR TO ASSUMING OFFICE Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided he or she did not make or participate in the making of, or use his or her position to influence any decision and did not receive or become entitled to receive any form of payment as a result of his or her appointment. Such persons shall not file either an assuming or a leaving office statement. (A)Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following: 1.File a written resignation with the appointing power; and 2.File a written statement with the filing officer declaring under penalty of perjury that during the period between appointment and resignation he or she did not make, participate in the making, or use the position to influence any decision of the agency or receive, or become entitled to receive, any form of payment by virtue of being appointed to the position. 6.07 CONTENTS OF AND PERIOD COVERED BY STATEMENTS OF ECONOMIC INTERESTS (A)Contents of Initial Statements Initial statements shall disclose any reportable investments, interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code. (B)Contents of Assuming Office Statements Assuming office statements shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or on the date of appointment, and income received during the 12 months prior to the date of assuming office or the date of being appointed, respectively. (C)Contents of Annual Statements Annual statements shall disclose any reportable investments, interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee’s first annual statement shall begin on the effective date of the code or the date of assuming office, whichever is later. -205 (D)Contents of Leaving Office Statements Leaving office statements shall disclose reportable investments, interest in real property, income and business positions held or received during the period between the closing date of the last statement filed and the date of leaving office. 6.08 MANNER OF REPORTING Statements of economic interest shall be made on forms prescribed by the Fair Political Practices Commission and supplied by the agency, and shall contain the following information: (A)Investments and Real Property Disclosure When an investment or an interest in real property3 is required to be reported4, the statement shall contain the following: 1.A statement of the nature of the investment or interest; 2.The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged; 3.The address or other precise location of the real property; 4.A statement whether the fair market value of the investment or interest in real property equals or exceeds two thousand dollars ($2,000), exceeds ten thousand dollars ($10,000), exceeds one hundred thousand dollars ($100,000), or exceeds one million dollars ($1,000,000). (B)Personal Income Disclosure When personal income is required to be reported5, the statement shall contain: 3 For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer. 4 Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act. However, investments or interests in real property of an individual include those held by the individual’s spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater. 5 A designated employee’s income includes his or her community property interest in the income of his or her spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. -206 1.The name and address of each source of income aggregating $500 or more in value or $50 or more in value if the income was a gift, and a general description of the business activity, if any, of each source; 2.A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source, was one thousand dollars ($1,000) or less, greater than one thousand dollars ($1,000), greater than ten thousand dollars ($10,000), or greater than one hundred thousand dollars ($100,000); 3.A description of the consideration, if any, for which the income was received; 4.In the case of a gift, the name, address and business activity of the donor and any intermediary through which the gift was made; a description of the gift; the amount or value of the gift; and the date on which the gift was received. A gift includes forgiveness of a debt or a rebate or discount of a debt owed6; 5.In the case of a loan given or received, the annual interest rate and the security, if any, given for the loan and the term of the loan. 6.Gov. Code section 82030 defines income and specifically excludes: (a)Any loan or loans from a commercial lending institution which are made in the lender's regular course of business on terms available to members of the public without regard to official status. (b)Any loan from or payments received on a loan made to an individual's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother- in-law, sister-in-law, nephew, niece, uncle, aunt, or first cousin, or the spouse of any such person, provided that a loan or loan payment received from any such person shall be considered income if he or she is acting as an agent or intermediary for any person not covered by this paragraph. (c)Any indebtedness created as part of a retail installment or credit card transaction if made in the lender's regular course of business on terms 6 2 Cal. Code of Regs. section 18940 -207 available to members of the public without regard to official status. (C)Business Entity Income Disclosure When income of a business entity, including income of a sole proprietorship, is required to be reported7, the statement shall contain: 1.The name, address, and a general description of the business activity of the business entity; 2.The name of every person from whom the business entity received payments if the filer’s pro rata share of gross receipts from such person was equal to or greater than $10,000. (D)Business Position Disclosure When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which he or she is a director, officer, partner, trustee, employee or in which he or she holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee’s position with the business entity. (E)Acquisition or Disposal During Reporting Period In the case of an annual or leaving office statement, if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal. 6.09 PROHIBITION ON RECEIPT OF HONORARIA A.No designated public official shall accept any honorarium from any source if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (a), (b), and (c) of Government Code Section 89501 shall apply to the prohibitions in this section. 7 Income of a business entity is reportable if the direct, indirect, or beneficial interest of the filer and the filer’s spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer. -208 This section shall not limit or prohibit payments, advances, or reim- bursements for travel and related lodging and subsistence authorized by Government Code section 89506. 6.10 PROHIBITION ON RECEIPT OF GIFTS IN EXCESS OF AMOUNT ESTABLISHED BY LAW8 A.No designated public official shall accept gifts with a total value of more than the maximum amount established by law, in any calendar year, from any single source, if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (e), (f), and (g) of Government Code section 89503 shall apply to the prohibitions in this section. 6.11 LOANS TO PUBLIC OFFICIALS A.No elected officer of a state or local government agency shall, from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the elected officer holds office or over which the elected officer’s agency has direction and control. B.No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the public official holds office or over which the public official’s agency has direction and control. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. C.No elected officer of a state or local government agency shall, from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer’s agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any 8 Designated Persons are prohibited from accepting gifts from any single source in a calendar year with a total value in excess of designated amounts. See Govt. Code § 89503, sub-divisions (e), (f) and (g). [Note: Pursuant to Gov. Code § 89503(f), the FPPC adjusts the gift limit every odd-numbered year to reflect changes in the Consumer Price Index; the gift limit for the 2021 and 2022 calendar years is set at $520; therefore the gift limit will be updated in January 2023 and every odd year thereafter, until further notice. therefore, the $470 limit adopted by the FPPC in January of 2017 will be updated in January 2019 and every odd year thereafter, until further notice. See also 2 CCR § 18940.2] -209 indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender’s regular course of business on terms available to members of the public without regard to the elected officer’s official status. D.No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer’s agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender’s regular course of business on terms available to members of the public without regard to the elected officer’s official status. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. E.This section shall not apply to the following: 1.Loans made to the campaign committee of an elected officer or candidate for elective office. 2.Loans made by a public official’s spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in- law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3.Loans from a person which, in the aggregate, do not exceed five hundred dollars ($500) at any given time. 4.Loans made, or offered in writing, before January 1, 1998. 6.12 LOAN TERMS A.Except as set forth in subdivision (B), no elected officer of a state or local government agency shall, from the date of his or her election to office through the date he or she vacates office, receive a personal loan of five hundred dollars ($500) or more, except when the loan is in writing and clearly states the terms of the loan, including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall be due on the loan and the amount of the payments, and the rate of interest paid on the loan. B.This section shall not apply to the following types of loans: -2010 1.Loans made to the campaign committee of the elected officer. 2.Loans made to the elected officer by his or her spouse, child, parent, grandparent, grandchild, brother, sister, parent-in- law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3.Loans made, or offered in writing, before January 1, 1998. C.Nothing in this section shall exempt any person from any other provision of Title 9 of the Government Code. 6.13 PERSONAL LOANS A.Except as set forth in subdivision (B), a personal loan received by any designated public official shall become a gift to the designated public official for the purposes of this section in the following circumstances: 1.If the loan has a defined date or dates for repayment, when the statute of limitations for filing an action for default has expired. 2.If the loan has no defined date or dates for repayment, when one year has elapsed from the later of the following: a.The date the loan was made. b.The date the last payment of one hundred dollars ($100) or more was made on the loan. c.The date upon which the debtor has made payments on the loan aggregating to less than two hundred fifty dollars ($250) during the previous 12 months. B.This section shall not apply to the following types of loans: 1.A loan made to the campaign committee of an elected officer or a candidate for elective office. 2.A loan that would otherwise not be a gift as defined in this title. 3.A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor has taken reasonable action to collect the balance due. 4.A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor, based on reasonable -2011 business considerations, has not undertaken collection action. Except in a criminal action, a creditor who claims that a loan is not a gift on the basis of this paragraph has the burden of proving that the decision for not taking collection action was based on reasonable business considerations. 5.A loan made to a debtor who has filed for bankruptcy and the loan is ultimately discharged in bankruptcy. C.Nothing in this section shall exempt any person from any other provisions of Title 9 of the Government Code. 6.14 DISQUALIFICATION No designated employee shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any governmental decision which he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the official or a member of his or her immediate family or on: (A)Any business entity in which the designated employee has a direct or indirect investment worth $2,000 or more; (B)Any real property in which the designated employee has a direct or indirect interest worth $2,000 or more; (C)Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating $500 or more in value provided to, received by or promised to the designated employee within 12 months prior to the time when the decision is made; (D)Any business entity in which the designated employee is a director, officer, partner, trustee, employee, or holds any position of management; or (E)Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating to the maximum amount established by law, or more, in value provided to, received by, or promised to the designated employee within 12 months prior to the time when the decision is made. 6.15 LEGALLY REQUIRED PARTICIPATION No designated public official shall be prevented from making or participating in the making of any decision to the extent his or her participation is legally required for the decision to be made. The -2012 fact that the vote of a designated public official who is on a voting body is needed to break a tie does not make his or her participation legally required for purposes of this section. 6.16 DISQUALIFICATION OF STATE OFFICERS AND EMPLOYEES In addition to the general disqualification provisions of Section 6.14, no state administrative official shall make, participate in making, or use his or her official position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of his or her immediate family has, within 12 months prior to the time when the official action is to be taken: (A)Engaged in a business transaction or transactions on terms not available to members of the public, regarding any investment or interest in real property; or (B)Engaged in a business transaction or transactions on terms not available to members of the public regarding the rendering of goods or services totaling in value $1000 or more. 6.17 DISCLOSURE OF DISQUALIFYING INTEREST When a designated public official determines that he or she should not make a governmental decision because he or she has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of the disqualifying interest. 6.18 ASSISTANCE OF THE COMMISSION AND COUNSEL Any designated employee who is unsure of his or her duties under this code may request assistance from the Fair Political Practices Commission pursuant to Government Code Section 83114 and 2 CCR Sections 18329 and 18329.5 or from the attorney for his or her agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. 6.19 VIOLATIONS This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal, and civil sanctions provided in the Political Reform Act, Government Code Sections 81000 – 91015. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Government Code Section -2013 87100 or 87450 has occurred may be set aside as void pursuant to Government Code Section 91003. 6.20 PROHIBITED TRANSACTIONS Members of the Board of Directors and Designated Employees shall comply with the Prohibited Transactions policy, annexed hereto as Exhibit A, pursuant to California Government Code Sections 1090, et seq. 6.21 INCOMPATIBLE ACTIVITIES Members of the Board of Directors, District officers, and all other District employees shall comply with the Incompatible Activities policy, annexed hereto as Exhibit B, pursuant to California Government Code Sections 1126, et seq. -2014 APPENDIX OTAY WATER DISTRICT CONFLICT OF INTEREST CODE DESIGNATED POSITIONS DESIGNATED EMPLOYEES’ TITLE OR FUNCTION__ DISCLOSURE CATEGORIES ASSIGNED Members of the Board of Directors 1, 2, 3, 4, 5, 6 General Manager 1, 2, 3, 4, 5, 6 District Secretary 6 Assistant Chief of Finance 1, 2, 5, 6, 7 Chief of Administrative Services 1, 2, 3, 4, 5, 6, 7 Chief Financial Officer 1, 2, 5, 6, 7 Chief of Engineering 1, 2, 3, 4, 6, 7 Chief of Water Operations 1, 2, 3, 4, 6, 7 Associate Civil Engineer 1, 2, 3, 4, 7 Communications Officer 6 Customer Service Manager 2, 5, 7 Environmental Compliance Specialist 1, 2, 3, 4, 7 Engineering Manager 1, 2, 3, 4, 7 Field Services Manager 1, 2, 3, 4, 7 Finance Manager 2, 5, 7 GIS Manager 3, 6, 7 Human Resources Manager 3, 6 IT Manager 3, 6, 7 Network Engineer 3, 6, 7 -2015 Purchasing and Facilities Manager 2, 6 Safety and Security Specialist 1, 2, 3, 4, 6 Senior Procurement and Contracting Analyst 6 Senior Civil Engineer 1, 2, 3, 4, 7 System Operations Manager 1, 2, 3, 4, 7 Utility Services Manager 1, 2, 3, 4, 7 Consultant/New Positions9 1, 2, 3, 4, 5, 6 District Officials who manage public investments, as defined by 2 Cal. Code of Regs. § 18701 (b) are not subject to the District's Conflict of Interest Code except with respect to its disqualification provisions. They must file disclosure statements under Government Code § 87200 et seq. [2 CCR § 18730(b)(3)] These positions are listed above for informational purposes only. Individuals holding the positions listed below are officials who manage public investments and who must file their disclosure statements under Government Code Section 87200: Members of the Board of Directors General Manager Chief Financial Officer Asst. Chief Financial Officer Financial Consultants Individuals holding the above-listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their position has been categorized incorrectly. The Fair Political Practices 9 Consultants/New Positions are included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation: The General Manager may determine in writing that a particular consultant or new position, although a “designated position,” is hired to perform a range of duties that is limited in scope and, thus, not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant’s or new position’s duties and, based upon that description, a statement of the extent of the disclosure requirements. The written determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code (Gov. Code section 81008) Consultants are required to file disclosure statements where they: (a) conduct research and arrive at conclusions with respect to rendition of information, advice, recommendation or counsel independent of control and direction of the agency or any agency official other than normal contract monitoring; and (b) possess no authority with respect to any agency decision beyond the rendition of information, advice, recommendation or counsel. -2016 Commission makes the final determination whether a position is covered by Government Code Section 87200. Government Code Section 87200 requires that individuals holding the above-listed positions shall, each year at a time specified by commission regulations, file a statement disclosing their investments, their interests in real property and their income during the period since the previous statement filed. The statement shall include any investments and interest in real property held at any time during the period covered by the statement, whether or not they are still held at the time of filing. -2017 APPENDIX, CONTINUED DISCLOSURE CATEGORIES The disclosure categories listed below identify the types of investments, business entities, sources of income, or real property which the designated employee must disclose for each disclosure category to which he or she is assigned. Category 1: All investments and business positions in, and sources of income from, all business entities that do business or own real property in the District, plan to do business or own real property in the District within the next year or have done business or owned real property in the District within the past two years. Category 2: All interests in real property which are located in whole or in part within, or not more than two (2) miles outside the boundaries of the District. Category 3: All investments and business positions in, and sources of income from, business entities subject to the regulatory, permit or licensing authority of the Designated Employee’s Department, will be subject to such authority within the next year or have been subject to such authority within the past two years. Category 4: All investments, business positions, and sources of income from, business entities that are engaged in land development, construction or the acquisition or sale of real property in the District, plan to engage in such activities in the District within the next year or have engaged in such activities in the District within the past two years. Category 5: All investments and business positions in, and sources of income from, business entities that are banking, savings and loan or other financial institutions. Category 6: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the District. Category 7: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the Designated Employee’s Department. -2018 EXHIBIT A Prohibited Transactions for Specified Personnel Members of the Board of Directors (“Members”) shall comply with this Prohibited Transactions policy pursuant to California Government Code §§ 1090, et seq. Members shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Members shall not be purchasers at any sale or vendors at any purchase made by them in their official capacity. Members shall not be deemed to be interested in a contract entered into by a body or board of which they are members if the Member has only a remote interest in the contract and if the fact of that interest is disclosed to the body or board of which the Member is a member and noted in its official records, and thereafter the body or board authorizes, approves, or ratifies the contract in good faith by a vote of its membership sufficient for the purpose without counting the vote or votes of the Board of Directors member with the remote interest. “Remote interest” shall be defined as in California Government Code § 1091(b). Members shall not be considered to be financially interested in a contract if their interest is including, but not limited to, any of the following (Government Code § 1091.5): 1.That of an officer in being reimbursed for his/her actual and necessary expenses incurred in the performance of an official duty; 2.That of a recipient of public services generally provided by the public body or board of which he/she is a member, on the same terms and conditions as if he or she were not a member of the board; 3.That of a landlord or tenant of the contracting party if such contracting party is the federal government or any federal department or agency, this state or an adjoining state, any department or agency of this state or an adjoining state, any county or city of this state or an adjoining state, or an public corporation or special, judicial or other public district of this state or an adjoining state unless the subject matter of such contract is the property in which such officer or employee has such interest as landlord or tenant in which even his/her interest shall be deemed a remote interest within the meaning of, and subject to, the provisions of Government Code 1091; -2019 4.That of a spouse of an officer or employee of a public agency if his/her spouse’s employment or office-holding has existed for at least one year prior to his/her election or appointment; 5.That of a non-salaried member of a nonprofit corporation, provided that such interest is disclosed to the board at the time of the first consideration of the contract, and provided further that such interest is noted in its official records; 6.That of a non-compensated officer of a nonprofit, tax-exempt corporation, which, as one of its primary purposes, supports the functions of the board or to which the board has legal obligation to give particular consideration, and provided further that such interest is noted in its official records; For purposes of this paragraph, an officer is “noncompensated” even though he or she receives reimbursement from the nonprofit, tax-exempt corporation for necessary travel and other actual expenses incurred in performing the duties of his or her office. 7.That of compensation for employment with a governmental agency, other than the governmental agency that employs the officer or employee, provided that the interest is disclosed to the board at the time of consideration of the contract, and provided further that the interest is noted in its official records; 8.That of an attorney of the contracting party of that of an owner, officer, employee or agent of a firm which renders, or has rendered, service to the contracting party in the capacity of stockbroker, insurance agent, insurance broker, real estate agent, or real estate broker if these individuals have not received and will not receive remuneration, consideration, or a commission as a result of the contract and if these individuals have an ownership interest of less than 10 percent in the law practice or firm, stock brokerage firm, insurance firm or real estate firm. In addition, Members shall not be deemed to be interested in a contract made pursuant to competitive bidding under a procedure established by law if their sole interest is that of an officer, director, or employee of a bank or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor (Government Code § 1091.5). Authority: California Government Code §§ 1090, et seq. -2020 EXHIBIT B Incompatible Activities Policy District officers, members of the Board of Directors, and all other District employees (collectively, “district personnel”) shall comply with this Incompatible Activities policy pursuant to California Government Code §§ 1125, et seq. District personnel shall not engage in any employment, activity, or enterprise for compensation which is inconsistent, incompatible, in conflict with, or inimical to his or her duties as a member of the Board of Directors, or with the duties, functions, or responsibilities of his or her appointing power or the agency by which he or she is employed. The outside employment, activity, or enterprise of district personnel is prohibited if it: (1) involves the use for private gain or advantage of his or her local District time, facilities, equipment and supplies; or the badge, uniform, prestige, or influence of his or her local District office or employment or, (2) involves receipt or acceptance by district personnel of any money or other consideration from anyone other than the District for the performance of an act which district personnel, if not performing such act, would be required or expected to render in the regular course or hours of their local District employment or as a part of their duties as a local District officer or employee or, (3) involves the time demands as would render performance of his or her duties as a local district personnel member less efficient. Nothing in this policy shall be interpreted to prohibit any outside employment, activity, counsel, or enterprise on behalf of another governmental entity, subject to common law and professional conflict of interest rules. Copies of this regulation shall be posted in prominent places at the District Office. District personnel who violate this regulation may be subject to discipline as set forth in the applicable Code of Ordinances and Policies. Board of Directors members who violate this section may be subject to censure. Disciplinary appeals by district personnel shall be handled pursuant to applicable Code of Ordinances and Policies. Authority: California Government Code §§ 1125, et seq. -201 OTAY WATER DISTRICT CONFLICTS OF INTEREST CODE DIVISION I DISTRICT ADMINISTRATION CHAPTER 5 PERSONNEL PRACTICES SECTION 6 CONFLICT OF INTEREST CODE The Political Reform Act (Government Code section 81000, et seq.) requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Sec. 18730) that contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency’s code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached Appendix, designating positions and establishing disclosure requirements, shall constitute the Conflict of Interest Code of the Otay Water District (District). 6.01 DEFINITIONS The definitions contained in the Political Reform Act of 1974 (Government Code Sections 81000 et seq.), regulations of the Fair Political Practices Commission (2 Cal. Code of Regs. Sections 18100, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this Conflict of Interest Code. 6.02 DESIGNATED EMPLOYEES The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on financial interests. The General Manager or his/her designee shall have the authority to designate any person holding a position within the District as a person designated to provide disclosures regardless of whether or not the position that the person holds is included in the Appendix if, in the view of the General Manager or his/her designee, the person has the potential to make or participate in the making of decisions which may foreseeably have a material effect on financial interests. Attachment C -202 6.03 DISCLOSURE CATEGORIES This Code does not establish any disclosure obligation for those designated employees who are also specified in Government Code Section 87200 if they are designated in this code in that same capacity, or if the geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction in which those persons must report their financial interest pursuant to Article 2 of Chapter 7 of the Political Reform Act, Government Code Sections 87200, et seq.1 In addition, this code does not establish any disclosure obligation for any designated public officials who are designated in a conflict of interest code for another agency, if all of the following apply: (A) The geographical jurisdiction of this agency is the same asor is wholly included within the jurisdiction of the other agency; (B) The disclosure assigned in the code of the other agency is the same as that required under Article 2 of Chapter 7 of the Political Reform Act, Government Code Section 87200; and (C) The filing officer is the same for both agencies. Such persons are covered by this Code for disqualificationpurposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds of financial interests are reportable. Such a designated employee shall disclose in his or her Statement of Economic Interest those financial interests he or she has which are of the kind described in the disclosure categories to which he or she is assigned in the Appendix. It has been determined that the financial interests set forth in a designated employee’s disclosure categories are the kinds of financial interests which he or she foreseeably can affect materially through the conduct of his or her office. 6.04 STATEMENTS OF ECONOMIC INTERESTS: PLACE OF FILING All officials and employees required to submit a Statement of Economic Interest (employees in Designated Positions) shall file their statements with the General Manager, or his or her designee. The District shall make and retain a copy of all statements filed by Designated Positions and forward the originals of such statements to the Executive Office of the Board of Supervisors of San Diego County. 1 Designated employees who are required to file statements of economic interest under any other agency’s Conflict of Interest Code or under Article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interest in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and district statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by the designated employee as if it were an original. See Government Code Section 81004. -203 All retained statements, originals or copies shall be available for public inspection and reproduction. (Cal. Gov’t Code § 81008).2 The General Manager, or his or her designee may file Statements of Economic Interests electronically in accordance with the provisions of Government Code Section 87500.2. 6.05 STATEMENTS OF ECONOMIC INTERESTS: TIME OF FILING (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated, and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements. All persons assuming designatedpositions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. If a person assumes an office between October 1 and December 31 and files an assuming office Statement of Economic Interests, that person need not file an annual Statement of Economic Interests pursuant to Section 87203 until one year later than the date specified in subsection C below. (C) Annual Statements. All designated employees shall filestatements no later than April 1. (D) Leaving Office Statements. All persons who leave designatedpositions shall file statements within 30 days after leaving office. (E) Military Service. If a person reports for military service as defined in the Servicemember's Civil Relief Act, the deadline for the annual statement of economic interests is 30 days following his or her return to office, provided the person, or someone authorized to represent the person's interests, notifies the filing officer in writing prior to the applicable filing deadline that he or she is subject to that federal statute and is unable to meet the applicable deadline, and provides the filing officer verification of his or her military status. 2 See Government Code section 81010 and 2 Cal. Code of Regs. section 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. -20 4 6.06 STATEMENTS FOR PERSONS WHO RESIGN PRIOR TO ASSUMING OFFICE Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided he or she did not make or participate in the making of, or use his or her position to influence any decision and did not receive or become entitled to receive any form of payment as a result of his or her appointment. Such persons shall not file either an assuming or a leaving office statement. (A) Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following: 1. File a written resignation with the appointing power; and 2. File a written statement with the filing officer declaring under penalty of perjury that during the period between appointment and resignation he or she did not make, participate in the making, or use the position to influence any decision of the agency or receive, or become entitled to receive, any form of payment by virtue of being appointed to the position. 6.07 CONTENTS OF AND PERIOD COVERED BY STATEMENTS OF ECONOMIC INTERESTS (A) Contents of Initial Statements Initial statements shall disclose any reportable investments, interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code. (B) Contents of Assuming Office Statements Assuming office statements shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or on the date of appointment, and income received during the 12 months prior to the date of assuming office or the date of being appointed, respectively. (C) Contents of Annual Statements Annual statements shall disclose any reportable investments, interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee’s first annual statement shall begin on the effective date of the code or the date of assuming office, whichever is later. -205 (D) Contents of Leaving Office Statements Leaving office statements shall disclose reportable investments,interest in real property, income and business positions held or received during the period between the closing date of the last statement filed and the date of leaving office. 6.08 MANNER OF REPORTING Statements of economic interest shall be made on forms prescribed by the Fair Political Practices Commission and supplied by the agency, and shall contain the following information: (A) Investments and Real Property Disclosure When an investment or an interest in real property3 is required to be reported4, the statement shall contain the following: 1. A statement of the nature of the investment or interest; 2. The name of the business entity in which each investment is held, and a general description of the business activity inwhich the business entity is engaged; 3. The address or other precise location of the real property; 4. A statement whether the fair market value of the investmentor interest in real property equals or exceeds two thousanddollars ($2,000), exceeds ten thousand dollars ($10,000),exceeds one hundred thousand dollars ($100,000), or exceedsone million dollars ($1,000,000). (B) Personal Income Disclosure When personal income is required to be reported5, the statementshall contain: 3 For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer. 4 Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act. However, investments or interests in real property of an individual include those held by the individual’s spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater. 5 A designated employee’s income includes his or her community property interest in the income of his or her spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. -206 1. The name and address of each source of income aggregating $500 or more in value or $50 or more in value if the incomewas a gift, and a general description of the businessactivity, if any, of each source; 2. A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed toeach source, was one thousand dollars ($1,000) or less,greater than one thousand dollars ($1,000), greater than ten thousand dollars ($10,000), or greater than one hundredthousand dollars ($100,000); 3. A description of the consideration, if any, for which theincome was received; 4. In the case of a gift, the name, address and business activity of the donor and any intermediary through which thegift was made; a description of the gift; the amount orvalue of the gift; and the date on which the gift was received. A gift includes forgiveness of a debt or a rebateor discount of a debt owed6; 5. In the case of a loan given or received, the annual interest rate and the security, if any, given for the loan and theterm of the loan. 6. Gov. Code section 82030 defines income and specificallyexcludes: (a) Any loan or loans from a commercial lendinginstitution which are made in the lender's regular course of business on terms available to members ofthe public without regard to official status. (b) Any loan from or payments received on a loan made toan individual's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, uncle, aunt, or first cousin, or the spouse of any such person,provided that a loan or loan payment received fromany such person shall be considered income if he or she is acting as an agent or intermediary for anyperson not covered by this paragraph. (c) Any indebtedness created as part of a retailinstallment or credit card transaction if made inthe lender's regular course of business on terms 6 2 Cal. Code of Regs. section 18940 -207 available to members of the public without regard to official status. (C) Business Entity Income Disclosure When income of a business entity, including income of a soleproprietorship, is required to be reported7, the statement shall contain: 1. The name, address, and a general description of the business activity of the business entity; 2. The name of every person from whom the business entityreceived payments if the filer’s pro rata share of grossreceipts from such person was equal to or greater than$10,000. (D) Business Position Disclosure When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which he or she is a director, officer, partner, trustee, employee or in which he or she holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee’s position with the business entity. (E) Acquisition or Disposal During Reporting Period In the case of an annual or leaving office statement, if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal. 6.09 PROHIBITION ON RECEIPT OF HONORARIA A. No designated public official shall accept any honorarium fromany source if the member or employee would be required to report thereceipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (a), (b), and (c) of Government Code Section 89501 shall apply to the prohibitions in this section. 7 Income of a business entity is reportable if the direct, indirect, or beneficial interest of the filer and the filer’s spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer. -208 This section shall not limit or prohibit payments, advances, or reim-bursements for travel and related lodging and subsistence authorized by Government Code section 89506. 6.10 PROHIBITION ON RECEIPT OF GIFTS IN EXCESS OF AMOUNT ESTABLISHED BY LAW8 A. No designated public official shall accept gifts with a total value of more than the maximum amount established by law, in anycalendar year, from any single source, if the member or employee wouldbe required to report the receipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (e), (f), and (g) of Government Code section 89503 shall apply to the prohibitions in this section. 6.11 LOANS TO PUBLIC OFFICIALS A. No elected officer of a state or local government agency shall,from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any officer,employee, member, or consultant of the state or local governmentagency in which the elected officer holds office or over which the elected officer’s agency has direction and control. B. No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, employee, member, orconsultant of the state or local government agency in which the publicofficial holds office or over which the public official’s agency has direction and control. This subdivision shall not apply to loans madeto a public official whose duties are solely secretarial, clerical, or manual. C. No elected officer of a state or local government agency shall,from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any person whohas a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer’sagency has direction and control. This subdivision shall not apply toloans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card 8 Designated Persons are prohibited from accepting gifts from any single source in a calendar year with a total value in excess of designated amounts. See Govt. Code § 89503, sub-divisions (e), (f) and (g). [Note: Pursuant to Gov. Code § 89503(f), the FPPC adjusts the gift limit every odd-numbered year to reflect changes in the Consumer Price Index; the gift limit for the 2021 and 2022 calendar years is set at $520; therefore the gift limit will be updated in January 2023 and every odd year thereafter, until further notice. See also 2 CCR § 18940.2] -209 transaction, if the loan is made or the indebtedness created in the lender’s regular course of business on terms available to members of the public without regard to the elected officer’s official status. D. No public official who is exempt from the state civil servicesystem pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holdsoffice, receive a personal loan from any person who has a contract with the state or local government agency to which that electedofficer has been elected or over which that elected officer’s agencyhas direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtednesscreated as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender’s regularcourse of business on terms available to members of the public withoutregard to the elected officer’s official status. This subdivisionshall not apply to loans made to a public official whose duties aresolely secretarial, clerical, or manual. E. This section shall not apply to the following: 1. Loans made to the campaign committee of an elected officeror candidate for elective office. 2. Loans made by a public official’s spouse, child, parent,grandparent, grandchild, brother, sister, parent-in-law, brother-in- law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans from a person which, in the aggregate, do not exceed five hundred dollars ($500) at any given time. 4. Loans made, or offered in writing, before January 1, 1998. 6.12 LOAN TERMS A. Except as set forth in subdivision (B), no elected officer of a state or local government agency shall, from the date of his or herelection to office through the date he or she vacates office, receive a personal loan of five hundred dollars ($500) or more, except whenthe loan is in writing and clearly states the terms of the loan,including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall bedue on the loan and the amount of the payments, and the rate of interest paid on the loan. B. This section shall not apply to the following types of loans: 1. Loans made to the campaign committee of the elected officer. -2010 2. Loans made to the elected officer by his or her spouse,child, parent, grandparent, grandchild, brother, sister, parent-in- law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans made, or offered in writing, before January 1, 1998. C. Nothing in this section shall exempt any person from anyother provision of Title 9 of the Government Code. 6.13 PERSONAL LOANS A. Except as set forth in subdivision (B), a personal loan received by any designated public official shall become a gift to thedesignated public official for the purposes of this section in thefollowing circumstances: 1. If the loan has a defined date or dates for repayment, whenthe statute of limitations for filing an action for default has expired. 2. If the loan has no defined date or dates for repayment, whenone year has elapsed from the later of the following: a. The date the loan was made. b. The date the last payment of one hundred dollars ($100) or more was made on the loan. c. The date upon which the debtor has made payments on the loan aggregating to less than two hundred fifty dollars ($250) during the previous 12 months. B. This section shall not apply to the following types of loans: 1. A loan made to the campaign committee of an elected officeror a candidate for elective office. 2. A loan that would otherwise not be a gift as defined in thistitle. 3. A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor has taken reasonable action to collect the balance due. 4. A loan that would otherwise be a gift as set forth undersubdivision (A), but on which the creditor, based on reasonable business considerations, has not undertaken collection action. Except in a criminal action, a creditor who claims that a loan is not a gift -20 11 on the basis of this paragraph has the burden of proving that the decision for not taking collection action was based on reasonable business considerations. 5. A loan made to a debtor who has filed for bankruptcy and the loan is ultimately discharged in bankruptcy. C. Nothing in this section shall exempt any person from any other provisions of Title 9 of the Government Code. 6.14 DISQUALIFICATION No designated employee shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any governmental decision which he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the official or a member of his or her immediate family or on: (A) Any business entity in which the designated employee has a direct or indirect investment worth $2,000 or more; (B) Any real property in which the designated employee has a direct or indirect interest worth $2,000 or more; (C) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating $500 or more in value provided to, received by or promised to the designated employee within 12 months prior to the time when the decision is made; (D) Any business entity in which the designated employee is a director, officer, partner, trustee, employee, or holds any position of management; or (E) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating to the maximum amount established by law, or more, in value provided to, received by, or promised to the designated employee within 12 months prior to the time when the decision is made. 6.15 LEGALLY REQUIRED PARTICIPATION No designated public official shall be prevented from making or participating in the making of any decision to the extent his or her participation is legally required for the decision to be made. The fact that the vote of a designated public official who is on a voting -2012 body is needed to break a tie does not make his or her participation legally required for purposes of this section. 6.16 DISQUALIFICATION OF STATE OFFICERS AND EMPLOYEES In addition to the general disqualification provisions of Section 6.14, no state administrative official shall make, participate in making, or use his or her official position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of his or her immediate family has, within 12 months prior to the time when the official action is to be taken: (A) Engaged in a business transaction or transactions on termsnot available to members of the public, regarding anyinvestment or interest in real property; or (B) Engaged in a business transaction or transactions on termsnot available to members of the public regarding the rendering of goods or services totaling in value $1000 ormore. 6.17 DISCLOSURE OF DISQUALIFYING INTEREST When a designated public official determines that he or she should not make a governmental decision because he or she has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of the disqualifying interest. 6.18 ASSISTANCE OF THE COMMISSION AND COUNSEL Any designated employee who is unsure of his or her duties under this code may request assistance from the Fair Political Practices Commission pursuant to Government Code Section 83114 and 2 CCR Sections 18329 and 18329.5 or from the attorney for his or her agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. 6.19 VIOLATIONS This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal, and civil sanctions provided in the Political Reform Act, Government Code Sections 81000 – 91015. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Government Code Section 87100 or 87450 has occurred may be set aside as void pursuant to Government Code Section 91003. -2013 6.20 PROHIBITED TRANSACTIONS Members of the Board of Directors and Designated Employees shall comply with the Prohibited Transactions policy, annexed hereto as Exhibit A, pursuant to California Government Code Sections 1090, etseq. 6.21 INCOMPATIBLE ACTIVITIES Members of the Board of Directors, District officers, and all other District employees shall comply with the Incompatible Activities policy, annexed hereto as Exhibit B, pursuant to California Government Code Sections 1126, et seq. -2014 APPENDIX OTAY WATER DISTRICT CONFLICT OF INTEREST CODE DESIGNATED POSITIONS DESIGNATED EMPLOYEES’ TITLE OR FUNCTION__ DISCLOSURE CATEGORIES ASSIGNED Members of the Board of Directors 1, 2, 3, 4, 5, 6 General Manager 1, 2, 3, 4, 5, 6 District Secretary 6 Assistant Chief of Finance 1, 2, 5, 6, 7 Chief of Administrative Services 1, 2, 3, 4, 5, 6, 7 Chief Financial Officer 1, 2, 5, 6, 7 Chief of Engineering 1, 2, 3, 4, 6, 7 Chief of Water Operations 1, 2, 3, 4, 6, 7 Associate Civil Engineer 1, 2, 3, 4, 7 Communications Officer 6 Customer Service Manager 2, 5, 7 Environmental Compliance Specialist 1, 2, 3, 4, 7 Engineering Manager 1, 2, 3, 4, 7 Field Services Manager 1, 2, 3, 4, 7 Finance Manager 2, 5, 7 GIS Manager 3, 6, 7 Human Resources Manager 3, 6 IT Manager 3, 6, 7 Network Engineer 3, 6, 7 -2015 Purchasing and Facilities Manager 2, 6 Safety and Security Specialist 1, 2, 3, 4, 6 Senior Procurement and Contracting Analyst 6 Senior Civil Engineer 1, 2, 3, 4, 7 System Operations Manager 1, 2, 3, 4, 7 Utility Services Manager 1, 2, 3, 4, 7 Consultant/New Positions9 1, 2, 3, 4, 5, 6 District Officials who manage public investments, as defined by 2 Cal. Code of Regs. § 18701 (b) are not subject to the District's Conflict of Interest Code except with respect to its disqualification provisions. They must file disclosure statements under Government Code § 87200 et seq. [2 CCR § 18730(b)(3)] These positions are listed above for informational purposes only. Individuals holding the positions listed below are officials who manage public investments and who must file their disclosure statements under Government Code Section 87200: Members of the Board of Directors General Manager Chief Financial Officer Asst. Chief Financial Officer Financial Consultants Individuals holding the above-listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their position has been categorized incorrectly. The Fair Political Practices 9 Consultants/New Positions are included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation: The General Manager may determine in writing that a particular consultant or new position, although a “designated position,” is hired to perform a range of duties that is limited in scope and, thus, not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant’s or new position’s duties and, based upon that description, a statement of the extent of the disclosure requirements. The written determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code (Gov. Code section 81008) Consultants are required to file disclosure statements where they: (a) conduct research and arrive at conclusions with respect to rendition of information, advice, recommendation or counsel independent of control and direction of the agency or any agency official other than normal contract monitoring; and (b) possess no authority with respect to any agency decision beyond the rendition of information, advice, recommendation or counsel. -2016 Commission makes the final determination whether a position is covered by Government Code Section 87200. Government Code Section 87200 requires that individuals holding the above-listed positions shall, each year at a time specified by commission regulations, file a statement disclosing their investments, their interests in real property and their income during the period since the previous statement filed. The statement shall include any investments and interest in real property held at any time during the period covered by the statement, whether or not they are still held at the time of filing. -2017 APPENDIX, CONTINUED DISCLOSURE CATEGORIES The disclosure categories listed below identify the types of investments, business entities, sources of income, or real property which the designated employee must disclose for each disclosure category to which he or she is assigned. Category 1: All investments and business positions in, and sources of income from, all business entities that do business or own real property in the District, plan to do business or own real property in the District within the next year or have done business or owned real property in the District within the past two years. Category 2: All interests in real property which are located in whole or in part within, or not more than two (2) miles outside the boundaries of the District. Category 3: All investments and business positions in, and sources of income from, business entities subject to the regulatory, permit or licensing authority of the Designated Employee’s Department, will be subject to such authority within the next year or have been subject to such authority within the past two years. Category 4: All investments, business positions, and sources of income from, business entities that are engaged in land development, construction or the acquisition or sale of real property in the District, plan to engage in such activities in the District within the next year or have engaged in such activities in the District within the past two years. Category 5: All investments and business positions in, and sources of income from, business entities that are banking, savings and loan or other financial institutions. Category 6: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the District. Category 7: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the Designated Employee’s Department. -2018 EXHIBIT A Prohibited Transactions for Specified Personnel Members of the Board of Directors (“Members”) shall comply with this Prohibited Transactions policy pursuant to California Government Code §§ 1090, et seq. Members shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Members shall not be purchasers at any sale or vendors at any purchase made by them in their official capacity. Members shall not be deemed to be interested in a contract entered into by a body or board of which they are members if the Member has only a remote interest in the contract and if the fact of that interest is disclosed to the body or board of which the Member is a member and noted in its official records, and thereafter the body or board authorizes, approves, or ratifies the contract in good faith by a vote of its membership sufficient for the purpose without counting the vote or votes of the Board of Directors member with the remote interest. “Remote interest” shall be defined as in California Government Code § 1091(b). Members shall not be considered to be financially interested in a contract if their interest is including, but not limited to, any of the following (Government Code § 1091.5): 1. That of an officer in being reimbursed for his/her actualand necessary expenses incurred in the performance of an officialduty; 2. That of a recipient of public services generally provided by the public body or board of which he/she is a member, on the sameterms and conditions as if he or she were not a member of the board; 3. That of a landlord or tenant of the contracting party if such contracting party is the federal government or any federaldepartment or agency, this state or an adjoining state, any department or agency of this state or an adjoining state, anycounty or city of this state or an adjoining state, or an publiccorporation or special, judicial or other public district of this state or an adjoining state unless the subject matter of suchcontract is the property in which such officer or employee has such interest as landlord or tenant in which even his/herinterest shall be deemed a remote interest within the meaning of,and subject to, the provisions of Government Code 1091; -2019 4. That of a spouse of an officer or employee of a publicagency if his/her spouse’s employment or office-holding has existed for at least one year prior to his/her election orappointment; 5. That of a non-salaried member of a nonprofit corporation,provided that such interest is disclosed to the board at the time of the first consideration of the contract, and provided furtherthat such interest is noted in its official records; 6. That of a non-compensated officer of a nonprofit, tax-exemptcorporation, which, as one of its primary purposes, supports the functions of the board or to which the board has legal obligationto give particular consideration, and provided further that suchinterest is noted in its official records; For purposes of this paragraph, an officer is “noncompensated” even though he or she receives reimbursement from the nonprofit, tax-exempt corporation for necessary travel and other actual expenses incurred in performing the duties of his or her office. 7. That of compensation for employment with a governmentalagency, other than the governmental agency that employs the officer or employee, provided that the interest is disclosed tothe board at the time of consideration of the contract, andprovided further that the interest is noted in its official records; 8. That of an attorney of the contracting party of that of anowner, officer, employee or agent of a firm which renders, or hasrendered, service to the contracting party in the capacity of stockbroker, insurance agent, insurance broker, real estateagent, or real estate broker if these individuals have not received and will not receive remuneration, consideration, or acommission as a result of the contract and if these individualshave an ownership interest of less than 10 percent in the law practice or firm, stock brokerage firm, insurance firm or realestate firm. In addition, Members shall not be deemed to be interested in a contract made pursuant to competitive bidding under a procedure established by law if their sole interest is that of an officer, director, or employee of a bank or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor (Government Code § 1091.5). Authority: California Government Code §§ 1090, et seq. -2020 EXHIBIT B Incompatible Activities Policy District officers, members of the Board of Directors, and all other District employees (collectively, “district personnel”) shall comply with this Incompatible Activities policy pursuant to California Government Code §§ 1125, et seq. District personnel shall not engage in any employment, activity, or enterprise for compensation which is inconsistent, incompatible, in conflict with, or inimical to his or her duties as a member of the Board of Directors, or with the duties, functions, or responsibilities of his or her appointing power or the agency by which he or she is employed. The outside employment, activity, or enterprise of district personnel is prohibited if it: (1) involves the use for private gain or advantage of his or her local District time, facilities, equipment and supplies; or the badge, uniform, prestige, or influence of his or her local District office or employment or, (2) involves receipt or acceptance by district personnel of any money or other consideration from anyone other than the District for the performance of an act which district personnel, if not performing such act, would be required or expected to render in the regular course or hours of their local District employment or as a part of their duties as a local District officer or employee or, (3) involves the time demands as would render performance of his or her duties as a local district personnel member less efficient. Nothing in this policy shall be interpreted to prohibit any outside employment, activity, counsel, or enterprise on behalf of another governmental entity, subject to common law and professional conflict of interest rules. Copies of this regulation shall be posted in prominent places at the District Office. District personnel who violate this regulation may be subject to discipline as set forth in the applicable Code of Ordinances and Policies. Board of Directors members who violate this section may be subject to censure. Disciplinary appeals by district personnel shall be handled pursuant to applicable Code of Ordinances and Policies. Authority: California Government Code §§ 1125, et seq. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 SUBMITTED BY: Lisa Coburn-Boyd Environmental Compliance Specialist PROJECT: Various DIV. NO. All APPROVED BY: Bob Kennedy, Engineering Manager Michael Long, Chief, Engineering Jose Martinez, General Manager SUBJECT: Award of Two (2) Professional Services Contracts for As-Needed Environmental Services to Helix Environmental Planning, Inc. and Chambers Group, Inc. for Fiscal Years 2023-2025 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award two (2) professional service contracts for As-Needed Environmental Services and to authorize the General Manager to execute two agreements with Helix Environmental Planning, Inc. (Helix) and Chambers Group, Inc. (Chambers Group), each in an amount not-to-exceed $500,000. The total amount of the two (2) contracts will not exceed $500,000 during Fiscal Years 2023-2025 (ending June 30, 2025). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization for the General Manager to enter into two (2) professional services contracts for As-Needed Environmental Services with Helix and Chambers Group, with each contract in an amount not-to-exceed $500,000 for Fiscal Years 2023-2025. The total amount of the two (2) contracts will not exceed $500,000 during Fiscal Years 2023-2025. AGENDA ITEM 6b 2 ANALYSIS: The District will require the services of two (2) professional environmental consultants on an as-needed basis in support of Capital Improvement Program (CIP) and Operations and Maintenance projects for Fiscal Years 2023-2025. It is more efficient and cost effective to issue as-needed contracts for environmental services, which will provide the District with the ability to obtain consulting services in a timely and efficient manner. This concept has also been used in the past for other disciplines, such as engineering design, construction management, geotechnical, and electrical services. The District staff will identify tasks and request cost proposals from the two (2) consultants during the contract period. Each consultant will prepare a detailed scope of work, schedule, and fee for each task order, with the District evaluating the proposals based upon qualifications and cost. The District will enter into negotiations with the consultants, selecting the proposal that has the best value for the District. Upon written task order authorization from the District, the selected consultant shall then proceed with the project, as described in the scope of work. The table below lists several projects that will require as-needed environmental services for Fiscal Years 2023-2025: CIP DESCRIPTION ESTIMATED COST P2460 I.D. 7 Trestle & Pipeline Demolition Biological & Cultural Resources Monitoring $10,000 P1253 As-needed Bird Surveys during Breeding Season $10,000 P1253 Biological & Cultural Resources Monitoring for District O&M & CIP Projects $20,000 P2612 Restoration of Temporary Construction Vegetation Impacts at Paso de Luz PL site $30,000 P1253 Annual Forcemain Road & Air-Vac Vegetation Maintenance & Low-effect HCP Report for USFWS $12,000 TBD CEQA Addendum for 870-2 Reservoir $30,000 TOTAL:$112,000 3 Staff believes that a $500,000 cap on each of the As-Needed Environmental Services contracts is adequate for upcoming projects, while still providing a buffer for any unforeseen tasks. Some examples of unforeseen tasks that have cropped up in the past are the environmental compliance (monitoring & regulatory agency coordination) for pipeline breaks, studies to investigate process control or regulatory issues at the Ralph W. Chapman Water Reclamation Facility, Air Pollution Control District permitting issues, and preparation of SWPPP’s (stormwater pollution prevention plans) for District construction projects. Also, as CIP projects advance during the period of this contract, CEQA compliance and regulatory permitting needs arise that require the expertise of these consultants. The As-Needed Environmental Services contracts do not commit the District to any expenditure until a task order is approved to perform the work. The District does not guarantee work to the consultants, nor does the District guarantee to the consultants that it will expend all the funds authorized by the contract on professional services. The District solicited environmental services by placing an advertisement on the Otay Water District’s website and using Periscope S2G, the District’s online bid solicitation website on June 16, 2022. The advertisement was also placed in the Daily Journal. Eight (8) firms submitted a Letter of Interest and a Statement of Qualifications. The Request for Proposal (RFP) for Environmental Services was sent to all eight (8) firms resulting in seven (7) proposals received on August 4, 2022. They are as follows: • Chambers Group (San Diego, CA) • Ecorp Consulting (San Diego, CA)• Helix Environmental Planning (La Mesa, CA) • Parsons (San Diego, CA)• Psomas (Irvine, CA)• Tetra Tech (Irvine, CA) • UltraSystems (Irvine, CA) The one firm that submitted a Letter of Interest (LOI) but did not propose was S&B Christ Consulting, located in Las Vegas, NV. In accordance with the District’s Policy 21, staff evaluated and scored all written proposals and interviewed the top four (4) firms on September 22, 2022. Helix and Chambers Group received the highest scores based on their experience, understanding of the scope of work, proposed method to accomplish the work, and their composite hourly rate. Helix has provided similar services to the District in the 4 past as well and Chambers Group and Helix have both provide as-needed environmental services to other local water agencies. They are both readily available to provide the services required. A summary of the complete evaluation is shown in Attachment B. Helix and Chambers Group submitted the Company Background Questionnaire, as required by the RFP, and staff did not find any significant issues. In addition, staff checked their references and performed an internet search on the company. Staff found the references to be excellent and did not find any outstanding issues with the internet search. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The funds for these contracts will be expended on a variety of projects, as previously noted above. These contracts are for as- needed professional services based on the District's need and schedule, and expenditures will not be made until a task order is approved by the District for the consultant's services on a specific CIP or Operations & Maintenance project. Based on a review of the financial budget, the Project Manager anticipates that the budgets will be sufficient to support the professional as-needed consulting services required for the CIP and Operations & Maintenance projects noted above. The Finance Department has determined that the funds to cover these contracts will be available as budgeted for these projects. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsible manner” and the General Manager’s Vision, "To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices." GRANTS/LOANS: Engineering staff researched and explored grants and loans and found none available for this Project. 5 LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Summary of Proposal Rankings ATTACHMENT A SUBJECT/PROJECT: Various Award of Two (2) Professional Services Contracts for As-Needed Environmental Services to Helix Environmental Planning, Inc. and Chambers Group, Inc. for Fiscal Years 2023-2025 COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on October 18, 2022. The Committee supported staff's recommendation. •Staff presented on the request to award two professional services contracts for as-needed environmental services to HelixEnvironmental Planning, Inc. and Chambers Group, Inc. for FY 23-25. •The Committee noted that as-needed contracts provide flexibilityto the District and appreciated the thoroughness of the report. •The Committee asked why the amount requested was for $500,000.00 and staff responded that the reason that amount was selected wasdue to projects identified with being “as-needed” for the next couple of years and projects always come up that were notanticipated, for example a pipe break, vegetation monitoring, orrevegetation project, and this would cover for those. Inprevious years, $400,000.00 was budgeted and the projects usedup $398,00.00. The last one issued was for $500,000.00 and the current amount spent is about $400,000.00. •Staff also mentioned that the funds can also be used for taskorders that in the past would have to do an RFP, such as for an MND or an EIR. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full Board as a Consent Item. Qualifications of Team Responsiveness, Project Understanding Technical and Management Approach INDIVIDUAL SUBTOTAL - WRITTEN AVERAGE SUBTOTAL - WRITTEN Proposed Fee* Consultant's Commitment to DBE AVERAGE TOTAL WRITTEN Additional Creativity and Insight Strength of Project Manager Presentation, Communication Skills Quality of Response to Questions INDIVIDUAL TOTAL - ORAL AVERAGE TOTAL ORAL 30 25 30 85 85 15 Y/N 100 15 15 10 10 50 50 150 Poor/Good/ Excellent Steve Beppler 26 22 26 74 14 14 10 9 47 Lisa Coburn-Boyd 28 23 27 78 14 14 9 9 46 Charles Mederos 27 24 28 79 11 12 9 8 40 Mike O'Donnell 28 24 27 79 12 14 8 8 42 Kent Payne 26 22 26 74 14 14 9 9 46 Steve Beppler 26 22 27 75 12 10 7 8 37 Lisa Coburn-Boyd 27 22 27 76 11 11 6 7 35 Charles Mederos 26 21 27 74 12 13 9 9 43 Mike O'Donnell 28 23 28 79 11 11 6 6 34 Kent Payne 26 22 26 74 12 11 7 7 37 Steve Beppler 29 24 29 82 15 14 10 9 48 Lisa Coburn-Boyd 29 24 29 82 14 14 9 9 46 Charles Mederos 29 24 29 82 14 13 9 9 45 Mike O'Donnell 28 24 28 80 13 14 8 9 44 Kent Payne 28 24 28 80 13 14 8 9 44 Steve Beppler 24 20 24 68 Lisa Coburn-Boyd 26 22 24 72 Charles Mederos 24 20 24 68 Mike O'Donnell 28 21 25 74 Kent Payne 26 22 26 74 Steve Beppler 26 22 27 75 12 13 9 7 41 Lisa Coburn-Boyd 27 23 25 75 11 12 7 7 37 Charles Mederos 26 22 27 75 11 12 9 9 41 Mike O'Donnell 28 24 27 79 11 11 8 7 37 Kent Payne 26 23 27 76 12 11 7 7 37 Steve Beppler 24 20 23 67 Lisa Coburn-Boyd 25 23 24 72 Charles Mederos 24 20 23 67 Mike O'Donnell 26 22 26 74 Kent Payne 25 22 24 71 Steve Beppler 24 19 22 65 Lisa Coburn-Boyd 24 21 23 68 Charles Mederos 23 20 22 65 Mike O'Donnell 25 21 24 70 Kent Payne 24 21 24 69 Firm Parsons Helix UltraSystems Psomas ECORP Chambers TetraTech Fee $144 $137 $151 $178 $135 $148 $144 Score 12 14 10 1 15 11 12 Note: The fees were evaluated by comparing rates for seven (7) positions. The sum of these rates are noted in the above table. Y Excellent 128 TOTAL SCORE 88 REFERENCES WRITTEN 132 911576 ORAL Parsons 7771 81 ATTACHMENT B As-needed Environmental Services 2023-2025 MAXIMUM POINTS 77 Helix Environmental Planning 11Chambers Group ECORP Consulting FIRM NOT INTERVIEWED SUMMARY OF PROPOSAL RANKINGS 76 1 Y 77Psomas 39 Y 4589 44 37Y 116 6 Excellent134Y8 UltraSystems Environmental 67 15 Y 82 FIRM NOT INTERVIEWED Tetra Tech 70 8 Y 78 FIRM NOT INTERVIEWED STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 SUBMITTED BY: Brandon DiPietro Field Services Manager PROJECT: Various DIV. NO. All APPROVED BY: Michael Long, Chief, Engineering Jose Martinez, General Manager SUBJECT: Award of Two (2) As-Needed In-Plant Inspection Services Contracts for Fiscal Years 2023 and 2024 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award two (2) professional services contracts for As-Needed In-Plant Inspection Services and to authorize the General Manager to execute two (2) agreements with On-Site Technical Services, Inc. (On-Site) and Kenny Consulting Services, Inc. (KCS), each in an amount not-to-exceed $175,000. The total amount of the two (2) agreements will not exceed $175,000 during Fiscal Years 2023 and 2024 (ending June 30, 2024). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization for the General Manager to enter into two (2) professional services agreements for As-Needed In-Plant Inspection Services with On-Site and KCS, with each agreement in an amount not-to-exceed $175,000 for Fiscal Years 2023 and 2024. The total amount of the two (2) agreements will not exceed $175,000 during Fiscal Years 2023 and 2024. AGENDA ITEM 6c 2 ANALYSIS: The District will require the services of a professional in-plant inspection consultant in support of the District’s Capital Improvement Program (CIP) and developer funded projects for the next two (2) fiscal years. Due to the strict requirements for the weld inspection, surface preparation, and coating application on steel pipelines, the District uses a third-party inspector to monitor, document, and verify welding reports and to ensure coatings are applied per District and coating manufacturer’s specifications. The District requires the specialty inspector to be certified by the American Welding Society as a Certified Welding Inspector (CWI) or Senior Certified Welding Inspector (SCWI) qualified to code AWS D1.1 QC1, American Society for Nondestructive Testing (ASNT) SNT-TC-1A as an NDT Level II or greater, and National Association of Corrosion Engineers (NACE) as a Level III Coating Inspector. The inspector’s tasks include, but are not limited to, submitting daily reports detailing the manufacturer’s activities, periodic testing, and overall quality control for the manufacturer’s procedures. It is more efficient and cost effective to issue an as-needed contract for In-Plant Inspection Services, which will provide the District with the ability to obtain consulting services in a timely and efficient manner. This concept has also been used in the past for other disciplines such as design engineering, construction management, geotechnical, and environmental services. The anticipated CIP and developer projects that are estimated to require in-plant inspection services for Fiscal Years 2023 and 2024 are listed below: CIP No. & Dev No. Capital Facilities & Developer Projects P2058 PL - 20-Inch, 1296 Zone, Proctor Valley Road from Melody Road to Highway 94 P2171 PL - 20-Inch, 1296 Zone, Proctor Valley Road from Pioneer Way to Melody Road P2195 PL - 24 - Inch, 640 Zone, Campo Road - Regulatory Site/Millar RanchP2196 PL - 24 - Inch, 640 Zone, Millar Ranch Road to 832-1 Pump Station D0362 Otay 250 D0914 Alta Crossing Unit 4 D1044 Otay Ranch Village 8 East 3 The District solicited for in-plant inspection services by placing an advertisement on the Otay Water District’s website and using Periscope S2G, the District’s online bid solicitation website on Monday, August 22, 2022. Five (5) firms submitted a letter of interest and a statement of qualifications. The Request for Proposal (RFP) for As-Needed In-Plant Inspection Services was sent to all five (5) firms. Of the five (5) firms that submitted a letter of interestand statement of qualifications, the two (2) incumbent firmssubmitted proposals. These are: •Kenny Consulting Services, Inc., San Diego, CA •On-Site Technical Service, Inc., Garden Grove, CA The following firms did not submit a proposal, MTGL Inc., Universal Engineering Services, and RMA Companies due to difficulty with finding capacity to accommodate additional work. A panel of five (5) staff members reviewed the proposals from On-Site and KCS. Staff agreed that On-site and KCS are well qualified to perform the services based on their experience, understanding of the scope of work, proposed method to accomplish the work, and their composite hourly rate. On-site and KCS have done an excellent job servicing the District’s current contract. On-Site and KCS submitted the Company Background Questionnaire, as required by the RFP, and staff did not find any significant issues. In addition, staff checked their references and performed an internet search on the companies. Staff found the references to be excellent and did not find any outstanding issues with the internet search. FISCAL IMPACT: Joe Beachem, Chief Financial Office The funds for these two (2) agreements will be expended on a variety of projects, as previously noted above. These agreements are for as- needed professional services based on the District's need and schedule, and expenditures will not be made until a task order is approved by the District for the consultant's services on a specific CIP or development project. Based on a review of the financial budget, the Project Manager anticipates that the budgets will be sufficient to support the professional as-needed services required for the CIP and developer projects noted above. The Finance Department has determined that the funds to cover these agreements will be available as budgeted for these projects. 4 GRANTS/LOANS: Engineering staff researched and explored grants and loans and found none available for this Project. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsible manner” and the General Manager’s Vision, "To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices." LEGAL IMPACT: None. Attachments: Attachment A – Committee Action ATTACHMENT A SUBJECT/PROJECT: Various Award of Two (2) As-Needed In-Plant Inspection Services Contracts for Fiscal Years 2023 and 2024 COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on October 18, 2022. The Committee supported staff's recommendation. •Staff presented the request to award two as-needed in-plantinspection services contracts for FY23 and 24. •In response to a comment from the Committee, staff explained thatthere were some slight cost increases from the previous contract to this current contract. Kenny Consulting Services, Inc. (KCS)had a 1.5 percent increase with a composite rate of $334 and On-Site Technical Services, Inc. (On-Site) had a steeper increase of 33 percent but the composite rate was lower at $303. Bothconsultants provide excellent service to the District. •In response to a comment from the Committee, the reason KCS hadhigher costs was that their PM is more expensive at around $209per hour and inspection is $145 per hour and On-Site’s PM is $158 per hour and inspection is $135 per hour. •The Committee asked if the PM is worth the cost for the work andstaff responded by stating that the PM is not brought in toooften unless they are needed to perform submittal reviews, but itis mostly for inspection. Staff also added that the On-Site consultant used at the 870-2 Pump Station was a much higher-levelrepresentative and was not participating in the regularinspections and was very helpful for this project. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full Board as a Consent Item. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 SUBMITTED BY: Kevin Cameron Senior Civil Engineer PROJECTS: P2567-001103 P2614-001103 DIV. NO. 3, 4 APPROVED BY: Bob Kennedy, Engineering Manager Michael Long, Chief, Engineering Jose Martinez, General Manager SUBJECT: Award of a Construction Contract to Unified Field Services Corporation for the 1004-2 & 485-1 Reservoir Interior/Exterior Coating & Upgrades Project GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award a construction contract to Unified Field Services Corporation (UFSC) and to authorize the General Manager to execute an agreement with UFSC for the 1004-2 & 485-1 Reservoir Interior/Exterior Coating & Upgrades Project in an amount not-to-exceed $1,857,865.00 (see Exhibits A-1 & A-2 for Project locations). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization for the General Manager to enter a construction contract with UFSC for the 1004-2 & 485-1 Reservoirs Interior/Exterior Coating & Upgrades Project in an amount not-to- exceed $1,857,865.00. AGENDA ITEM 6d 2 ANALYSIS: The 1004-2 Reservoir is a 1.26 million-gallon (MG) potable water storage facility that serves portions of Spring Valley. The 1004-2 Reservoir was originally constructed in 2004 and has never been recoated. It is the only storage facility in the 1004 Pressure Zone. Service in the 1004 Zone, during the project, will be maintained by the Variable Frequency Drive (VFD) Pump Trailer. The trailer will be located at the 1004-1 Pump Station site and perform as a hydropnuematic pump station to maintain water pressure in the system. The VFD Pump Trailer was successfully used in the same manner during the recoating of the 1200-1 Reservoir. The 485-1 Reservoir is a 1.0 MG potable water storage facility that serves portions of Chula Vista. The 485-1 Reservoir was originally constructed in 1983 and is the only storage facility in the 485 Pressure Zone. During the recoating, service will be maintained through two pressure reducing stations. The reservoir was last recoated in 2005. The District’s corrosion consultant maintains a Corrosion Control Program (CCP) that addresses the installation, maintenance, and monitoring of corrosion protection systems for the District’s steel reservoirs and buried metallic piping. The CCP includes a reservoir maintenance schedule that shows the 1004-2 & 485-1 Reservoirs are due for recoating on both the interior and exterior surfaces. An in- service internal and external inspection was performed by CSI Services, Inc., which illustrates the interior roof coating is in fair to poor condition with areas of blistering on the shell and floor beneath the waterline on both tanks. Although the blistering paint is still protecting the steel, blisters in the paint are the beginning signs of failure. The external inspection shows the shell coating in fair to poor condition; however, the 485-1 roof coating has exceeded its useful life. In addition to the interior and exterior coating removal/replacement, the recommended structural and safety upgrades are as follows: replace the existing level indicator, install new fall prevention devices on the exterior ladder, modify anode access ports, replace all cathodic anodes, replace the roof vent, install new safety cable lanyards for roof access, and add multiple tank penetrations for chlorination and sampling. These upgrades will ensure compliance with the American Water Works Association (AWWA) and the Occupational Safety and Health Administration Standards for both Federal (OSHA) and State (Cal-OSHA) as well as upgrade antiquated equipment on the tank. 3 The Project was advertised on August 25, 2022, using the District’s online bid solicitation website, Periscope S2G, on the Otay Water District’s website, and in the Daily Transcript. A Pre-Bid Meeting was held on September 8, 2022, which was attended by five (5) contractors and vendors via an online Zoom meeting. Two (2) addenda were sent out to all bidders and plan houses to address questions and clarifications to the contract documents during the bidding period. Bids were publicly opened online via a Zoom meeting on September 22, 2022, with the following results: CONTRACTOR TOTAL BID AMOUNT 1 Unified Field Services Corporation (UFSC) Bakersfield, CA $1,857,865.00 2 Advanced Industrial Services, Inc. Los Alamitos, CA $1,869,400.00 3 Associated Tank Constructors, Inc. Temecula, CA 92590 $2,045,500.00 4 Capital Industrial Coatings, LLC Huntington Beach, CA 92649 $2,321,462.00 5 Abhe & Svoboda, Inc. Alpine, CA 91901 $4,063,400.00 The Engineer's Estimate is $1,652,000. A review of the bids was performed by District staff for conformance with the contract requirements. Staff determined that UFSC is the lowest responsive and responsible bidder. UFSC holds a Class A Contractor’s license, which expires on December 31, 2023. UFSC also holds a current QP-1 required certification from the Association for Materials Protection and Performance. UFSC submitted the Company Background and Company Safety Questionnaires, as required by the Contract Documents. Staff checked references, and the response from other agencies indicated UFSC has an overall good performance rating on similar projects. The proposed Project Manager has experience in California on similar projects and received excellent recommendations. UFSC has previously worked with the District on the recycled filter storage tank coating project, which was completed on time and on budget. Staff has verified the validity of the bid bond provided by Nationwide Mutual Insurance Company. Upon Board approval, UFSC will sign the contract, furnish the performance bond and labor and materials bond, and staff will verify both bonds prior to fully executing the contract. 4 FISCAL IMPACT: Joe Beachem, Chief Financial Officer The total budget for CIP P2567, as approved in the FY 2023 budget, is $1,275,000. Total expenditures, plus outstanding commitments and forecast, are $1,273,717. See Attachment B-1 for the budget detail. The total budget for CIP P2614, as approved in the FY 2023 budget, is $1,375,000. Total expenditures, plus outstanding commitments and forecast, are $1,167,764. See Attachment B-2 for the budget detail. Based on a review of the financial budgets, the Project Manager anticipates that the budget for both CIP P2567 & P2614 is sufficient to support the Project. The Finance Department has determined that, under the current rate model, 100% of the funding is available from the Replacement Fund. GRANTS/LOANS: Engineering staff researched and explored grants and loans and found none currently available for this Project. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsible manner” and the General Manager’s Vision, "To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices." LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B-1 – Budget Detail – CIP P2567 Attachment B-2 – Budget Detail – CIP P2614 Exhibit A-1 – Project Location for 1004-2 Reservoir Exhibit A-2 – Project Location for 485-1 Reservoir ATTACHMENT A SUBJECT/PROJECT: P2567-001103 P2614-001103 Award of a Construction Contract to Unified Field Services Corporation for the 1004-2 & 485-1 Reservoir Interior/Exterior Coating & Upgrades Project COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on October 18, 2022 and the following comments were made: • Staff presented the request to award a construction contract to Unified Field Services Corporation for the 1004-2 and 485-1 Reservoir for interior/exterior coating and upgrades project. • The Committee commented that the bids came in over the engineer’s estimate and since they are the lowest bidder and assuming that staff did the thorough research to ensure the quality of work that the company can perform. Staff responded that two years ago, there were two similar tanks of the same size and for that bid it was $1.4 million, as a comparison. The coating removal and offsite disposal have the largest cost increases from the previous years. • In response to a question from the Committee, the contractor is coming down from Bakersfield, which is typical of many other firms of this type. Many coating contractors are located in the Los Angeles area and their workforce stay in the local area to complete the job. • The Committee noted that one of the tanks is isolated and the other is near a community and asked if public outreach is typically conducted for the potential 24-hour construction operations that may be required for the tank coating and upgrade project adjacent to the community? Staff confirmed that the community would be notified of the work which is expected to start in December. Staff will work with the Communications Officer to reach out to nearby residents. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full Board as a Consent Item. ATTACHMENT B-1 – Budget Detail CIP P2567 SUBJECT/PROJECT: P2567-001103 P2614-001103 Award of a Construction Contract to Unified Field Services Corporation for the 1004-2 & 485-1 Reservoir Interior/Exterior Coating & Upgrades Project 9/22/2022 Budget 1,275,000 Planning Standard Salaries 38,669 38,669 - 38,669 Service Contracts 3,975 3,975 - 3,975 CSI SERVICES Total Planning 42,644 42,644 - 42,644 Design Standard Salaries 17,000 15,521 1,479 17,000 Service Contracts 47 47 - 47 DAILY JOURNAL CORPORATION Total Design 17,047 15,568 1,479 17,047 Construction Standard Salaries 90,000 21,107 68,893 90,000 Construcion Contract 948,438 - 948,438 948,438 UNIFIED FIELD SERVICES CORPORATION Service Contracts 30,000 - 30,000 30,000 CONSTRUCTION MANAGEMENT50,000 - 50,000 50,000 COATING INSPECTION 2,000 - 2,000 2,000 WELDING INSPECTION10,000 - 10,000 10,000 WATCHLIGHT 1,000 - 1,000 1,000 STRUCTURAL ENGINEER1,000 - 1,000 1,000 CLARKSON LABORATORY Infrastrucutre Equipment & Materials 564 564 - 564 SUPERIOR READY MIX LP26,645 26,645 - 26,645 FERGUSON ENTERPRISES INC #1083 1,107 1,107 - 1,107 MCMASTER-CARR SUPPLY CO19,669 19,669 - 19,669 DAWSON COMPANY 2,468 2,468 - 2,468 FERGUSON ENTERPRISES #10832,682 2,682 - 2,682 SOUTHLAND PIPE CORP Project Contingency 28,453 - 28,453 28,453 3% CONTINGENCY Total Construction 1,214,026 74,242 1,139,784 1,214,026 Grand Total 1,273,717 132,454 1,141,263 1,273,717 Vendor/Comments Otay Water DistrictP2567 - 1004-2 Reservoir Interior/Exterior Coating Committed Expenditures Outstanding Commitment & Forecast Projected Final Cost ATTACHMENT B-2 – Budget Detail CIP P2614 SUBJECT/PROJECT: P2567-001103 P2614-001103 Award of a Construction Contract to Unified Field Services Corporation for the 1004-2 & 485-1 Reservoir Interior/Exterior Coating & Upgrades Project 9/22/2022 Budget 1,375,000 Planning Standard Salaries 8,032 8,032 - 8,032 Service Contracts 3,975 - 3,975 3,975 CSI SERVICES Total Planning 12,007 8,032 3,975 12,007 Design Standard Salaries 20,000 2,332 17,668 20,000 Service Contracts 47 47 - 47 DAILY JOURNAL CORP Total Design 20,047 2,379 17,668 20,047 ConstructionStandard Salaries 100,000 - 100,000 100,000 Construcion Contract 909,427 - 909,427 909,427 UNIFIED FIELD SERVICES CORPORATION Service Contracts 35,000 - 35,000 35,000 CONSTRUCTION MANAGEMENT50,000 - 50,000 50,000 COATING INSPECTION 2,000 - 2,000 2,000 WELDING INSPECTION10,000 - 10,000 10,000 WATCHLIGHT 1,000 - 1,000 1,000 STRUCTURAL ENGINEER1,000 - 1,000 1,000 CLARKSON LABORATORY Project Contingency 27,283 - 27,283 27,283 3% CONTINGENCY Total Construction 1,135,710 - 1,135,710 1,135,710 Grand Total 1,167,764 10,411 1,157,353 1,167,764 Vendor/Comments Otay Water District P2614 - 485-1 Reservoir Interior/Exterior Coating Committed Expenditures Outstanding Commitment & Forecast Projected Final Cost OTAY WATER DISTRICT1004-2 RESERVOIR INT/EXT COATING & UPGRADES LOCATION MAP EXHIBIT A-1 C: \ U s e r s \ d o n a l d . b i e n v e n u e \ O t a y W a t e r D i s t r i c t \ E N G C I P - D o c u m e n t s \ P 2 5 6 7 1 0 0 4 - 2 R e s e r v o i r I n t - E x C o a t i n g & U p g r a d e s \ G r a p h i c s \ E x h i b i t s - F i g u r e s \ E x h i b i t A . m x d !\ VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS PROJECT SITE CIP P2567F 0 450225 Feet EUCALYPTUS ST IVY ST BU E N A V I S T A A V E LA P R E S A A V E ACCE S S R D OTAY WATER DISTRICT485-1 RESERVOIR INT/EXT COATING & UPGRADESLOCATION MAP EXHIBIT A-2 C: \ O n e D r i v e \ O t a y W a t e r D i s t r i c t \ E N G C I P - D o c u m e n t s \ P 2 6 1 4 4 8 5 - 1 R e s e r v o i r I n t e r i o r - E x t e r i o r C o a t i n g \ G r a p h i c s \ E x h i b i t s - F i g u r e s \ E x h i b i t A . m x d !\ VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS PROJECT SITE CIP P2614F 0 500250 Feet EAST H ST SOLDEL CAMI N O TI E R R A D E L R E Y STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 SUBMITTED BY: Jeff Marchioro Senior Civil Engineer PROJECT: P1043 & Various CIPs DIV. NO. ALL APPROVED BY: Bob Kennedy, Engineering Manager Michael Long, Chief, Engineering Jose Martinez, General Manager SUBJECT: Award of As-Needed Corrosion Engineering Services Contracts for Fiscal Years 2023 through 2025. GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award two (2) professional As-Needed Corrosion Engineering Services agreements and to authorize the General Manager to execute two (2) agreements with RFYeager Engineering, LLC (RFYeager) and JDH Corrosion Consultants, Inc. (JDH), each in an amount not-to-exceed $640,000. The total amount of the two (2) contracts will not exceed $640,000 during Fiscal Years 2023 through 2025 (ending June 30, 2025). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board authorization for the General Manager to enter into two (2) professional As-Needed Corrosion Engineering Services agreements with RFYeager and JDH, each in an amount not-to-exceed $640,000 for Fiscal Years 2023 through 2025 (ending June 30, 2025). The total amount of the two (2) contracts will not exceed $640,000 during Fiscal Years 2023 through 2025. AGENDA ITEM 6e 2 ANALYSIS: The District’s Cathodic Protection Program (Program) was implemented two decades ago to provide the long-term benefit of preserving the life expectancy of metallic pipeline and reservoir facilities by preventing corrosion and reducing the risk of costly failures. The Program includes the selection of appropriate corrosion resistant materials, the use of coatings and linings to prevent corrosion, and cathodic protection. The Program also ensures that all facilities are consistently designed, specified, constructed, and tested in accordance with the District’s corrosion control standards. The District has regularly awarded professional services contracts in support of the District’s Program. RFYeager has held the current agreement since June 15, 2017. To supplement RFYeager’s agreement, two (2) separate as-needed corrosion engineering agreements were executed with RFYeager and Coffman Engineers, Inc. (Coffman) in the amount of $70,000 each on February 9, 2015. Both RFYeager and Coffman existing agreements will expire on June 30, 2023. The general scope of work for the new contract includes the following items: • Annual Maintenance and improvements to the District’s Corrosion Control Program Corrosion Protection Report • Testing and survey of 108 existing steel pipeline cathodic protection systems with various subsystems • Testing and inspection of 29 existing steel reservoir cathodic protection systems • As-Needed Corrosion Engineering Services The As-Needed Corrosion Engineering Services portion of the scope of work will provide the District with the ability to obtain consulting services in a timely and efficient manner and on an as-needed basis. District staff will identify tasks and request cost proposals from the two consultants during the contract period. Each consultant will prepare a detailed scope of work, schedule, and fee for each task order, with the District evaluating the proposals based upon qualifications and cost. The District will enter into negotiations with the consultants, selecting the proposal that has the best value for the District. Upon written task order authorization from the District, the selected consultant shall then proceed with the project as described in the scope of work. The CIP projects that are estimated to require corrosion engineering design services for Fiscal Years 2023-2025, at this time, are listed below: 3 CIP DESCRIPTION ESTIMATED COST P2563 870-1 Reservoir Cover/Liner Replacement and Supporting Projects $35,000 P2639 Vista Diego Hydropneumatic Pump Station Replacement $25,000 P2646 North District Area Cathodic Protection Improvements $100,000 P2647 Central Area Cathodic Protection Improvements $150,000 P2685 980/711 PRS Renovation - Proctor Valley Rd $25,000 varies Miscellaneous developer projects $30,000 TOTAL: $365,000 Staff believes that a $400,000 cap on each of the As-Needed Corrosion Engineering Services portion of the contracts is adequate, while still providing a buffer for unforeseen tasks. The As-Needed Corrosion Engineering Services portion of the contracts does not commit the District to any expenditure until a task order is approved to perform the work. The District does not guarantee as-needed work to the consultants, nor does the District guarantee to the consultants that it will expend all the funds authorized by the contract on professional services. The District solicited corrosion engineering services by placing an advertisement on the Otay Water District’s website and using Periscope S2G, the District’s online bid solicitation website on June 30, 2022. The advertisement was also placed in the Daily Transcript. Ten (10) firms submitted a Letter of Interest and a Statement of Qualifications. Six (6) people representing five (5) consulting firms attended the Pre-Proposal Meeting held July 19, 2022. 1. Accurate Corrosion Control, Inc (Pleasanton, CA) 2. Alisto Engineering Group, Inc. (Walnut Creek, CA) 3. Coffman Engineers, Inc. (San Diego, CA) 4. Farwest Corrosion Control Company (Downey, CA) 5. HDR, Inc. (San Diego, CA) 6. JDH Corrosion Consultants, Inc. (Concord, CA) 7. National Corrosion (Los Alamitos, CA) 8. Pond and Company (San Diego, CA) 9. RFYeager Engineering (Lakeside, CA) 10. V&A Consulting Engineers, Inc. (San Diego, CA) The Request for Proposal (RFP) for As-Needed Corrosion Engineering Services was sent to all ten (10) firms resulting in six (6) proposals received by August 9, 2022. Firms that submitted Letters 4 of Interest, but did not propose, were Coffman, Farwest, and HDR. Pond and Company’s proposal was considered non-responsive due to the errors in their fee proposal (omitted line items for annual work and errors in hourly rate position titles). In accordance with the District’s Policy 21, staff evaluated and scored all written proposals and interviewed the top three (3) firms on September 14, 2022. RFYeager and JDH received the highest scores based on their experience, understanding of the scope of work, proposed method to accomplish the work, and their composite rates. RFYeager and JDH were the most qualified consultants with the best overall proposal. As discussed above, RFYeager currently holds a similar as-needed corrosion engineering agreement with the District and has performed well. A summary of the complete evaluation is shown in Attachment B. RFYeager and JDH submitted the Company Background Questionnaire form, as required by the RFP, and staff did not find any significant issues. In addition, staff checked their references and performed an internet search on each company and did not find any outstanding issues. Staff found the references to be excellent. District staff will assign annual work (annual testing and reporting) to RFYeager or JDH after Board award and contract execution. The work will be assigned based on consultant responsiveness and availability to complete the work. FISCAL IMPACT: Joe Beachem, Chief Financial Officer These contracts are for professional services based on the District’s need and schedule, and expenditures will not be made until individual main tasks or task orders under the as-needed portion of these contracts are authorized by District staff. The FY 2023 Engineering Planning Operating budget for cathodic testing and annual reporting is $75,000. Approximately $240,000 of this award will be funded by the P1043 operating budget FY 2023 through 2025. The remaining $400,000 as-needed budget will be funded by specific CIP and developer budgets detailed above. The Project Manager anticipates that the FY 2024 and FY 2025 budgets, if approved, will be sufficient to support the future professional As-Needed Corrosion Engineering Services required. 5 Finance has determined that, with approval of the future budgets, funding will be available from the General, Betterment, and Replacement funds, as outlined in the individual CIP project budgets described above. GRANTS/LOANS: Engineering staff researched and explored grants and loans and found none available for this Project. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsible manner” and the General Manager’s Vision, "To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices." LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Summary of Proposal Rankings ATTACHMENT A SUBJECT/PROJECT: P1043 & Various CIPs Award of As-Needed Corrosion Engineering Services Contracts for Fiscal Years 2023 through 2025. COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee (Committee) reviewed this item at a meeting held on October 18, 2022 and the following comments were made: • Staff presented the request to award an as-needed corrosion Engineering Services contracts for Fiscal Years 2023 through 2025. • In response to a question from the Committee, staff clarified that the annual work (annual testing and reporting) expense charged to the operating budget typically runs a little more than $100,000.00 per year. The current fiscal year annual operating budget has only $75,000.00 (rather than the typical $100,000.00) budgeted since the annual work will start mid-fiscal year. The $640,000.00 agreement amount accounts for annual work charged to the operating budget at the rate of just over than $100,000.00 per year, for two years, plus $400,000.00 as-needed corrosion engineering services. Following the discussion, the Committee supported staffs’ recommendation and presentation to the full Board as a Consent Item. Qualifications of Team Responsiveness and Project Understanding Technical and Management Approach INDIVIDUAL SUBTOTAL - WRITTEN AVERAGE SUBTOTAL - WRITTEN Proposed Rates* Consultant's Commitment to DBE TOTAL - WRITTEN Additional Creativity and Insight Strength of Project Manager Presentation and Communication Skills Responses to Questions INDIVIDUAL TOTAL - ORAL AVERAGE TOTAL ORAL TOTAL SCORE 30 25 30 85 85 15 Y/N 100 15 15 10 10 50 50 150 Poor/Good/ Excellent Aaron Hazard 25 15 25 65 Bernardo Separa 23 19 22 64 Dongxing Ma 22 19 20 61 Jeff Marchioro 24 19 24 67 Trevor Rogers 23 20 24 67 Aaron Hazard 23 20 25 68 Bernardo Separa 26 21 26 73 Dongxing Ma 23 20 23 66 Jeff Marchioro 25 22 26 73 Trevor Rogers 25 22 26 73 Aaron Hazard 25 25 25 75 12 15 8 7 42 Bernardo Separa 28 24 29 81 13 13 9 8 43 Dongxing Ma 28 22 26 76 12 13 8 8 41 Jeff Marchioro 28 23 28 79 15 14 10 8 47 Trevor Rogers 29 24 27 80 13 13 8 8 42 Aaron Hazard 19 22 19 60 Bernardo Separa 24 19 25 68 Dongxing Ma 23 21 20 64 Jeff Marchioro 24 19 24 67 Trevor Rogers 24 20 24 68 Aaron Hazard 25 23 25 73 12 15 10 8 45 Bernardo Separa 28 23 29 80 14 13 9 8 44 Dongxing Ma 28 23 27 78 14 14 10 9 47 Jeff Marchioro 27 23 28 78 14 14 10 9 47 Trevor Rogers 28 23 29 80 14 14 10 9 47 Aaron Hazard 28 25 25 78 13 13 7 9 42 Bernardo Separa 29 24 30 83 12 12 8 8 40 Dongxing Ma 26 25 28 79 12 12 8 9 41 Jeff Marchioro 30 24 29 83 13 14 9 9 45 Trevor Rogers 29 25 30 84 14 13 8 8 43 Notes: Consultant Rate Score 1.Review Panel does not see or consider rates when scoring other categories. Rates are scored by Engineering staff not on Review Panel. Accurate Corrosion Control $798,011 3 2.The fees were evaluated by comparing rates for six positions. The sum of these rates are noted on the table to the left. Alisto Engineering Group $596,920 11 JDH Corrosion Consultants $705,815 7 National Corrosion $474,060 15 V & A Consulting Engineers $862,882 1 RF Yeager Engineering $656,968 8 65 80 1 Y 79 46 125 80 Alisto Engineering Group 71 11 65 68 JDH Corrosion Consultants Not Interviewed ATTACHMENT B SUMMARY OF PROPOSAL RANKINGS Professional Corrosion Engineering Services- Fiscal Years 2023 through 2025 WRITTEN ORAL 78 82 Accurate Corrosion Control 785 MAXIMUM POINTS 3 131 Excellent 68 Y Y National Corrosion 89 REFERENCES 82 43 128 Excellent Not Interviewed Not Interviewed 42 78 15 Y RATES SCORING CHART RF Yeager 81 8 Y V & A Consulting Engineers STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Adolfo Segura Chief of Administrative Services APPROVED BY: Jose Martinez, General Manager SUBJECT: ADOPT RESOLUTION #4420 TO UPDATE BOARD POLICY #40, “ETHICS POLICY” GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Resolution #4420 to update Board Policy #40, “Ethics Policy”, due to the recent amendment to the Brown Act, via AB 992. COMMITTEE ACTION: See “Attachment A”. PURPOSE: To request that the Board adopt Resolution #4420 to update Board Policy #40, “Ethics Policy”, due to the recent amendment to the Brown Act, via AB 992, and the absence of electronic communication language throughout the current version of Board Policy 40. ANALYSIS: The codification or organization of ordinances provides an essential framework of operating laws for an agency to function. The District’s code of ordinances contains fifty-two (52) Board adopted policies that govern how the District operates. As a standard course of action, the District reviews and updates its Board policies as needed. AGENDA ITEM 7b On January 21, 2021, AB 992 took affect by amending the Brown Act to provide clarity on the actions public officials can and cannot take on social media. Under AB 992, a public or elected official may communicate on a social media platform to answer questions, provide information to the public, or to solicit information from the public. However, via AB 992, a public or elected official “shall” not respond directly to any communication on an internet-based social media platform regarding official agency or District business. The District’s Board Policy 40, or Ethics Policy, contains language regarding Disclosure of Closed Session Matters, Disclosure of Confidential Communications, Ex Parte (On Behalf of or By an Outside Party), including that of written or oral communication; however, there is no language or reference of electronic or social media communications. The use of electronic or social media technology for public communication is a standard process for most, if not, all agencies. As a best practice, policies regarding responsible and professional use of online technology platforms have and continue to be adopted by agencies for their staff, board members, and elected officials. The previous revision of Board Policy 40, or Ethics Policy, was executed in 2001. Given the recent update to the Brown Act, via AB 992, and the absence of electronic communication language throughout the current version of Board Policy 40, staff is presenting recommended updates for Board review and consideration (see Attachment C). Based on the above, it is recommended that the Board of Directors adopt Resolution #4420 in support of the proposed updates. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. STRATEGIC GOAL: Operate the District in a financially sustainable and transparent manner. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Resolution #4420 Exhibit 1 – Board Policy #40, “Ethics Policy” Attachment C - Recommended Updates and Proposed Copy, Board Policy #40, “Ethics Policy” ATTACHMENT A SUBJECT/PROJECT: ADOPT RESOLUTION #4420 TO UPDATE BOARD POLICY #40, “ETHICS POLICY” COMMITTEE ACTION: The Communications, Public Relations, Legal & Legislative Committee discussed and reviewed this item at a meeting held on October 17, 2022, and the following comments were made: •Staff noted that the intent of updating Board Policy No. 40, Ethics Policy, is to clarify the language. For example, adding details of Brown Act AB 922 that addresses public officials’ use of social media. •In response to a question from the Committee, staff stated that other agencies have updated their Ethics Policy. •It was noted that Resolution No. 4420 will be drafted and brought to the November 2, 2022, board meeting for consideration and approval by the full board to update Policy No. 40. Following the discussion, the committee supported staffs’ recommendation and presentation to the full board as an action item. 1 ATTACHMENT B RESOLUTION NO. 4420 RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT TO REVISE BOARD POLICY #40, “ETHICS POLICY” WHEREAS, the Board of Directors of Otay Water District have established policies, procedures, ordinances, and resolutions for the efficient operation of the District; and WHEREAS, it is the policy of the District to establish procedures to review policies, procedures, ordinances, and resolutions periodically to ensure they are current and relevant; and WHEREAS, District staff has identified Board Policy #40, “Ethics Policy”, as requiring updates as per the attached strike-through copy. NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Otay Water District amend the Board Policy indicated above in the form presented to the Board at this meeting. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting held this 2nd of November 2022. __________________________ Board President ATTEST: ___________________________ District Secretary OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 1 of 2 PURPOSE To establish an Ethics Policy to define guidelines and specific prohibitions to which elected officials of the Board of Directors of the Otay Water District must conform in pursuit of their assigned duties and responsibilities to foster public respect, confidence, and trust. POLICY 1. Declaration of Policy The respected operations of democratic government emphasize that elected officials be independent, impartial, and responsible to the people. It requires that they conduct themselves in a manner above reproach. It also imposes an obligation of personal integrity that will foster public respect, confidence, and trust. This Ethics Policy provides the following general guidelines and specific prohibitions to which elected Otay Water District Officials must conform in pursuit of their assigned duties and responsibilities. 2. Disclosure of Closed Session Matter No member of the Otay Water District Board shall disclose to any person, other than members of the Board, General Manager, or other District staff designated by the General Manager to handle such matters of confidential District business, the content or substance of any information presented or discussed during a closed session meeting unless the District first authorizes such disclosure by the affirmative vote of three members. 3. Disclosure of Confidential Communications Except when disclosure is mandated by State or Federal law, no member of the District Board shall disclose confidential or privileged communications to any person other than members of the Board, General Manager, or other District staff designated by the General Manager to handle such matters, unless the Board of Directors first authorizes such disclosure by the affirmative vote of three members of the Board of Directors. 4. Conduct During Negotiations/Litigation The Board of Directors is authorized to provide direction to specifically identified negotiators in a legally constituted EXHIBIT 1 OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 2 of 2 closed session on matters involving pending litigation, real estate negotiations and labor negotiations. If the Board of Directors, in closed session, provides such direction to its negotiators, all contact with the negotiating party or party’s representative shall be limited to and made by those individuals designated to handle the negotiations. During a pending labor negotiation, no member of the District Board shall have any contact or discussion with the negotiating party or the party’s representative regarding the subject matter of the pending negotiation. In addition, during litigation or real estate negotiations, no member of the District Board (unless they have been designated as a negotiator) shall have any contact or discussion with litigating or negotiating party or the party’s representative regarding the subject matter of the pending litigation or real estate negotiations. Nothing in this section shall prohibit Board members from receiving written communications provided they are made available to all Board members, the General Manager, or the District’s designated negotiators on an equal basis. 5. Ex Parte Communications The purpose of this provision is to guarantee that all interested parties to any matter before the Board have equal opportunity to express and represent their interests. Ex parte communications are those communications members of the Board have with representatives of only one side of a matter outside the presence of other interested parties. A communication concerning only the status of a pending matter shall not be regarded as an ex parte communication. Any written or oral ex parte communication received by a member of the Board in matters where all interested parties are entitled to an equal opportunity for a hearing, shall be made a part of the record by the recipient. 6. Violations and Penalties Any violation of this Ethics Policy by a member of the Board shall constitute official misconduct if determined by an affirmative vote of three members of the Board in an open and public meeting. In addition to any criminal or civil penalties provided by the Federal, State, or other local law, any violation of the Ethics Policy shall constitute a cause for censure by the Board of Directors adoption of a Resolution of Censure. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 1 of 3 PURPOSE To establish an Ethics Policy to define guidelines and specific prohibitions to which elected officials of the Board of Directors of the Otay Water District must conform in pursuit of their assigned duties and responsibilities to foster public respect, confidence, and trust. POLICY 1.Declaration of Policy The respected operations of democratic government emphasize thatelected officials be independent, impartial, and responsible tothe people. It requires that they conduct themselves in a mannerabove reproach. It also imposes an obligation of personalintegrity that will foster public respect, confidence, and trust. This policy also outlines responsibilities and best practice recommendations for the use of electronic communication andsocial media by the Board and individual Board members in theircapacity as elected officials. The Board of Directors is committed to open communications with its constituents via theuse of available and online technologies within the limits of thelaw and the Brown Act. This Ethics Policy provides the following general guidelines and specific prohibitions to which elected Otay Water DistrictOfficials must conform in pursuit of their assigned duties and responsibilities. 2.Disclosure of Closed Session Matters No member of the Otay Water District Board shall disclose to anyperson, other than members of the Board, General Manager, orother District staff designated by the General Manager to handlesuch matters of confidential District business, the content orsubstance of any information presented or discussed during a closed session meeting unless the District Board President firstauthorizes such disclosure by the affirmative vote of three (3) members or the majority. 3.Disclosure of Confidential Communications Except when disclosure is mandated by State or Federal law, nomember of the District Board shall disclose confidential or ATTACHMENT C OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 2 of 3 privileged communications to any person other than members of the Board, General Manager, or other District staff designated by the General Manager to handle such matters, unless the Board of Directors first authorizes such disclosure by the affirmative vote of three (3) members or the majorityof the Board of Directors. 4.Conduct During Negotiations/LitigationThe Board of Directors is authorized to provide direction tospecifically identified negotiators in a legally constituted closed session on matters involving pending litigation, realestate negotiations and labor negotiations. If the Board of Directors, in closed session, provides such direction to itsnegotiators, all contact with the negotiating party or party’srepresentative shall be limited to and made by those individualsdesignated to handle the negotiations. During a pending labornegotiation, no member of the District Board shall have any contact or discussion with the negotiating party or the party’srepresentative regarding the subject matter of the pending negotiation. In addition, during litigation or real estatenegotiations, no member of the District Board (unless they havebeen designated as a negotiator) shall have any contact or discussion with the litigating or negotiating party or theparty’s representative regarding the subject matter of thepending litigation or real estate negotiations. Nothing in this section shall prohibit Board members from receiving written or electronic communications provided they aremade available to all Board members, the General Manager, or the District’s designated negotiators on an equal basis. 5.Ex Parte Communications The purpose of this provision is to guarantee that all interestedparties to any matter before the Board have equal opportunity toexpress and represent their interests. Ex parte communicationsare those communications members of the Board have withrepresentatives of only one side of a matter outside the presence of other interested parties. Any type of communication concerningonly the status of a pending matter shall not be regarded as an ex parte communication. Any written, electronic (including social media), or oral ex parte communication received by a member of the Board in matterswhere all interested parties are entitled to an equal opportunity OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 3 of 3 for a hearing, shall be made a part of the record by the recipient. a.Social Media or Online Technology Communications Definition“Social Media” are third-party hosted online technologies that facilitate social interactions and dialogue. Theseonline technologies are operated by non-District hosted services and may include, but are not limited to socialnetworking sites (Twitter, Facebook, LinkedIn, Instagram,Myspace), micro-blogging tools (Twitter, RSS feeds), audiovisual networking sites (YouTube, Flickr), blogs, etc. b.Social Media or Online Technology General UsageSocial media may be used by the Board and/or individualboard members to communicate with the public. Directorsshall make every effort to ensure that their electronic communications conform to the same standards and protocolsestablished for other forms of communication (Government Code Section 54952.2, Assembly Bill 992, Brown Act, Districtordinances, etc.) which includes but is not limited to:applicable record retention laws; the use of digital icons and reactions as means of communication; blocking accountsor access, etc. The content and tenor of onlineconversations, discussions, and information posts shouldmodel the same professional behavior displayed during Boardor community meetings. To the extent possible, electronic communications regarding any district-related business shallbe transmitted through a district approved account. Examples of business that may not be conducted through unapprovedsocial media include but are not limited to: making policydecisions, official public noticing, and discussing items of legal or fiscal significance that have not previously beenreleased to the public. 6.Violations and PenaltiesAny violation of this Ethics Policy by a member of the Board shall constitute official misconduct if determined by anaffirmative vote of three (3) members or the majority of the Board in an open and public meeting. In addition to any criminalor civil penalties provided by the Federal, State, or other locallaw, any violation of the Ethics Policy shall constitute a cause for censure by the Board of Directors adoption of a Resolution ofCensure. STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: November 2, 2022 SUBMITTED BY: Tita Ramos-Krogman, District Secretary W.O./G.F. NO:DIV. NO. APPROVED BY: Tita Ramos-Krogman, District Secretary Jose Martinez, General Manager SUBJECT: Board of Directors 2022 Calendar of Meetings GENERAL MANAGER’S RECOMMENDATION: At the request of the Board, the attached Board of Director’s meeting calendars for 2022 and 2023 are being presented for discussion. PURPOSE: This staff report is being presented to provide the Board the opportunity to review the 2022 and 2023 Board of Director’s meeting calendar and amend the schedules as needed. COMMITTEE ACTION: N/A ANALYSIS: The Board requested that this item be presented at each meeting so they may have an opportunity to review the Board meeting calendar schedule and amend it as needed. STRATEGIC GOAL: N/A FISCAL IMPACT: None. LEGAL IMPACT: None. Attachment: Calendar of Meetings for 2022 and 2023 G:\UserData\DistSec\WINWORD\STAFRPTS\Board Meeting Calendar 11-02-22.doc AGENDA ITEM 7c Board of Directors, Workshops and Committee Meetings 2022 Regular Board Meetings: Special Board or Committee Meetings (3rd Wednesday of Each Month or as Noted) January 5, 2022 February 2, 2022 March 2, 2022 April 6, 2022 May 11, 2022 June 8, 2022 July 6, 2022 August 3, 2022 September 7, 2022 October 5, 2022 November 2, 2022 December 7, 2022 January 19, 2022 February 16, 2022 March 16, 2022 April 20, 2022 May 18, 2022 June 15, 2022 July 20, 2022 August 17, 2022 September 21, 2022 October 19, 2022 November 16, 2022 December 21, 2022 Board of Directors, Workshops and Committee Meetings 2023 Regular Board Meetings: Special Board or Committee Meetings (3rd Wednesday of Each Month or as Noted) January 4, 2023 February 1, 2023 March 1, 2023 April 5, 2023 May 3, 2023 June 7, 2023 July 5, 2023 August 2, 2023 September 6, 2023 October 4, 2023 November 1, 2023 December 6, 2023 January 18, 2023 February 15, 2023 March 15, 2023 April 19, 2023 May 17, 2023 June 21, 2023 July 19, 2023 August 16, 2023 September 20, 2023 October 18, 2023 November 15, 2023 December 20, 2023 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 SUBMITTED BY: Marissa Dychitan Senior Accountant PROJECT: DIV. NO. All APPROVED BY: Eid Fakhouri, Finance Manager Kevin Koeppen, Assistant Chief of Finance Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Approve the Audited Financial Statements for the Fiscal Year Ended June 30, 2022 GENERAL MANAGER'S RECOMMENDATION: That the Board approve the Audited Financial Statements (Attachment B), including the Independent Auditors' unqualified opinion, for the fiscal year ending June 30, 2022. COMMITTEE ACTION: See Attachment A. PURPOSE: To inform the Board of the significant financial events which occurred during the fiscal year ended June 30, 2022, as reflected in the audited financial statements. ANALYSIS: Davis Farr LLP performed the audit and found that, in all material respects, the financial statements correctly represent the District's AGENDA ITEM 8a 2 financial position. They found no material errors in the financial records or statements (Attachment D). Total Assets: Total assets increased by $50.2 million or 8.92% during Fiscal Year 2022, to $613.0 million, due to increases in cash and cash equivalents, investments, lease receivables, net Other Post-Employment Benefits (OPEB) assets, capital contributions, and improved operating results, which were partially offset by depreciation. Deferred Outflows & Deferred Inflows: Deferred outflows decreased by $0.3 million or 4.00% in Fiscal Year 2022 due primarily to the amortization of the difference between projected and actual earnings on OPEB and the Pension plan. Deferred inflows increased by $56.1 million or 3,935.40% due to the recognition of deferred inflows from leases as the result of implementing GASB Statement No. 87 Leases and increases in deferred investment income for the Pension and OPEB plans. Total Liabilities & Net Positions: Total liabilities decreased by approximately $25.6 million or 15.58% from the previous fiscal year to $138.4 million. The decrease is attributable to the annual debt payment of $5.3 million and decreases in the net Pension and OPEB liabilities. The net position increased by $19.4 million, or 4.79%, to $424.7 million as of June 30, 2022. Capital Contributions: Capital contributions for Fiscal Year 2022 were $13.2 million. Capital contributions consist of developers contributing $8.6 million in capacity fees and $4.0 million in contributed fixed assets; and Caltrans contributed $0.1 million in reimbursements for utility relocations. Ratepayers also paid $0.5 million in availability fees, which are considered a part of capital contributions. Results of Operations: Operating revenues increased by $1.6 million, or 1.51%, due to increased water and wastewater rates. 3 The cost of water sales increased by $3.7 million, or 5.49%, due to increased unit purchase costs. Non-Operating Revenues & Expenses: Non-operating revenues decreased by $1.0 million or 7.80% for Fiscal Year 2022 due primarily to the decrease in investment income. Non-operating expenses in Fiscal Year 2022 were $5.3 million, the same as the previous year. Conclusion: In summary, the overall audit process was successful, and the auditors found no material errors or misstatements in the District's financial statements. Additional Audit Correspondence: As a part of completing the audit engagement, Davis Farr LLP also provided the following letters summarizing their observations and conclusions concerning the District's overall financial processes: • Management Letter: The auditors did not identify any internal control deficiencies that they considered material weaknesses. (Attachment C). • Audit Committee Letter: This letter describes the overall aspects of the audit, including audit principles, performance, dealings with management, and significant findings or issues. There were no disagreements with management concerning financial accounting, reporting, or auditing matters, and there were no significant difficulties in dealing with management in performing the audit. (Attachment D). • Report on Applying Agreed-Upon Procedures: A review of the District's investment portfolio at year-end and a sample of specific investment transactions completed throughout the fiscal year were performed. There were no exceptions to compliance from the District's Investment Policy. (Attachment E). FISCAL IMPACT: None. 4 STRATEGIC GOAL: The District ensures its continued financial health through long-term financial planning, formalized financial policies, enhanced budget controls, fair pricing, debt planning, and improved financial reporting. LEGAL IMPACT: None. Attachments: A) Committee Action B) Audited Annual Financial Statements C) Management Letter D) Audit Committee Letter E) Report on Applying Agreed-Upon Procedures F) PowerPoint Presentation by Davis Farr LLP ATTACHMENT A SUBJECT/PROJECT: Approve the Audited Financial Statements for the Fiscal Year Ended June 30, 2022 COMMITTEE ACTION: The Finance and Administration Committee (Committee) reviewed this item at a meeting held on October 19, 2022 and the following comments were made: • Staff provided a review of the District’s financials for the year ending June 30, 2022. It was indicated that the auditors found no material errors in the financial records or statements, and they found no transactions entered into by the District during the year for which there was lack of authoritative guidance or consensus. • Ms. Shannon Ayala, Partner at Davis Farr LLP, attended the meeting and provided a review of the audit process and the results of the audit. − The District received an “unmodified opinion” which is the highest level of opinion that can be received on the financial statements. − For the Internal Controls and IT Assessment, auditors interviewed District staff regarding various processes to include revenues, receivables, disbursement, human resource, and payroll. Auditors had no recommendations for internal controls. Davis Farr LLP had an IT auditor conduct an IT assessment which also resulted in no recommendations. Ms. Ayala reported this was the first audit she has seen at Davis Farr LLP that resulted in no recommendations for IT. − It was stated that the capital asset depreciation expense and accumulated depreciation were recalculated and found to be accurate. Approximately 66% of construction in progress items were reviewed to ensure all capital assets were correctly recorded. There were no exceptions. − For cash disbursement testing, 40 transactions were chosen at random and evaluated according to the purchasing procedures. There were no findings. − For GASB 87, Davis Farr LLP reviewed 67% of the outstanding lease receivables and 100% of the lease payables. Lease receivables for the District primarily include cell sites. No exceptions were noted. • In response to a question from the Committee regarding the completion of a fraud questionnaire, Ms. Ayala stated that she will follow up with the Committee prior to the November Regular Board Meeting. • The Committee inquired what the role of developing technology is in relationship to audits, including artificial intelligence and the ability of a software program to constantly analyze accounting transactions in real time. Ms. Ayala informed the Committee that typically in the second year Davis Farr LLP is required to perform an unpredictability test and they use data mining software for this process. The software can then analyze the data and report any anomalies that the auditors should examine. • The PowerPoint presentation slides provided by Ms. Ayala at the Committee have been included in the staff report as “Attachment F” for the upcoming Board. • Staff is recommending that the Board approve the District’s Audited Financial Statements, including the Independent Auditors’ unqualified opinion for the fiscal year ended June 30, 2022. Upon completion of the discussion, the Committee supported staffs’ recommendation and presentation to the full board ass an action item. OTAY WATER DISTRICT FINANCIAL STATEMENTS WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 2022 Attachment B Table of Contents Year Ended June 30, 2022 Page Number Independent Auditors’ Report 1 Management’s Discussion & Analysis 4 Basic Financial Statements: Statement of Net Position 13 Statement of Revenues, Expenses, and Changes in Net Position 15 Statement of Cash Flows 16 Notes to Financial Statements 18 Required Supplementary Information: Schedule of Changes in the Net OPEB Liability and Related Ratios 63 Schedule of Contributions 64 Schedule of Changes in the Net Pension Liability and Related Ratios 65 Schedule of Plan Contributions 67 Independent Auditor’s Report Board of Directors Otay Water District Spring Valley, California Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Otay Water District (District), as of and for the year ended June 30, 2022 and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the District as of June 30, 2022, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As described further in Note 13 to the financial statements, during the year ended June 30, 2022, the District implemented Governmental Accounting Standards Board (GASB) Statement No.87, Lease Accounting. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America,and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 1 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for one year after the date that the financial statements are issued. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Report on Summarized Comparative Information The financial statements of the District for the year ended June 30, 2021 were audited by other auditors whose report dated October 20, 2021 expressed an unmodified opinion on those financial statements.In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2021, is consistent, in all material respects, with the audited financial statements from which it has been derived. 2 Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Schedule of Changes in the Net OPEB Liability and Related Ratios, Schedule of Contributions, Schedule of Changes in the Net Pension Liability and Related Ratios, and Schedule of Plan Contributions, be presented to supplement the basic financial statements.Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 19, 2022 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely 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 effectiveness of internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. Irvine, California October 19, 2022 3 Management’s Discussion and Analysis As the management of the Otay Water District (the "District"), we offer readers of the District's financial statements,this narrative overview,and an analysis of the District's financial performance during the fiscal year ending June 30, 2022.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. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District's basic financial statements, which are comprised of the following: 1) Statement of Net Position, 2) Statement of Revenues, Expenses,and Changes in Net Position, 3) Statement of Cash Flows, and 4) Notes to the Financial Statements.This report also contains other supplementary information in addition to the basic financial statements. The Statement of Net Position presents information on the District's assets,deferred outflows of resources, liabilities,and deferred inflows of resources, with the difference reported as Total Net Position.Over time, increases or decreases in net positions may serve as a valuable indicator of whether the District's financial position is improving or weakening. The Statement of Revenues, Expenses,and Changes in Net Position presents information showing how the District's net position changed during the most recent fiscal year.All changes in net positions are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 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 essential to a complete understanding of the data supplied in the specific financial statements listed above. Financial Highlights The assets and deferred outflows of resources of the District exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $424.7 million (net position). Of this amount, $80.0 million (unrestricted net position)may be used to meet the District’s ongoing obligations to residents and creditors. Total assets increased by $50.2 million or 8.92% during Fiscal Year 2022,to $613.0 million, due to increases in cash and cash equivalents,investments, recording of lease receivables due to implementation of GASB 87,and net OPEB assets, which were partially offset by a drop in capital assets due to depreciation exceeding current year additions. 4 Management’s Discussion and Analysis 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 retirement benefits to its employees. Financial Analysis: As noted, net position may serve,over time,as a valuable indicator of an entity's financial position.In the case of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $424.7 million at the close of Fiscal Year 2022. The most significant portion of the District's net position, $340.3 million (80%), reflects its investment in capital assets,plus unused debt proceeds,less any remaining outstanding debt used to acquire those capital assets.The District uses these capital assets to provide services to customers; consequently, these assets are not available for future spending.Although the District's investment in its capital assets is reported effectively as a resource,it should be noted that the resources needed to repay the debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. 5 Management’s Discussion and Analysis Statement of Net Position (In Millions of Dollars) 2022 2021 2020 Assets Current and Other Assets $ 166.3 $111.2 $94.4 Capital Assets 446.7 451.6 456.5 Total Assets 613.0 562.8 550.9 Deferred Outflows of Resources Deferred Actuarial Pension Costs 4.5 5.4 3.4 Deferred Actuarial OPEB Costs 3.1 2.5 1.1 Total Deferred Outflows of Resources 7.6 7.9 4.5 Liabilities Current Liabilities 33.5 32.1 32.2 Long-Term Debt Outstanding 100.9 106.2 112.0 Net Pension Liability 0.3 20.0 16.6 Net OPEB Liability 0.0 1.8 0.0 Other Liabilities 3.7 3.9 3.5 Total Liabilities 138.4 164.0 164.3 Deferred Inflows of Resources Deferred Inflows from Leases 36.6 0.0 0.0 Deferred Actuarial Pension Costs 14.4 0.0 1.3 Deferred Actuarial OPEB Costs 6.5 1.4 2.3 Total Deferred Inflows of Resources 57.5 1.4 3.6 Net Position Net Investment in Capital Assets 340.3 340.4 345.2 Restricted for Debt Service 3.7 4.2 4.3 Unrestricted 80.7 60.7 38.0 Total Net Position $ 424.7 $405.3 $387.5 The District's operations and population are growing.Much of this expansion has occurred in the residential sector, particularly in the multi-family dwellings and commercial areas. By 2055, the District's service area population is expected to increase by 19% to 271,531 residents.The District has created several future planning documents to ensure a reliable water supply and sewer system in the future, including the maintenance of current infrastructure. 6 Management’s Discussion and Analysis In FY 2022,the District's Capital Assets increased by $3.7 million before accumulated depreciation.(See Note 4 in the Notes to Financial Statements).The District also saw a decrease in long-term debt of $5.3 million (excluding current maturities)due to annual debt service payments (See Note 5 in the Notes to Financial Statements). Total Liabilities decreased by $25.6 million in FY 2022 primarily due to decreases in Net Pension and OPEB liabilities and annual debt service payments. In FY 2021, Total Liabilities decreased by $0.3 million due to a reduction in long-term debt,partially offset by increases in Net Pension and Net OPEB liabilities. In FY 2022, deferred outflows of resources decreased by $0.3 million due to the amortization of the difference between projected and actual earnings of the pension plan. Deferred outflows of resources increased by $3.4 million in FY 2021 due to additional funding of $1.2 million to CalPERS;an increase of $1.0 million on the net difference between projected and actual earnings for the pension, a $1.0 million increase in the OPEB differences between expected and actual experience,and a $0.2 million increase in FY 2021 PERS Unfunded Actuarial Liability (UAL). Deferred inflows of resources increased by $56.1 million in FY 2022 due to the recognition of deferred inflows from leases related to the implementation of GASB Statement No. 87 Leases, and increases in deferred Pension and OPEB investment income. Deferred inflows of resources declined by $2.2 million in FY 2021 due to decreases in deferred investment income for the pension and OPEB. At the end of FY 2022,the District reports positive balances in all net position categories.This situation also applies to the prior two fiscal years. 7 Management’s Discussion and Analysis Statement of Revenues, Expenses,and Changes in Net Position (In Millions of Dollars) 2022 2021 2020 Water Sales $102.8 $101.7 $90.4 Wastewater Revenue 3.1 2.9 2.9 Connection and Other Fees 2.9 2.5 2.6 Non-operating Revenues 11.9 12.9 10.9 Total Revenues 120.7 120.0 106.8 Depreciation Expense 17.6 17.2 16.8 Other Operating Expenses 91.6 91.5 90.2 Non-operating Expenses 5.3 5.3 6.9 Total Expenses 114.5 114.0 113.9 Income (Loss) Before Capital Contributions 6.2 6.0 (7.1) Capital Contributions 13.2 11.8 7.0 Change in Net Position 19.4 17.8 (0.1) Beginning Net Position 405.3 387.5 387.6 Ending Net Position $ 424.7 $405.3 $387.5 Water Sales increased by $1.1 million in FY 2022 due to the increase in water rates. Water Sales increased by $11.3 million in FY 2021 due to an increase in units sold because of the lockdown during the pandemic and higher water rates. Other Operating Expenses increased by $0.1 million in FY 2022,predominantly due to the increase in the cost of water, partially offset by decreases in wastewater costs and general and admin expenses. Other Operating Expenses increased by $1.3 million in FY 2021,predominantly due to the increased water units purchased because of increased water sales volumes.The FY 2021 increases were partially offset by a credit received from the City of San Diego due to a reduction in the contractual recycled water volumes resulting from the City's plant being shut down. Specific planning and environmental study costs associated with capital projects do not qualify as capital costs under Generally Accepted Accounting Principles. 8 Management’s Discussion and Analysis These costs are included in the District's miscellaneous (non-operating) expenses.For FY 2022 and FY 2021, those expenses were $0.4 million and $0.2 million, respectively. Connection and Other Fees increased by $0.4 million in FY 2022 and decreased by $0.1 million in FY 2021 due to continued development in the District. Capital Contributions increased by $1.4 million and $4.8 million in FY2022 and FY 2021,respectively,due to high demand in the housing development market. Non-operating Revenues Non-operating Revenues by Major Source (In Millions of Dollars) 2022 2021 2020 Taxes and Assessments $ 5.2 $5.3 $ 4.9 Rents and Leases 2.1 1.6 1.5 Other Non-operating Revenue 4.6 6.0 4.5 Total Non-operating Revenues $ 11.9 $ 12.9 $ 10.9 The District's total non-operating revenues decreased by $1.0 million in FY 2022 due primarily to the decrease in investment earnings. Total non-operating revenues increased by $2.0 million in FY 2021 due mainly to the $3.2 million settlement from Metropolitan Water District (MWD),partially offset by a decrease in investment earnings. Capital Assets and Debt Administration The District's capital assets (net of accumulated depreciation) as of June 30, 2022, totaled $446.7 million. Included in this amount is land, which is a non-depreciable asset.The District's net capital assets decreased by 1.09% and 1.07% in FY 2022 and FY 2021, respectively. 9 Management’s Discussion and Analysis Capital Assets (In Millions of Dollars) As indicated by the figures in the table above, most capital assets added during both fiscal years were related to the water systems.Additionally,most of the construction-in-progress cost is associated with water systems.Additional information on the District's capital assets can be found in Note 4 of the Notes to Financial Statements. In November 2018, the District issued $32.4 million in Water Revenue Bonds, Series 2018,to provide funds for the construction of water storage, treatment,and transmission facilities and advance refunded $6.9 million of the 1996 Certificates of Participation.As of June 30, 2022, all the bond proceeds were used to pay for the construction cost of the water system. In December 2019, the District issued $3.1 million in Wastewater Revenue Bonds to fund specific capital improvements to the District's wastewater system.As of June 30, 2020,all the bond proceeds were used to pay for the construction cost of the wastewater main replacement at Campo Road. 2022 2021 2020 Land $14.4 $14.4 $14.4 Construction in Progress 7.3 25.8 24.7 Potable Water System 535.5 506.7 498.1 Recycled Water System 117.8 116.6 115.5 Wastewater System 59.1 59.1 59.1 Field Equipment 8.1 8.1 8.4 Buildings 19.6 19.6 19.5 Transportation Equipment 3.8 3.8 3.6 Communication Equipment 2.5 2.8 2.7 Office Equipment 8.1 16.3 16.5 Right to Use Assets 0.7 0.0 0.0 Total Capital Assets 776.9 773.2 762.5 Less Accumulated Depreciation (330.2)(321.6)(306.0) Net Capital Assets $ 446.7 $451.6 $456.5 10 Management’s Discussion and Analysis On June 30, 2022,the District had $100.9 million in outstanding debt (net of $5.3 million of maturities occurring in FY 2023), which consisted of the following: Lease Payable $ 0.7 Revenue Bonds 100.2 Total Long-Term Debt $ 100.9 Additional information on the District's long-term debt can be found in Note 5 of the Notes to Financial Statements. Fiscal Year 2022-2023 Budget Economic Factors The San Diego region imports 76%of its potable supply; therefore,factors such as local rainfall and weather conditions elsewhere in the western portion of the nation can affect the region.San Diego received below-average rainfall of 6.83 inches in FY 2022.The 10-year average of 8.90 inches for San Diego rainfall reflects the long-term drought conditions for our area.San Diego's rainfall average over 20 years is 9.20 inches; the 30-year average is 9.44 inches,and the 40-year average is 9.80 inches. While water sales peaked in 2008, prolonged droughts have led to an increase in conservation which has had permanent influence on volumes.Higher rainfall resulted in a 2.37% decline in potable water sales volume in FY 2022, whereas below-average rainfall and COVID-19 raised potable water sales volume by 10.7% in FY 2021.The FY 2023 sales volume is anticipated to increase by 1.2% compared to the previous year's budget and decrease by 3.3%versus the FY 2021 actual sales volume. The District continues to respond to the challenges presented by growth, State mandates,and drought by creating new opportunities and new organizational efficiencies.Utilizing and refining its Strategic Business Plan has captured the Board of Directors'vision and united its staff in a joint mission.The District has achieved several significant accomplishments due to its successful adherence to its Strategic Business Plan.The District is poised to continue successfully providing an affordable,safe, and reliable water supply for the people of its service area, while also being set to reap the rewards of greater efficiencies and economies of scale. The District is currently at about 77% of its projected ultimate population, serving approximately 228,000 people.Long-term, this percentage should continue to increase as the District's service area develops and grows.By 2055,the District is projected to serve approximately 271,531 people, with an average daily demand of 36.6 million gallons per day (MGD)compared to the current average daily demand of 28.9 million gallons per day (MGD). 11 Management’s Discussion and Analysis Currently,the District services the needs of this growing population by purchasing water from the San Diego County Water Authority (CWA), which in turn purchases its water from the Metropolitan Water District (MWD) and the Imperial Irrigation District (IID). Otay takes delivery of water through several connections of large-diameter pipelines owned and operated by CWA.The District receives treated water from CWA directly and from the Helix Water District via a CWA contract.Also, the District has an emergency agreement with the City of San Diego to purchase water in the case of a shutdown of the primary treated water source.The City of San Diego also has a long-term contract with the District to provide recycled water for landscape and irrigation usage.Through innovative agreements like these, both parties can benefit by using another agency's excess capacity and diversifying local supply, thereby increasing reliability. Financial The District is budgeted to deliver approximately 27,337 acre-feet of potable water to 51,494 potable customer accounts during FY 2022-2023.The Fiscal Year 2023 budget was prepared with the continuing challenges of inflation,supply-chain challenges, water supply rate increases, added CIP projects, increasing power costs, and current and pending legislative initiatives. Additional hurdles include the expenditures associated with the City of San Diego's Pure Water program, the County of San Diego's renovation of shared facilities, and the anticipated future issuance of debt.The nationwide demand for new homes and condominiums is expected to continue unabated. An increase in consumer goods demand is expected due to the Federal government's assistance programs.District staff projects that the District will sell another 1,384 meters over the next six years,translating to 3,890 equivalent dwelling units (EDUs).This growth is estimated to increase sales volumes by an average of less than 1% per year over the next five years.While all these factors impact the region's water usage, people's water needs remain an underlying constant. Management is unaware of any other conditions that are likely to have a significant impact the District's current financial position, net position,or operating results. Contacting the District's Financial Management This financial report provides a general overview of the Otay Water District's finances for the Board of Directors, customers, creditors, and other interested parties.Questions concerning any 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. 12 STATEMENT OF NET POSITION June 30, 2022 (with comparative totals as of June 30, 2021) 2022 2021 ASSETS Current Assets: Cash and Cash Equivalents (Notes 1 and 2)87,556,645$ 84,818,274$ Board Designated Cash and Cash Equivalents (Notes 1 and 2)3,021,765 3,092,512 Restricted Cash and Cash Equivalents (Notes 1 and 2)186,346 816,218 Investments (Notes 1 and 2)11,689,224 - Restricted Investments (Notes 1 and 2)3,499,094 3,666,097 Accounts Receivable, Net 15,450,919 14,840,937 Accrued Interest Receivable 262,315 144,169 Taxes and Availability Charges Receivable, Net 277,505 252,183 Restricted Taxes and Availability Charges Receivable, Net 15,059 21,170 Current Lease Receivable (Note 11)1,055,499 - Inventories 1,350,220 855,563 Prepaid Items and Other Receivables 2,507,703 2,710,237 Total Current Assets 126,872,294 111,217,360 Non-current Assets: Capital Assets (Note 4): Land 14,423,773 14,423,773 Construction in Progress 7,306,003 25,786,352 Capital Assets, Net of Depreciation 425,017,900 411,352,279 Net OPEB Asset (Note 8)3,005,037 - Lease Receivable (Note 11)36,446,255 - Total Non-current Assets 486,198,968 451,562,404 Total Assets 613,071,262 562,779,764 DEFERRED OUTFLOWS OF RESOURCES Deferred Actuarial Pension Costs (Note 7)4,481,769 5,421,523 Deferred Actuarial OPEB Costs (Note 8)3,078,056 2,439,632 Total Deferred Outflows of Resources 7,559,825 7,861,155 Continued The accompanying notes are an integral part of this statement. 13 STATEMENT OF NET POSITION Continued June 30, 2022 (with comparative totals as of June 30, 2021) 2022 2021 LIABILITIES Current Liabilities: Current Maturities of Long-term Debt (Note 5)5,525,676$ 5,250,000$ Accounts Payable 15,694,680 14,735,726 Accrued Payroll Liabilities 978,174 910,173 Other Accrued Liabilities 4,973,784 4,985,693 Customer and Developer Deposits 4,658,907 4,480,951 Accrued Interest 1,649,672 1,722,189 Liabilities Payable from Restricted Assets: Restricted Accrued Interest 9,600 19,000 Total Current Liabilities 33,490,493 32,103,732 Non-current Liabilities: Long-term Debt (Note 5): General Obligation Bonds 2,726 739,080 Revenue Bonds 100,237,053 105,484,807 Lease Payable 707,725 - Net Pension Liability (Note 7)280,298 20,043,519 Net OPEB Liability - 1,801,159 Other Non-current Liabilities (Note 1)3,704,232 3,793,011 Total Non-current Liabilities 104,932,034 131,861,576 Total Liabilities 138,422,527 163,965,308 DEFERRED INFLOWS OF RESOURCES Deferred Inflows from Leases (Note 11)36,619,439 - Deferred Actuarial Pension Costs (Note 7)14,422,139 - Deferred Actuarial OPEB Costs (Note 8)6,444,195 1,424,536 Total Deferred Inflows of Resources 57,485,773 1,424,536 NET POSITION Net Investment in Capital Assets 340,274,496 340,383,389 Restricted for Debt Service 3,685,440 4,187,443 Unrestricted 80,762,851 60,680,243 Total Net Position 424,722,787$ 405,251,075$ The accompanying notes are an integral part of this statement. 14 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION Year Ended June 30, 2022 (with comparative totals for the year ended June 30, 2021) 2022 2021 OPERATING REVENUES Water Sales 102,807,098$ 101,742,970$ Wastewater Revenue 3,073,326 2,899,180 Connection and Other Fees 2,874,174 2,498,318 Total Operating Revenues 108,754,598 107,140,468 OPERATING EXPENSES Cost of Water Sales 70,562,038 66,889,570 Wastewater 1,802,256 2,633,413 Administrative and General 19,174,479 21,948,435 Depreciation 17,688,535 17,212,905 Total Operating Expenses 109,227,308 108,684,323 Operating Income (Loss)(472,710)(1,543,855) NON-OPERATING REVENUES (EXPENSES) Investment Earnings (Losses)(1,506,486)254,668 Taxes and Assessments 5,244,584 5,251,540 Availability Charges 740,928 686,697 Gain (Loss) on Disposal of Capital Assets (187,313)(159,734) Rents and Leases 2,071,200 1,587,687 Miscellaneous Revenues 5,417,588 5,062,779 Donations (106,913)(84,389) Interest Expense (4,551,134)(4,782,490) Miscellaneous Expenses (447,192)(241,379) Total Non-operating Revenues (Expenses)6,675,262 7,575,379 Income (Loss) Before Capital Contributions 6,202,552 6,031,524 Capital Contributions 13,269,160 11,752,788 Change in Net Position 19,471,712 17,784,312 Total Net Position, Beginning 405,251,075 387,466,763 Total Net Position, Ending 424,722,787$ 405,251,075$ The accompanying notes are an integral part of this statement. 15 STATEMENT OF CASH FLOWS For the Year Ended June 30, 2022 (with comparative totals for the year ended June 30, 2021) 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers 105,448,398$ 104,028,293$ Receipts from Connections and Other Fees 2,874,174 2,498,318 Receipts from Property Rents and Leases 109,941 1,587,687 Other Receipts 4,634,753 4,222,338 Payments to Suppliers (73,728,635) (70,598,225) Payments to Employees (22,002,283) (22,630,352) Other Payments (554,105) (325,768) Net Cash Provided By (Used For) Operating Activities 16,782,243 18,782,291 CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Receipts from Taxes and Assessments 5,483,041 5,170,067 Net Cash Provided By (Used For) Noncapital and Related Financing Activities 5,483,041 5,170,067 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from Capital Contributions 9,236,895 8,560,257 Proceeds from Sale of Capital Assets 35,370 24,748 Proceeds from Property Rents and Leases 1,553,886 - Proceeds from Debt Related Taxes and Assessments 483,260 748,857 Principal Payments on Long-Term Debt (5,265,100) (4,955,000) Interest Payments and Fees (4,324,324) (4,551,016) Acquisition and Construction of Capital Assets (8,325,724) (9,264,511) Net Cash Provided By (Used For) Capital and Related Financing Activities (6,605,737) (9,436,665) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received on Investments 518,928 371,234 Proceeds from Sale and Maturities of Investments 3,666,096 170,315 Purchase of Investments (17,806,819) (95,892) Net Cash Provided By (Used For) Investing Activities (13,621,795) 445,657 Net Increase (Decrease) in Cash and Cash Equivalents 2,037,752 14,961,350 Cash and Cash Equivalents - Beginning 88,727,004 73,765,654 Cash and Cash Equivalents - Ending 90,764,756$ 88,727,004$ Continued The accompanying notes are an integral part of this statement. 16 STATEMENT OF CASH FLOWS Continued For the Year Ended June 30, 2022 (with comparative totals for the year ended June 30, 2021) 2022 2021 Reconciliation of Operating Income (Loss) to Net Cash Flows Provided By (Used For) Operating Activities: Operating Income (Loss)(472,710)$ (1,543,855)$ Adjustments to Reconcile Operating Income to Net Cash Provided By (Used For) Operating Activities: Depreciation 17,688,535 17,212,905 Receipts from Property Rents and Leases 109,941 1,587,687 Miscellaneous Revenues 4,634,753 4,222,338 Miscellaneous Expenses and Donations (554,105) (325,768) (Increase) Decrease in Accounts Receivable (609,982) (1,420,833) (Increase) Decrease in Inventory (494,657) 87,001 (Increase) Decrease in Prepaid Items and Other Receivables 202,534 (706,267) (Increase) Decrease in Net OPEB Asset (3,005,037) 20,021 (Increase) Decrease in Deferred Actuarial Pension Costs 939,754 (2,063,158) (Increase) Decrease in Deferred Actuarial OPEB Costs (638,424) (1,300,097) Increase (Decrease) in Accounts Payable 958,954 (1,488,391) Increase (Decrease) in Accrued Payroll and Related Expenses 68,001 98,652 Increase (Decrease) in Other Accrued Liabilities (11,909) 341,188 Increase (Decrease) in Customer and Developer Deposits 177,956 806,976 Increase (Decrease) in Other Non-current Liabilities (88,779) 242,440 Increase (Decrease) in Net OPEB Liability (1,801,159) 1,801,159 Increase (Decrease) in Net Pension Liability (19,763,221) 3,426,664 Increase (Decrease) in Deferred Actuarial Pension Costs 14,422,139 (1,366,658) Increase (Decrease) in Deferred Actuarial OPEB Costs 5,019,659 (849,713) Net Cash Provided By (Used For) Operating Activities 16,782,243$ 18,782,291$ Schedule of Cash and Cash Equivalents: Current Assets: Cash and Cash Equivalents 87,556,645$ 84,818,274$ Board Designated Cash and Cash Equivalents 3,021,765 3,092,512 Restricted Cash and Cash Equivalents 186,346 816,218 Total Cash and Cash Equivalents 90,764,756$ 88,727,004$ Supplemental Disclosures Non-Cash Investing and Financing Activities Consisted of the Following: Contributed Capital for Water and Sewer System 4,032,265$ 3,192,531$ Change in Fair Value of Investments and Recognized Gains/Losses 2,618,502 360,636 Amortization Related to Long-term Debt 474,108 474,110 The accompanying notes are an integral part of this statement. 17 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A)Reporting Entity The reporting entity Otay Water District (the “District”) includes the accounts of the District and the Otay Water District Financing Authority (the “Financing Authority”). The 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 wastewater services to the properties in the District.The District is governed by a Board of Directors consisting of five directors elected by geographical divisions based on District population for a four-year alternating term. The District formed the Financing Authority on March 3, 2010 under the Joint Exercise of Powers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code. The Financing Authority was formed to assist the District in the financing of public capital improvements. The financial statements present the District and its component unit. The District is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the District appoints a voting majority of the component unit’s board, or because the component units will provide a financial benefit or impose a financial burden on the District. The District has accounted for the Financing Authority as a “blended” component unit. Despite being legally separate, the Financing Authority is so intertwined with the District that it is in substance, part of the District’s operations. Accordingly, the balances and transactions of this component unit are reported within the funds of the District. Separate financial statements are not issued for the Financing Authority. B)Measurement Focus, Basis of Accounting and Financial Statement Presentation Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the economic resources measurement focus, and the accrual basis of accounting. Under the economic measurement focus all assets and liabilities (whether current or noncurrent) associated with these activities are included on the Statement of Net Position. 18 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –Continued B)Measurement Focus, Basis of Accounting and Financial Statement Presentation -Continued The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The District reports its activities as an enterprise fund, which is used to account for operations that are financed and operated in a manner similar to a private business enterprise, where the intent of the District is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The basic financial statements of the Otay Water District have been prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting financial reporting purposes. Net position of the District is classified into three components: (1) net investment in capital assets, (2) restricted net position, and (3) unrestricted net position. These classifications are defined as follows: Net Investment in Capital Assets This component of net position consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of notes or borrowing that are attributable to the acquisition of the assets, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds are not included in the calculation of the net investment in capital assets. Restricted Net Position This component of net position consists of net position with constrained use through external constraints imposed by creditors (such as through debt covenants), grantors, contributions, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation. 19 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued B)Measurement Focus, Basis of Accounting and Financial Statement Presentation -Continued Unrestricted Net Position This component of net position consists of net position that do not meet the definition of “net investment in capital assets” or “restricted net position”. The District distinguishes operating revenues and expenses from those revenues and expenses that are 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 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 $32,507 at June 30, 2022. Additionally, capacity fee contributions received which are related to specific operating expenses are offset against those expenses and included in Cost of Water Sales in the Statement of Revenues and Expenses and Changes in Net Position. Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted -net position and unrestricted -net position, a flow assumption must be made about the order in which the resources are considered to be applied.It is the District’s practice to consider restricted -net position to have been depleted before unrestricted -net position is applied, however it is at the Board’s discretion. 20 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued C)New Accounting Pronouncements Implemented as of June 30, 2022 Governmental Accounting Standard Board Statement No. 87 In June 2017, GASB issued Statement No. 87, Leases. This Statement was issued to increase the usefulness of governmental financial statements by requiring recognition of certain lease assets and liabilities for all leases, including those that previously were classified as operating leases and recognized as income by lessors and expenditures by lessees. This Statement replaces the previous lease accounting methodology and establishes a single model for lease accounting based on the foundation principle that leases are a financing of the right to use an underlying asset. Governmental Accounting Standard Board Statement No. 2019-3 In August 2019, GASB issued Statement No. 2019-3, Leases. This Statement was issued to increase clarify, explain, or elaborate on the GASB’s new standards on accounting and financial reporting for leases, GASB Statement 87, “Leases.”.The implementation guide includes new Q&As to address accounting and financial reporting topics for leases relative to the following areas: Scope and applicability of Statement 87 (1-11); Lease term (12-16); Short-term leases (17-20); Contracts that transfer ownership (21-22); Lessee and lessor recognition and measurement for leases other than short-term leases and contracts that transfer ownership (23-36) and (43-53); Notes to financial statements –lessees and lessors (37-42) and (54-55); Lease incentives (56-57); Contracts with multiple components (58-62); Contract combinations (63-64); Lease modifications and terminations (65-70); Sale-leaseback transactions (71-72); Lease-leaseback transactions (73-74); Intra-entity leases (75); Effective date and transition of Statement 87 (76-77). Governmental Accounting Standard Board Statement No. 91 In May 2019, GASB issued Statement No. 91, Conduit Obligations. This Statement was issued to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. Currently, this Statement has no effect on the District’s financial statements. 21 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued C)New Accounting Pronouncements -Continued Governmental Accounting Standard Board Statement No. 92 In January 2020, GASB issued Statement No. 92, Omnibus 2020. This Statement was issued to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. . Governmental Accounting Standard Board Statement No. 93 In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. This Statement was issued to address those and other accounting and financial reporting implications that result from the replacement of an IBOR. Currently, this Statement has no effect on the District’s financial statements. Governmental Accounting Standard Board Statement No. 97 In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32 Leases. This Statement was issued to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. Currently, this Statement has no effect on the District’s financial statements. 22 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued C)New Accounting Pronouncements -Continued Governmental Accounting Standard Board Statement No.2019-1 In May 2019, GASB issued Statement No. 2019-1, Replacement of Interbank Offered Rates. This Statement was issued to clarify, explain, or elaborate on certain GASB pronouncements. The guide includes 14 new questions and answers to address application of existing GASB standards covering various topics including Postemployment benefits –plan and employer (1-5); derivative instruments (6); nonexchange transactions (7)impairment of capital assets and insurance recoveries (8); intra- entity transfers of assets (9-10); fund balance reporting and governmental fund type definitions (11); tax abatement disclosures (12); irrevocable split-interest agreements (13-14). Currently, this Statement has no effect on the District’s financial statements. Pending Accounting Pronouncements GASB has issued the following statements which may impact the District’s financial reporting requirements in the future: i.GASB Statement 94 -“Public-Private and Public-Public Partnerships and Availability Payment Arrangements”, effective for reporting periods beginning after June 15, 2022. ii.GASB Statement 96 -“Subscription-Based Information Technology Arrangements”, effective for reporting periods beginning after June 15, 2022. iii.GASB Statement 99 -“Omnibus 2022”, effective for reporting periods beginning after June 15, 2023. iv.GASB Statement 100 -“Accounting Changes and Error Corrections”, effective for reporting periods beginning after June 15, 2023. v.GASB Statement 101 -“Compensated Absences”, effective for reporting periods beginning after December 15, 2023. D)Deferred Outflows/Deferred Inflows In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District has two items that qualify for reporting in this category, deferred actuarial pension costs and deferred actuarial OPEB costs are items that are deferred and recognized as an outflow of resources in the period the amounts become available. 23 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued D)Deferred Outflows/ Deferred Inflows -Continued In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The District has three items that qualify for reporting in this category. Accordingly, the items, deferred actuarial pension costs,deferred actuarial OPEB costs, and deferred lease revenue are deferred and recognized as an inflow of resources in the period that the amounts become available. E)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. F)Investments Investments are stated at their fair value, which represents the quoted or stated market value. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value as presented by the external pool. All investments are stated at their fair value. The District has not elected to report certain investments at amortized costs. G)Inventory and Prepaid Items Inventory consists primarily of materials used in the construction and maintenance of the water and wastewater system and is valued at weighted average cost. Both inventory and prepaid items use the consumption method whereby they are reported as an asset and expensed as they are consumed. H)Capital Assets Capital assets are recorded at cost, where historical records are available, and at an estimated historical cost where no historical records exist. 24 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued H)Capital Assets –Continued Infrastructure assets in excess of $20,000 and other capital assets in excess of $10,000 are capitalized if they have an expected useful life of two years or more. The District will also capitalize individual purchases under the capitalization threshold if they are part of a new capital program. The cost of purchased and self-constructed additions to utility plant and major replacements of property are capitalized. Costs include materials,direct labor, transportation, and such indirect items as engineering, supervision, employee fringe benefits and overhead. Repairs, maintenance, and minor replacements of property are charged to expense. Donated assets are capitalized at their acquisition value on the date contributed. Depreciation is calculated using the straight-line method over the following estimated useful lives: Water System 15-70 Years Field Equipment 2-50 Years Buildings 30-50 Years Communication Equipment 2-10 Years Transportation Equipment 2-7 Years Office Equipment 2-10 Years Recycled Water System 50-75 Years Wastewater System 25-50 Years Right to Use Asset The estimated life of the leased asset or the contract term whichever is shorter I)Other Non-current Liabilities For compensated absences, the District’s policy is to record vested and accumulated vacation and sick leave as an expense and liability as benefits accrue to employees. Beginning Ending Due Within Balance Additions Deletions Balance One Year Compensated absences 3,509,161$3,437,206$(3,521,817)$3,424,550$ 342,455$ Customer credits 278,122 - (12,629) 265,493 - Reimbursement agreements 356,644 - - 356,644 - Total 4,143,927$3,437,206$(3,534,446)$4,046,687$ 342,455$ 25 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued I)Other Non-current Liabilities –Continued Current portion is reflected in accrued payroll liabilities and remainder in other non-current liabilities on the Statement of Net Position. J)Classification of Liabilities Certain current liabilities have been classified as current liabilities payable from restricted assets as they will be funded from restricted assets. K)Allowance for Doubtful Accounts The District charges doubtful accounts arising from water sales receivable to bad debt expense when it is probable that the accounts will be uncollectible. Uncollectible accounts are determined by the allowance method based upon prior experience and management’s assessment of the collectability of existing specific accounts. The allowance for doubtful accounts was $177,283 for 2022. L)Property Taxes Tax levies are limited to 1% of full market value (at time of purchase) which results in a tax rate of $1.00 per $100 assessed valuation, under the provisions of Proposition 13. Tax rates for voter- approved indebtedness are excluded from this limitation. The County of San Diego (the “County”) bills and collects property taxes on behalf of the District. The County’s tax calendar year is July 1 to June 30. Property taxes attach as a lien on property on January 1. Taxes are levied on July 1 and are payable in two equal installments on November 1 and February 1, and become delinquent after December 10 and April 10, respectively. M)Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s California Public Employees’ Retirement System (CalPERS)plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. 26 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued M)Pensions –Continued For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Valuation Date June 30, 2020 Measurement Date June 30, 2021 Measurement Period July 1, 2020 to June 30, 2021 N)Other Post-Employment Benefits (OPEB) For purposes of measuring the net OPEB liability(asset), deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the District’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2021 Measurement Date June 30, 2021 Measurement Period July 1, 2020 to June 30, 2021 O)Leases The District is a lessor and lessee for leases as detailed in Footnotes 5 and 11. The District recognizes a lease receivable, a deferred inflow of resources, and a lease payable in the financial statements. At the commencement of the lease, the District initially measures the lease receivable at the present value of payments expected to be received and paid during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received and the lease payable is reduced by the principal portion of lease payments made. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources is recognized as revenue over the life of the lease term. 27 Notes To Financial Statements Year Ended June 30, 2022 1)REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued O)Leases –Continued Key estimates and judgments include how the district determines the discount rate it uses to discount the expected lease receipts and payments to present value, lease term and lease receipts. The District used the estimated cost of capital rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. The District monitors changes in circumstances that would require a remeasurement of its leases and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. P)Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Q)Prior Year Comparative Information Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government’s prior year financial statements, from which this selected financial data was derived. In addition, certain minor reclassifications of the prior year data have been made to enhance their comparability to the current year. 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, remain sufficiently liquid to enable the District to meet all operating requirements and generate income under the parameters of such policies. 28 Notes To Financial Statements Year Ended June 30, 2022 2)CASH AND INVESTMENTS -Continued Cash and Investments are classified in the accompanying financial statements as follows: Cash and Investments consist of the following: 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. Statement of Net Position: Cash and Cash Equivalents 87,556,645$ Board Designated Cash and Cash Equivalents 3,021,765 Restricted Cash and Cash Equivalents 186,346 Investments 11,689,224 Restricted Investments 3,499,094 Total Cash and Investments 105,953,074$ Cash on Hand 2,950$ Deposits with Financial Institutions 1,868,242 Investments 104,081,882 Total Cash and Investments 105,953,074$ 29 Notes To Financial Statements Year Ended June 30, 2022 2)CASH AND INVESTMENTS -Continued Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity Of Portfolio(1)In One Issuer U.S. Treasury Obligations 5 years 100%100% U.S. Government Sponsored Entities 5 years 100% 100% Certificates of Deposit 5 years 15%100% Corporate Medium-Term Notes 5 years 10%2% Commercial Paper 270 days 10%2% Money Market Mutual Funds N/A 10%100% County Pooled Investment Funds N/A 100%N/A Local Agency Investment Fund (LAIF)N/A $75 Million N/A (1)Excluding amounts held by bond trustee that are not subject to California Government Code restrictions. Investments Authorized by Debt Agreements Investments of debt proceeds held by the bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the District’s Investment Policy. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally,the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing investments with shorter durations than the maximum allowable under the District’s Investment Policy and by timing cash flows from maturities,so that a portion of the portfolio is maturing or coming close to maturity evenly over time,as necessary,to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the District’s investments to market interest rate fluctuations are provided by the following tables that show the distribution of the District’s investments by maturity as of June 30, 2022. 30 Notes To Financial Statements Year Ended June 30, 2022 2)CASH AND INVESTMENTS –Continued Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the District’s Investment Policy, or debt agreements, and the Moody’s ratings as of June 30, 2022. Concentration of Credit Risk The investment policy of the District contains various limitations on the amounts that can be invested in any one type or group of investments and in any issuer, beyond that stipulated by the California Government Code, Sections 53600 through 53692. All the investments for fiscal year 2022 are within the limitations of the District’s investment policy. 12 Months 13 to 36 More than Investment Type Total Or Less Months 36 Months U.S. Government Sponsored Entities $ 15,122,453 -$ 7,822,100$ 7,300,353$ Local Agency Investment Fund (LAIF) 33,659,564 33,659,564 - - San Diego County Pool 55,234,000 55,234,000 - - Money Market Funds 65,865 65,865 - - Total $ 104,081,882 $ 88,959,429 $ 7,822,100 $ 7,300,353 Remaining Maturity (in Months) Legal Minimum Not Investment Type Total Rating AAA Rated U.S. Government Sponsored Entities $ 15,122,453 A 15,122,453$ -$ Local Agency Investment Fund (LAIF) 33,659,564 N/A - 33,659,564 San Diego County Pool 55,234,000 N/A - 55,234,000 Money Market Funds 65,865 AAA 65,865 - Total $ 104,081,882 15,188,318$ 88,893,564$ Rating as of Year End 31 Notes To Financial Statements Year Ended June 30, 2022 2)CASH AND INVESTMENTS –Continued The investments listed below disclose the concentration of risk within the District’s investment portfolio. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total District investments as of June 30, 2022: Issuer Investment Type Reported Amount Federal Home Loan Bank U.S. Government Sponsored Entities $5,890,920 Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the District’s Investment Policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.As of June 30, 2022, $2,397,878 of the District’s deposits with financial institutions in excess of federal depository insurance limits, were held in collateralized accounts. Local Agency Investment Fund (LAIF) The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon District’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost-basis. 32 Notes To Financial Statements Year Ended June 30, 2022 2)CASH AND INVESTMENTS –Continued The LAIF is a special fund of the California State Treasury through which local governments may pool investments. The District may invest up to $75,000,000 in the fund. Investments in LAIF are highly liquid, as deposits can be converted to cash within twenty-four hours without loss of interest. Investments with LAIF are secured by the full faith and credit of the State of California. The annualized yield of LAIF for the quarter ended June 30, 2022 was 0.69%. The estimated amortized cost and fair value of the LAIF pool at June 30, 2022 was $33,659,564. San Diego County Pooled Fund The San Diego County Pooled Investment Fund (SDCPIF) is a pooled investment fund program governed by the County of San Diego Board of Supervisors and administered by the County of San Diego Treasurer and Tax Collector. Investments in SDCPIF are highly liquid as deposits and withdrawals can be made at any time without penalty, determined on an amortized cash basis, the same as the fair value of the District’s position in the pool. The County of San Diego’s bank deposits are either federally insured or collateralized in accordance with the California Government Code. Pool detail is included in the County of San Diego Comprehensive Annual Financial Report (“Annual Report”). Copies of the Annual Report may be obtained from the County of San Diego Auditor-Controller’s Office –1600 Pacific Coast Highway, San Diego California 92101. Restricted Cash and Cash Equivalents Board Designated Cash and Investments Cash and investments are Board restricted for the cost of the following District projects: Debt Service: General Obligation Bond ID No. 27-2009 186,346$ Cash and Cash Equivalents: New Water Supply 3,021,765$ 33 Notes To Financial Statements Year Ended June 30, 2022 2)CASH AND INVESTMENTS –Continued Restricted Investments 3)FAIR VALUE MEASUREMENTS Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurements and Application, provides the framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value with Level 1 given the highest priority and Level 3 the lowest priority. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the organization has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: a.Quoted prices for similar assets or liabilities in active markets. b.Quoted prices for identical or similar assets or liabilities in markets that are not active. c.Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). d.Inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Level 3 inputs are unobservable inputs for the asset or liability. Debt Service: Water Revenue Bond Series 2010A 964,819$ Water Revenue Bond Series 2010B 2,534,275 $ 3,499,094 34 Notes To Financial Statements Year Ended June 30, 2022 3)FAIR VALUE MEASUREMENTS -Continued Fair value of assets measured on a recurring basis at June 30, 2022 are as follows: Investments classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Investments not measured at fair value do not fall under the fair value hierarchy as there is no active market for the investments. Significant Other Observable Inputs Not Measured Total (Level 2)at Fair Value U.S. Government Sponsored Entities 15,122,453$ 15,122,453$ -$ Local Agency Investment Fund (LAIF) 33,659,564 - 33,659,564 San Diego County Pool 55,234,000 - 55,234,000 Money Market Funds 65,865 - 65,865 Total $ 104,081,882 $ 15,122,453 $ 88,959,429 35 Notes To Financial Statements Year Ended June 30, 2022 4)CAPITAL ASSETS The following is a summary of changes in Capital Assets for the year ended June 30, 2022: Depreciation expense for the year ended June 30, 2022 was $17,688,535. Beginning Ending Balance Additions Deletions Balance Capital Assets, Not Depreciated: Land $ 14,423,773 $ - $ - $ 14,423,773 Construction in Progress 25,786,352 8,325,724 (26,806,073) 7,306,003 Total Capital Assets, Not Depreciated 40,210,125 8,325,724 (26,806,073) 21,729,776 Capital Assets, Being Depreciated: Infrastructure 682,453,956 30,710,630 (763,282) 712,401,304 Field Equipment 8,107,404 85,186 (82,826) 8,109,764 Buildings 19,581,800 40,230 (3,776) 19,618,254 Transportation Equipment 3,750,101 75,148 (85,417) 3,739,832 Communication Equipment 2,777,165 66,083 (331,430) 2,511,818 Office Equipment 16,313,938 99,896 (8,312,114) 8,101,720 Right to Use Assets - 738,501 - 738,501 Total Capital Assets, Being Depreciated 732,984,364 31,815,674 (9,578,845) 755,221,193 Less Accumulated Depreciation: Infrastructure 285,006,319 16,018,245 (311,541) 300,713,023 Field Equipment 6,399,838 277,337 (82,826) 6,594,349 Buildings 9,955,756 555,231 (3,776) 10,507,211 Transportation Equipment 2,550,362 275,208 (85,417) 2,740,153 Communication Equipment 2,485,718 135,141 (331,430) 2,289,429 Office Equipment 15,234,092 392,206 (8,302,337) 7,323,961 Right to Use Assets - 35,167 - 35,167 Total Accumulated Depreciation 321,632,085 17,688,535 (9,117,327) 330,203,293 Total Capital Assets, Being Depreciated, Net 411,352,279 14,127,139 (461,518) 425,017,900 Total Capital Assets, Net $ 451,562,404 $ 22,452,863 $ (27,267,591) $ 446,747,676 36 Notes To Financial Statements Year Ended June 30, 2022 5) LONG-TERM DEBT Long-term liabilities for the year ended June 30, 2022 are as follows: General Obligation Bonds In June 1998, the District issued $11,835,000 of General Obligation Refunding Bonds. The proceeds of this issue, together with other lawfully available monies, were to be used to establish an irrevocable escrow to advance refund and defease in their entirety the District’s previous outstanding General Obligation Bond issue.In November 2009, the District issued $7,780,000 of General Obligation Refunding Bonds Improvement District No. 27-2009 to refund the 1998 issue. The proceeds from the bond issue were $7,989,884, which included an original issue premium of $209,884. Beginning Ending Due Within Balance Additions Deletions Balance One Year General Obligation Bonds: Improvement District No. 27 – 2009 1,425,000$ -$ (705,000)$ 720,000$ 720,000$ Unamortized Bond Premium 19,080 - (16,354) 2,726 - Net General Obligation Bonds 1,444,080 - (721,354) 722,726 720,000 Revenue Bonds: 2010 Water Revenue Bonds Series A 4,825,000 - (1,120,000) 3,705,000 1,175,000 2010 Water Revenue Bonds Series B 36,355,000 - - 36,355,000 - 2013 Water Revenue Refunding Bonds 2,415,000 - (775,000) 1,640,000 805,000 2016 Water Revenue Refunding Bonds 27,870,000 - (1,215,000) 26,655,000 1,285,000 2018 Water Revenue Bonds 29,880,000 - (1,370,000) 28,510,000 1,455,000 2019 Wastewater Revenue Bonds 3,120,000 - (65,000) 3,055,000 70,000 2010 Series A Unamortized Premium 241,805 - (74,401) 167,404 - 2013 Bonds Unamortized Premium 208,206 - (96,095) 112,111 - 2016 Bonds Unamortized Premium 2,708,333 - (178,571) 2,529,762 - 2018 Bonds Unamortized Premium 2,419,451 - (109,148) 2,310,303 - 2019 Bonds Unamortized Discount (12,988) - 461 (12,527) - Net Revenue Bonds 110,029,807 - (5,002,754) 105,027,053 4,790,000 Lease Payable - 738,501 (15,100) 723,401 15,676 Total Long-Term Liabilities 111,473,887$738,501$(5,739,208)$ 106,473,180$5,525,676$ 37 Notes To Financial Statements Year Ended June 30, 2022 5)LONG-TERM DEBT -Continued These bonds are general obligations of Improvement District No. 27 (ID 27) of the District. The Board of Directors has the power and is obligated to levy annual ad valorem taxes without limitation, as to rate or amount for payment of the bonds and the interest upon all property which is within ID 27 and subject to taxation. The General Obligation Bonds are payable from District-wide tax revenues. The Board may utilize other sources for servicing the bond debt and interest. The Improvement District No. 27-2009 General Obligation Refunding Bonds have interest rates from 3.00% to 4.00% with maturities through Fiscal Year 2023. Future debt service requirements for the bonds are as follows: For the Year Ended June 30,Principal Interest 2023 $720,000 $14,400 Water Revenue Bonds In April 2010, Water Revenue Bonds with a face value of $50,195,000 were sold by the Otay Water District Financing Authority to provide funds for the construction of water storage and transmission facilities. The bond issue consisted of two series; Water Revenue Bonds, Series 2010A (Non-AMT Tax Exempt) with a face value of $13,840,000 plus a $1,078,824 original issue premium, and Water Revenue Bonds,Series 2010B (Taxable Build America Bonds) with a face value of $36,355,000. The Series 2010A bonds are due in annual installments of $785,000 to $1,295,000 from September 1, 2012 through September 1, 2025; bearing interest at 2% to 5.25%. The Series 2010B bonds are due in annual installments of $1,365,000 to $3,505,000 from September 1, 2026 through September 1, 2040; bearing interest at 6.377% to 6.577%. Interest on both Series is payable on September 1, 2010 and semiannually thereafter on March 1st and September 1st of each year until maturity or earlier redemption. The installment payments are to be made from taxes and net revenues of the Water System as described in the installment purchase agreement, on parity with the payments required to be made by the District for the 2013,2016 Water Revenue Refunding Bonds and 2018 Water Revenue Bonds described below. The original issue premium is being amortized over the 14-year life of the Series 2010A bonds. Amortization for the year ending June 30, 2022 was $74,401. The amortizations are included in interest expense. The unamortized premium at June 30, 2022 is $167,404. 38 Notes To Financial Statements Year Ended June 30, 2022 5)LONG-TERM DEBT –Continued Water Revenue Bonds –Continued The 2010 Water Revenue Bonds contains various covenants and restrictions, principally that the District fix, prescribe, revise and collect rates, fees and charges for the Water System which will at least be sufficient to yield, during each fiscal year, taxes and net revenues equal to one hundred twenty-five percent (125%) of the debt service for such fiscal year. The District was in compliance with these rate covenants for the fiscal year ended June 30, 2022. In June 2013, the 2013 Water Revenue Refunding Bonds were issued to defease the 2004 Refunding Certificates of Participation. The bonds were issued with a face value of $7,735,000 plus a $984,975 original issue premium. The bonds are due in annual installments of $660,000 to $835,000 from September 1, 2013 through September 1, 2023; bearing interest at 1% to 4%. The installment payments are to be made from taxes and net revenues of the Water System, on parity with the payments required to be made by the District for the 2016 Water Revenue Refunding Bonds,the 2010A,2010B and 2018 Water Revenue Bonds. The original issue premium is being amortized over the 11-year life of the Series 2013 bonds. Amortization for the year ending June 30, 2022 was $96,095. The amortizations are included in interest expense. The unamortized premium at June 30, 2022 is $112,111. In May 2016, Water Revenue Refunding Bonds were issued to defease the 2007 Revenue Certificates of Participation. The bonds are due in annual installments of $1,200,000 to $2,235,000 from September 1, 2016 through September 1, 2036; bearing interest of 2%to 5%. The bonds were issued with a face value of $33,385,000 plus $3,630,950 original issue premium. The savings between the cash flow required to service, the old debt and the cash flow required to service the new debt is $5,664,140 and represent an economic gain on refunding of $4,538,175. The original issue premium is being amortized over the 20-year life of the Series 2016 bonds. Amortization for the year ending June 30, 2022 was $178,571. The amortizations are included in interest expense. The unamortized premium at June 30, 2022 is $2,529,762. In November 2018, Water Revenue Bonds were issued to provide funds for construction of water storage, treatment and transmission facilities and to refinance the 1996 Certificates of Participation. The bonds are due in annual installments of $775,000 to $1,915,000 from September 1, 2019 through September 1, 2043; bearing interest of 3% to 5%. The bonds were issued with a face value of $32,435,000 plus $2,710,512 original issue premium. 39 Notes To Financial Statements Year Ended June 30, 2022 5)LONG-TERM DEBT –Continued Water Revenue Bonds –Continued The original issue premium is being amortized over the 25-year life of the Series 2018 bonds. Amortization for the year ending June 30, 2022 was $109,148. The amortization expense is included in interest expense. The unamortized premium at June 30, 2022 is $2,310,303. The total amount outstanding at June 30, 2022 and aggregate maturities of the revenue bonds for the fiscal years subsequent to June 30, 2022, are as follows: For the Year Ended June 30,Principal Interest Principal Interest Principal Interest 2023 1,175,000$ 159,113$ -$ 2,371,868$ 805,000$ 49,500$ 2024 1,235,000 98,862 -2,371,868 835,000 16,700 2025 1,295,000 33,994 -2,371,868 - - 2026 - - 1,365,000 2,328,345 - - 2027 - -1,450,000 2,238,589 - - 2028-2032 - -8,760,000 9,631,793 - - 2033-2037 - -12,005,000 6,275,281 - - 2038-2042 --12,775,000 1,747,345 -- 3,705,000$ 291,969$ 36,355,000$29,336,957$1,640,000$66,200$ 2013 Water Revenue Refunding Bonds 2010 Water Revenue Bond Series A 2010 Water Revenue Bond Series B For the Year Ended June 30,Principal Interest Principal Interest 2023 1,285,000$ 941,706$ 1,455,000$ 1,223,413$ 2024 1,350,000 875,831 1,650,000 1,145,788 2025 1,420,000 806,581 1,730,000 1,061,288 2026 1,495,000 733,706 1,820,000 972,538 2027 1,570,000 657,081 1,915,000 879,163 2028-2032 8,955,000 2,238,718 5,685,000 3,479,288 2033-2037 10,580,000 761,972 6,775,000 2,122,338 2038-2042 - - 5,905,000 875,269 2043-2044 - - 1,575,000 63,500 26,655,000$7,015,595$28,510,000$11,822,585$ 2016 Water Revenue 2018 Water Revenue Refunding Bonds Refunding Bonds 40 Notes To Financial Statements Year Ended June 30, 2022 5)LONG-TERM DEBT -Continued Wastewater Revenue Bonds In December 2019, Wastewater Revenue Bonds were issued to provide funds to pay for certain capital improvements to the District’s wastewater system. The bonds are due in annual installments of $65,000 to $160,000 from September 1, 2021 through September 1, 2049; bearing interest of 2% to 3.125%. The bonds were issued with a face value of $3,120,000 less a $13,680 original issue discount. The original issue discount is being amortized over the 30-year life of the Series 2019 bonds. Amortization for the year ending June 30, 2022 was $(461). The amortization expense is included in interest expense. The unamortized discount at June 30,2022 is $(12,527). The 2019 Wastewater Revenue Bonds contains various covenants and restrictions, principally that the District fix, prescribe, revise and collect rates, fees and charges for the Wastewater System which will at least be sufficient to yield, during each fiscal year, net revenues equal to one hundred fifteen percent (115%) of the debt service for such fiscal year. The District was in compliance with these rate covenants for the fiscal year ended June 30, 2022. Future debt service requirements for the bonds are as follows: For the Year Ended June 30,Principal Interest 2023 70,000$ 88,741$ 2024 75,000 87,291 2025 75,000 85,416 2026 80,000 83,091 2027 80,000 80,691 2028-2032 445,000 365,069 2033-2037 505,000 299,722 2038-2042 585,000 221,984 2043-2047 675,000 126,875 2048-2051 465,000 22,109 3,055,000$ 1,460,989$ 2019 Wastewater Revenue Bonds 41 Notes To Financial Statements Year Ended June 30, 2022 5)LONG-TERM DEBT –Continued Revenues Pledged The District has pledged a portion of future water sales revenues to repay its Water Revenue and Water Revenue Refunding Bonds. Total principal and interest remaining on the water revenue bonds and water revenue refunding bonds is $145,398,305 payable through fiscal year 2044. For June 30, 2022, principal and interest paid by the water sales revenues were $4,480,000 and $4,967,700 respectively. The District has pledged a portion of future wastewater sales revenues to repay its Wastewater Revenue Bonds. Total principal and interest remaining on the wastewater revenue bonds is $4,515,991 payable through fiscal year 2050. For June 30, 2022, principal and interest paid by the wastewater sales revenues were $65,000 and $90,091, respectively Lease Payable Antenna Site Lease The District has one antenna site sublease payable with a lease term of forty-eight years. The District is required to make annual fixed payments ranging from $15,100 to $64,303, with a discount rate of 1.39%. The lease has three extension options of 5 years each. As of June 30, 2022, the value of the lease payable is $723,401. Future lease payable requirements are as follows: For the Year Ended June 30,Principal Interest 2023 15,676$ 9,956$ 2024 17,188 9,728 2025 18,781 9,479 2026 20,469 9,207 2027 22,253 8,911 2028-2032 141,611 39,180 2033-2037 203,442 27,318 2038-2042 283,981 10,546 723,401$ 124,325$ 42 Notes To Financial Statements Year Ended June 30, 2022 6)NET POSITION Designations of Net Position In addition to the restricted net position, a portion of unrestricted net position has been designated by the Board of Directors for the following purposes as of June 30, 2022: 7)DEFINED BENEFIT PENSION PLAN A)General Information about the Pension Plans Plan Descriptions All qualified permanent and probationary employees are eligible to participate in the District’s Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and District resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding provisions, assumptions and membership information that can be found on the CalPERS website. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 (52 if new PERS member)with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law. Designated Betterment 548,740$ Replacement Reserve 56,027,557 Designated Expansion 440,374 Designated New Supply Fund 5,961 Total $ 57,022,632 43 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN -Continued Benefits Provided The Plans’ provisions and benefits in effect at June 30, 2022 are summarized as follows: Prior to On or After Hire Date January 1, 2013 January 1, 2013 Benefit Formula 2.7% at 55 2% at 62 Benefit Vesting Schedule 5 years service 5 years service Benefit Payments Monthly for life Monthly for life Retirement Age 50 –55+52 –67+ Monthly Benefits, as a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5% Required Employee Contribution Rates 2022 8.00%7.00% Required Employer Contribution Rates 2022 21.62% 21.62% Employees Covered The following employees were covered by the benefit terms for the Plan: Inactive Employees or Beneficiaries Currently Receiving Benefits 208 Inactive Employees Entitled to But Not Yet Receiving Benefits 121 Active Employees 135 Total 464 Contributions Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. 44 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN -Continued The District is required to fund the difference between the actuarially determined rate and the contribution rate of employees. B)Net Pension Liability The District’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of actuarial assumptions and methods used to determine the net pension liability is shown below: Actuarial Assumptions The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions: Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.15% Inflation 2.50% Salaries Increases Varies(1) Mortality Rate Table CalPERS Membership Data(2) Post Retirement Benefit Increase See Footnote(3) (1)Depending on age, service and type of employment. (2)The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pe- retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report form December 2017 that can be found on the CalPERS website. (3)The lesser of contract COLA or 2.5% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.5% thereafter. 45 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN –Continued Discount Rate The discount rate used to measure the total pension liability at June 30, 2021 measurement date was 7.15% for the Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building- block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. 46 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN –Continued The following table reflects the long-term expected real rate of return by asset class. (a)In the System’s Comprehensive Annual Financial Report, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (b)An expected inflation of 2.00% used for this period. (c)An expected inflation of 2.92% used for this period. Subsequent Events: On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the threshold specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021. On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. Assumed Real Return Real Return Asset Class(a)Asset Allocation Years 1 - 10(b)Years 11+(c) Global Equity 50.00%4.80%5.98% Fixed Income 28.00%1.00%2.62% Inflation Assets/Sensitive -0.77%1.81% Private Equity 8.00%6.30%7.23% Real Assets 13.00%3.75%4.93% Liquidity 1.00%--0.92% 47 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN –Continued This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date. C)Changes in the Net Pension Liability (Asset) The changes in the Net Pension Liability (Asset) for the Plan for June 30, 2022: Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) Beginning Balance 148,318,894$ 128,275,375$ 20,043,519$ Changes in the Year: Service Cost 2,662,845 - 2,662,845 Interest on the Total Pension Liability 10,489,284 - 10,489,284 Changes in Benefit Terms - - - Changes in Assumptions - - - Difference Between Expected and Actual Experience 705,426 - 705,426 Net Plan to Plan Resource Movement - - - Contributions - Employer 3,945,147 (3,945,147) Contributions - Employees 1,095,898 (1,095,898) Net Investment Income 28,707,870 (28,707,870) Benefit Payments, Including Refunds of Employee Contributions (7,304,947) (7,304,947) - Administrative Expense - (128,139) 128,139 Other Miscellaneous Income (Expense)- - - Net Changes 6,552,608 26,315,829 (19,763,221) Ending Balance 154,871,502$ 154,591,204$ 280,298$ Increase ( Decrease) 48 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN –Continued Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the District for the Plan, calculated using the discount rate for the Plan, as well as what the District’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. D) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2022, the District recognized pension expense (income)of $(440,542). At June 30, 2022, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following services: 1% Decrease 6.15% Net Pension Liability 19,737,148$ Current Discount Rate 7.15% Net Pension Liability 280,298$ 1% Increase 8.15% Net Pension Liability/(Asset)(15,969,291)$ Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date 3,960,785$ -$ Differences between actual and expected experience 520,984 - Net difference between projected and actual earnings on pension plan investments - 14,422,139 Total 4,481,769$ 14,422,139$ 49 Notes To Financial Statements Year Ended June 30, 2022 7)DEFINED BENEFIT PENSION PLAN –Continued D)Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -Continued For fiscal year 2022, $3,960,785 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: E)Payable to the Pension Plan At June 30, 2022, the District reported a payable of $104,458 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2022. These payables are reflected in the accrued payroll liabilities on the Statement of Net Position. 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) Plan Description The District’s defined benefit postemployment healthcare plan, (DPHP), provides medical benefits to eligible retired District employees and beneficiaries. DPHP is part of the Public Agency portion of the California Employers’ Retiree Benefit Trust Fund (CERBT), an agent multiple-employer plan administered by California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for participating public employers within the State of California. CalPERS issues a separate Comprehensive Annual Financial Report. Copies of the CalPERS’ annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, California 95814. Fiscal Deferred Year Ended Outflow/(Inflows) June 30 of Resources 2023 (3,351,450)$ 2024 (3,229,454) 2025 (3,393,836) 2026 (3,926,415) 2027 - Thereafter - 50 Notes To Financial Statements Year Ended June 30, 2022 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Prior to the plan agreements signed in 2011, the eligibility in the plan was broken into 3 tiers, employees hired before January 1, 1981, employees hired on or after January 1, 1981 but before July 1, 1993 and employees hired on or after July 1, 1993. Board members elected before January 1, 1995 are also eligible for the plan. Eligibility also includes age and years of service requirements which vary by tier. Benefits include up to 100% medical and/or dental premiums for life for the retiree for Tier I or II employees, and up to 100% spouse premium until death of retiree or age 65 whichever is greater and dependent premium up to age 19.Tier III employees received up to 50% medical (no dental coverage) up to age 65 and did not include dependent coverage. Subsequent to the agreements in 2011 and 2012 all employees are eligible for the plan after 20 years of consecutive service and unrepresented employees hired before January 1, 2013 are eligible after 15 years. Survivor benefits are covered beyond Medicare. Employees Covered As of June 30, 2021 actuarial valuations, the following current and former employees were covered by the benefit terms under the Plan: Contributions The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2022, the District made no cash contributions to the trust. Active Employees 132 Inactive Employees or Beneficiaries Currently Receiving Benefits 80 Inactive Employees Entitled to But Not Yet Received Benefits - Total 212 51 Notes To Financial Statements Year Ended June 30, 2022 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Net OPEB Liability The District’s net OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by actuarial valuations dated June 30, 2021 based on the following actuarial methods and assumptions: Actuarial Assumptions Discount Rate 6.75% Inflation 2.50% Salary Increases 2.75% plus merit Investment Rate of Return 6.75% Mortality Rate(1)Derived using CalPERS Membership Data for all funds Pre-Retirement Turnover(2)Derived using CalPERS Membership Data for all funds Healthcare Trend Rate 6.00% PPO decreasing to 4.50% PPO Notes: (1)The pre-retirement mortality information is derived from the 2017 CalPERS Retiree Mortality for All Employees table created by CalPERS. CalPERS periodically studies mortality for participating agencies and establishes mortality tables that are modified versions of commonly used tables. This table incorporates mortality projection as deemed appropriate based on CalPERS analysis. (2)The pre-retirement turnover information is based on the 2017 CalPERS Turnover for Miscellaneous Employees table created by CalPERS. CalPERS periodically studies the experience for participating agencies and establishes tables that are appropriate for each pool. 52 Notes To Financial Statements Year Ended June 30, 2022 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued The long-term expected rate of return on OPEB plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset are summarized in the following table for the June 30, 2021 actuarial valuations: Discount Rate The discount rate used to measure the total OPEB liability was 6.75%for the June 30, 2021 measurement period.The projection of cash flows used to determine the discount rate assumed that District contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projects benefit payments to determine the total OPEB liability. Long-Term Target Expected RealAsset Class Allocation Rate of Return Global Equity 59.00%7.55% Global Fixed Income 25.00%4.25% TIPS 5.00%3.00% Commodities 3.00%7.55% REITs 8.00%7.25% 53 Notes To Financial Statements Year Ended June 30, 2022 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Changes in the OPEB Liability (Asset) The changes in the net OPEB liability (asset) for the Plan are as follows: Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate The following presents the net OPEB liability (asset) of the District if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2021: Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (Asset) Balance at June 20, 2021 (Valuation Date June 30, 2020)29,859,997$ 28,058,838$ 1,801,159$ Changes Recognized for the Measurement Period: Service Cost 755,756 - 755,756 Interest on TOL/Return on FNP 2,077,446 7,880,863 (5,803,417) Difference Between Expected and Actual Experience 2,595,855 - 2,595,855 Changes of Assumptions (1,557,334) - (1,557,334) Contributions - Employer 807,867 (807,867) Benefit Payments (1,201,678) (1,201,678) - Administrative Expenses - (10,811) 10,811 Other Expenses - - - Net Changes 2,670,045 7,476,241 (4,806,196) Balance at June 30, 2022 (Measurement Date June 30, 2021)32,530,042$ 35,535,079$ (3,005,037)$ Increase ( Decrease) Current 1% Decrease Discount Rate 1% Increase 2022 Net OPEB Liability (Asset) (2021 Measurement Period)1,573,406$ (3,005,037)$ (6,778,400)$ 54 Notes To Financial Statements Year Ended June 30, 2022 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued Sensitivity of the Net OPEB Liability (Asset) to Changes in the Healthcare Cost Trend Rates The following presents the net OPEB liability of the District if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021: OPEB Plan Fiduciary Net Position CERBT issues a publicly available financial report that may be obtained from the California Public Employees Retirement System Executive Office, 400 P Street, Sacramento, California 95814. Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss: Net difference between projected and actual earnings on OPEB plan investments 5 years All other amounts Expected average remaining service lifetime (EARSL) Current Healthcare Cost 1% Decrease Trend Rates 1% Increase (4.00% HMO/4.00% PPO (5.00% HMO/5.00% PPO (6.00% HMO/6.00% PPO Decreasing to Decreasing to Decreasing to 3.50% HMO/3.50% PPO)4.50% HMO/4.50% PPO)5.50% HMO/5.50% PPO) 2022 Net OPEB Liability (Asset) (2021 Measurement Period)(7,330,550)$ (3,005,037)$ 2,357,056$ 55 Notes To Financial Statements Year Ended June 30, 2022 8)OTHER POST EMPLOYMENT BENEFITS (OPEB) -Continued OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2022, the District recognized OPEB expense (income)of $(1,672,344). As of the fiscal year ended June 30, 2022, the District reported deferred outflows and inflows of resources related to OPEB from the following sources: Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows: 9)COMMITMENTS AND CONTINGENCIES Construction Commitments The District has commitments related to capital projects under construction with an estimated cost to complete of $2,552,684 at June 30, 2022. Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience 3,078,056$ (811,646)$ Changes in assumptions - (1,466,358) Net difference between projected and actual earnings on OPEB plan investments - (4,166,191) Total 3,078,056$ (6,444,195)$ Fiscal Deferred Year Ended Outflows/(Inflows) June 30, of Resources 2023 (1,184,152)$ 2024 (1,149,103) 2025 (706,303) 2026 (889,463) 2027 296,715 Thereafter 266,167 56 Notes To Financial Statements Year Ended June 30, 2022 9)COMMITMENTS AND CONTINGENCIES –Continued Litigation Certain claims, suits and complaints arising in the ordinary course of operation have been filed or are pending against the District. In the opinion of the staff and counsel, most of those 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. There is one potential case, see below, that could have a significant effect on the District’s financial position. In November 2015, a District ratepayer filed a lawsuit against the District (Coziahr v.Otay Water District, Superior Court of the State of California, County of San Diego, contending that the District’s water rates violated Article XIIID of the California Constitution (“Proposition 218”). The court subsequently certified the action as a class action on behalf of all single-family residential ratepayers who have received water service at any time after July 14, 2014. On March 4, 2021, the court issued a decision in favor of the plaintiffs holding its tiered water rates adopted in 2013 and 2017 for the following 5-year periods were not proportionate to the cost of service attributable to each customer’s parcel, as required by Proposition 218. On June 15, 2022, the court issued a Statement of Decision in the case. The Statement of Decision adopts a methodology for computing overcharges to ratepayers in the class based on the court’s earlier finding that the District’s tiered water rates adopted in 2013 and 2017 were not proportionate to the cost of service attributable to each customer’s parcel, as required by Proposition 218. Applying its methodology, the court states that the overcharges to ratepayers through June 2021 is estimated to be approximately $18,105,256, with an approximate additional $208,762 of overcharges, plus interest accruing each month subsequent to June 2021 until the District changes its rates to be consistent with Proposition 218. The District’s position is that the Court decision is inconsistent with rates set by water districts across the State and the District will vigorously defend its interests. The District also notes that the court’s ruling is inconsistent with some case law. The District and its Attorney has objected to the decision and the District will appeal the Courts decision and believes a favorable outcome is reasonable and as such a liability has not been recorded. 57 Notes To Financial Statements Year Ended June 30, 2022 9)COMMITMENTS AND CONTINGENCIES –Continued 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, 2022, 1,750 EDUs had been relinquished and refunded, 15,095 EDUs had been connected, and 1,022 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, 2022, none of the outstanding developer projects had been completed. 10)RISK MANAGEMENT General Liability and Property 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 is a member of an insurance pool through the Association of California Water Agencies Joint Powers Insurance Authority (ACWA JPIA). ACWA JPIA is a not-for-profit public agency formed under California Government Code Sections 6500 et. Seq. ACWA JPIA is governed by a board composed of members from participating agencies. The District pays an annual premium for commercial insurance covering general liability, excess liability, property, automobile, public employee dishonesty, and various other claims. Separate financial statements of ACWA JPIA may be obtained at ACWA JPIA 2100 Professional Drive, Roseville, CA 95661-3700. 58 Notes To Financial Statements Year Ended June 30, 2022 10)RISK MANAGEMENT -Continued General and Auto Liability, Public Officials’ Errors and Omissions and Employment Practices Liability: Total limits of $5 million combined single limit at $5 million per occurrence, with excess aggregate coverage at $50 million subject to the following deductibles: $50,000 per occurrence for third party general liability property damage; $50,000 per occurrence for third party auto liability property damage; Employee Dishonesty Coverage: Total of $1,000,000 per loss includes Public Employee Dishonesty, Forgery or Alteration and Theft and Faithful Performance of Duty effective July 1, 2021. Property Loss: Replacement cost, for property on file, paid on an actual cash value basis, to a combined total of $500 million per occurrence, subject to a $1,000 deductible per occurrence, effective July 1, 2021. Boiler and Machinery: Replacement cost up to $100 million per occurrence, subject to a $1,000 deductible, effective July 1, 2021. Comprehensive and Collision: Deductibles of $1,000, as elected; ACV limits; fully self-funded by ACWA, effective July 1, 2021. Workers’ Compensation Coverage and Employer’s Liability: Statutory limits per occurrence for Workers’ Compensation and $2.0 million for Employer’s Liability Coverage, subject to the terms, conditions and exclusions as provided in the Memorandum of Coverage, effective July 1, 2021. Cyber Coverage: $5,000,000 Annual Program-Wide Aggregate Limit of Liability for each Insured/Member for Information Security & Privacy Liability. Policy includes $50,000 deductible per claim. 11) LEASES RECEIVABLE Leases Receivable The District has entered into 29 cell site leases with lease terms ranging from less than one year to sixty years. The lessees are required to make annual fixed payments ranging from $29,532 to $60,503, with discount rates of 1.39%. As of June 30, 2022, the lease receivable is $37,501,754 and deferred inflows of resources is $36,619,439. The District recognized $1,402,389 of lease revenue during the fiscal year. 59 Notes To Financial Statements Year Ended June 30, 2022 12)SEGMENT INFORMATION The District has issued Water and Wastewater Revenue Bonds in the previous fiscal years to finance certain capital improvements. While water and wastewater services are accounted for jointly in these financial statements, the investors in the Water Revenue Bonds rely solely on the revenues of the water services for repayment and the Wastewater Revenue Bonds solely on the revenues of the wastewater services for repayment. Summary financial information for the water and wastewater services is presented for June 30, 2022: Water Wastewater Services Services Total Assets Cash and Investments 100,700,457$ 5,252,617$ 105,953,074$ Accounts Receivable, Net 15,250,261 200,658 15,450,919 Other Current Assets 4,333,973 78,829 4,412,802 Leases Receivable 37,501,754 - 37,501,754 Net OPEB Asset 2,832,142 172,895 3,005,037 Capital Assets 418,117,496 28,630,180 446,747,676 Total Assets 578,736,083 34,335,179 613,071,262 Deferred Outflows of Resources Deferred Actuarial Pension Costs 4,414,755 67,014 4,481,769 Deferred Actuarial OPEB Costs 2,937,822 140,234 3,078,056 Total Deferred Outflows of Resources 7,352,577 207,248 7,559,825 Liabilities Accounts Payable 15,661,906 32,774 15,694,680 Other Miscellaneous Liabilities 5,445,866 506,092 5,951,958 Other Current Liabilities 11,744,041 99,814 11,843,855 General Obligation Bonds 2,726 - 2,726 Revenue Bonds 97,264,580 2,972,473 100,237,053 Lease Payable 707,725 - 707,725 Net Pension (Asset) Liability 680,991 (400,693) 280,298 Other Non-current Liabilities 3,704,232 - 3,704,232 Total Liabilities 135,212,067 3,210,460 138,422,527 Deferred Inflows of Resources Deferred Actuarial Pension Costs 13,745,566 676,573 14,422,139 Deferred Actuarial OPEB Costs 6,122,270 321,925 6,444,195 Deferred Leases 36,619,439 - 36,619,439 Total Deferred Inflows of Resources 56,487,275 998,498 57,485,773 Net Position Net Investment in Capital Assets 314,686,789 25,587,707 340,274,496 Restricted for Debt Service 3,685,440 - 3,685,440 Unrestricted 76,017,089 4,745,762 80,762,851 Total Net Position 394,389,318$ 30,333,469$ 424,722,787$ June 30, 2022 Condensed Statement of Net Position 60 Notes To Financial Statements Year Ended June 30, 2022 12)SEGMENT INFORMATION –Continued Water Wastewater Services Services Total Operating Revenues Water Sales 102,807,098$ -$ 102,807,098$ Wastewater Revenue - 3,073,326 3,073,326 Connection and Other Fees 2,863,017 11,157 2,874,174 Total Operating Revenues 105,670,115 3,084,483 108,754,598 Operating Expenses Cost of Water Sales 70,562,038 - 70,562,038 Wastewater - 1,802,256 1,802,256 Administrative and General 19,174,479 - 19,174,479 Depreciation 16,577,035 1,111,500 17,688,535 Total Operating Expenses 106,313,552 2,913,756 109,227,308 Operating Income (Loss)(643,437) 170,727 (472,710) Non-Operating Revenues (Expenses) Investment Earnings (Losses)(1,490,694) (15,792) (1,506,486) Taxes and Assessments 5,244,584 - 5,244,584 Availability Charges 688,008 52,920 740,928 Gain (Loss) on Sale of Capital Assets (187,313) - (187,313) Rents and Leases 2,071,200 - 2,071,200 Miscellaneous Revenues 5,392,269 25,319 5,417,588 Donations (106,913) - (106,913) Interest Expense (4,461,015) (90,119) (4,551,134) Miscellaneous Expenses (387,538) (59,654) (447,192) Total Non-operating Revenues (Expenses)6,762,588 (87,326) 6,675,262 Income (Loss) Before Capital Contributions and Transfers 6,119,151 83,401 6,202,552 Capital Contributions 12,874,942 394,218 13,269,160 Change in Net Position 18,994,093 477,619 19,471,712 Total Net Position, Beginning 375,395,225 29,855,850 405,251,075 Total Net Position, Ending 394,389,318$ 30,333,469$ 424,722,787$ Condensed Statement of Revenues, Expenses and Changes in Net Pension Year Ended June 30, 2022 61 Notes To Financial Statements Year Ended June 30, 2022 12)SEGMENT INFORMATION –Continued 13)IMPLEMENTATION OF NEW ACCOUNTING STANDARDS As described in Note 11 to the financial statements, the District changed accounting policies related to leases by adopting Statement of Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, in the fiscal year 2022. The District did not restate prior year balances as it was not practicable to do so. Water Wastewater Services Services Total Net Cash Provided/(Used) by: Operating Activities 16,039,567$ 742,676$ 16,782,243$ Non-capital and Related Financing Activities 5,430,121 52,920 5,483,041 Capital and Related Financing Activities (6,597,611) (8,126) (6,605,737) Investing Activities (13,606,003) (15,792) (13,621,795) Net Increase(Decrease) in Cash and Cash Equivalents 1,266,074 771,678 2,037,752 Cash and Cash Equivalents, Beginning 84,246,065 4,480,939 88,727,004 Cash and Cash Equivalents, Ending 85,512,139$ 5,252,617$ 90,764,756$ For the Year Ended June 30, 2022 Condensed Statement of Cash Flows 62 Schedule of Changes in the Net OPEB Liability and Related Ratios Measurement Periods Ended June 30, Last Ten Fiscal Years (1) Measurement Period 2021 2020 2019 2018 2017 Total OPEB Liability Service Cost 755,756$ 735,529$ 757,725$ 735,655$ 687,528$ Interest on the Total OPEB Liability 2,077,446 1,915,358 1,970,613 1,864,967 1,764,343 Actual and Expected Experience Difference 2,595,855 1,151,927 (2,029,118) - - Changes in Assumptions (1,557,334) - (345,110) - - Changes in Benefit Terms - - - - - Benefit Payment (1,201,678) (1,120,146) (1,141,344) (1,085,586) (1,039,420) Net Change in Total OPEB Liability 2,670,045 2,682,668 (787,234) 1,515,036 1,412,451 Total OPEB Liability - Beginning 29,859,997 27,177,329 27,964,563 26,449,527 25,037,076 Total OPEB Liability - Ending (a)32,530,042$ 29,859,997$ 27,177,329$ 27,964,563$ 26,449,527$ Plan Fiduciary Net Position Contributions - Employer 807,867$ 1,011,358$ 2,206,363$ 2,202,004$ 2,284,420$ Net Investment Income 7,880,863 983,790 1,595,092 1,734,626 2,011,985 Benefit Payments (1,201,678) (1,120,146) (1,141,344) (1,085,586) (1,039,420) Administrative Expenses (10,811) (13,514) (12,299) (11,784) (10,167) Other Expenses - - - - - Net Change in Plan Fiduciary Net Position 7,476,241 861,488 2,647,812 2,839,260 3,246,818 Plan Fiduciary Net Position - Beginning 28,058,838 27,197,350 24,549,538 21,739,035 18,492,217 Plan Fiduciary Net Position - Ending (b)35,535,079$ 28,058,838$ 27,197,350$ 24,578,295$ 21,739,035$ Net OPEB Liability/(Asset) - Ending (a)-(b)(3,005,037)$ 1,801,159$ (20,021)$ 3,386,268$ 4,710,492$ Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 109.24%94.00%100.10%87.80%82.20% Covered-Employee Payroll 13,917,932$ 13,538,959$ 13,176,602$ 12,677,000$ 12,513,000$ Net OPEB Liability/(Asset) as a Percentage of Covered-Employee Payroll -21.59%13.30%-0.20%26.90%37.60% Notes to Schedule (1)Historical information is required only for measurement periods for which GASB 75 is applicable.Future years’information will be displayed up to 10 years as information becomes available.Contributions are determined by an actuarial valuation based on eligible participants’ estimated medical and dental benefits. 63 Schedule of Contributions For Fiscal Year Ended June 30, Last Ten Fiscal Years (1) Actuarially Determined Contributions in Contribution Covered-Contributions as a Fiscal Contribution Relation to the Deficiency Employee Percentage of Covered- Year (ADC)ADC (Excess)Payroll Employee Payroll 2018 1,116,418$ (2,202,004)$ (1,085,586)$ 12,677,000$ 17.37% 2019 1,149,911 (2,206,363) (1,056,452) 13,176,602 16.74% 2020 1,011,358 (1,011,358) - 13,538,959 7.47% 2021 807,867 (807,867) - 13,917,932 5.80% 2022 - - - 14,148,052 0.00% Notes to Schedule: Methods and assumptions used to determine contributions: Actuarial Cost Method Entry Age Normal Amortization Method/Period Level percent of payroll over a closed rolling 15-year period Asset Valuation Method Market value Inflation 2.50% Payroll Growth 2.75% Investment Rate of Return 6.75% Healthcare Cost-trend Rates 6.00% HMO/6.00% PPO decreasing to 4.50% HMO/4.50% PPO Retirement Age Mortality The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022 were from the June 30, 2021 actuarial valuation.Also note,that some of the data from prior years were updated with the most current available information. Tier 1 employees -2.7%at 55 and Tier 2 employees -2.0%at 62.The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement mortality and post-retirement mortality probability based on CalPERS Experience Study with mortality improvements using Mortality Improvement Scale MP2018 (1)Historical information is required only for measurement periods for which GASB 75 is applicable.Future years’ information will be displayed up to 10 years as information becomes available.Contributions are determined by an actuarial valuation based on eligible participants’ medical and dental benefits. 64 Schedule of Changes in the Net Pension Liability and Related Ratios Fiscal Years Ended June 30, Last Ten Years(1) Measurement Period 2020 - 2021 2019 - 2020 2018 - 2019 2017 - 2018 Total Pension Liability Service Cost 2,662,845$ 2,623,208$ 2,586,911$ 2,528,271$ Interest 10,489,284 10,043,778 9,638,674 9,168,092 Changes in Benefit Terms - - - - Changes in Assumptions - - - (1,312,634) Difference Between Expected and actual Experience 705,426 260,337 1,183,213 461,917 Benefit Payments, including Refunds of Employee Contributions (7,304,947) (7,017,816) (6,658,719) (5,995,949) Net Change in Total Pension Liability 6,552,608 5,909,507 6,750,079 4,849,697 Total Pension Liability - Beginning 148,318,894 142,409,387 135,659,308 130,809,611 Total Pension Liability - Ending (a)154,871,502$ 148,318,894$ 142,409,387$ 135,659,308$ Plan Fiduciary Net Position Net Plan to Plan Resource Movement -$ -$ -$ (203)$ Contributions - Employer 3,945,147 2,437,119 36,706,983 4,441,517 Contributions - Employee 1,095,898 1,055,769 1,019,255 1,015,008 Net Investment Income 28,707,870 6,185,108 7,516,686 6,949,676 Benefit Payments, Including Refunds of Employee Contributions (7,304,947) (7,017,816) (6,658,719) (5,995,949) Administrative Expenses (128,139) (177,337) (62,278) (126,575) Other Changes in Fiduciary Net Position - - 203 (240,367) Net Change in Plan Fiduciary Net Position 26,315,829 2,482,843 38,522,130 6,043,107 Plan Fiduciary Net Position - Beginning 128,275,375 125,792,532 87,270,402 81,227,295 Plan Fiduciary Net Position - Ending (b)154,591,204$ 128,275,375$ 125,792,532$ 87,270,402$ Plan Net Pension Liability/(Asset) - Ending (a)-(b)280,298$ 20,043,519$ 16,616,855$ 48,388,906$ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 99.82%86.49%88.33%64.33% Covered Payroll 13,768,586$ 13,383,715$ 12,892,655$ 12,969,485$ Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 2.04%149.76%128.89%373.10% (2) Historical information is required only for measurement periods for which GASB 68 is applicable. (1) Measurement period 2020-21 (fiscal year 2021-2022) was the eighth year of implementation; therefore, only eight years are shown. 65 Schedule of Changes in the Net Pension Liability and Related Ratios Fiscal Years Ended June 30, Last Ten Years(1) Measurement Period 2016 - 2017 2015 - 2016 2014 - 2015 2013 - 2014 Total Pension Liability Service Cost 2,556,902$ 2,298,617$ 2,250,860$ 2,330,709$ Interest 8,836,284 8,575,275 8,229,312 7,907,915 Changes in Benefit Terms - - - - Changes in Assumptions 7,308,486 - (1,996,819) - Difference Between Expected and actual Experience (1,208,593) (613,440) (981,200) - Benefit Payments, including Refunds of Employee Contributions (5,779,040) (5,448,218) (5,288,251) (4,885,406) Net Change in Total Pension Liability 11,714,039 4,812,234 2,213,902 5,353,218 Total Pension Liability - Beginning 119,095,572 114,283,338 112,069,436 106,716,218 Total Pension Liability - Ending (a)130,809,611$ 119,095,572$ 114,283,338$ 112,069,436$ Plan Fiduciary Net Position Net Plan to Plan Resource Movement -$ -$ -$ -$ Contributions - Employer 4,105,810 3,819,770 3,557,098 3,137,174 Contributions - Employee 1,014,329 1,010,337 1,007,023 1,074,954 Net Investment Income 8,149,097 369,214 1,601,760 10,874,999 Benefit Payments, Including Refunds of Employee Contributions (5,779,040) (5,448,218) (5,288,251) (4,885,406) Administrative Expenses (109,029) (45,185) (83,511) - Other Changes in Fiduciary Net Position - - - - Net Change in Plan Fiduciary Net Position 7,381,167 (294,082) 794,119 10,201,721 Plan Fiduciary Net Position - Beginning 73,846,128 74,140,210 73,346,091 63,144,370 Plan Fiduciary Net Position - Ending (b)81,227,295$ 73,846,128$ 74,140,210$ 73,346,091$ Plan Net Pension Liability/(Asset) - Ending (a)-(b)49,582,316$ 45,249,444$ 40,143,128$ 38,723,345$ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 62.10%62.01%64.87%65.45% Covered Payroll 12,829,415$ 12,767,963$ 12,451,513$ 12,276,578$ Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 386.47%354.40%322.40%315.42% (2) Historical information is required only for measurement periods for which GASB 68 is applicable. (1) Measurement period 2020-21 (fiscal year 2021-2022) was the eighth year of implementation; therefore, only eight years are shown. 66 Schedule of Plan Contributions For Fiscal Year Ended June 30, Last Ten Fiscal Years(1) Actuarially Determined Contributions in Contribution Covered-Contributions as a Fiscal Contribution Relation to the Deficiency Employee Percentage of Covered- Year (ADC)(2)ADC(2)(Excess)Payroll(3)Employee Payroll(3) 2015 3,557,098$ (3,557,098)$ -$ 12,451,513$ 28.57% 2016 3,819,770 (3,819,770) - 12,767,963 29.92% 2017 4,105,810 (4,105,810) - 12,829,415 32.00% 2018 4,441,517 (4,441,517) - 12,969,485 34.25% 2019 4,906,983 (36,706,983) (31,800,000) 12,892,655 284.71% 2020 2,437,119 (2,437,119) - 13,383,715 18.21% 2021 2,765,952 (3,965,952) (1,200,000) 13,768,586 28.80% 2022 2,971,785 (3,960,785) (989,000) 14,148,052 28.00% (1) Historical information is required only for measurement periods for which GASB 68 is applicable. Notes to Schedule: Actuarial Cost Method Entry Age Normal Amortization Method/Period For details see June 30, 2018 Funding Valuation Report Asset Valuation Method Actuarial Value of Assets. For details see June 30, 2018 Funding Valuation Report Discount Rate 7.15% Inflation 2.50% Salary Increases Varies by Entry Age and Service Payroll Growth 2.75% Investment Rate of Return 7.00% Net of Pension Plan Investments and Administrative Expenses, includes inflation. Retirement Age Mortality (2)Employers are assumed to make contributions equal to the actuarially determined contributions.However,some employers may choose to make additional contributions toward their unfunded liability.Employer contributions for such plans exceed the actuarially determined contributions. (3) Includes one year’s payroll growth assumption using 2.75% payroll growth assumption for fiscal years 2018-2021; 3.00% payroll The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were from the June 30, 2019 public agency valuations. Also note, that some of the data from prior years were updated with the most current available information. The probabilities of Retirement are based on the 2017 CalPERS The probabilities of mortality are based on the 2017 CalPERS 67 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Board of Directors Otay Water District Spring Valley, California Independent Auditor’s Report We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Otay Water District (“the District”), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated October 19, 2022. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Attachment C Compliance and Other Matters As part of obtaining reasonable assurance about whether the District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California October 19, 2022 To the Board of Directors Otay Water District Spring Valley, California We have audited the financial statements of the Otay Water District (“the District”)as of and for the year ended June 30, 2022 and have issued our report thereon dated October 19, 2022. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated February 15, 2022, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the District solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied with all relevant ethical requirements regarding independence. We identified self-review threats to independence as a result of non-attest services provided. Those non-attest services included the preparation of the financial statements and recording journal entries detected during the audit process. To mitigate the risk,management has compared the draft financial statements and footnotes to the underlying accounting records to verify accuracy and has reviewed a disclosure checklist to ensure footnotes are complete and accurate. Attachment D Additionally, we utilize a quality control reviewer to perform a second review of journal entries and the financial statements. We believe these safeguards are sufficient to reduce the independence threats to an acceptable level. Significant Risks Identified We have identified implementation of Governmental Accounting Standards Board No. 87 – Leases as a significant risk. We compared the terms of the agreements to the information included in the calculation of the lease receivable, deferred inflows of resources and recognition of revenue and leases payable for 67% of outstanding balance. We have identified capital assets as a significant risk due to the significance of the balance. As a result, we ensured that asset additions are properly recorded and removed from construction in progress when completed. We reviewed 66% of the construction in progress balance to ensure projects were in fact, still in process and appropriately classified. We also recalculated current year depreciation expense and accumulated depreciation. Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the District is included in Note 1 to the financial statements. As described in Note 11 to the financial statements, the District changed accounting policies related to leases by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 87, Leases, in the fiscal year 2022.No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements are: Management’s estimate of which capital projects represent ordinary maintenance activities necessary to keep an asset operational for its originally intended useful life versus significant improvement, replacement, and life extending projects that should be capitalized as additions to capital assets is based on management’s knowledge of the assets and their useful lives. We evaluated the key factors and assumptions used to develop the amounts added to capital assets in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of transactions related to net pension liabilities based on actuarial information. We evaluated the key factors and assumptions used to develop the amounts by the actuary and determined that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of transactions related to net OPEB liabilities based on actuarial information. We evaluated the key factors and assumptions used to develop the amounts by the actuary and determined that it is reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the District’s financial statements were: The disclosure of pensions in note 7 of the financial statements. The disclosure of OPEB in note 8 to the financial statements. The financial statement disclosures are neutral, consistent, and clear. Significant Unusual Transactions For purposes of this communication, professional standards require us to communicate to you significant unusual transactions identified during our audit.There were no significant unusual transactions identified as a result of our audit procedures. Identified or Suspected Fraud We have not identified or have obtained information that indicates that fraud may have occurred. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit.There were no uncorrected misstatements that we identified as a result of our audit procedures. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were no material misstatements that we identified as a result of our audit procedures. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the District’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit. Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. There were none. Representations Requested from Management We have requested certain written representations from management, which are included in the attached letter dated October 19, 2022. Management’s Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with the District, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year,operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the District’s auditors. Restriction on Use This report is intended solely for the information and use of the Board of Directors and management of the District and is not intended to be and should not be used by anyone other than these specified parties. Irvine, California October 19, 2022 Otay Water District Spring Valley, California INDEPENDENT ACCOUNTANTS’ REPORT ON AGREED UPON PROCEDURES APPLIED TO INVESTMENTS FOR OTAY WATER DISTRICT We have performed the procedures enumerated below, in reviewing the Otay Water District’s (“the District”) compliance with the requirements of the Investment Policies as such requirements apply to the Investments of the District for the period July 1, 2021, through June 30, 2022. The District is responsible for compliance with the requirements as noted in the referenced Investment Policies. The District has agreed to acknowledge that the procedures performed are appropriate to meet the intended purpose of determining compliance by the District with respect to the Investment Policies for the period July 1, 2021, through June 30, 2022.This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The procedures performed, and the results of those procedures are as follows: 1.Obtain a copy of the District’s investment policy and determine that it is in effect for the fiscal year ended June 30, 2022. Results:At June 30, 2022 the current investment policy (Policy #27) is dated May 5, 2021. No exceptions were noted. 2.Select 4 investments held at year end and determine if they are allowable investments under the District’s Investment Policy. Results:No exceptions were noted as a result of applying the above procedure. 3.For the four investments selected in #2 above, determine if they are held by a third party custodian designated by the District. Results:No exceptions were noted as a result of applying the above procedure. 4.Confirm the par or original investment amount and market value for the four investments selected above with the custodian or issuer of the investments. Results:No exceptions were noted as a result of applying the above procedure. Attachment E Otay Water District Spring Valley, California Page 2 5. Select two investment earnings transactions that took place during the year and recompute the earnings to determine if the proper amount was received. Results:No exceptions were noted as a result of applying the above procedure. 6. Trace amounts received for transactions selected at #5 above into the District’s bank accounts. Results:No exceptions were noted as a result of applying the above procedure. 7. Select five investment transactions (buy, sell, trade or maturity) occurring during the year under review and determine that the transactions are permissible under the District’s investment policy. Results:No exceptions were noted as a result of applying the above procedure. 8. Review the supporting documents for the five investments selected at #7 above to determine if the transactions were appropriately recorded into the District’s general ledger. Results:No exceptions were noted as a result of applying the above procedure. We were engaged by Otay Water District to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the District’s accounting records. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures other matters might have come to our attention that would have been reported to you. We are required to be independent of the District and to meet our other ethical responsibilities in accordance with the relevant ethical requirement related to our agreed-upon procedures engagement. This report is intended solely for the information and use of management of Otay Water District and is not intended to be and should not be used by anyone other than those specified parties. Irvine, California October 19, 2022 November 02, 2022 Attachment F 2 Basic Financial Statements Unmodified opinion dated October 19, 2022 Implementation of GASB 87 –Leases Government Auditing Standards Opinion Letter to Those in Governance Agreed-Upon Procedures Report over Investments 3 Finance staff was prepared for the audit No material journal entries detected as a result of the audit procedures Noted no instances of noncompliance with laws and regulations that are direct and material to the financial statements No material weaknesses or significant deficiencies in internal controls 4 Cash Disbursement Testing Implementation of GASB 87 Capital Asset Testing Internal Controls and IT Assessment GASB 94 –Public-Private and Public- Public Partnerships –Effective for FY ending June 30, 2023 GASB 96 –Subscription Based Information Technology Arrangements – Effective for FY ending June 30, 2023 5 Shannon Ayala |Partner Davis Farr LLP |5927 Priestly Drive, Suite 201 |Carlsbad, CA 92008 Phone: Direct:760.298.5872 | Email:sayala@davisfarr.com STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 SUBMITTED BY: Jake Vaclavek, System Operations Manager PROJECT: Various DIV. NO. ALL APPROVED BY: Andrew Jackson, Chief of Operations Jose Martinez, General Manager SUBJECT: INFORMATIONAL ITEM – UPDATE ON THE DISTRICT’S LEAK DETECTION PROGRAM GENERAL MANAGER’S RECOMMENDATION: None. This is an informational item only. COMMITTEE ACTION: Please see “Attachment A.” PURPOSE: To update the Board on the District’s ongoing proactive Leak Detection Program. ANALYSIS: Proactive leak detection helps identify leaks before they become a larger problem, requiring immediate corrective action. When small leaks are discovered, they can be scheduled for a repair during normal working hours. Larger leaks and breaks, however, must be addressed when they occur, no matter the time of day and typically have increased damage to roads and easements. Finding leaks early also helps reduce water loss to the District and decreases non-revenue water. AGENDA ITEM 9a 2 This update is intended to provide details on the District’s proactive Leak Detection Program, that has been in place since 2013, and identify grant funding sources used and review emerging technologies in leak detection. The District’s proactive Leak Detection Program has identified 292 leaks that have been repaired by staff, resulting in an average annual savings of $54,000.00 per year from reduced water losses. FISCAL IMPACT: Joe Beachem, Chief Financial Officer No fiscal impact as this is an informational item only. STRATEGIC GOAL: This project helps support the District’s Mission Statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsible manner” and the General Manager’s Vision, "To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices." LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Presentation ATTACHMENT A SUBJECT/PROJECT: INFORMATIONAL ITEM – UPDATE ON THE DISTRICT’S LEAK DETECTION PROGRAM COMMITTEE ACTION: The Engineering, Operations, and Water Resources Committee reviewed this item at a meeting held on October 18, 2022 and the following comments were made: • Staff presented an informational item on an update for the District’s Leak Detection Program. • The Committee appreciated that the District is being proactive with leaks using this program since it is cost-effective to handle the leaks prior to them becoming a larger problem. Staff added that smaller service leaks typically cost about $3,000.00 to repair and if the District waits to make a repair the cost can average up to $6,000.00. On main lines, if those leaks are found in advance, the cost can be anywhere between $15,000.00 to $30,000.00 and if the repair does not get done in time, the cost to repair can be anywhere from $130,000.00 to $400,000.00 or more due to the nature of the damage this can cause. • In response to a question from the Committee, this program for the consultant to perform the leak detection is budgeted through the Operations budget and Utility Maintenance section will budget for the repairs, which are usually completed within a couple of days. In the last few years, the District has been able to use grant funds to offset some of the costs. General Manager Martinez added that when this project started about ten years ago, there were no grants available for something like this and it still made sense to budget for this program. Several years later, grant funds obtained through Engineering were available for water-savings initiatives and the District was able to use these grants for this type of program. • The Committee noted a leak detection presentation from April 2015 and pointed out a table that had a “cost-recovery” item and uses the cost of the survey and subtracts it from estimated water loss, for example, for 2015, it showed that the District spent $44,000.00 but saved $120,000.00 in water loss and illustrating a cost-savings for the District’s customers. • In response to a question from the Committee, this leak detection information has been provided in the District’s newsletter a couple of times and it is also available on the District's website under the “Water Efficiencies” page. • In response to a question from the Committee, the District does participate in “Operations Heads” meetings at San Diego County Water Authority and shares this information with other agencies. Staff noted that every year there are more and more questions regarding this program as other agencies are starting to perform this program. When discussing with the vendor that performs this service, they noted that the biggest struggle is that not many agencies go out to make the necessary repairs as the District does. • In response to a question from the Committee, there are several consultants that perform this type of work. Following the discussion, the Committee supported staffs’ presentation to the full board as an information item. Otay Water District Leak Detection and Repair Program Jake Vaclavek System Operations Manager November 2, 2022 ATTACHMENT B Introduction •An effective “Leak Detection and Repair Program” is one of the main components for water conservation and an important part of asset management. •Proactive leak detection provisions are currently included in SWRCB’s Water Loss Performance Standards draft regulatory language. •This presentation is intended to summarize the District’s efforts, used since 2013, regarding the proactive “Leak Detection and Repair Program.” Leak Detection Surveys 2013-2022 •2013: 70 miles surveyed •2014: 108 miles surveyed •2015: 167 miles surveyed •2016: 150 miles surveyed •2017: 242 miles surveyed •2018: 147 miles surveyed •2019: 166 miles surveyed •2020: 172 miles surveyed •2021: 168 miles surveyed •2022: 173 miles surveyed 1,563 total miles surveyed to date (189% of system) Leak Detection Campaign Process •Survey Area Selection •RFP Solicitation and PO Issuance •Outreach •Kickoff Meeting •Begin Survey •Daily Updates Provided to the District •Wrap-Up and Final Report How Are Leaks Found? •Correlation •Ground Microphones •Field Observations What if a Leak is Suspected? •District staff will physically verify if there is a suspicion of a leak. •If a leak is confirmed, then a repair is scheduled and completed within days of discovery and during normal working hours. •The precise location of the leak is shared with the leak detection company. Additional Benefits of Leak Detection •Identified broken lids or meter boxes •Paved over valve caps •Vegetation overgrowth •Missing fire hydrant caps •GIS map edits Grant Funding •From 2016 to 2021, the District has received $425,000.00 in funding used to cover the costs of surveys, repairs, and equipment related to leak detection. •Received MAAP funding through SDCWA and MWD’s Leak detection Grant Program for costs associated with leak detection and repairs during FY22 ($170/mile surveyed and $49/hour for repairs). What Have We Accomplished? Leaks found and repaired since 2013: 292 Total water saved by repairing leaks: 215 GPM (310,000 gal/day) Average annual savings from reduced water losses: $54,000/year What’s Next?Potential Technologies Include: •Technology improvements in PVC pipe leak detection •District Metered Areas (DMA’s) working in collaboration with AMI •Satellite Leak Detection Questions? STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Emilyn Zuniga Safety & Security Specialist APPROVED BY: Adolfo Segura, Chief, Administrative Services Jose Martinez, General Manager SUBJECT: UPDATE OF THE DISTRICT’S HAZARD MITIGATION ACTION PLAN GENERAL MANAGER’S RECOMMENDATION: No recommendation. This is an informational item only. COMMITTEE ACTION: Please see “Attachment A”. PURPOSE: To provide an update of the District’s Hazard Mitigation Action Plan. ANALYSIS: The Otay Water District (District) is exposed to natural and human- caused hazards. To mitigate the potential impacts of these hazards, the District has developed a draft of its local Hazard Mitigation Action Plan (Plan). This Plan is a living document that guides action over the next five (5) years and will be part of the San Diego County’s, and its partners', Multi-Jurisdictional Hazard Mitigation Plan (MJHMP). The District's Hazard Mitigation Plan will be included as an annex to the MJHMP. Hazard mitigation planning reduces loss of life and property by lessening the impact of disasters. A hazard mitigation plan increases AGENDA ITEM 9b 2 awareness of hazards, risks, vulnerabilities, identifies actions for risk reduction, and focuses local resources on the most significant dangers while communicating priorities to state and federal officials. The process further validates the District’s mitigation practice of our day-to-day decision-making about land use planning, watershed management, reservoir retrofits, site design, and other functions. Mitigation is an investment in the District's future safety and sustainability. Mitigation planning guides us to take action before a disaster occurs to reduce losses. The benefits of mitigation planning include: • Protecting public safety and preventing loss of life and injury. • Reducing damage to existing and future development. • Maintaining community continuity and strengthening the social connections that are essential for recovery. • Avoiding damage to our current environmental assets. • Minimizing downtime, accelerating recovery, and reducing financial costs. • Helping accomplish other District objectives, such as capital improvements, infrastructure protection, open space preservation, and economic resiliency. The local planning process and annex development consisted of an internal planning committee, which includes representatives from Engineering, Finance, Operations, Communications, and Administrative Services. The mitigation plan consists of: 1. Organizing the planning process and resources, which included reaching out to technical experts, defining the planning area, and identifying individuals, agencies, neighboring jurisdictions, businesses, and other partners to participate in the process. 2. Assessing risks, which identified the characteristics and potential consequences of the District's hazards. 3. Developing and updating mitigation strategies to set priorities and develop long-term strategies for avoiding or minimizing the undesired effects of disasters. 3 4. Adopting and implementing the Plan. Once the Cal Office of Emergency Services (Cal OES) and the Federal Emergency Management Agency (FEMA) approve the Plan, staff will present it to the Board of Directors for their review, endorsement, and adoption so that the mitigation actions outlined in the strategy can be implemented. The process and annex development were conducted from December 2021 through June 2022. Attached herein is the draft of the District's Hazard Mitigation Action Plan/Projects Matrix (“Attachment B”). FISCAL IMPACT: Joe Beachem, Chief Financial Officer Informational item only; no fiscal impact. STRATEGIC GOAL: Mitigation plans are a prerequisite for certain non-emergency disaster assistance, such as Hazard Mitigation Assistance (HMA) projects, including those funded by the Building Resilient Infrastructure and Communities program (BRIC). The District listed its mitigation strategies in the annex to qualify for BRIC funding instead of using internal capital improvement funds. This year, the County OES updated its MJMHP with input from county residents, officials, the San Diego Water County Water Authority, the Alpine and Rancho Santa Fe Fire Protection Districts, the Padre Dam Municipal Water District, Otay Water District, the San Diego Foundation, ICLEI, the Cal OES, and FEMA. During this update, the County informed agencies that did not have a local hazard mitigation plan (LHMP) that new partners could develop their LHMPs and be included in the County program. The advantage of the MJHMP is that it helps the County, and its partners, remain eligible for various types of pre-and post-disaster community assistance, such as grants from the FEMA and the State government. The process was facilitated by a County steering committee and had a robust public engagement. As a result, the District created its draft annex and, in June 2022, submitted it to the County to be included in their revised MJHMP. The MJHMP was submitted to Cal OES for review and approval in August. In the meantime, the County OES shared the MJHMP Base Plan with the Unified Disaster Council (UDC) for their review on October 6, 2022. The 4 updated Hazard Mitigation/MJHMP purpose and process will then be presented to the UDC on October 20, 2022, for a vote of UDC acceptance, even with Cal OES/FEMA plan edits pending. The UDC presentation and acceptance vote differ from the MJHMP adoption by the County of San Diego Board of Supervisors, which will mark FEMA- approved, regional adoption of the plan. After the Board of Supervisor approval, tentatively scheduled for February 2023, staff will be able to present the District’s annex for Board approval and adoption at the March or April 2023 Board Meeting. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Mitigation Action Plan Matrix Attachment C – PowerPoint Presentation ATTACHMENT A SUBJECT/PROJECT: UPDATE OF DISTRICT’S HAZARD MITIGATION ACTION PLAN COMMITTEE ACTION: This item was presented to the Finance and Administration Committee (Committee) at a meeting held on October 19, 2022. The following comments were made: • Staff highlighted that the Local Hazard Mitigation Plan (LHMP) is a living document. Once the District’s plan is approved it will be annexed into the County Office of Emergency Services Multi- Jurisdiction Hazard Mitigation Plan (MJHMP). • Eligibility for certain grants is one benefit of having a LHMP. One of the grants that the District has interest in applying to is the Building Resilience Infrastructure and Communities (BRIC) Grant. Grant recipients can receive up to $2.0M in funding for infrastructure improvements that would typically require internal funds. • The District’s proposed LHMP was developed without the use of consultants. Many agencies use consultants that can cost up to $100k. By utilizing the knowledge, expertise, and ideas of 13 key staff members the District developed the program in six months, half the typical amount of time needed. • In response to an inquiry from the Committee, staff indicated that the notice of interest period for the BRIC loans is in the fall and the notice of interest period for the Hazard Mitigation Grant Program (HMGP) loans is in the spring. Staff has been able to apply for one HMGP loan for a climate adaptation plan for the District. • Staff noted the District’s participation in the AWIA Risk and Resilience Assessment which aided staff in their pursuit to update our LHMP to address terrorism, cybersecurity, and drought. • The Committee commended staff on an amazing job preparing the LHMP in record time and for the incredibly detailed presentation. • The PowerPoint presented by staff at the Committee has been included in the staff report as “Attachment C” for the upcoming Board. Following the discussion, the Committee supported staffs’ presentation to the full board as an information item. SECTION 6 Develop a Mitigation Strategy 25 ATTACHMENT B PURPOSE & BACKGROUND •Local Hazard Mitigation Plan (LHMP) is a five-yearrisk mitigation plan. •Includes an assessment of the most significanthazardssuch has flood, dam failure,wildfire,earthquake, drought,climate change,severeweather, cyber threats,and terrorism. •County Office of Emergency Services Multi-Jurisdiction Hazard Mitigation Plan (MJHMP) ATTACHMENT C BENEFITS OF A LHMP •Supports District’s commitment toreduce and eliminate,the potentialrisks and impacts of natural andhuman-caused hazards to theagency’s communities, systemsand/or operations. •Increased access to FEMA grants TYPES OF GRANTS: Fire Mitigation Assistance Grants Hazard Mitigation Grant Program (HMA) Building Resilient Infrastructure and Communities (BRIC) Flood Mitigation Assistance (FMA) PROCESS Timeline: December 2021 –June 2022: •District Planning Team created. •Virtual Meetings a.District and County OES b.Hazards assessments and planning c.Hazard Mitigation Action Items Hazard Mitigation Plan –Final Draft Annex to the County Joint Hazard Mitigation Plan NEXT STEPS •Cal OES and FEMA August 2022 - Technical review •Unified Disaster Council (UDC) October 6, 2022 -County OES shared MJHMP with the October 20, 2022 -UDC Vote of Acceptance •OWD Finance and Administrative Committee Meeting October 19, 2022 –District Update NEXT STEPS cont. •Cal OES and FEMA Estimated in November 2022 –Final approval •OWD Finance and Administrative Committee Meeting March 2023 -Request for the Board to approve the District’s Annex into the County’s MJHMP •OWD Board Meeting April 2023 -Approval and Board Resolution QUESTIONS? STAFF REPORT TYPE MEETING:Regular Board MEETING DATE:November 2, 2022 SUBMITTED BY: Jose Martinez General Manager W.O./G.F. NO: N/A DIV. NO. N/A APPROVED BY: Jose Martinez, General Manager SUBJECT:General Manager’s Report GENERAL MANAGER •District’s Response to COVID-19 Pandemic – The District has had no impacts to its water supply and has maintained a continuity ofoperations and services during the challenging and dynamicenvironment. Staff continues to monitor and provide updates relating to responding to this pandemic, as needed, including but not limitedto water and wastewater services, supplies, operations, finances, and communication. The District remains committed to the safety of thepublic and its employees who continue to provide the public withessential services. Staff continue to monitor and comply with allFederal, State, and Local orders and guidelines including those thatare expected to be updated by California in December. ADMINISTRATIVE SERVICES: GIS: •Asset Management AI Tool: Fracta AI - The District recently adoptedFracta AI as one of its Asset Management tools to obtain projectionof asset conditions and risk factors. Staff has been loading the District’s asset data into Fracta AI along with leak and break data.Staff is working with Fracta AI staff to further verify work order related information for accuracy. Human Resources: •Open Enrollment – Held October 11 - 21. A virtual Open Enrollment meeting was held on October 18, 2022, at 3:00 pm. AGENDA ITEM 10 2 •Employee Appreciation Luncheon – The District held its EmployeeAppreciation Luncheon on Wednesday, October 26. This was a hybrid event that provided employees with lunch and the option to watch atan alternate location. The General Manager and Chiefs recognized employees for key work and accomplishments. •New Hires/Recruitments: o The District recently filled the following positions: Meter Services Supervisor Utility Worker I (one position) o The District is/will be recruiting for the followingpositions: Construction Inspector I/II Engineering Manager Reclamation Plant Operator I/II/III Utility Worker I/II IT Operations: •SCADA Upgrade Project – Working with the Operations SCADA team, staffcontinues to work with our SCADA consultant, Techknowsion, to complete enterprise software and hardware upgrades. The upgrade willinclude the latest program versions, reporting services, and datamigration from the present system to the new platform. After final testing and staff training, the upgrade is expected to be completedby November. •Phishing Campaign Assessment - The District is partnering with CISA(Cybersecurity and Infrastructure Security Agency) of the Department of Homeland Security to conduct a Phishing Campaign Assessment(PCA). The no-cost continuous service will parallel the District'scurrent email phishing campaign for social engineeringawareness. Staff will receive automated reports on click rates,deception levels, and user susceptibility. The service will begin later this month. Purchasing & Facilities: •District Administration Building Landscape Update – The District is soliciting landscape bids for the installation of updated irrigationsystems and new planting at the Administration Building entrance. Theexisting landscape installation is 30 years old and was initiallydesigned as a water conservation demonstration garden that outlined 3 typical “Xeriscape” water conservation measures promoted at that time. Over the years the landscape has established but is currently in need of an enhancement in design, materials, irrigation systems, and new available plant species that promote water conservation. The engineering estimate for preparation and installation is $176,795. At this budget level, the District is authorized per California Uniform Public Construction Cost Accounting Act (CUPCCAA) to procure bids informally from a select list of qualified bidders. The project will not be advertised as a formal public works bid project. The purpose of this landscape project is to update a low water use landscape demonstration garden of a variety of drought tolerant landscape plantings. Installation is anticipated to begin in late winter to early spring of calendar year 2023 following a final staff recommendation and Board approval. The project is funded under CIP P2638 Buildings and Grounds Refurbishments. 4 Safety & Security: • Emergency Management: o SDCWA Water Agencies Emergency Collaborative (WAEC) Group - Staff attended the semi-annual meeting and provided a security updated on behalf of InfraGard (private sector FBI partnership) and shared that OWD was able to successfully switch to generator power during the September heat wave and CAISO guidelines and flex alerts. • Safety Services and Training: o Annual Respiratory Fit Testing – Staff conducted the Cal OSHA annual respirator fit testing for Utility Maintenance staff. Fit testing confirms the fit of any respirator on the user's face before it is used in the workplace; proving a tight seal ensures that workers receive the expected level of protection. o Competent Person Inspections/Fall Personal Protective Equipment (PPE) – Cal/OSHA requires a competent person to inspect the staff’s PPE at least twice a year. The inspection guidelines are dictated by the manufacturer requirements. The affected groups included Operations and Engineering/Inspection. • Associations and Volunteer Program - Safety participated in the four- week InfraGard Sector Training Academy, which is a requirement for their role as the Water and Wastewater Sector Chief for the San Diego Chapter InfraGard. Again, InfraGard is a partnership between the FBI and the private sector. The objective of the training is to present Sector Chiefs with the Mission Model Canvas objectives, which is very similar to the District’s strategic objectives program. Safety interviewed four security professionals from the critical sectors and selected a problem, mission, and the deliverables to alleviate the security-related issues. FINANCE: • FY 2024 Budget – Staff is preparing to begin the FY 2024 Budget process, which will begin in early December. The tentative timeline is to bring the annual Economic Study to the April Board meeting, hold a Budget Workshop with the Board in late April or early May, and present the full budget for approval at the June Board meeting. 5 • FY 2022 Annual Financial Audit – The external audit firm, Davis Farr LLP, completed the audit work and issued an unqualified opinion. District staff is now preparing the transmittal letter and the statistical section of the Annual Comprehensive Financial Statement for review. Staff has also closed the first two fiscal periods of FY 2023 and is closing the month of September. The periods are partially left open until the audit opinion is issued, staff then reconciles and closes those periods from further financial postings. • Subscription-Based IT Arrangements (SBITAs), Accounting Pronouncement GASB 96 – The implementation of GASB 96 is now completed and business processes are in place to comply with the requirements of the Governmental Accounting Standards Board (GASB). GASB now directs governmental agencies to capitalize IT subscription services as a capital asset, offset with a liability, and then amortize the asset and liability. Finance has been working on the implementation plan including the creation of amortization schedules, fixed asset classes in EDEN, and other set-up requirements. Finance has worked with IT and Procurement to obtain copies of all contracts and agreements that renew or start in FY 2023. These agreements are necessary to determine which SBITAs are subject to the new accounting rule and require capitalization. Also, Finance received a confirmation that our auditors have accepted a capitalization threshold of $10,000; this threshold will help keep the list of SBITAs fairly short. • FEMA COVID-19 Grant – Finance staff completed the expense analysis for the District’s third round of expense reimbursements under the Federal Government’s “Safe Reopening - COVID-19 Response” grant funding. Under “Assistance for Category B COVID-19 Emergency Protective Measures, FEMA shall provide 100% Federal Cost Share.” The cost share only covers work performed from January 20, 2020 through July 2, 2022. This third submittal, which primarily covers expenses for COVID-19 testing and facility disinfection incurred between January 1, 2022 through July 1, 2022, totals $16,259.33. Staff will continue to track expenses after July 1, 2022, with the expectation that FEMA will share in some of the costs, but it will likely not be at 100%. • General Liability Insurance Renewal FY 2023 – The District received the FY 2023 renewal invoice from ACWA-JPIA, we had anticipated a 10-15% increase due to the hardening of the markets and the result of road repair work due to various main breaks. Our FY 2023 contribution to the JPIA is increasing by nearly 60%; however, we are still within 3% of our overall FY 2023 insurance budget. Furthermore, the JPIA has reimbursed the District and paid claimants nearly $2.0M between 2019 and 2022. Our liability contributions to the pool for that period were $1.6M. 6 • Low Income Household Water Assistance Program (LIHWAP) – The MAAC Project in San Diego is currently processing low income water assistance applications. Qualified customers can apply for assistance up to $2,000 on their past due water bills. As of October 20, Otay has received $5,775.34 to apply to nine customer accounts. Otay is advertising this program through social media and a bill insert. Customer Service representatives are also referring customers to the program who are struggling with making their water payment. Staff has received positive feedback from customers about how quick and easy it is to apply for assistance. The LIHWAP program allows a customer to apply only once for assistance and is scheduled to end in August 2023. • January 2023 Rate Testing - Staff has started testing the new 2023 rates. The new rates include quite a few changes to rate structures for customers therefore Customer Service, Finance, and IT will test multiple billing cycles throughout October and November to ensure all is correct for implementation in January. Financial Reporting: • The financial reporting for September 30, 2022 is as follows: o For the third month ending September 30, 2022, there are total revenues of $33,980,354 and total expenses of $32,253,944. The revenues exceeded expenses by $1,726,410. • The financial reporting for investments for September 30, 2022 is as follows: o The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of September 30, 2022 total $96,977,725 with an average yield to maturity of 1.861%. The total earnings year to date are $395,166. ENGINEERING AND WATER SYSTEM OPERATIONS: Engineering: • Vista Diego Hydropneumatic Pump Station Replacement and 12-inch Pipeline Replacement, 1530 Zone, Vista Diego Road: This project includes replacement of the existing Pump Station, which serves the small 1530 Pressure Zone, containing approximately thirty-seven (37) potable water meters and four (4) hydrants. The project also includes 1530 Pressure Zone distribution system improvements in support of the Pump Station replacement project. Since District staff took over the project with the intent that District staff will complete the remainder of the project in-house with support of the District’s as-needed consultants, the 30% redesign was completed and 7 a review meeting was held August 8, 2022. Task Orders were issued to as-needed electrical and structural engineer consultants on August 31, 2022 with the goal of reaching 60% design by October 2022. The project is within budget. (P2639 and P2680) • RWCWRF Disinfection System Improvements: The project involves the replacement of the chlorine gas disinfection system with an ultraviolet (UV) process at the Ralph W. Chapman Water Reclamation Facility. Consultant selection for design and construction support to Carollo Engineers was approved by the Board at the June 2021 Board Meeting. Design work initiated in July 2021. Monitoring of ultraviolet transmittance has been completed and analyzed for setting the design criteria for the UV equipment. Initial contact with the regulating state agencies has been made. Information on available equipment manufacturers has been assessed and pre-procurement procedures completed for designing the project around the Trojan UV system. A memorandum of understanding has been reached with Trojan for procuring the UV system through the construction contractor at a bid obtained cost. This will also prevent materials acquisition delays related to this equipment. The draft preliminary design report has been finalized and 60% design is in progress. (R2117 and R2157) • Melrose Ave and Oleander Ave PRSs and 980 Reservoirs Altitude Valve Vaults: This project involves the replacement of two (2) 1960’s era pressure reducing stations in Chula Vista and the renovations of the 980-1 & -2 Reservoirs altitude valve vaults. The Board approved awarding a contract to CCL Contracting at the May 5, 2021 Board Meeting. The project is complete, and all checklist items have been finished. Final CO#4 has been executed and the NOC process is underway. The projects are within budget. (P2605, P2627, & P2671) • Olympic Parkway Recycled Water Line Replacement: Several main breaks within the past year of the 20-inch recycled water line in Olympic Parkway between Heritage Road and La Media Road resulted in the establishment of this Capital Improvement Program Project at the May 2021 Board meeting. The engineering firm, NV5, has been selected to design the replacement waterline using the District’s As-Needed Engineering Design Services contract. The project is out for bids, with a construction contract expected to be brought to the Board of Directors at their January 2023 meeting. Submission to the City of Chula Vista for permits has been made. Consideration was given to potentially using trenchless installation, but several drawbacks and limitations eliminated it from selection. Traffic control design was handled through the As-Needed Traffic Engineering Services contract and is substantially complete. (R2159) • Paso de Luz and Vista Sierra Waterlines Replacement: The existing 1950’s steel water lines in the Hillsdale area have been identified for replacement due to past failures. Under this contract, the water 8 line between Vista Grande and Vista Sierra will be replaced. Included in this project is the replacement of a water line between Paso de Luz and Telegraph Canyon Road in Chula Vista that is located in an easement on an embankment. The water line has been isolated due to a leak, removing the redundancy for this neighborhood. Bids were opened in February with the construction contract approved by the Board at the April meeting. A limited notice to proceed was provided in May 2022 to begin material acquisition. Pre-con was held on August 3, 2022 and the formal notice to proceed was issued on August 8, 2022. Construction is expected to start in November 2022. The project is within budget. (P2612 & P2616) • 1655-1 Reservoir & Rancho Jamul Hydropneumatic Pump Station: This project consists of constructing a new 0.5 MG prestressed concrete potable water tank in Jamul and modifying the existing Rancho Jamul Hydropneumatic Pump Station (HPS) to become the permanent Pump Station to feed the new 1655-1 Reservoir. The project also includes replacing approximately 1,500 linear feet of existing pipe that will be experiencing pressure over the rated pressure class under the new configuration. Richard Brady and Associates (Brady) delivered the 60% design on July 6, 2022. Staff provided comments back to Brady on September 7, 2022. Brady is working toward 90% design. The project is on schedule and within budget. (P2040, P2642, & P2681) • Recycled Water Pipeline Cathodic Protection Improvements: This project includes repairs to existing cathodic protection systems, such as anode replacement and cathodic test station repairs for recycled water pipelines located in the Central Area. The project advertised for bid in March 2022 and was awarded at the June 8, 2022 Board Meeting. The contract was executed, the NTP was issued for August 1, 2022, and the pre-construction meeting was held. Construction is anticipated to begin upon delivery of materials in early November 2022. Project completion date is anticipated by February 7, 2023. The project is within budget. (R2146) • Advanced Metering Infrastructure Upgrade Project: Advertisement for bids anticipated early November 2022 with Board approval to award a contract in early 2023. (P2682) • San Miguel Habitat Management Area: The District was informed that our San Miguel HMA Threat Reduction grant application under the SANDAG TransNet Environmental Mitigation Program Land Management Grant Program has been recommended for award. Of the eleven projects they are recommending for funding, the District’s application had the fourth highest ranking. The award amount is $78,593.80 for this project. The project will reduce threats to sensitive species found within the HMA's Diegan coastal sage scrub and grassland habitats. This will be accomplished through implementation of a variety of deterrent and education-oriented strategies to reduce threats and prevent disturbance to vulnerable habitats on the HMA. The 9 recommendations for award will be taken to the SANDAG Board for approval and the agreement with SANDAG will be executed in the Fall of 2022. This grant does not require matching funds from the District. • Sweetwater Authority and Otay Water District Intertie Feasibility Grant: The resolution to accompany the grant application has been approved by the Board at their October 5, 2022 Board meeting. The application to the State for the feasibility study grant funding will be submitted soon. • FY 2023 Sewage Flows to Metro vs Planned Capacity: The Metro Amended and Restated Regional Wastewater Disposal Agreement became effective at the start of FY 2023. The District’s annual capacity of 0.38 MGD (139 MG) is now in effect, though the District would need to exceed this capacity for three (3) consecutive years before additional capacity must be acquired. Metro capacity was set based upon the District’s sewer system requirements through planning year 2050. The Ralph W. Chapman Water Reclamation Facility continues to operate at a productive level since the start of the fiscal year as indicated in the graph below. • Summary of Budgeted and Sold Meters and EDUs for Fiscal Year 2023 up through September 30, 2022: 10 Water System Operations: • On Wednesday, September 21st, staff performed a planned shutdown in La Mesa and replaced valves for the second phase of the Fury Lane CIP valve replacements. Staff replaced five valves by installing a new three-way tee with three (3) 12-inch valves, one (1) 12-inch line valve, and one (1) eight-inch valve for a cul-de-sac. Thrust blocks and support pads were poured and excavations were plated to be backfilled the following day. The shutdown lasted 10 hours and affected 34 meters. Four water trailers were available on site for those affected. • On Thursday, September 22nd, staff relocated two electric motors to different positions at the 980-2 Pump Station to test their operating conditions. After testing concluded, both motors were found to be in good operating condition. • On Monday, September 26th, staff completed vibration testing at all pump stations. Vibration testing is important and an effective method of detecting the health of pumps and motors. Vibration data can help the District identify faults or detect warning signs of potential failures. It can also aid in the detection of misalignment or imbalance of assets, such as bearings and rotating pieces of equipment. • On Wednesday, September 28th, staff performed a planned shutdown to replace four water distribution system valves. These valves were identified with having excessive leak by during routine valve maintenance in the Fury Lane area in La Mesa. Water isolation valves are critical components of a water distribution systems for separating pipe segments from the network for repair and maintenance purposes. The shutdown lasted nine hours and affected 13 meters with four water trailers available for those affected. • The following events occurred on Friday, September 30th: o Staff coordinated the synchronization and calibration of the #4 MOV (Motor Operated Valve) equipment at the 980-2 Pump Station. After completing the scheduled calibration, motor #4 operated with no issues. Date Meters (Budgeted) Meters Sold (Actual) EDUs (Budgeted) EDUs Sold (Actual) Total $ Collected (Budgeted) Total $ Collected (Actual) September 2022 25.7 12 66.9 36.5 $206,750 $460,264 Totals FY 2023 77.0 35 200.6 72.5 $620,250 $999,512 11 o Staff responded to an after-hours call at the 1655 Jamul Hydro Station since it was operating with a low-pressure alarm. After troubleshooting, a mechanical failure was found in the equipment and was resolved. The hydropneumatic was placed back online. o Mexico water deliveries ended, and the targeted water deliveries were met at 9:00 am. The International boundary Water and International Water Commission (IBWC) and (Comision Estatal de Servicios Publicos de Tijuana) CESPT representatives were on site to verify the final totalizer meter read. • The following events occurred on Monday, October 3rd: o Staff responded to two main breaks on the 12-inch CML&C line on Lyons Valley Road in Jamul. Stand-by staff received a call at 12:00 a.m. and responded to the first of the two 12-inch main breaks. Staff arrived on site around 2:00 a.m. and secured the site by setting up traffic control to divert the traffic. At 5:00 a.m., Water Systems Operators isolated the needed valves to locate the first break. While excavating the first break, another section of 12-inch CML&C had blown out about 800 feet north from the first location. Staff exposed the damaged pipe and removed four-foot sections on both locations. A welder was required to weld 12-inch flanges on each side of the steel main at both locations. Both repairs were made using four feet of 12-inch C900 DR14 and two Romac Macro FC’s. Staff grouted the exterior of the steel pipe that was removed for welding purposes and backfilled using DG then Class 2 Base mix. Water Systems staff loaded and flushed the line while Utility Maintenance staff placed temporary asphalt on the patches, then cleaned and secured the site. The outage lasted 28 hours and affected 18 meters with one water trailer available on site for those affected. o During routine inspections, staff found that the foundation to one of the pumps was creating alignment issues due to corrosion damage at the Cottonwood Sewer Lift Station. Repairs were required to keep the lift station running and staff coordinated this work with a certified welder. This temporary repair was crucial to keep the lift station in operating condition. The lift station is on the Capital Improvement Projects (CIP) list to be refurbished in the near future. o The Programmable Logic Controller (PLC) at the 870-1 High Head Pump Station was upgraded to the latest and the District’s most standardized model. The proactive upgrade of PLCs to the newest model assists with maintaining the District’s automation infrastructure to ensure the components are up to date with the latest technologies and functionality and prevents older equipment from reaching obsolescence while still in operation in the system. • On Tuesday, October 4th, pump #4 failed to start on the 980-2 Pump Station. After two days of troubleshooting, staff was able to get it back up and running by replacing a relay board on the Motor Control Center. 12 • On Wednesday, October 5th, staff assisted the Fleet Shop with testing of the emergency generators in the Administrative, Operations, and Warehouse buildings. This was an important test to ensure that the equipment was in working condition and ready when it is needed. Staff did not find any issues in the Operations and Warehouse generators. The Administrative generator had a loose potentiometer that was creating light flickering issues in the Administration building when the generator ran. Staff tightened it up and resolved the problem with no further issues found. • On Saturday, October 8th, staff responded to an emergency leak on a poly service line at 1127 Paseo Sierra Drive in Chula Vista. Staff replaced the service and backfilled the excavation. • On Tuesday, October 11th, staff completed wiring of two parallel generators at the 832-1 Pump Station, to allow for the capacity to operate two pumps at the same time in the event of a power outage by SDG&E. This was performed due to a fuel pump leak, and it was required to be placed offline to complete the repair. The generator will be placed back in service when repairs are completed next month. • On Thursday, October 13th, staff performed a planned shutdown to replace three water distribution system valves. These valves were identified with having excessive leak by during routine valve maintenance in the Fury Lane area in La Mesa. Water isolation valves are critical components of a water distribution systems for separating pipe segments from the network for repair and maintenance purposes. The shutdown lasted nine and a half hours and affected 56 meters with four water trailers available for those affected. Purchase and Change Orders: • The following table summarizes purchases and change orders issued during the period from October 5, 2022 through October 18, 2022 that were within staff signatory authority: Date Action Amount Project Contractor/ Consultant/ Vendor 10/5/2022 P.O. $57,174.84 FY2023 WORKERS’ COMP PROGRAM (QTR 1) ACWA JPIA 10/7/2022 P.O. $2,000.00 FY2023 CONSULTING SERVICES LINDSAY POLIC CONSULTING, INC. 10/18/2022 C.O. $36,909.33 MELROSE & OLEANDER PRS AND 980 VALVE VAULTS CCL CONTRACTING 13 Water Conservation and Sales: • Water Conservation – September 2022 usage was 18% lower than September 2013 usage. Since September 2021, customers have saved an average of 9% over 2013 levels. • Conservation 2020 vs Present – On July 8, 2021, Governor Gavin Newsom called on Californians to voluntarily reduce water use by 15%. The benchmark year for comparison is 2020. The chart below shows the difference in usage since July 2021. September 2022 usage was 4% lower than September 2020. Since July 2021, customer usage decreased .33% compared to 2020 levels. San Diego experienced above average rainfall in the winter of 2020 and below average rainfall in 2022. 14 • Potable Water Purchases – The September potable water purchases were 2,736 acre-feet which is 10.0% below the budget of 3,041 acre-feet. Year-to-date potable purchases are 8,781 acre-feet, which is 2.6% below the cumulative budget of 9,014 acre-feet. • Recycled Water Purchases – The September recycled water purchases from the City of San Diego and production at the District’s treatment facility were 455 acre-feet which is 6.2% below the budget of 485 acre-feet. Year-to-date recycled purchases and production are 1,490 acre-feet, which is 2.4% above the cumulative budget of 1,455 acre-feet. 15 • Rainfall for the month of September and year to date can be seen in the table below. Potable, Recycled, and Sewer (Reporting up to the month of September): • Total number of potable water meters: 51,557. • Total number of sewer connections: 4,740. • Recycled water consumption for the month of September: o Total consumption: 511.50 acre-feet or 166,662,628 gallons. o Average daily consumption: 5,555,420 gallons per day. o Total cumulative recycled water consumption since September 1, 2021: 1,528.5 acre-feet. o Total number of recycled water meters: 770. • Wastewater flows for the month of September: o Total basin flow: 1,540,333 gallons per day.  This is a decrease of .73 percent from September 2021. o Spring Valley Sanitation District flows to Metro: 513,444 gallons per day. Rainfall September Y-T-D Actual 0.65 0.65 Historical Average 0.20 0.28 Variance 0.45 (220%) 0.37 (132%) 16 o Total Otay flow: 1,026,833 gallons per day. o Flow processed at the Ralph W. Chapman Water Recycling Facility: 968,733 gallons per day. o Flow to Metro from Otay Water District: 58,633 gallons per day. o By the end of September there were 6,752 wastewater EDUs. Exhibit A Annual YTD REVENUES: Budget Actual Budget Variance Var % Potable Water Sales 61,958,000$ 18,423,470$ 18,621,000$ (197,530)$ (1.1%) Recycled Water Sales 10,217,000 4,058,892 3,864,100 194,792 5.0% Potable Energy Charges 2,721,000 826,016 851,900 (25,884) (3.0%) Potable System Charges 15,168,000 4,477,823 4,461,000 16,823 0.4% Potable MWD & CWA Fixed Charges 13,547,000 3,466,136 3,405,000 61,136 1.8% Potable Penalties and Other Fees 914,000 270,081 287,782 (17,701) (6.2%) Total Water Sales 104,525,000 31,522,418 31,490,782 31,636 0.1% Sewer Charges 3,284,000 790,128 786,990 3,138 0.4% Meter Fees 170,000 16,636 42,600 (25,964) (60.9%) Capacity Fee Revenues 2,311,000 607,413 577,800 29,613 5.1% Non-Operating Revenues 2,523,100 804,976 591,000 213,976 36.2% Tax Revenues 5,310,000 163,053 133,200 29,853 22.4% Interest 495,000 75,730 123,750 (48,020) (38.8%) Total Revenues 118,618,100$ 33,980,354$ 33,746,122$ 234,232$ 0.7% EXPENSES: Potable Water Purchases 44,250,000$ 13,071,445$ 13,449,000$ 377,555$ 2.8% Recycled Water Purchases 5,487,000 2,316,801 2,316,801 - 0.0% CWA-Infrastructure Access Charge 2,998,000 772,296 772,200 (96) (0.0%) CWA-Customer Service Charge 1,881,000 466,542 466,500 (42) (0.0%) CWA-Reliability Charge 3,003,000 736,863 736,800 (63) (0.0%) CWA-Emergency Storage Charge 4,711,000 1,177,804 1,177,800 (4) (0.0%) MWD-Capacity Res Charge 762,000 210,815 210,900 85 0.0% MWD-Readiness to Serve Charge 685,000 153,389 163,200 9,811 6.0% Subtotal Water Purchases 63,777,000 18,905,955 19,293,201 387,246 2.0% Power Charges 3,893,000 1,211,303 1,267,000 55,697 4.4% Payroll & Related Costs 22,649,100 5,634,623 5,989,000 354,377 5.9% Material & Maintenance 4,132,600 1,027,110 1,033,300 6,190 0.6% Administrative Expenses 7,602,700 1,255,696 1,890,900 635,204 33.6% Legal Fees 455,000 196,647 113,700 (82,947) (73.0%) Expansion Reserve 684,800 171,210 171,210 - 0.0% Replacement Reserve 8,393,600 2,098,500 2,098,500 - 0.0% OPEB Trust 2,080,900 520,200 520,200 - 0.0% General Fund Reserve 40,400 10,200 10,200 - 0.0% Rate Stabilization Reserve 19,000 - - - 0.0% Total Expenses 118,618,100$ 32,253,944$ 33,609,711$ 1,355,767$ 4.0% EXCESS REVENUES(EXPENSE) -$ 1,726,410$ 136,411$ 1,589,999$ OTAY WATER DISTRICT COMPARATIVE BUDGET SUMMARY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 F:/MORPT/FS2023-P3 10/19/2022 12:39 PM The year-to-date actual net revenues through September show a positive variance of $1,726,410. COMPARATIVE BUDGET SUMMARY NET REVENUE AND EXPENSES FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 ‐$1,600,000 ‐$1,400,000 ‐$1,200,000 ‐$1,000,000 ‐$800,000 ‐$600,000 ‐$400,000 ‐$200,000 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000  JUL  AUG  SEP  OCT  NOV  DEC  JAN  FEB  MAR  APR  MAY  JUN YTD Actual Net Revenues YTD Budget Net Revenues YTD Variance in Net Revenues STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 02, 2022 SUBMITTED BY: Jose Martinez General Manager W.O./G.F. NO: DIV. NO. SUBJECT: General Manager’s Report ADMINISTRATIVE SERVICES AND FINANCE: Finance: The financial reporting for investments for September 30, 2022 is as follows:  The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of September 30, 2022 total $96,977,725 with an average yield to maturity of 1.861%. The total earnings year to date are $395,166. $1,159,730 1.15% $71,697,132 71.18% $27,870,677 27.67% Otay Water District Investment Portfolio: 09/30/2022 Banks (Passbook/Checking/CD)Pools (LAIF & County) Agencies & Money Market Mutual Funds Total Cash and Investments: $100,727,539 (Book Value) July FY22 Aug FY22 Sep FY22 1st Qtr FY22 Oct FY22 Nov FY22 Dec FY22 2nd Qtr FY22 Jan FY22 Feb FY22 Mar FY22 3rd Qtr FY22 Apr FY22 May FY22 June FY22 4th Qtr FY22 July FY23 Aug FY23 Sep FY23 1st Qtr FY23 Otay 0.57 0.59 0.57 0.58 0.54 0.52 0.52 0.53 0.52 0.57 0.62 0.57 0.80 0.91 1.10 0.94 1.32 1.46 1.74 1.50 LAIF 0.22 0.22 0.21 0.20 0.20 0.20 0.21 0.20 0.23 0.28 0.37 0.29 0.52 0.68 0.86 0.69 1.09 1.28 1.51 1.29 Difference 0.35 0.37 0.36 0.38 0.34 0.32 0.31 0.32 0.29 0.29 0.25 0.28 0.28 0.23 0.24 0.25 0.23 0.18 0.23 0.21 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 Re t u r n o n I n v e s t m e n t s Month Performance Measure FY-23 Return on Investment Otay LAIF Difference Target: Meet or Exceed 100% of LAIF OTAY WATER DISTRICT INVESTMENT PORTFOLIO REVIEW September 30, 2022 INVESTMENT OVERVIEW & MARKET STATUS: At the Federal Reserve Board's regular scheduled meeting on September 21, 2022, the Committee increased the target range for the federal funds rate from 2.25%-2.50% to 3.00% -3.25% and anticipates that ongoing increases in the target range will be appropriate. The Committee's long-term goal is to attain maximum employment and inflation of 2%. The Committee will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities, as outlined in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet issued in May. The Committee will continue to observe the effects of incoming information on the economic outlook. In determining the timing and size of future adjustments to the target range for the federal funds rate, they went on to say: "the Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments." The District's effective rate of return for September 2022 was 1.74%, twenty-eight basis points higher than the previous month. LAIF's return was twenty-three basis points higher than the last month, reaching an average effective yield of 1.51% for September 2022. Based on our success at maintaining a competitive rate of return on our portfolio during this extended period of low-interest rates, no changes in investment strategy regarding returns on investment are being considered. Under the District's Investment Policy, all District funds continue to be managed based on the objectives, in priority order, of safety, liquidity, and return on investment. PORTFOLIO COMPLIANCE: September 30, 2022 Investment State Limit Otay Limit Otay Actual 8.01: Treasury Securities 100% 100% 0 8.02: Local Agency Investment Fund (Operations) $75 Million $75 Million $26.85 Million 8.03: Federal Agency Issues 100% 100% $27.73 Million 8.04: Certificates of Deposit 30% 15% 0 8.05: Short-Term Commercial Notes 25% 10% 0 8.06: Medium-Term Commercial Debt 30% 10% 0 8.07: Money Market Mutual Funds 20% 10% 0.14% 8.08: San Diego County Pool 100% 100% 44.52% 12.0: Maximum Single Financial Institution 100% 50% 1.15% Month End Portfolio Management September 30, 2022 Portfolio Summary % of Portfolio Book ValueInvestmentsMarket Value Par Value Days to MaturityTerm YTM 360 Equiv. YTM 365 Equiv. Federal Agency Issues- Callable 8,991,726.32 7189.03 2.5255878,728,900.009,000,000.00 2.560 Federal Agency Issues - Bullet 18,736,887.39 1,01818.82 2.42385517,896,350.5618,796,000.00 2.457 Money Market 142,063.24 10.14 1.9631142,063.24142,063.24 1.990 Local Agency Investment Fund (LAIF)26,854,333.06 126.97 1.492126,337,681.5326,854,333.06 1.513 San Diego County Pool 44,842,799.49 145.04 1.657142,713,000.0044,842,799.49 1.680 99,567,809.50 100.00%Investments 95,817,995.3399,635,195.79 257 215 1.836 1.861 Cash (not included in yield calculations)Passbook/Checking 1,159,729.70 1 0.68611,159,729.701,159,729.70 0.695 100,727,539.20Total Cash and Investments 96,977,725.03100,794,925.49 257 215 1.836 1.861 Current Year September 30 144,820.69 Fiscal Year To Date 395,166.24 Average Daily Balance Effective Rate of Return 101,551,221.38 104,603,946.51 1.50%1.74% Total Earnings Month Ending I hereby certify that the investments contained in this report are made in accordance with the District Investment Policy Number 27 adopted by the Board of Directors on May 11, 2022. The investmentsprovide sufficient liquidity to meet the cash flow requirements of the District for the next six months of expenditures. __________________________________________________ ____________________Joseph Beachem, Chief Financial Officer Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Reporting period 09/01/2022-09/30/2022 Run Date: 10/20/2022 - 09:37 PM (PRF_PM1) 7.3.0 Report Ver. 7.3.5 10/20/2022 YTM 360 Page 1 Par Value Book Value Maturity Date Stated RateMarket Value September 30, 2022 Portfolio Details - Investments Average BalanceIssuer Portfolio Management Month End Days to MaturityS&PCUSIP Investment # Purchase Date Federal Agency Issues- Callable 1.294Federal Home Loan Bank2395 2,000,000.00 1,991,726.32 07/26/20241.08002/03/2022 1,878,340.00 AA3130AQL68 664 1.973Federal Home Loan Bank2396 2,000,000.00 2,000,000.00 03/28/20242.00003/30/2022 1,925,440.00 AA3130ARE31 544 2.615Federal Home Loan Bank2398 2,000,000.00 2,000,000.00 02/16/20242.65005/16/2022 1,947,920.00 AA3130ARWD9 503 3.652Federal Home Loan Bank2401 3,000,000.00 3,000,000.00 06/13/20243.70009/13/2022 2,977,200.00 AA3130AT4S3 621 8,991,726.328,728,900.009,000,000.007,791,543.16Subtotal and Average 2.525 587 Federal Agency Issues - Bullet 2.855Federal Farm Credit Bank2397 2,000,000.00 1,992,918.00 04/25/20252.75004/26/2022 1,927,660.00 AA3133ENVC1 937 4.261Federal Farm Credit Bank2402 3,000,000.00 2,994,155.42 09/30/20254.25009/30/2022 2,989,890.00 AA3133ENP95 1,095 3.361Federal Home Loan Bank2399 3,000,000.00 2,999,120.00 09/01/20233.37509/01/2022 2,974,830.003130AT5B9 335 3.449Federal Home Loan Bank2400 3,000,000.00 2,994,101.32 06/14/20243.37509/08/2022 2,950,470.00 AA3130AT4D6 622 0.612Federal Home Loan Mortgage2391 1,045,000.00 1,037,451.73 09/23/20250.37509/16/2021 931,993.70 AA3137EAEX3 1,088 0.618Federal Home Loan Mortgage2392 2,751,000.00 2,730,718.73 09/23/20250.37509/22/2021 2,453,506.86 AA3137EAEX3 1,088 0.996Federal National Mortage Assoc2393 2,000,000.00 2,027,378.71 01/07/20251.62512/09/2021 1,886,920.00 AA3135G0X24 829 1.129Federal National Mortage Assoc2394 2,000,000.00 1,961,043.48 11/07/20250.50012/15/2021 1,781,080.00 AA3135G06G3 1,133 18,736,887.3917,896,350.5618,796,000.0015,143,286.50Subtotal and Average 2.423 855 Money Market 2.012Blackrock T - Fund Inst9010 8,233.97 8,233.97 2.0408,233.97RESERVE-10A WRB 1 2.012Blackrock T - Fund Inst9011 16,009.12 16,009.12 2.04016,009.12RESERVE 10 BABS 1 1.953FIRST AMERICAN US TREASURY9016 117,820.15 117,820.15 1.980117,820.15OWD TRUST & CUS 1 142,063.24142,063.24142,063.24212,813.86Subtotal and Average 1.963 1 Local Agency Investment Fund (LAIF) 1.492STATE OF CALIFORNIA9001 26,854,333.06 26,854,333.06 1.51326,337,681.53LAIF 1 26,854,333.0626,337,681.5326,854,333.0620,520,999.73Subtotal and Average 1.492 1 San Diego County Pool 1.657San Diego County9007 44,842,799.49 44,842,799.49 1.68042,713,000.00SD COUNTY POOL 1 44,842,799.4942,713,000.0044,842,799.4954,842,799.49Subtotal and Average 1.657 1 101,551,221.38 99,635,195.79 1.836 21595,817,995.33 99,567,809.50Total and Average Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 PM (PRF_PM2) 7.3.0 Report Ver. 7.3.5 YTM 360 Page 2 Par Value Book Value Stated RateMarket Value September 30, 2022 Portfolio Details - Cash Average BalanceIssuer Portfolio Management Month End Days to MaturityS&PCUSIP Investment # Purchase Date Union Bank 0.000STATE OF CALIFORNIA9002 100.02 100.02100.02UNION MONEY 1 0.000STATE OF CALIFORNIA9003 2,950.00 2,950.002,950.00PETTY CASH 1 0.740STATE OF CALIFORNIA9004 1,074,794.85 1,074,794.85 0.7501,074,794.85UNION OPERATING 1 0.000STATE OF CALIFORNIA9005 28,774.71 28,774.7107/01/2022 28,774.71PAYROLL 1 0.000STATE OF CALIFORNIA9014 53,110.12 53,110.1207/01/2022 53,110.12UBNA-FLEX ACCT 1 0.00 101,551,221.38 100,794,925.49 1.836 215 1Average Balance 96,977,725.03 100,727,539.20Total Cash and Investments Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 PM (PRF_PM2) 7.3.0 Month End Activity Report Sorted By Issuer September 1, 2022 - September 30, 2022 Current Rate Transaction Date Balance Beginning Balance Ending Par Value Percent of Portfolio Par Value CUSIP Investment # Issuer Purchases or Deposits Redemptions or Withdrawals Issuer: Blackrock T - Fund Inst Money Market Blackrock T - Fund Inst9010 1,970.072.040 0.00RESERVE-10A WRB Blackrock T - Fund Inst9011 5,176.622.040 0.00RESERVE 10 BABS 0.0017,096.40 24,243.09Subtotal and Balance 7,146.69 7,146.69 0.0017,096.40 24,243.090.024%Issuer Subtotal Issuer: STATE OF CALIFORNIA Union Bank STATE OF CALIFORNIA9004 2,212,155.520.750 1,942,384.05UNION OPERATING STATE OF CALIFORNIA9005 0.00 352,931.36PAYROLL STATE OF CALIFORNIA9014 0.00 4,697.76UBNA-FLEX ACCT 2,300,013.171,247,587.35 1,159,729.70Subtotal and Balance 2,212,155.52 Local Agency Investment Fund (LAIF) STATE OF CALIFORNIA9001 15,500,000.001.513 14,400,000.00LAIF 14,400,000.0025,754,333.06 26,854,333.06Subtotal and Balance 15,500,000.00 17,712,155.52 16,700,013.1727,001,920.41 28,014,062.7627.793%Issuer Subtotal Issuer: FIRST AMERICAN US TREASURY Money Market FIRST AMERICAN US TREASURY9016 6,020,229.881.980 8,990,726.25OWD TRUST & CUS 8,990,726.253,088,316.52 117,820.15Subtotal and Balance 6,020,229.88 6,020,229.88 8,990,726.253,088,316.52 117,820.150.117%Issuer Subtotal Issuer: Federal Farm Credit Bank Federal Agency Issues - Bullet Federal Farm Credit Bank2402 3,000,000.004.250 09/30/2022 0.003133ENP95 0.002,000,000.00 5,000,000.00Subtotal and Balance 3,000,000.00 Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 DA (PRF_DA) 7.2.0 Report Ver. 7.3.5 Current Rate Transaction Date Balance Beginning Balance Ending Par Value Page 2 Percent of Portfolio Par Value September 1, 2022 - September 30, 2022 Activity Report Month End CUSIP Investment # Issuer Purchases or Deposits Redemptions or Withdrawals 3,000,000.00 0.002,000,000.00 5,000,000.004.961%Issuer Subtotal Issuer: Federal Home Loan Bank Federal Agency Issues- Callable Federal Home Loan Bank2401 3,000,000.003.700 09/13/2022 0.003130AT4S3 0.006,000,000.00 9,000,000.00Subtotal and Balance 3,000,000.00 Federal Agency Issues - Bullet Federal Home Loan Bank2399 3,000,000.003.375 09/01/2022 0.003130AT5B9 Federal Home Loan Bank2400 3,000,000.003.375 09/08/2022 0.003130AT4D6 0.000.00 6,000,000.00Subtotal and Balance 6,000,000.00 9,000,000.00 0.006,000,000.00 15,000,000.0014.882%Issuer Subtotal Issuer: Federal Home Loan Mortgage Federal Agency Issues - Bullet 3,796,000.00 3,796,000.00Subtotal and Balance 0.00 0.003,796,000.00 3,796,000.003.766%Issuer Subtotal Issuer: Federal National Mortage Assoc Federal Agency Issues - Bullet 4,000,000.00 4,000,000.00Subtotal and Balance 0.00 0.004,000,000.00 4,000,000.003.968%Issuer Subtotal Issuer: San Diego County San Diego County Pool San Diego County9007 0.001.680 12,000,000.00SD COUNTY POOL 12,000,000.0056,842,799.49 44,842,799.49Subtotal and Balance 0.00 0.00 12,000,000.0056,842,799.49 44,842,799.4944.489%Issuer Subtotal 102,746,132.82 100,794,925.49Total 37,690,739.4235,739,532.09100.000% Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 DA (PRF_DA) 7.2.0 Report Ver. 7.3.5 Month End Duration Report Sorted by Investment Type - Investment Type Through 09/30/2022 Investment #Security ID Issuer Investment Class Book Value Par Value Market Value Current Rate YTM Current Yield Maturity/ Call Date Duration Modified 360Fund Federal Home Loan Bank2395 99 2,000,000.00 1,878,340.003130AQL68 4.604 07/26/2024 1.7611,991,726.32 1.294Fair 1.080000 Federal Home Loan Bank2396 99 2,000,000.00 1,925,440.003130ARE31 4.615 03/28/2024 1.4432,000,000.00 1.973Fair 2.000000 Federal Home Loan Bank2398 99 2,000,000.00 1,947,920.003130ARWD9 4.629 02/16/2024 1.3242,000,000.00 2.615Fair 2.650000 Federal Home Loan Bank2401 99 3,000,000.00 2,977,200.003130AT4S3 5.260 06/13/2024 1.6163,000,000.00 3.652Fair 3.700000 Federal Home Loan Mortgage2391 99 1,045,000.00 931,993.703137EAEX3 4.282 09/23/2025 2.9001,037,451.73 0.612Fair .3750000 Federal Home Loan Mortgage2392 99 2,751,000.00 2,453,506.863137EAEX3 4.282 09/23/2025 2.9002,730,718.73 0.618Fair .3750000 Federal National Mortage Assoc2393 99 2,000,000.00 1,886,920.003135G0X24 13.708 01/07/2025 2.0772,027,378.71 0.996Fair 1.625000 Federal National Mortage Assoc2394 99 2,000,000.00 1,781,080.003135G06G3 25.144 11/07/2025 2.7151,961,043.48 1.129Fair .5000000 Federal Farm Credit Bank2397 99 2,000,000.00 1,927,660.003133ENVC1 4.253 04/25/2025 2.4131,992,918.00 2.855Fair 2.750000 Federal Home Loan Bank2399 99 3,000,000.00 2,974,830.003130AT5B9 4.321 09/01/2023 0.8892,999,120.00 3.361Fair 3.375000 Federal Home Loan Bank2400 99 3,000,000.00 2,950,470.003130AT4D6 6.789 06/14/2024 1.6062,994,101.32 3.449Fair 3.375000 Federal Farm Credit Bank2402 99 3,000,000.00 2,989,890.003133ENP95 4.371 09/30/2025 2.7842,994,155.42 4.261Fair 4.250000 Blackrock T - Fund Inst9010 99 8,233.97 8,233.97RESERVE-10A 2.040 0.0008,233.97 2.012 †Amort 2.040000 Blackrock T - Fund Inst9011 99 16,009.12 16,009.12RESERVE 10 2.040 0.00016,009.12 2.012 †Amort 2.040000 FIRST AMERICAN US TREASURY9016 99 117,820.15 117,820.15OWD TRUST & 1.980 0.000117,820.15 1.953 †Amort 1.980000 STATE OF CALIFORNIA9001 99 26,854,333.06 26,337,681.53LAIF 1.513 0.00026,854,333.06 1.492Fair 1.513000 San Diego County9007 99 44,842,799.49 42,713,000.00SD COUNTY 1.680 0.00044,842,799.49 1.657Fair 1.680000 3.062 0.54699,567,809.50 99,635,195.79 95,817,995.33Report Total † † = Duration can not be calculated on these investments due to incomplete Market price data. Portfolio OTAY NL! AP Page 1 Data Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 DU (PRF_DU) 7.1.1 Report Ver. 7.3.5 Month End GASB 31 Compliance Detail Sorted by Fund - Fund September 1, 2022 - September 30, 2022 Investment #Maturity Date Beginning Invested Value Purchase of Principal Investment ClassFundCUSIP Adjustment in Value Ending Invested Value Addition to Principal Redemption of Principal Amortization Adjustment Change in Market Value Fund: Treasury Fund 2391 951,817.35Fair Value 09/23/2025 -19,823.6599 931,993.703137EAEX3 0.00 0.00 0.00 0.00 2392 2,505,693.33Fair Value 09/23/2025 -52,186.4799 2,453,506.863137EAEX3 0.00 0.00 0.00 0.00 2394 1,820,080.00Fair Value 11/07/2025 -39,000.0099 1,781,080.003135G06G3 0.00 0.00 0.00 0.00 2393 1,918,020.00Fair Value 01/07/2025 -31,100.0099 1,886,920.003135G0X24 0.00 0.00 0.00 0.00 2400 0.00Fair Value 06/14/2024 -43,410.0099 2,950,470.003130AT4D6 2,993,880.00 0.00 0.00 0.00 2399 0.00Fair Value 09/01/2023 -24,210.0099 2,974,830.003130AT5B9 2,999,040.00 0.00 0.00 0.00 2401 0.00Fair Value 06/13/2024 -22,800.0099 2,977,200.003130AT4S3 3,000,000.00 0.00 0.00 0.00 2398 1,965,940.00Fair Value 02/16/2024 -18,020.0099 1,947,920.003130ARWD9 0.00 0.00 0.00 0.00 2396 1,944,540.00Fair Value 03/28/2024 -19,100.0099 1,925,440.003130ARE31 0.00 0.00 0.00 0.00 2395 1,901,640.00Fair Value 07/26/2024 -23,300.0099 1,878,340.003130AQL68 0.00 0.00 0.00 0.00 9003 2,950.00Amortized 0.0099 2,950.00PETTY CASH 0.00 0.00 0.00 0.00 9002 100.02Amortized 0.0099 100.02UNION MONEY 0.00 0.00 0.00 0.00 9001 25,422,756.68Fair Value -185,075.1699 26,337,681.53LAIF 0.00 15,500,000.00 14,400,000.00 0.00 9005 381,706.07Amortized 0.0099 28,774.71PAYROLL 0.00 0.00 352,931.36 0.00 9004 805,023.38Amortized 0.0099 1,074,794.85UNION OPERATING 0.00 2,212,155.52 1,942,384.05 0.00 9014 57,807.88Amortized 0.0099 53,110.12UBNA-FLEX ACCT 0.00 0.00 4,697.76 0.00 2397 1,964,120.00Fair Value 04/25/2025 -36,460.0099 1,927,660.003133ENVC1 0.00 0.00 0.00 0.00 2402 0.00Fair Value 09/30/2025 -4,260.0099 2,989,890.003133ENP95 2,994,150.00 0.00 0.00 0.00 9007 54,723,000.00Fair Value -10,000.0099 42,713,000.00SD COUNTY POOL 0.00 0.00 12,000,000.00 0.00 9016 3,088,316.52Amortized 0.0099 117,820.15OWD TRUST & CUS 0.00 6,020,229.88 8,990,726.25 0.00 9010 6,263.90Amortized 0.0099 8,233.97RESERVE-10A WRB 0.00 1,970.07 0.00 0.00 9011 10,832.50Amortized 0.0099 16,009.12RESERVE 10 BABS 0.00 5,176.62 0.00 0.00 99,470,607.63Subtotal -528,745.28 96,977,725.0311,987,070.00 23,739,532.09 37,690,739.42 0.00 99,470,607.63Total 96,977,725.03-528,745.2811,987,070.00 23,739,532.09 37,690,739.42 0.00 Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 GD (PRF_GD) 7.1.1 Report Ver. 7.3.5 Month End Interest Earnings Sorted by Fund - Fund September 1, 2022 - September 30, 2022 Yield on Beginning Book Value Maturity Date Current Rate Ending Par Value EndingSecurity TypeFund Book Value Beginning Book Value Adjusted Interest Earnings AccretionAmortization/EarningsAdjusted InterestAnnualized YieldCUSIP Investment # Interest Earned Fund: Treasury Fund 1,037,451.732391 1,045,000.00 0.375FAC 09/23/2025 326.56 211.23 537.790.63199 1,037,240.503137EAEX3 2,730,718.732392 2,751,000.00 0.375FAC 09/23/2025 859.69 567.57 1,427.260.63699 2,730,151.163137EAEX3 1,961,043.482394 2,000,000.00 0.500FAC 11/07/2025 833.33 1,047.22 1,880.551.16799 1,959,996.263135G06G3 2,027,378.712393 2,000,000.00 1.625FAC 01/07/2025 2,708.33 -1,006.58 1,701.751.02199 2,028,385.293135G0X24 2,994,101.322400 3,000,000.00 3.375FAC 06/14/2024 6,468.75 221.32 6,690.073.54699 0.003130AT4D6 2,999,120.002399 3,000,000.00 3.375FAC 09/01/2023 8,437.50 80.00 8,517.503.45599 0.003130AT5B9 3,000,000.002401 3,000,000.00 3.700MC1 06/13/2024 5,550.00 0.00 5,550.003.75199 0.003130AT4S3 2,000,000.002398 2,000,000.00 2.650MC1 02/16/2024 4,416.67 0.00 4,416.672.68799 2,000,000.003130ARWD9 2,000,000.002396 2,000,000.00 2.000MC1 03/28/2024 3,333.33 0.00 3,333.332.02899 2,000,000.003130ARE31 1,991,726.322395 2,000,000.00 1.080MC1 07/26/2024 1,800.00 378.95 2,178.951.33199 1,991,347.373130AQL68 26,854,333.069001 26,854,333.06 1.513LA1 25,519.13 0.00 25,519.131.20699 25,754,333.06LAIF 1,074,794.859004 1,074,794.85 0.750PA1 1,819.42 0.00 1,819.422.75099 805,023.38UNION OPERATING 1,992,918.002397 2,000,000.00 2.750FAC 04/25/2025 4,583.33 229.94 4,813.272.93999 1,992,688.063133ENVC1 2,994,155.422402 3,000,000.00 4.250FAC 09/30/2025 354.17 5.42 359.594.38499 0.003133ENP95 44,842,799.499007 44,842,799.49 1.680LA3 75,728.14 0.00 75,728.141.62199 56,842,799.49SD COUNTY POOL 117,820.159016 117,820.15 1.980PA2 315.37 0.00 315.370.12499 3,088,316.52OWD TRUST & CUS 8,233.979010 8,233.97 2.040PA2 11.40 0.00 11.402.21499 6,263.90RESERVE-10A WRB 16,009.129011 16,009.12 2.040PA2 20.50 0.00 20.502.30299 10,832.50RESERVE 10 BABS 100,709,990.64Subtotal 100,642,604.35 1.610 144,820.691,735.07143,085.62102,247,377.49 100,709,990.64Total 100,642,604.35 1.610 144,820.691,735.07143,085.62102,247,377.49 Portfolio OTAY NL! APData Updated: SET_ME8: 10/20/2022 09:37 Run Date: 10/20/2022 - 09:37 IE (PRF_IE) 7.2.0 Report Ver. 7.3.5 SUMMARY FOR PERIOD 9/22/2022 - 10/19/2022 NET DEMANDS $)&$,4     70*%$)&$,4    505"-$)&$,4    8*3&50 #&/&'*54$003%*/"5034%&/5"-$0#3"$-"*.4 4&15   #&/&'*54$003%*/"5034%&/5"-#&/&'*54"%.*/'&&4 4&15   #&/&'*54$003%*/"5034%&/5"-#&/&'*54"%.*/'&&4 4&15  $"45"5&%*4#634&.&/56/*5#*8&&,-:1":30--%&%6$5*0/  $"45"5&%*4#634&.&/56/*5#*8&&,-:1":30--%&%6$5*0/  05":8"5&3%*453*$5#*8&&,-:1":30--%&%6$5*0/  05":8"5&3%*453*$5#*8&&,-:1":30--%&%6$5*0/  16#-*$&.1-0:&&43&54:45&.#*8&&,-:1&34$0/53*#65*0/   16#-*$&.1-0:&&43&54:45&.#*8&&,-:1&34$0/53*#65*0/   4"/%*&(0$06/5:8"5&3"65)8"5&3%&-*7&3*&4$)"3(&4 "6(    6/*0/#"/,#*8&&,-:1":30--5"9&4   6/*0/#"/,#*8&&,-:1":30--5"9&4   64#"/,$"-$"3%&91&/4&4 .0/5)-:   70:"'*/"/$*"-#*8&&,-:"1-"/   70:"'*/"/$*"-#*8&&,-:"1-"/   TOTAL CASH DISBURSEMENTS $ 9,159,056.89 RECOMMENDED ACTION: 5IBUUIF#PBSESFDFJWFEUIFBUUBDIFEMJTUPGEFNBOET +C"UUBDINFOU PURPOSE: "UUBDIFEJTUIFMJTUPGEFNBOETGPSUIF#PBSEhTJOGPSNBUJPO FISCAL IMPACT: STAFF REPORT TYPE MEETING: SUBMITTED BY: APPROVED BY: APPROVED BY: SUBJECT: 3FHVMBS#PBSE &JE'BLIPVSJ 'JOBODF.BOBHFS 5SFBTVSZ"DDPVOUJOH4FSWJDFT +PTFQI#FBDIFN $IJFG'JOBODJBM0GGJDFS +PTF.BSUJOF[ (FOFSBM.BOBHFS "DDPVOUT1BZBCMF%FNBOE-JTU MEETING DATE: W.O./G.F. NO: DIV. NO. /PWFNCFS  Check Total 16,095.13 3,260.40 5,658.00 5,658.00 980-2 PS MOTOR 13,944.60 13,944.60 2058750 10/19/22 08156 BROWNSTEIN HYATT FARBER 910265 10/12/22 LEGISLATIVE ADVOCACY CONSULT SERV 2058749 10/19/22 04209 BRAX COMPANY INC 42974 09/30/22 8,409.90 2058667 10/05/22 21254 BITBODYGUARD INC OWD-005 09/15/22 INTERNET CIRCUITS UPGRADE FY23 7,750.00 7,750.00 851.23 851.23 2058748 10/19/22 20125 AZTEC LANDSCAPING INC J1258 09/30/22 JANITORIAL SERVICES FY23 8,409.90 UB Refund Cst #0000272168 63.38 63.38 2058642 09/28/22 21519 ATP GENERAL ENGINEERING CONT Ref002676534 09/26/22 UB Refund Cst #0000276496 2058700 10/12/22 21540 ATHENA GEORGES Ref002676673 10/07/22 1,278,435.00 2058716 10/12/22 20199 ASSOC OF CA WATER AGENCIES 100322 10/03/22 FY2023 WORKERS' COMP PROGRAM (QTR 1)57,174.84 57,174.84 48,918.00 48,918.00 2058747 10/19/22 20199 ASSOC OF CA WATER AGENCIES 100122 10/01/22 LIABILITY INSURANCE 1,278,435.00 EMPLOYEE ASSISTANCE PROGRAM (CY2022)317.80 317.80 2058746 10/19/22 17264 ARTIANO SHINOFF ABED 306313 10/11/22 PROF SERV (SEPT 2022) 2058666 10/05/22 08967 ANTHEM EAP 448946835648 09/26/22 10.72 2058745 10/19/22 14256 ALLIANT INSURANCE SERVICES INC 2034148 10/03/22 INSURANCE CONSULTING SERVICES FY23 7,250.01 7,250.01 252.23 252.23 2058699 10/12/22 21528 ALICIA SANTOS Ref002676660 10/07/22 UB Refund Cst #0000090123 10.72 UB Refund Cst #0000282809 74.91 74.91 2058698 10/12/22 21530 ALFREDO MARQUEZ Ref002676662 10/07/22 UB Refund Cst #0000120711 2058697 10/12/22 21548 ALEXANDER DUMAS Ref002676682 10/07/22 1,281.60 9130210782 09/20/22 AS-NEEDED AQUA AMMONIA FY23 1,152.00 9130210780 09/20/22 AS-NEEDED AQUA AMMONIA FY23 826.80 TEMP METER/ BACKFLOW STANDS 2,903.86 2,903.86 2058665 10/05/22 07732 AIRGAS SPECIALTY PRODUCTS INC 9130210781 09/20/22 AS-NEEDED AQUA AMMONIA FY23 808312022 08/26/22 458-1 RES INT/EXT COATING (AUG 2022)6,840.00 2058664 10/05/22 07951 AHLEE BACKFLOW SERVICE INC 107619 09/09/22 6,643.88 2058641 09/28/22 13901 ADVANCED INDUSTRIAL SVCS INC 707312022 07/29/22 458-1 RES INT/EXT COATING (JULY 2022)9,255.13 890.00 890.00 2058744 10/19/22 21455 ADVANCED CONSERVATION 1009 09/12/22 HYDRANT BUDDY 6,643.88 INTERNET CIRCUITS (SEPT 2022)1,323.91 1,323.91 2058743 10/19/22 17989 ADS CORP 22446.22-0922 10/01/22 SEWER FLOW MONITORING FY23 2058742 10/19/22 18122 ACC BUSINESS 222566117 09/27/22 591.79 2058741 10/19/22 08488 ABLEFORCE INC 11285 10/17/22 SHAREPOINT & INTRANET SUPP SVCS FY23 450.00 450.00 Amount 2058715 10/12/22 15416 24 HOUR ELEVATOR INC 129797 10/01/22 ELEVATOR GENERAL MAINTENANCE FY23 591.79 CHECK REGISTER Otay Water District Date Range: 9/22/2022 - 10/19/2022 Check #Date Vendor Vendor Name Invoice Inv. Date Description Page 1 of 8 918.00 139,393.17 474.00 27,698.81 14,114.36 S129093 08/25/22 RED DYE DIESEL FUEL FOR 870-2 PS 13,584.45 CUSTOMER REFUND 38.00 38.00 2058648 09/28/22 10338 DION AND SONS INC S129391 09/13/22 RED DYE DIESEL FUEL FOR 870-2 PS 2058647 09/28/22 05122 DEE JENNINGS 0065092722 09/27/22 12,250.00 2058646 09/28/22 20657 DAWSON COMPANY 816447 09/07/22 HYDROPNEUMATIC TANKS 19,668.96 19,668.96 74.10 74.10 2058645 09/28/22 21128 DAVIS FARR LLP 12777 09/07/22 AUDIT SERVICES FY22 FINANCIAL STATEMENT 12,250.00 MEMBERSHIP RENEWAL 150.00 150.00 2058755 10/19/22 17433 DAILY JOURNAL CORPORATION A3633123 10/12/22 ADVERTISEMENT 193E602230922 10/04/22 SHUT DOWN TEST (9/21/22)79.00 2058722 10/12/22 00693 CSDA - SAN DIEGO CHAPTER 22-30 06/10/22 193E637280922 10/04/22 SHUT DOWN TEST (9/23/22)79.00 193E602340922 10/04/22 DEVELOPER INSPECTION (9/12/22)79.00 193E637230922 10/04/22 SHUT DOWN TEST (9/20/22)79.00 193E637270922 10/04/22 SHUT DOWN TEST (9/21/22)79.00 5,069.55 5,069.55 2058754 10/19/22 00184 COUNTY OF SAN DIEGO 193E637210922 10/04/22 SHUT DOWN TEST (9/15/18)79.00 POLY TANK BOSS FITTING 3,036.58 3,036.58 2058671 10/05/22 00099 COUNTY OF SAN DIEGO DPWMWD0822 09/12/22 COUNTY EXCAVATION PERMITS (AUG 2022) 09/30/22 DATA SERVICES (SEPT 2022)540.75 540.75 2058721 10/12/22 02643 CORE-ROSION PRODUCTS C2022321 08/31/22 133,197.54 R510921 09/09/22 INVENTORY 6,195.63 2058753 10/19/22 15049 CORELOGIC SOLUTIONS LLC 82148862 CUSTOMER REFUND 61.44 61.44 2058670 10/05/22 18331 CORE & MAIN LP Q353983 08/02/22 FORD WATER METER TEST BENCH 2058644 09/28/22 21522 COMPASS PROPERTY MGMT 6027092722 09/27/22 27954 09/30/22 BACTERIOLOGICAL TESTING (9/14/22)183.00 27956 09/30/22 BACTERIOLOGICAL TESTING (9/27/22)138.00 27955 09/30/22 BACTERIOLOGICAL TESTING (9/27/22)186.00 27953 09/30/22 BACTERIOLOGICAL TESTING (9/14/22)183.00 20.00 20.00 2058752 10/19/22 04119 CLARKSON LAB & SUPPLY INC 27952 09/30/22 BACTERIOLOGICAL TESTING (8/31/22)228.00 BRONZE SPONSORSHIP 1,000.00 1,000.00 2058751 10/19/22 08895 CITY OF LA MESA 24567 09/20/22 FINGERPRINTING SERVICES 2058720 10/12/22 02026 CHULA VISTA ELEM SCHOOL DIST 092822 09/28/22 4,707.00 2058719 10/12/22 21535 CH REALTY VII Ref002676667 10/07/22 UB Refund Cst #0000239953 3,968.50 3,968.50 8,567.50 8,567.50 2058669 10/05/22 15177 CAROLLO ENGINEERS INC FB27404 09/14/22 870-1 RESERVOIR COVER/LINER EVALUATION 4,707.00 MEMBERSHIP DUES 202.00 202.00 2058718 10/12/22 15177 CAROLLO ENGINEERS INC FB27813 09/19/22 DISINFECTION SYS IMPROVE (AUG 2022) 2058717 10/12/22 00192 CALIFORNIA WATER ENVIRONMENT 59860100622 09/29/22 6,936.69 2058668 10/05/22 20374 CALBURTON INC CAL1027 09/15/22 UTILITY LOCATING SERVICES (AUG 2022)14,840.00 14,840.00 2058643 09/28/22 08156 BROWNSTEIN HYATT FARBER 907758 09/22/22 LEGISLATIVE ADVOCACY CONSULT SERV 6,936.69 Page 2 of 8 1,386.38 27,423.46 14,394.65 853719 10/03/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 3,680.96 851234 09/22/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 1,707.11 4,227.24 851233 09/22/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 3,864.47 852871 09/29/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 3,819.66 AS950 AUTO SAMPLER 5,095.75 5,095.75 2058761 10/19/22 19978 HASA INC.852005 09/26/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 2058677 10/05/22 00174 HACH COMPANY 13252528 09/20/22 8.96 2058760 10/19/22 02630 HAAKER EQUIPMENT COMPANY M3A008 09/23/22 JET SCAN RODDER CAMERA 15,961.67 15,961.67 30.72 30.72 2058703 10/12/22 21531 GODOFREDO CORPUZ Ref002676663 10/07/22 UB Refund Cst #0000183448 8.96 UB Refund Cst #0000274245 38.82 38.82 2058702 10/12/22 21527 GINA MARIA ZIVELONGHI Ref002676659 10/07/22 UB Refund Cst #0000059756 2058701 10/12/22 21542 GEORGE GARMO Ref002676676 10/07/22 100.00 2058726 10/12/22 19473 FRANCISCO LOPEZ Ref002676669 10/07/22 UB Refund Cst #0000251783 94.77 94.77 100.00 100.00 2058650 09/28/22 21053 FRANCHISE TAX BOARD Ben2676582 09/29/22 BI WEEKLY PAYROLL DEDUCTION 100.00 AI-BASED SFTWRE SUBSCRIPTION FY23-25 11,995.00 11,995.00 2058725 10/12/22 21053 FRANCHISE TAX BOARD Ben2676708 10/13/22 BI WEEKLY PAYROLL DEDUCTION 2058724 10/12/22 21370 FRACTA F20220802 08/02/22 196.11 2058649 09/28/22 11962 FLEETWASH INC 2640728 09/02/22 FLEETWASH SERVICES FY23 122.54 122.54 150.00 150.00 2058676 10/05/22 11962 FLEETWASH INC 2651339 09/16/22 FLEETWASH SERVICES FY23 196.11 DOCUMENT SERVICE (MONTHLY)99.00 99.00 2058759 10/19/22 02591 FITNESS TECH 12232 10/01/22 FY23 GYM EQUIPMENT MAINTENANCE 0799112-2 09/19/22 8" GATE LIDS 2,621.02 2058758 10/19/22 17888 FIRST AMERICAN DATA TREE LLC 9003400922 09/30/22 0811669 09/14/22 INVENTORY 2,837.49 0810149 09/09/22 980-2 PS DISMANTLING BOLTS 2,639.01 VALVE GATE 4" (LOW VOLTAGE) FLG X FLG 3,383.35 0811598 09/19/22 INVENTORY 2,913.78 0797405-2 09/27/22 INVENTORY 7,332.39 2058675 10/05/22 03546 FERGUSON WATERWORKS # 1083 0808799 09/14/22 INVENTORY 11,292.20 0801944 09/27/22 INVENTORY 8,798.87 165441731 09/20/22 VISION BENEFITS ADMINISTRATION (CY2022)38.05 2058757 10/19/22 03546 FERGUSON WATERWORKS # 1083 0812249 09/30/22 2,838.20 2058674 10/05/22 20511 EYEMED (FIDELITY)165441600 09/20/22 VISION BENEFITS ADMINISTRATION (CY2022)1,348.33 44,269.46 44,269.46 2058673 10/05/22 20794 ENTISYS 360 185859 09/20/22 MS SOFTWARE MAINTENANCE RENEWAL 2,838.20 TRAVEL ADVANCEMENT 384.02 384.02 2058756 10/19/22 20794 ENTISYS 360 186267 09/28/22 MS SOFTWARE MAINTENANCE RENEWAL 09/30/22 RECYCLED WASTE SERVICE FY23 149.69 149.69 2058723 10/12/22 14323 EDWARDS, JEFFREY 101622 10/11/22 2058672 10/05/22 02447 EDCO DISPOSAL CORPORATION 5458 093022 Page 3 of 8 21,618.42 22,536.01 12,055.00 3,449.80 18,843.79 09/08/22 13,690.07 283.23 283.23 2058729 10/12/22 21541 KEARNY PCCP OTAY 311 LLC Ref002676675 10/07/22 UB Refund Cst #0000274131 13,690.07 UB Refund Cst #0000281774 1,697.79 1,697.79 2058652 09/28/22 21521 JULIO PALAFOX 9831092722 09/27/22 CUSTOMER REFUND 2058728 10/12/22 21546 JP GUNITE INC Ref002676680 10/07/22 76.40 2058651 09/28/22 21523 JORGE ARCHIBOLD 5101092722 09/27/22 CUSTOMER REFUND 413.00 413.00 5,728.35 5,728.35 2058705 10/12/22 21543 JESUS GUZMAN Ref002676677 10/07/22 UB Refund Cst #0000275332 76.40 ANTENNA SUBLEASE FY23 2,135.70 2,135.70 2058766 10/19/22 10563 JCI JONES CHEMICALS INC 896936 09/28/22 AS-NEEDED CHLORINE GAS FY23 222269 10/03/22 BILL PROCESSING SERVICES FY23 2,746.02 2058765 10/19/22 20752 IWG TOWERS ASSETS II LLC 109897614 10/01/22 BILL PROCESSING SERVICES FY23 12,712.48 221741 09/30/22 BILL PROCESSING SERVICES FY23 3,385.29 U2216042776 09/08/22 INVENTORY (FOR ADJUSTMENT ONLY)7,314.45 2058764 10/19/22 08969 INFOSEND INC 221742 09/30/22 1,253.95 2058727 10/12/22 21269 ICONIX WATERWORKS INC U2215003841 12 ROMAC MACRO HP COUPLING 1270-1380 -3,864.65 108.50 108.50 2058763 10/19/22 20950 HOCH CONSULTING APC 20220096 10/04/22 PROJECT FUNDING SERVICES (6/1/22-9/30/22)1,253.95 WEB HOSTING (JULY 2022-JUNE 2023)112.50 112.50 2058704 10/12/22 21549 HIROAKI MAEKAWA Ref002676683 10/07/22 UB Refund Cst #0000282860 200940058 09/20/22 ASSET MANAGEMENT (THROUGH AUG 2022)2,652.50 2058762 10/19/22 00062 HELIX WATER DISTRICT 101022 10/10/22 ASSET MANAGEMENT (THROUGH AUG 2022)5,677.50 2009400412 09/20/22 ASSET MANAGEMENT (THROUGH AUG 2022)3,725.00 849708 09/15/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 426.78 2058679 10/05/22 18436 HAZEN AND SAWYER DPC 200940072 09/20/22 849400 09/14/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 917.57 848276 09/09/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 746.86 848275 09/09/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 1,045.61 848613 09/12/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 943.18 849707 09/15/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 2,123.22 849709 09/15/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 1,540.67 848994 09/13/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 3,435.56 850510 09/19/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 2,646.02 AS-NEEDED SODIUM HYPOCHLORITE FY23 4,826.86 850369 09/19/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 3,883.68 2058678 10/05/22 19978 HASA INC.848274 09/09/22 852557 09/28/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 665.77 851236 09/22/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 230.46 851235 09/22/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 819.41 851237 09/22/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 746.86 852870 09/29/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 938.91 851021 09/21/22 AS-NEEDED SODIUM HYPOCHLORITE FY23 917.57 Page 4 of 8 7,525.96 19,652.23 3,272.15 1,980.00 1,980.00 TOWEL LAUNDRY SERVICE FY23 259.08 259.08 2058777 10/19/22 00137 PETTY CASH CUSTODIAN 101722 10/17/22 PETTY CASH REIMBURSEMENT 2058683 10/05/22 19310 PALM LAUNDRY INC 221 10/01/22 INVENTORY 2,940.28 S100443483.001 09/14/22 INVENTORY 331.87 S100442735.002 10/04/22 INVENTORY 778.49 2058682 10/05/22 01002 PACIFIC PIPELINE SUPPLY INC S100439103.005 09/14/22 S100437858.004 09/27/22 INVENTORY 2,812.28 S100437858.005 10/04/22 INVENTORY 1,193.87 S100444125.001 09/21/22 WAX TAPE, OUTER WRAP & PRIMER 4,999.60 S100444434.001 10/04/22 INVENTORY 3,915.75 2,046.00 2058776 10/19/22 01002 PACIFIC PIPELINE SUPPLY INC S100444528.001 10/04/22 INVENTORY 5,952.24 17,846.26 17,846.26 2058732 10/12/22 21547 OVL LP Ref002676681 10/07/22 UB Refund Cst #0000282470 2,046.00 IN-PLANT INSPECTION SERVICES (JULY 2022)6,048.76 6,048.76 2058775 10/19/22 16834 ON-SITE TECHNICAL SVCS INC 10769 09/21/22 IN-PLANT INSPECTION SERVICES (AUG 2022) 2058681 10/05/22 16834 ON-SITE TECHNICAL SVCS INC 10721 08/05/22 1,000.00 2058654 09/28/22 18332 NV5 INC 288681 09/06/22 ENGINEERING DESIGN (AUG 2022)25,352.25 25,352.25 818.75 818.75 2058774 10/19/22 02027 NTH GENERATION COMPUTING INC 40696TM4 09/23/22 PROF SERV - SERVER UPGRADE PROJECT 1,000.00 CONSULT SERV HOTLINKING PROJECT 9,930.00 9,930.00 2058773 10/19/22 20996 NORTH CAROLINA DEPT OF REVENUE 601397030 10/17/22 WITHHOLDING TAX 3RD QTR 2022 2058772 10/19/22 03517 NOBEL SYSTEMS 15491 09/30/22 75.00 2058731 10/12/22 02848 NEWMAN, PATRICK 080122 08/01/22 EXPENSE REIMBURSEMENT 140.00 140.00 9,689.00 9,689.00 2058709 10/12/22 21536 NEIDE DUARTE Ref002676668 10/07/22 UB Refund Cst #0000244404 75.00 PLAN CHECK SERVICES (AUG 2022)8,593.00 8,593.00 2058771 10/19/22 17261 NATURESCAPE SERVICES 6033 09/30/22 LANDSCAPE MAINTENANCE SERVICES FY23 2058680 10/05/22 19824 MURRAYSMITH INC 21320114 09/13/22 5,806.60 2058770 10/19/22 21567 MONTECITO VILLAGE PARTNERS LP 100422 10/04/22 OTAY RANCH VILLAGE 2 R-28 349.02 349.02 82.10 82.10 2058769 10/19/22 01824 MERKEL & ASSOCIATES INC 22092101 09/28/22 SMA HABITAT MANAGEMENT (AUG 2022)5,806.60 EXPENSE REIMBURSEMENT 989.37 989.37 2058708 10/12/22 21545 MAXIMILLIAN RAMIREZ Ref002676679 10/07/22 UB Refund Cst #0000276370 2058730 10/12/22 15599 MARTINEZ, JOSE 082222082522 08/25/22 69.83 2058768 10/19/22 21255 LONG, MICHAEL 102322102622 10/13/22 TRAVEL ADVANCE 189.00 189.00 57.55 57.55 2058707 10/12/22 21529 LENETTE GOMEZ Ref002676661 10/07/22 UB Refund Cst #0000091832 69.83 AS-NEEDED PAVING SERVICES FY23 6,844.05 6,844.05 2058706 10/12/22 21532 KRISTA KILPATRICK Ref002676664 10/07/22 UB Refund Cst #0000185227 22-115-5 09/22/22 AS-NEEDED PAVING SERVICES FY23 3,445.66 2058653 09/28/22 05840 KIRK PAVING INC 22-115-2 09/07/22 2058767 10/19/22 05840 KIRK PAVING INC 22-115-4 09/22/22 AS-NEEDED PAVING SERVICES FY23 4,080.30 Page 5 of 8 38,558.74 334.83 783.33 302,202.70 64.48 EXPENSE REIMBURSEMENT 36.98 080122083122 08/31/22 MILEAGE REIMBURSEMENT 27.50 2058659 09/28/22 16229 SMITH, TIMOTHY 060122083122 08/31/22 1,040.58 2058689 10/05/22 16229 SMITH, TIMOTHY 090122093022 09/30/22 MILEAGE REIMBURSEMENT 30.00 30.00 540.00 540.00 2058735 10/12/22 21544 SILVERADO CONTRACTORS INC Ref002676678 10/07/22 UB Refund Cst #0000275931 1,040.58 UTILITY EXPENSES (MONTHLY)135,376.56 135,376.56 2058784 10/19/22 19603 SECURITAS SECURITY SVC USA INC 11000355 10/04/22 ON-DEMAND SECURITY RESPONSE FY23 2058783 10/19/22 00121 SAN DIEGO GAS & ELECTRIC 100722 10/07/22 093022B 09/30/22 UTILITY EXPENSES (MONTHLY)71,244.13 092722 09/27/22 UTILITY EXPENSES (MONTHLY)833.57 UTILITY EXPENSES (MONTHLY)122,394.69 093022A 09/30/22 UTILITY EXPENSES (MONTHLY)107,730.31 2058688 10/05/22 00121 SAN DIEGO GAS & ELECTRIC 093022 09/30/22 UTILITY EXPENSES (MONTHLY)722.86 092022 09/20/22 UTILITY EXPENSES (MONTHLY)60.47 2058658 09/28/22 00121 SAN DIEGO GAS & ELECTRIC 092222 09/22/22 6,109.00 2058734 10/12/22 02586 SAN DIEGO COUNTY ASSESSOR 202200753 10/05/22 MONTHLY ASSESSOR DATA FY23 125.00 125.00 1,006.29 1,006.29 2058657 09/28/22 19377 SAGEVIEW ADVISORY GROUP LLC 202230114 10/01/22 ADVISOR FOR DEFERRED COMP PLANS 6,109.00 WASTE BACKWASH GEAR REDUCERS 1,761.27 1,761.27 2058733 10/12/22 21538 RYAN COMPANIES US INC Ref002676671 10/07/22 UB Refund Cst #0000265205 090122093022 09/30/22 MILEAGE REIMBURSEMENT 25.00 2058782 10/19/22 02620 ROTORK CONTROLS INC RI176332 09/23/22 5,568.75 5,568.75 2058687 10/05/22 04542 ROBAK, MARK 90122093022 09/30/22 EXPENSE REIMBURSEMENT 309.83 CORROSION SERVICES (8/1/22-9/30/22)2,695.00 2,695.00 2058686 10/05/22 02923 RICHARD BRADY & ASSOCIATES 2208115 09/13/22 DESIGN JAMUL PS (AUG 2022) 2058781 10/19/22 15647 RFYEAGER ENGINEERING LLC 22155 10/04/22 250.00 2058712 10/12/22 21537 REEJAY LORENZO Ref002676670 10/07/22 UB Refund Cst #0000259258 76.03 76.03 26.92 26.92 2058780 10/19/22 19836 RED WING BUSINESS ADV ACCOUNT 20221010069504 10/10/22 AS-NEEDED SAFETY BOOTS FY23 250.00 WATER COST OF SERVICE STUDY 2,337.50 2,337.50 2058711 10/12/22 21534 RAQUEL ALVAREZ Ref002676666 10/07/22 UB Refund Cst #0000216873 10149202 10/02/22 980-2 #2 VALVE REPAIR ACTUATOR 4,040.00 2058685 10/05/22 20861 RAFTELIS 25106 09/14/22 5,500.00 2058779 10/19/22 19883 R& B AUTOMATION INC 10149201 09/28/22 980-2 #2 VALVE REPAIR ACTUATOR 34,518.74 500.00 500.00 2058684 10/05/22 16208 POSM SOFTWARE LLC 2914 09/12/22 PIPELINE OBSERVE SYST SFTWRE SUPP 5,500.00 AS-NEEDED GRAPHIC DESIGN SERVICES FY23 127.50 127.50 2058656 09/28/22 03351 POSADA, ROD 09252022 09/25/22 REIMBURSEMENT 2058778 10/19/22 15081 PINOMAKI DESIGN 6220 10/01/22 52.08 2058655 09/28/22 21520 PINNATE SMILE LLC Ref002676535 09/26/22 UB Refund Cst #0000276839 127.09 127.09 2058710 10/12/22 21533 PHILLIP ZENTNER Ref002676665 10/07/22 UB Refund Cst #0000213662 52.08 Page 6 of 8 27,550.13 1,417.50 981.32 925.63 1,933.12 16,000.00 2,576.92 2,576.92 2058794 10/19/22 14879 WATER CONSERVATION GARDEN JPA 9547 10/01/22 GARDEN FUNDING CONTRIBUTION 16,000.00 SECURITY ALARM MONITORING FY23 2,576.92 2,576.92 2058793 10/19/22 15807 WATCHLIGHT CORPORATION 780124 10/15/22 SECURITY ALARM MONITORING FY23 2058695 10/05/22 15807 WATCHLIGHT CORPORATION 776699 09/15/22 WATER INTERNS (9/19-9/25)966.56 45518520 10/09/22 WATER INTERNS (10/3-10/9)966.56 2058792 10/19/22 20909 VOLT WORKFORCE SOLUTIONS 45483449 10/13/22 966.56 2058738 10/12/22 20909 VOLT WORKFORCE SOLUTIONS 45504510 10/02/22 WATER INTERNS (9/26-10/2)459.12 459.12 7,101.70 7,101.70 2058694 10/05/22 20909 VOLT WORKFORCE SOLUTIONS 45468480 09/18/22 WATER INTERNS (9/12-9/18)966.56 UB Refund Cst #0000011376 165.85 165.85 2058791 10/19/22 21240 VILLAGE OF ESCAYA APTS LLC 7500101822 10/18/22 CUSTOMER REFUND 2058714 10/12/22 21526 VICTOR CANDIA Ref002676658 10/07/22 09/20/22 PORT. TOILET RENTAL FY23 779.16 1018211 09/20/22 PORT. TOILET RENTAL FY23 146.47 741.50 222301113 10/01/22 DIG SAFE BOARD FEES (MONTHLY)239.82 2058693 10/05/22 15675 UNITED SITE SERVICES INC 01020762 MANHOLE MONITORING EQUIPMENT 19,002.93 19,002.93 2058790 10/19/22 00427 UNDERGROUND SERVICE ALERT 920220512 10/01/22 UNDERGROUND ALERTS (MONTHLY) 12860523 09/15/22 MANHOLE MONITORING EQUIPMENT 337.50 2058789 10/19/22 05989 TRIMBLE INC 12859228 09/13/22 434.80 434.80 2058692 10/05/22 05989 TRIMBLE INC 12861252 09/15/22 MANHOLE MONITORING EQUIPMENT 1,080.00 UB Refund Cst #0000005024 64.84 64.84 2058788 10/19/22 19536 TREBOR SHORING RENTALS 275275-3 10/10/22 SHORING RENTALS 2058713 10/12/22 21525 THOMAS MARTINEZ Ref002676657 10/07/22 1,320.00 2058787 10/19/22 03236 THE CENTRE FOR ORGANIZATION TCFOE3941 10/04/22 MANAGEMENT TRAINING (FALL 2022)3,199.00 3,199.00 1,800.00 1,800.00 2058691 10/05/22 21394 TEEDEEUAS LLC Otay 03 10/04/22 UNMANNED AIRCRAFT SYS PROG SERV 1,320.00 COMM CONSULT SERV (JULY 2022)2,500.00 2,500.00 2058786 10/19/22 18376 SVPR COMMUNICATIONS LLC 1544 09/30/22 COMM CONSULT SERV (AUG 2022) 09/22/22 YOGA SESSIONS (OCT 2022)640.00 640.00 2058663 09/28/22 18376 SVPR COMMUNICATIONS LLC 1532 07/31/22 16,540.14 418513 09/02/22 UNLEADED & DIESEL FUEL 11,009.99 2058662 09/28/22 07362 SUSAN MARCUS SM092222 LIFE INSURANCE AND STD/LTD (SEPT 2022)11,286.90 11,286.90 2058661 09/28/22 10339 SUPREME OIL COMPANY 418422 09/02/22 UNLEADED & DIESEL FUEL 2058690 10/05/22 15974 SUN LIFE FINANCIAL 38166090122 10/01/22 1,454.53 2058785 10/19/22 05755 STATE WATER RESOURCES 3920312122PC 10/13/22 D5 CERTIFICATION RENEWAL 105.00 105.00 553.85 553.85 2058737 10/12/22 21472 SOUTHWESTERN COMMUNITY COLLEGE Ref002676674 10/07/22 UB Refund Cst #0000272751 1,454.53 BI-WEEKLY PAYROLL DEDUCTION 553.85 553.85 2058736 10/12/22 21115 SONIA RIVAS Ben2676706 10/13/22 BI-WEEKLY PAYROLL DEDUCTION 2058660 09/28/22 21115 SONIA RIVAS Ben2676580 09/29/22 Page 7 of 8 205.00 2,500.00 155 Checks 847.50 847.50 Amount Pd Total:2,702,179.93 Check Grand Total:2,702,179.93 ENGINEERING DESIGN SERVICES (AUG 2022)19,521.00 19,521.00 2058740 10/12/22 08023 WORKTERRA 0103912 09/30/22 EMPLOYEE BENEFITS (SEPT 2022) 2058739 10/12/22 19866 WOOD RODGERS INC 162063 08/30/22 ARBITRAGE REBATE SERVICES 1,250.00 010-52433 09/27/22 ARBITRAGE REBATE SERVICES 1,250.00 57015 09/15/22 AS-NEEDED BEE REMOVAL FY23 80.00 2058795 10/19/22 15181 WILLDAN FINANCIAL SERVICES 010-52432 09/27/22 2058696 10/05/22 01343 WE GOT YA PEST CONTROL INC 57051 09/15/22 AS-NEEDED BEE REMOVAL FY23 125.00 Page 8 of 8